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EO12866 MeBr CUE 2060-AQ83 Final Rule 20120405.docx

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2009-0277; FRL-]

RIN: 2060-AQ83

Protection of Stratospheric Ozone: The 2012 Critical Use Exemption from the 

Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

SUMMARY: EPA is authorizing uses that qualify for the 2012 critical use exemption 

and the amount of methyl bromide that may be produced, imported, or supplied from 

existing pre-phaseout inventory for those uses in 2012. EPA is taking this action under 

the authority of the Clean Air Act to reflect a recent consensus decision by the Parties to 

the Montreal Protocol on Substances that Deplete the Ozone Layer at the Twenty-Second

Meeting of the Parties.

DATES: This rule is effective on [insert date of publication].

ADDRESSES: EPA has established a docket for this action under Docket ID No. EPAHQ-OAR-2009-0277. All documents in the docket are listed on the www.regulations.gov 

web site. Although listed in the index, some information is not publicly available, e.g., 

CBI or other information whose disclosure is restricted by statute. Certain other material, 

such as copyrighted material, is not placed on the Internet and is publicly available only 

in hard copy form. Publicly available docket materials are available either electronically 

through www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA/DC, 

Deleted: 20120103
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EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 

legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, 

and the telephone number for the Air and Radiation Docket is (202) 566-1742).

FOR FURTHER INFORMATION CONTACT: 

For further information about this rule, contact Jeremy Arling by telephone at 

(202) 343-9055, or by e-mail at arling.jeremy@epa.gov or by mail at U.S. Environmental 

Protection Agency, Stratospheric Protection Division, Stratospheric Program 

Implementation Branch (6205J), 1200 Pennsylvania Avenue, N.W., Washington, D.C., 

20460. You may also visit the methyl bromide section of the ozone layer protection 

website at www.epa.gov/ozone/mbr for further information about the methyl bromide 

critical use exemption, other stratospheric ozone protection regulations, the science of 

ozone layer depletion, and related topics.

SUPPLEMENTARY INFORMATION:

This rule concerns Clean Air Act (CAA) restrictions on the consumption, 

production, and use of methyl bromide (a Class I, Group VI controlled substance) for 

critical uses during calendar year 2012. Under the Clean Air Act, methyl bromide 

consumption and production were phased out on January 1, 2005, apart from allowable 

exemptions, such as the critical use exemption and the quarantine and preshipment (QPS) 

exemption. Consumption is defined under the CAA as production plus imports minus 

exports. With this action, EPA is authorizing the uses that qualify for the 2012 critical use 

exemption as well as specific amounts of methyl bromide that may be produced and
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imported, or sold from pre-phaseout inventory (also referred to as “stocks”) for critical 

uses in 2012.

Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. Chapter 5, 

generally provides that rules may not take effect earlier than 30 days after they are 

published in the Federal Register. EPA is issuing this final rule under section 307(d)(1) of 

the Clean Air Act, which states: “The provisions of section 553 through 557 . . . of Title 

5 shall not, except as expressly provided in this section, apply to actions to which this 

subsection applies.” Thus, section 553(d) of the APA does not apply to this rule. EPA is 

nevertheless acting consistently with the policies underlying APA section 553(d) in 

making this rule effective on [Insert date of publication]. APA section 553(d) allows an 

effective date less than 30 days after publication "as otherwise provided by the agency for 

good cause found and published with the rule." Section 5 U.S.C. 553(d)(1) allows an 

effective date less than 30 days after publication for a rule that “that grants or recognizes 

an exemption or relieves a restriction.” 5 U.S.C. § 553(d)(1). Since today’s action can be 

considered to either grant an exemption for limited critical uses during 2012 from the 

general prohibition on production or import of methyl bromide after the phaseout date of 

January 1, 2005, or relieve a restriction that would otherwise prevent production or 

import of methyl bromide, EPA is making this action effective immediately upon 

publication.

Table of Contents

I. General Information

A. Regulated Entities

II. What Is Methyl Bromide?
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III. What Is the Background to the Phaseout Regulations for Ozone-Depleting 

Substances?

IV. What Is the Legal Authority for Exempting the Production and Import of Methyl 

Bromide for Critical Uses Authorized by the Parties to the Montreal Protocol?

V. What Is the Critical Use Exemption Process?

A. Background of the Process

B. How Does This Rule Relate to Previous Critical Use Exemption Rules?

C. Stocks of Methyl Bromide

D. Critical Uses

E. Critical Use Amounts

F. Critical Use Allowance Allocations

G. Critical Stock Allowance Allocations

H. The Criteria in Decisions IX/6 and Ex. I/4

I. Emissions Minimization

VI. 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

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

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

Governments

Deleted: 1. Approach for Determining Critical 

Stock Allowances¶

2. Approach for Determining New Production 

and Import Allowances¶

3. Summary of Calculations¶

F. The Criteria in Decisions IX/6 and Ex. I/4¶

G. Emissions Minimization¶

H.

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G. Executive Order 13045: Protection of Children from Environmental 

Health and Safety Risks

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

Distribution, or Use

I. National Technology Transfer and Advancement Act

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

in Minority Populations and Low-Income Populations

K. Congressional Review Act

I. General Information

A. Regulated Entities

Entities and categories of entities potentially regulated by this action include 

producers, importers, and exporters of methyl bromide; applicators and distributors of 

methyl bromide; and users of methyl bromide that applied for the 2012 critical use 

exemption including growers of vegetable crops, fruits, and nursery stock, and owners of 

stored food commodities and structures such as grain mills and processors. This 

rulemaking does not affect applicants for future control periods.

This list is not intended to be exhaustive, but rather to provide a guide for readers 

regarding entities likely to be regulated by this action. To determine whether your 

facility, company, business, or organization could be regulated by this action, you should 

carefully examine the regulations promulgated at 40 CFR part 82, subpart A. If you have 

questions regarding the applicability of this action to a particular entity, consult the 

person listed in the preceding section.

II. What Is Methyl Bromide?
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Methyl bromide is an odorless, colorless, toxic gas which is used as a broadspectrum pesticide and is controlled under the CAA as a Class I ozone-depleting 

substance (ODS). Methyl bromide was once widely used as a fumigant to control a 

variety of pests such as insects, weeds, rodents, pathogens, and nematodes. Information 

on methyl bromide can be found at http://www.epa.gov/ozone/mbr.

Methyl bromide is also regulated by EPA under the Federal Insecticide, 

Fungicide, and Rodenticide Act (FIFRA) and other statutes and regulatory authority, as 

well as by States under their own statutes and regulatory authority. Under FIFRA, methyl 

bromide is a restricted use pesticide. Restricted use pesticides are subject to Federal and 

State requirements governing their sale, distribution, and use. Nothing in this rule 

implementing Title VI of the Clean Air Act is intended to derogate from provisions in 

any other Federal, State, or local laws or regulations governing actions including, but not 

limited to, the sale, distribution, transfer, and use of methyl bromide. Entities affected by 

this rule must comply with FIFRA and other pertinent statutory and regulatory 

requirements for pesticides (including, but not limited to, requirements pertaining to 

restricted use pesticides) when producing, importing, exporting, acquiring, selling, 

distributing, transferring, or using methyl bromide. The provisions in this action are 

intended only to implement the CAA restrictions on the production, consumption, and 

use of methyl bromide for critical uses exempted from the phaseout of methyl bromide. 

III. What Is the Background to the Phaseout Regulations for Ozone-Depleting 

Substances?

The regulatory requirements of the stratospheric ozone protection program that 

limit production and consumption of ozone-depleting substances are in 40 CFR part 82, 
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subpart A. The regulatory program was originally published in the Federal Register on 

August 12, 1988 (53 FR 30566), in response to the 1987 signing and subsequent 

ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer 

(Montreal Protocol). The Montreal Protocol is the international agreement aimed at 

reducing and eliminating the production and consumption of stratospheric ozonedepleting substances. The United States was one of the original signatories to the 1987 

Montreal Protocol and the United States 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 of 1990) which included Title VI on Stratospheric Ozone 

Protection, codified as 42 U.S.C. Chapter 85, Subchapter VI, to ensure that the U.S. could 

satisfy its obligations under the Montreal Protocol. EPA issued regulations to implement 

this legislation and has since amended the regulations as needed.

Methyl bromide was added to the Montreal Protocol as an ozone-depleting 

substance in 1992 through the Copenhagen Amendment. The Parties to the Montreal 

Protocol (Parties) agreed that each industrialized country’s level of methyl bromide 

production and consumption in 1991 should be the baseline for establishing a freeze in 

the level of methyl bromide production and consumption for industrialized countries.

EPA published a rule in the Federal Register on December 10, 1993 (58 FR 65018), 

listing methyl bromide as a Class I, Group VI controlled substance, freezing U.S. 

production and consumption at the 1991 baseline level of 25,528,270 kilograms, and 

setting forth the percentage of baseline allowances for methyl bromide granted to 

companies in each control period (each calendar year) until 2001, when the complete 

phaseout would occur. This phaseout date was established in response to a petition filed 
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in 1991 under sections 602(c)(3) and 606(b) of the CAAA of 1990, requesting that EPA 

list methyl bromide as a Class I substance and phase out its production and consumption.

This date was consistent with section 602(d) of the CAAA of 1990, which for newly 

listed Class I ozone-depleting substances provides that “no extension [of the phaseout 

schedule in section 604] under this subsection may extend the date for termination of 

production of any class I substance to a date more than 7 years after January 1 of the year 

after the year in which the substance is added to the list of class I substances.”

At the Seventh Meeting of the Parties (MOP) in 1995, the Parties agreed to 

adjustments to the methyl bromide control measures and agreed to reduction steps and a 

2010 phaseout date for industrialized countries with exemptions for critical uses. At that 

time, the U.S. continued to have a 2001 phaseout date in accordance with section 602(d) 

of the CAAA of 1990. At the Ninth MOP in 1997, the Parties agreed to further 

adjustments to the phaseout schedule for methyl bromide in industrialized countries, with 

reduction steps leading to a 2005 phaseout. The Parties also established a phaseout date 

of 2015 for developing (Article 5) countries.

IV. What Is the Legal Authority for Exempting the Production and Import of 

Methyl Bromide for Critical Uses Authorized by the Parties to the Montreal 

Protocol?

In October 1998, the U.S. Congress amended the Clean Air Act to prohibit the 

termination of production of methyl bromide prior to January 1, 2005, to require EPA to 

align the U.S. phaseout of methyl bromide with the schedule specified under the Protocol, 

and to authorize EPA to provide certain exemptions. These amendments were contained 

in Section 764 of the 1999 Omnibus Consolidated and Emergency Supplemental 
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Appropriations Act (Pub. L. 105-277, October 21, 1998) and were codified in section 604 

of the CAA, 42 U.S.C. 7671c. The amendment that specifically addresses the critical use 

exemption appears at section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout 

schedule for methyl bromide production and consumption in a final rulemaking on 

November 28, 2000 (65 FR 70795), which allowed for the phased reduction in methyl 

bromide consumption specified under the Protocol and extended the phaseout to 2005

while creating a placeholder for critical use exemptions. EPA again amended the 

regulations to allow for an exemption for quarantine and preshipment (QPS) purposes on 

July 19, 2001 (66 FR 37751), with an interim final rule and with a final rule on January 2, 

2003 (68 FR 238).

On December 23, 2004 (69 FR 76982), EPA published a rule (the “Framework 

Rule”) that established the framework for the critical use exemption; set forth a list of 

approved critical uses for 2005; and specified the amount of methyl bromide that could 

be supplied in 2005 from stocks and new production or import to meet the needs of 

approved critical uses. EPA has subsequently published rules applying the critical use 

exemption framework for each of the control periods from 2006 to 2011. Under the 

authority of section 604(d)(6) of the CAA, this action authorizes the uses that qualify as 

approved critical uses in 2012 and the amount of methyl bromide that may be produced, 

imported, or supplied from inventory to satisfy those uses.

This action reflects Decision XXII/6, taken at the Twenty-Second Meeting of the 

Parties in November 2010. In accordance with Article 2H(5) of the Montreal Protocol, 

the Parties have issued several Decisions pertaining to the critical use exemption. These 

include Decisions IX/6 and Ex. I/4, which set forth criteria for review of critical uses. The 
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status of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, D.C. Cir. 2006) and in 

EPA’s “Supplemental Brief for the Respondent,” filed in NRDC v. EPA and available in 

the docket for this action. In this rule on critical uses for 2012, EPA is honoring 

commitments made by the United States in the Montreal Protocol context.

V. What is the Critical Use Exemption Process?

A. Background of the Process

Article 2H of the Montreal Protocol established the critical use exemption 

provision. At the Ninth Meeting of the Parties in 1997 the Parties agreed to criteria for 

the exemption, as contained in Decision IX/6. In that Decision, the Parties agreed that “a 

use of methyl bromide should qualify as ‘critical’ only if the nominating Party determines 

that: (i) The specific use is critical because the lack of availability of methyl bromide for 

that use would result in a significant market disruption; and (ii) there are no technically 

and economically feasible alternatives or substitutes available to the user that are 

acceptable from the standpoint of environment and public health and are suitable to the 

crops and circumstances of the nomination.” EPA promulgated these criteria in the

definition of “critical use” at 40 CFR 82.3.

In response to EPA’s request for critical use exemption applications published in 

the Federal Register on May 20, 2009 (74 FR 23705), applicants provided data on the 

technical and economic feasibility of using alternatives to methyl bromide. Applicants 

also submitted data on their use of methyl bromide, research programs into the use of 

alternatives, and efforts to minimize use and emissions.

EPA’s Office of Pesticide Programs reviews the data submitted by applicants, as 

well as data from governmental and academic sources, to establish whether there are 
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technically and economically feasible alternatives available for a particular use of methyl 

bromide, and whether there would be a significant market disruption if no exemption 

were available. In addition, EPA reviews other parameters of the exemption applications 

such as dosage and emissions minimization techniques and applicants’ research or 

transition plans. This assessment process culminates in the development of the U.S. 

Government’s critical use nomination (CUN). The U.S. Department of State has 

submitted a CUN annually to the United Nations Environment Programme (UNEP) 

Ozone Secretariat. The Methyl Bromide Technical Options Committee (MBTOC) and 

the Technology and Economic Assessment Panel (TEAP), which are advisory bodies to 

Parties to the Montreal Protocol, review the CUNs of the Parties and make 

recommendations to the Parties on the nominations. The Parties then take Decisions to 

authorize critical use exemptions for particular Parties, including how much methyl 

bromide may be supplied for the exempted critical uses. As required in section 604(d)(6) 

of the CAA, for each exemption period, EPA consults with the United States Department 

of Agriculture (USDA) and other departments and institutions of the Federal government 

that have regulatory authority related to methyl bromide. EPA also provides an 

opportunity for public comment on the amounts of methyl bromide that the agency is 

proposing to exempt for critical uses and the uses that the agency is proposing as 

approved critical uses.

Additional information on the domestic review process and methodology 

employed by the Office of Pesticide Programs is available in a detailed memorandum 

titled “Development of 2003 Nomination for a Critical Use Exemption for Methyl 

Bromide for the United States of America,” contained in the docket for this rulemaking.
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While the particulars of the data continue to evolve and administrative matters are further 

streamlined, the technical review itself remains rigorous with careful consideration of 

new technical and economic conditions.

On January 22, 2010, the U.S. Government (USG) submitted the eighth CUN to 

the Ozone Secretariat of the UNEP. This nomination contained the request for 2012

critical uses. In February 2010, MBTOC sent questions to the USG concerning technical 

and economic issues in the 2012 nomination. The USG transmitted responses to MBTOC 

in March, 2010. These documents, together with reports by the advisory bodies noted 

above, are in the public docket for this rulemaking. The critical uses and allocation 

amounts reflect the analysis contained in those documents.

B. How Does This Rule Relate to Previous Critical Use Exemption Rules?

The December 23, 2004, Framework Rule (69 FR 76982) established the 

framework for the critical use exemption program in the U.S., including definitions, 

prohibitions, trading provisions, and recordkeeping and reporting obligations. The 

preamble to the Framework Rule included EPA’s determinations on key issues for the 

critical use exemption program.

An approved critical user may purchase methyl bromide produced or imported 

with critical use allowances (CUAs) as well as limited inventories of pre-phaseout methyl 

bromide, the combination of which constitute the supply of “critical use methyl bromide” 

intended to meet the needs of agreed critical uses. Since publishing the Framework Rule, 

EPA has annually promulgated regulations to exempt from the phaseout of methyl 

bromide specific quantities of production and import for each control period (each 

calendar year), to determine the amounts that may be supplied from pre-phaseout 
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inventory, and to indicate which uses meet the criteria for the exemption program for that 

year. See 71 FR 5985 (calendar year 2006), 71 FR 75386 (calendar year 2007), 72 FR 

74118 (calendar year 2008), 74 FR 19878 (calendar year 2009), 75 FR 23167 (calendar 

year 2010), and 76 FR 60736 (calendar year 2011).

Today’s action uses the existing regulatory framework to determine critical uses 

for 2012 and the amounts of critical use allowances (CUAs) and critical stock allowances 

(CSAs) to be allocated for those uses. A CUA is the privilege granted through 40 CFR 

part 82 to produce or import 1 kilogram (kg) of methyl bromide for an approved critical 

use during the specified control period. These allowances expire at the end of the control 

period and, as explained in the Framework Rule, are not bankable from one year to the 

next. A CSA is the right granted through 40 CFR part 82 to sell 1 kg of methyl bromide 

from the remaining inventory of material produced or imported prior to the January 1, 

2005, phaseout date for an approved critical use during the specified control period.

C. Stocks of Methyl Bromide

The Framework Rule established provisions governing the sale of pre-phaseout 

inventories for critical uses, including the concept of CSAs and a prohibition on the sale 

of pre-phaseout inventories for critical uses in excess of the amount of CSAs held by the 

seller. It also established trading provisions that allow CUAs to be converted into CSAs.

The aggregate amount of pre-phaseout methyl bromide reported as being in 

inventory at the beginning of 2011 was 1,802,715 kg. As in prior years, the Agency 

continues to closely monitor CUA and CSA data. As stated in the final 2006 CUE Rule, 

if an inventory shortage occurs, EPA may consider various options including authorizing 

Deleted: 

Moved down [1]: EPA received one comment 

that the rulemaking process typically is not 

completed in a timely manner. Methyl bromide 

producers, importers, and distributers need advance 

notice of their allowances to ensure material can be 

manufactured or imported and ultimately distributed 

to growers to meet spring fumigation schedules. The 

commenter requests that EPA develop a more 

efficient process to promulgate the critical use rule 

so that it is in effect before the control period begins. 

Deleted: EPA notes that the Decision of the Parties 

to the Montreal Protocol on critical uses is issued 

late in the calendar year, and the holders of prephaseout inventory report their end of year inventory 

to EPA early the following calendar year, preceding 

the control period. This schedule constrains EPA 

ability to promulgate the rule well in advance of the 

control period, since the Decision of the Parties and 

information on the pre-phaseout inventory are 

central to the development of the rule. However, 

EPA acknowledges that promulgating the rule after 

the start of the control period is not ideal and will 

continue to consider means of avoiding that 

outcome. ¶
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the conversion of a limited number of CSAs to CUAs through a rulemaking, bearing in 

mind the upper limit on U.S. production/import for critical uses.

As explained in the 2008 CUE Rule, EPA intends to continue releasing the 

aggregate methyl bromide stockpile data reported under the requirements at 40 CFR 

82.13 for the end of each control period. If the number of competitors in the industry 

were to decline appreciably, EPA may revisit the question of whether the aggregate is 

entitled to treatment as confidential business information and whether to release the 

aggregate without notice. EPA did not propose to change the treatment of submitted 

information but welcomes relevant information concerning the composition of the 

industry. EPA did not receive any information suggesting that the number of companies 

has declined to the point that EPA should consider treating the aggregate as confidential 

information. The aggregate information for 2003 through 2011 is available in the docket 

for this rulemaking.

D. Critical Uses

In Decision XXII/6, taken in November 2010, the Parties to the Protocol agreed 

“to permit, for the agreed critical-use categories for 2012 set forth in table C of the annex 

to the present decision for each party, subject to the conditions set forth in the present 

decision and in decision Ex.I/4 to the extent that those conditions are applicable, the 

levels of production and consumption for 2012 set forth in table D of the annex to the 

present decision which are necessary to satisfy critical uses ...” The following uses are 

those set forth in table C of the annex to Decision XXII/6 for the United States:

 Commodities

 National Pest Management Association food processing structures

 Mills and processors

 Dried cured pork

Deleted: would

Deleted: welcomed

Deleted: in this regard
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 Cucurbits

 Eggplant – field

 Forest nursery seedlings

 Nursery stock – fruits, nuts, flowers

 Orchard replants

 Ornamentals

 Peppers – field

 Strawberry – field

 Strawberry runners

 Tomatoes – field

 Sweet potato slips

EPA sought comment on the technical analysis contained in the U.S. nomination 

(available for public review in the docket to this rulemaking), and information regarding 

any changes to the registration (including cancellation or new registrations), use, or 

efficacy of alternatives that have transpired after the 2012 U.S. nomination was written.

Such information has the potential to alter the technical or economic feasibility of an 

alternative and could thus cause EPA to modify the analysis that underpins EPA’s 

determination as to which uses and what amounts of methyl bromide qualify for the 

CUE.

EPA recognizes that as the market for alternatives evolves, the thresholds for 

what constitutes “significant market disruption” or “technical and economic feasibility” 

change. EPA received one comment urging the agency to consider greater use of 1,3-D 

and sulfuryl fluoride than contained in the technical analysis. This comment repeats a 

comment submitted by the same commenter on the 2010 CUE Rule but does not provide 

any new data. EPA has considered the commenter’s concerns and believes that response 

contained in the 2010 CUE Rule response to comments, which is available in the docket 

to this rule, still appropriately addresses this comment.

Formatted: Normal, Line spacing: Double

Deleted: The Decision XXII/6 critical use levels

for 2012 total 1,022,826 kilograms (kg), which is 

equivalent to 4.0% of the U.S. 1991 methyl bromide 

consumption baseline of 25,528,270 kg. The 

maximum amount of allowable new production and 

import for U.S. critical uses in Table D of Decision 

XXII/6 is 922,826 kg (3.6% of baseline), minus 

available stocks. ¶

EPA proposed a total critical use exemption in 2012

of 1,022,826 kg (4.0% of baseline) with new 

production or import of methyl bromide for critical 

uses up to 759,744 kg (3.0% of baseline), and with

up to 263,082 kg (1.0% of baseline) coming from 

pre-phaseout inventory (i.e., stocks). This final rule 

allocates a total critical use exemption in 2012 of 

1,022,826 kg (4.0% of baseline) as proposed. Based 

on updated information, EPA is allocating 810,751 

kg (3.2% of baseline) CUAs for new production or 

import and 212,075 kg (0.8% of baseline) CSAs

from pre-phaseout inventory.¶

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EPA proposed to modify the table in 40 CFR part 82, subpart A, appendix L to 

reflect the agreed critical use categories identified in Decision XXII/6. EPA is finalizing 

the lists of critical uses and critical users as proposed. First, EPA is removing from the 

list of approved critical users two users that did not submit applications for 2012 and 

therefore were not included in the U.S. nomination. These users are International Paper 

and Weyerhaeuser Company in the forest nursery seedlings sector and beans in the

commodities sector.

Second, EPA is removing North Carolina and Tennessee strawberry nurseries

from the list of approved critical users. Southeast strawberry growers applied for a critical 

use in 2012. The U.S. did not submit a nomination to UNEP for this use in this 

geographical location because EPA’s technical review found that there are alternatives to 

methyl bromide for Southeast strawberry nurseries.

Third, EPA is limiting the scope of the approved critical use for the National Pest 

Management Association’s (NPMA) post harvest fumigations. In past control periods, the 

scope of the NPMA food processing critical use included “processed food, cheese, herbs 

and spices, and spaces and equipment in associated processing and storage facilities.” 

MBTOC found that the nomination for food processing facilities was inadequately 

justified and recommended only cheese storage facilities for consideration by the Parties 

as a critical use. MBTOC’s comments can be found in the May 2010 TEAP Progress 

Report in the docket to this rule. The Parties’ Decision reflects the MBTOC 

recommendation. EPA is modifying the NPMA critical use to include only “Members of 

the National Pest Management Association treating cheese storage facilities.” 

Deleted: also

Deleted: 
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EPA did not receive any comments objecting to the proposed modifications to the 

table in 40 CFR part 82, subpart A, appendix L. EPA received three comments agreeing 

that the proposed critical uses have a continuing need for access to methyl bromide under 

a 2012 CUE. One commenter stated that the strict application and review process 

properly limits the use of methyl bromide, given its effect on the stratospheric ozone 

layer. EPA also received comment that there should be no uses of methyl bromide given 

its toxicity and effect on the stratospheric ozone layer. EPA disagrees that all methyl 

bromide use should stop. The CUN addresses the need for methyl bromide for the 2012

critical uses. In addition, the 2012 critical uses were reviewed by the technical bodies to 

the Ozone Secretariat and authorized by the Parties to the Montreal Protocol. Concerns 

about the toxicity of methyl bromide are addressed through the pesticide registration 

program under FIFRA, as well as other authorities, and are outside the scope of this 

rulemaking. EPA also received one comment questioning some of the limiting critical 

conditions. This commenter has raised the same points in past CUE rulemakings and 

EPA believes our responses from past rulemakings, which are included in the docket for 

this rule, remain appropriate.

EPA is repeating the following clarifications made in previous years for ease of 

reference. The “local township limits prohibiting 1,3-dichloropropene” are prohibitions 

on the use of 1,3-dichloropropene products in cases where local township limits on use of 

this alternative have been reached. In addition, “pet food” under subsection B of Food 

Processing refers to food for domesticated dogs and cats. Finally, “rapid fumigation” for 

commodities is when a buyer provides short (two working days or fewer) notification for 

Deleted: one
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a purchase or there is a short period after harvest in which to fumigate and there is limited 

silo availability for using alternatives.

E. Critical Use Amounts

Table C of the annex to Decision XXII/6 lists critical uses and amounts agreed to 

by the Parties to the Montreal Protocol. When added together, the total authorization for 

2012 is 1,022,826 kg, which is equivalent to 4.0% of the U.S. 1991 methyl bromide 

consumption baseline. The maximum amount of new production or import authorized by 

the Parties is 922,826 kg (3.6% of baseline) as set forth in Table D of the annex to 

Decision XXII/6. The difference between the total authorization and the authorized 

amount of new production is 100,000 kg (0.4% of baseline), which is the minimum that 

the Parties expect the U.S. to use from pre-phaseout inventory on critical uses. 

EPA is finalizing the amount of new production and import discussed in the 

proposed rule. With this final rule, EPA is allocating 759,744 kg (3.0% of baseline) of 

new production and import of methyl bromide for critical uses for 2012. EPA is also 

allocating 263,082 kg (1.0 % of baseline) in the form of critical stock allowances for sale 

of pre-phaseout inventory for critical uses in 2012.

In the proposed rule, EPA used the methodology established in the 2008 CUE 

Rule to determine the level of “available stocks,” from which the CSAs are calculated. At 

the time of the proposed rule, EPA estimated that 263,082 kg of pre-phaseout inventory 

would be “available” for use in 2012. Therefore, EPA proposed allocating 263,082 kg of 

critical stock allowances for 2012. Using the calculation described in the proposed rule, 

EPA then proposed a CUA amount of 759,744 kg.

Deleted: 810,751

Deleted: 2

Deleted: 212,075

Deleted: .8

Deleted: The sub-sections below explain EPA’s 

reasons for allocating the critical use amounts for 

2012.

Deleted: 1. Approach for Determining Critical 

Stock Allowances¶
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Due to the timing of the 2012 CUE rulemaking, EPA issued a No Action 

Assurance letter December 21, 2011. This letter allowed critical use allowance holders to 

continue producing and importing methyl bromide beyond December 31, 2011, in the 

absence of allowances, subject to certain conditions. The No Action Assurance allows for 

the production and import of 379,872 kg and the sale of 131,541 kg from pre-phaseout 

inventory for critical uses. The No Action Assurance levels were half the amounts 

contained in the proposed rule to allow for changes to the final rule after new inventory 

data were received. 

At the end of February, distributors reported to EPA the amount of pre-phaseout 

inventory that was still under their ownership as of December 31, 2011. These data show 

that the pre-phaseout inventory was greater than the estimates that formed the basis of the 

CSA and CUA amounts in the proposed rule. In the proposed rule, EPA estimated that 

the inventory would decline to 692,082 kg at the end of 2011. The reported data show 

that the remaining inventory was actually 1,248,876 kg.

The amount of inventory drawdown was so low compared to EPA’s estimates in 

the proposed rule that if EPA were to apply the framework calculation detailed in the 

proposed rule to the new data, the new production levels would be less than what is 

allowed under the No Action Assurance (these calculations are available in the docket for 

this rulemaking). The No Action Assurance allows for the production and import of 

379,872 kg and the sale of 131,541 kg from pre-phaseout inventory for critical uses. 

Under the framework calculation based on new inventory data, the allocation would be 

202,950 kg of new production/import and 819,876 kg of inventory.
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Hence, EPA is not finalizing a critical use allocation of 202,950 kg for 2012. This 

amount would be below what is currently allowed for production/import in the No Action 

Assurance letter. Regulated entities have been acting on the amounts in the No Action

Assurance letter in good faith, and may have already produced up to the allowed level. In 

addition, EPA never determined that the No Action Assurance levels for CUAs and CSAs 

would be sufficient for an entire year. When this situation occurred during the 

development of the 2011 CUE Rule, EPA finalized the new production amount allowed 

under the No Action Assurance and allocated CSAs up to the full level authorized by the 

Parties. Were EPA to follow this approach in this 2012 Rule, EPA would finalize 

379,872 kg of new production and import and 819,876 kg of critical stock allowances.

For the reasons discussed below, EPA is not following this approach but rather is 

finalizing the amounts discussed in the proposed rule.

An allocation of 202,950 kg, or even 379,872 kg (i.e., an amount consistent with 

the No Action Assurance) for new production and import would be substantially less than 

the amount proposed, which was 759,744 kg. These circumstances are substantially 

different from the 2011 rule, when EPA proposed to authorize 1,500,000 kg of new 

production, and issued a No Action Assurance for that same amount of new production. 

While EPA provided the public with an explanation of how it calculated its proposed 

authorization for CUE, and noted that it might adjust those calculations with new data, 

EPA believes the results of the methodology using the updated data now available are 

sufficiently different that additional notice and the opportunity to comment would be 

warranted before using that data as the basis for a final CUE authorization. At the same 

time, EPA recognizes that regulated entities, including manufacturers and critical users of 
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methyl bromide, are in need of a final CUE rule for calendar year 2012. EPA did not 

propose, and is not considering, a total authorization of less than 1,022,826 kg for critical 

uses in 2012. EPA has weighed the benefit of re-opening for comment the allocation of 

the total authorization between critical use allowances and critical stock allowances 

against the time-sensitive need for a CUE authorization for the current calendar year and 

concluded that re-opening the allocation for comment is not warranted. Accordingly, 

EPA is finalizing its proposed allocations of 759,744 kg of critical use allowances and 

263,082 kg of critical stock allowances for 2012.

EPA received a comment that the calculation mistakenly used the CSA allocation 

amount from the proposed 2011 CUE rule, not the final rule. When EPA was developing 

the proposed 2012 rule, the 2011 rule was still not finalized. EPA assumed that the final 

2011 rule would allocate 482,333 kg but it actually allocated 555,200 kg of CSAs. The 

commenter requests that the estimated drawdown calculation be updated. EPA agrees 

with the commenter that EPA would have used the value from the final 2011 rule, had it 

been available when EPA was developing the proposed 2012 rule. EPA has used the 

updated CSA value from the final 2011 rule, as well as updated inventory information, in 

calculating how the formula used in the proposal would allocate the CUE authorization. 

However, as noted above, EPA is not basing the allocation in this final rule on that 

formula.

One commenter objected to EPA’s proposal to allocate 759,744 kg for new 

production or import. The commenter stated that the Parties authorized 922,826 kg for 

new production and import and that it is arbitrary and capricious for the agency to 

allocate any amount less than that level of new production. EPA disagrees with the 

Moved (insertion) [2]

Moved down [3]: The 2004 Framework Rule (69 

FR 52366) established the provisions governing the 

sale of pre-phaseout inventories for critical uses, 

including the concept of CSAs and a prohibition on 

the sale of pre-phaseout inventories for critical uses 

in excess of the amount of CSAs held by the seller. 

In addition, the Framework Rule further took prephaseout inventories into account through the trading 

provisions that allow CUAs to be converted into 

CSAs.

Deleted: ¶

In the Framework Rule, EPA issued CSAs in an 

amount equal to the difference between the total 

authorized CUE amount and the amount of new 

production or import authorized by the Parties. In 

each of the subsequent CUE allocation rules, EPA 

has allocated CSAs in amounts that represented not 

only the difference between the total authorized CUE 

amount and the amount of authorized new 

production and import but also an additional amount 

to reflect available stocks. In the 2006 CUE Rule, 

EPA issued a total of 1,136,008 CSAs, equivalent to 

4.4% of baseline. For 2006, the difference in the 

Parties’ decision between the total CUE amount and 

the amount of new production and import was 3.6% 

of baseline. In the 2007 rule, EPA added to the 

minimum amount (6.3% of baseline) an additional 

amount (1.2% of baseline) for a total of 1,914,600 

CSAs (7.5% of baseline). In the 2008 rule, EPA 

added to the minimum amount (3.0% of baseline) an 

additional amount (3.8% of baseline) for a total of 

1,729,689 CSAs (6.8% of baseline). In the 2009 rule, 

EPA added to the minimum amount (1.2% of 

baseline) an additional amount (6.3% of baseline) for 

a total of 1,919,193 CSAs (7.5% of baseline). In the 

2010 rule, EPA added to the minimum amount 

(1.8% of baseline) an additional amount (2.2% of 

baseline) for a total of 1,028,108 CSAs (4.0% of 

baseline). In the 2011 rule, EPA added to the 

minimum amount (0.8% of baseline) an additional 

amount (1.4% of baseline) for a total of 555,200 

CSAs (2.2% of baseline). After determining the CSA 

amount, EPA reduced the portion of CUE methyl 

bromide to come from new production and import 

such that the total amount of methyl bromide 

exempted for critical uses did not exceed the total 

amount authorized by the Parties for that year. ¶
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commenter’s interpretation of Decision XXII/6. In Table D of Decision XXII/6, the 

Parties authorized 922,826 kg for new production and import “minus available stocks.” 

Thus, EPA does not believe it would be consistent with Decision XXII/6 to authorize 

922,826 kg for new production and import without considering available stocks.

Furthermore, EPA notes, consistent with our position in prior rulemakings, that the 

Agency is not required to allocate the full amount of authorized new production and 

consumption. The Parties only agree to “permit” a particular level of production and 

consumption; they do not – and cannot – mandate that the U.S. authorize this level of 

production and consumption domestically. Nor does the CAA require EPA to allow the 

full amount permitted by the Parties. Section 604(d)(6) of the CAA does not require EPA 

to exempt any amount of production and consumption from the phaseout, but instead 

specifies that the Agency “may” create an exemption for critical uses, providing EPA 

with substantial discretion.

When determining the CSA amount for a year, EPA considers what portion of 

existing stocks is “available” for critical uses. As discussed in prior CUE rulemakings, 

the Parties to the Protocol recognized in their Decisions that the level of existing stocks 

may differ from the level of available stocks. Decision XXII/6 states that “production and 

consumption of methyl bromide for critical uses should be permitted only if methyl 

bromide is not available in sufficient quantity and quality from existing stocks.” In 

addition, earlier decisions refer to the use of “quantities of methyl bromide from stocks 

that the Party has recognized to be available.” Thus, it is clear that individual Parties have 

the ability to determine their level of available stocks. Decision XXII/6 further reinforces 

this concept by including the phrase “minus available stocks” as a footnote to the United 

Deleted: Rather, EPA is acting consistently with 

Decision XXII/6 by identifying an amount of 

“available stocks.”
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States’ authorized level of production and consumption in Table D. Section 604(d)(6) of 

the CAA does not require EPA to adjust the amount of new production and import to 

reflect the availability of stocks; however, as explained in previous rulemakings, making 

such an adjustment is a reasonable exercise of EPA’s discretion under this provision. 

One commenter objects to the use of a supply chain factor in determining an 

amount of “available stocks” that can be used by critical users and requests that EPA 

require that the inventory be exhausted before allowing any additional new production. 

The commenter also states that the calculation of the supply chain factor is overly 

conservative because it assumes a catastrophic loss when production is at the peak. EPA 

has addressed this comment in prior rulemakings; those responses are available in the 

docket for this rulemaking.

Another commenter stated that the CSA allocation failed to consider the effect 

that drawing down the pre-phaseout inventory would have if there is a catastrophic 

failure in the domestic supply of methyl bromide in future years. EPA believes that the 

calculation of the supply chain factor (which reflects the level of authorized CUE use as 

it declines) was adequate consideration of the possibility of a future catastrophic 

interruption in the domestic supply of methyl bromide. Although EPA is not relying on 

calculation of a supply chain factor and the formula it proposed to use to allocate CSAs in 

this final rule, EPA notes that the CSA allocation is lower under this final rule than if 

EPA had relied on that formula, because more methyl bromide remains in pre-phaseout 

inventory than anticipated.

Unlike past control periods, all critical use methyl bromide that companies 

reported to be produced or imported in 2010 was sold to end users. The information

Deleted: EPA employs the concept of “available 

stocks” to determine whether to allocate additional 

CSAs beyond the minimum stock amount stipulated 

by the Parties. In response to stakeholder questions 

about how EPA derived its CSA amounts, the 2008 

CUE rule established a refined approach for 

determining the amount of existing methyl bromide 

stocks that is “available” for critical uses. The 

approach uses a tool called the supply chain factor 

(SCF). The SCF is EPA’s technical estimate of the 

amount of inventory that would be adequate to meet 

the need for critical use methyl bromide after an 

unforeseen domestic production failure, until imports 

became available. The SCF recognizes the benefit of 

allowing the private sector to maintain a buffer in 

case of a major supply disruption. However, the SCF 

is not intended to set aside or physically separate 

stocks as an inventory reserve.¶

2. Calculation of Available Pre-Phaseout 

Inventory¶

For 2012, EPA calculates the amount of “available” 

stocks as follows, using the formula adopted in the 

2008 CUE rule: AS2012 = ES2011 – D2011 – SCF2012, 

where AS2012 is the available stocks on January 1, 

2012; ES2011 is the existing pre-phaseout stocks of 

methyl bromide held in the United States by 

producers, importers, and distributors on January 1, 

2011; D2011 is the estimated drawdown of existing 

stocks during calendar year 2011; and SCF2012 is the ... [1]

Moved up [2]: EPA received a comment that the 

calculation mistakenly used the CSA allocation 

amount from the proposed 2011 CUE rule, not the 

final rule. When EPA was developing the proposed 

2012 rule, the 2011 rule was still not finalized. EPA 

assumed that the final 2011 rule would allocate 

482,333 kg but it actually allocated 555,200 kg of 

CSAs. 

Deleted: EPA agrees with the commenter that it is 

appropriate to use the value from the final 2011 rule. 

EPA has updated the estimate of drawdown using 

the new allocation amount from the 2011 rule and 

changed the allocation of CSAs and CUAs 

accordingly. ¶

As discussed in the Technical Support Document, on 

average only 58% of the CSAs allocated for a ... [2]

Deleted: . This commenter states that there is no 

basis for making this allowance for the supposed risk 

of a catastrophic loss of the methyl bromide 

production plant. This commenter

Deleted: EPA responds, as it did in the 2011 CUE 

Rule, that the supply chain factor is proportional to 

the authorized CUE amount. The 2013 authorization 

and the potential authorization for 2014 continue to 

decline in pace with both the inventory and therefore 

so does the supply chain factor.

Deleted: As EPA stated in previous CUE Rules, 

the SCF is not a “reserve” or “strategic inventory” of 

methyl bromide but is merely an analytical tool used 

to provide greater transparency regarding how the 

Agency determines CSA amounts. Additional

discussion of the SCF is in the final 2008 CUE rule 

(72 FR 74118) and further detail about the analysis 

used to derive the value for the 2012 supply chain ... [3]

Formatted: Indent: First line: 0.5"
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reported to EPA is that 1,954,610 kg of critical use methyl bromide was produced or 

imported. A slightly higher amount than the amount produced or imported was actually

sold to end-users in 2010. This additional amount was from distributors selling amounts 

that were carried over from the 2009 control period. Thus, EPA did not propose to apply 

any carryover deduction to the new production amount for 2012.

One commenter suggested that the lack of a carryover demonstrates excess 

demand and that EPA should therefore increase the amount of newly produced or 

imported material. EPA responds that the agency expects material produced or imported 

for use in a particular control period to be used in that control period and that there 

typically should not be a carryover. EPA established the carryover reduction to account 

for an over allocation or underuse of allowances in a particular control period and avoid 

any stockpiling of critical use material. The absence of a carryover does not mean that the 

agency should increase the allocation. EPA’s carryover calculation is consistent with the 

method used in previous CUE rules, and with the method agreed to by the Parties in 

Decision XVI/6 for calculating column L of the U.S. Accounting Framework. All past 

U.S. Accounting Frameworks for the methyl bromide critical use exemption are available 

in the public docket for this rulemaking.

EPA considers new data about alternatives that were not available at the time the 

U.S. Government submitted the CUN to the Parties and adjusts the allocation for new 

production and import accordingly. Two alternatives not considered in the 2012 CUN, 

which was submitted to UNEP in January 2010, may be used in limited quantities in 

2012. EPA proposed to not adjust the allocation considering that the uptake of these two 

Deleted: proposed

Deleted: the

Deleted: of 0 kg 

Deleted: 

Deleted: Uptake of Alternatives
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alternatives (iodomethane and DMDS) is expected to be minimal in 2012. One 

commenter agreed that the uptake will be practically nonexistent.

In July 2010, EPA registered Dimethyl Disulfide (DMDS) to control nematodes, 

weeds, and pathogens in tomatoes, peppers, eggplants, curcurbits, strawberries, 

ornamentals, forest nursery seedlings, and onions. 24 states have now registered DMDS 

and registrations are pending in four other states. Even though DMDS is registered in 

states that grow critical use crops, EPA believes that the uptake of this alternative will be 

minimal in 2012. Use in the 2011 growing season was small because the product was 

either not registered in the state or the distribution system was still under development. 

Furthermore, the manufacturer of DMDS, Arkema, has stated that they are limiting the 

roll-out of this alternative to ensure proper applicator training and use of odor mitigation 

practices. As stated in the proposed rule, EPA continues to anticipate that growers will 

use the 2012 growing season to test the fumigant on limited acreage. Therefore, EPA is 

not reducing the allocation of allowances based on the uptake of DMDS in 2012.

Second, California registered iodomethane in December of 2010. EPA is unable 

to estimate uptake of iodomethane in California during 2012 due to uncertainties created 

by the California label. Specifically, the California label has larger buffer zones and 

lower use rates than the federal label. EPA does not have efficacy studies at the 

California label’s lower use rates and is uncertain how widely it will be adopted without 

that data. In addition to the state registration, County Agricultural Commissioners must 

permit each iodomethane application that occurs within their jurisdiction.

One commenter stated that EPA should not be allocating fewer CUEs than the 

amount authorized by the Parties given EPA’s January 19, 2011, proposal to revoke the 

Formatted: Indent: First line: 0.5"
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tolerances established for sulfuryl fluoride under section 408 of the Federal Food, Drug, 

and Cosmetic Act (76 FR 3422). This rule is based on the current status of alternatives 

and is limited to 2012. The proposed tolerance revocation rule includes a staggered

implementation scheme so that it is unlikely that any specific revocation will be effective 

as soon as 2012 (76 FR 3447). Therefore, EPA has not based the allocation amounts for 

2012 on any anticipated impacts of that proposal on methyl bromide use.

EPA did not propose to take any other reductions because the 2012 CUN properly 

applied transition rates for all other alternatives. The TEAP report of October 2010

included reductions in its recommendations for critical use categories based on the 

transition rates in the 2012 CUN. The TEAP’s recommendations were then considered in 

the Parties’ 2012 authorization amounts, as listed in Decision XXII/6. Therefore, 

transition rates, which account for the uptake of alternatives, have already been applied 

for authorized 2012 critical use amounts. EPA continues to gather information about 

methyl bromide alternatives through the CUE application process, and by other means. 

EPA also continues to support research and adoption of methyl bromide alternatives, and 

to request information about the economic and technical feasibility of all existing and 

potential alternatives.

EPA also took comment on an issue raised in the proposed 2011 CUE rule. In that 

rulemaking, EPA proposed a critical-use allowance allocation of 1,500,000 kg for 2011, 

given that regulated entities had been acting in good faith on statements made by the 

agency in a No Action Assurance letter that producers and importers could assume the 

final allocation would be at least that much. While the total allocation was not affected, 

the amount of new production was 128,382 kg more than what EPA would have allocated
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for 2011 had the CSA and CUA amounts been based on the “available stocks” calculation 

using end of year inventory data. It also means that the critical stock allocation was 

128,382 kg less than the amount of “available stocks.” EPA stated in the 2011 proposed 

rule that the Agency could reduce critical-use allowances for new production and import 

in the 2012 allocation rule to account for this difference. 

EPA took comment on an alternative approach in which EPA would allocate 

631,362 kg (2.5% of baseline) of CUAs for 2012. This amount is 128,382 kg less than the 

proposed CUA amount. The CSA amount could remain either at 263,082 kg or be 

increased to 391,464 kg to reflect the lower CSA allocation in 2011. The total allocation 

for 2012 would be 894,444 kg or 1,022,826 kg depending on how many CSAs are issued 

under this alternative. EPA did not propose this alternative as the lead approach because 

the number of CUAs in the 2011 rule did not exceed the Parties’ production authorization

for 2011 and the total CUE amount for 2011 was unaffected. EPA received one comment 

in opposition to this approach. The commenter states that the 2011 CUA allocation was 

proper because it maintained consistency with the No Action Assurance letter and that 

any “over allocation” in 2011 will self-correct in future rules. First, any additional new 

production would reduce the need to use CSAs, which will result in more “available 

stocks” in next year’s CUE calculation and therefore a higher CSA allocation. Second, 

any unused allocation will be captured in EPA’s calculation of carryover. After 

considering this issue, EPA is not finalizing the alternative allocation approach in the 

final rule.

EPA received one comment that the rulemaking process typically is not 

completed in a timely manner. Methyl bromide producers, importers, and distributers 

Deleted: EPA agrees with

Deleted: comment and

Deleted: 3. Summary of Calculations¶

The calculations described above for determining the 

level of new production and critical stock allowances 

are summarized in the table below:¶

Step 1: Calculate supply chain factor ... [4]

Moved (insertion) [1]
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need advance notice of their allowances to ensure material can be manufactured or 

imported and ultimately distributed to growers to meet spring fumigation schedules. The 

commenter requests that EPA develop a more efficient process to promulgate the critical 

use rule so that it is in effect before the control period begins. EPA notes that the Parties 

to the Montreal Protocol take their decision to authorize critical uses typically a year 

before the control period at issue. This schedule, coupled with the Clean Air Act section 

604(d)(6) requirement to provide notice and the opportunity for public comment, makes 

it difficult for EPA to complete the rule in advance of the control period, since the 

Decisions of the Parties are central to the development of the rule. However, EPA 

acknowledges that promulgating the rule after the start of the control period is not ideal. 

EPA will consider means of streamlining the Critical Use Exemption rulemaking in the 

future so that the rule can be issued prior to the start of the control period.

F. Critical Use Allowance Allocations

EPA is allocating critical use allowances for new production or import of methyl 

bromide up to the amount of 759,744 kg (3.0% of baseline) as shown in the table in 40 

CFR 82.8(c)(1). These allowances expire at the end of the control period and, as 

explained in the Framework Rule, are not bankable from one year to the next. The CUA 

allocation is subject to the trading provisions at 40 CFR 82.12, which are discussed in 

section V.G. of the preamble to the Framework Rule (69 FR 76982).

Paragraph 3 of Decision XXII/6 states “that Parties shall endeavor to license, 

permit, authorize or allocate quantities of critical-use methyl bromide as listed in tables A 

and C of the annex to the present decision.” This is similar to language in prior Decisions 

authorizing critical uses. The language from these Decisions calls on Parties to endeavor 

Moved (insertion) [4]

Moved (insertion) [5]
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to allocate critical use methyl bromide on a sector basis. EPA’s Framework Rule 

proposed several options for allocating critical use allowances, including a sector-bysector approach. The agency evaluated the various options based on their economic, 

environmental, and practical effects. After receiving comments, EPA determined that a 

lump-sum, or universal, allocation, modified to include distinct caps for pre-plant and 

post-harvest uses, was the most efficient and least burdensome approach that would 

achieve the desired environmental results, and that a sector-by-sector approach would 

pose significant administrative and practical difficulties.

One commenter states that EPA should allocate specifically to each of the Critical 

Use Categories as authorized by the Parties. The EPA’s “lump sum” approach, the 

commenter asserts, does not guarantee that critical users have access to methyl bromide 

and it instead allows those with the greatest ability to pay to garner methyl bromide away 

from other users with approved critical needs. Furthermore, developers of methyl 

bromide alternatives need assurance that methyl bromide will eventually exit a particular 

use segment. Allowing an open market for methyl bromide allocation is an economic 

disincentive for anyone developing alternatives. At a minimum, this commenter supports 

distinguishing between pre-plant and post-harvest sectors as EPA currently does. EPA 

received a separate comment favoring the universal allocation approach over a sectorspecific allocation. The commenter states that by allocating up to 14 types of allowances 

the sector specific approach would be overly complex to administer, would create 

problems for distributors, and would spread allowances among too many 

producer/importers and distributors. EPA has addressed these comments in prior 

rulemakings; those responses are available in the docket for this rulemaking. 
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For the reasons discussed in the preamble to the 2009 CUE rule (74 FR 19894), 

the agency believes that under the universal allocation approach adopted in the 

Framework Rule, the actual critical use will closely follow the sector breakout listed in 

the Parties’ decisions.

G. Critical Stock Allowance Allocations

The 2004 Framework Rule (69 FR 52366) established the provisions governing 

the sale of pre-phaseout inventories for critical uses, including the concept of CSAs and a 

prohibition on the sale of pre-phaseout inventories for critical uses in excess of the 

amount of CSAs held by the seller. In addition, the Framework Rule further took prephaseout inventories into account through the trading provisions that allow CUAs to be 

converted into CSAs.

A preambular paragraph to Decision XXII/6 states “that parties should reduce 

their stocks of methyl bromide retained for employment in critical-use exemptions to a 

minimum in as short a time period as possible.” EPA notes that the U.S. Government 

does not retain pre-phaseout inventory. Pre-phaseout inventory is held by private 

companies that may sell or distribute it for any use that meets the labeling under FIFRA,

whether critical or not. EPA believes it is responsibly managing the stocks of prephaseout inventory through the CUE authorization process. Prior rulemakings have 

generally allocated higher amounts from stocks than the minimum set forth in the Parties’

decisions. Through the careful management, aggregate amounts have been reduced by 

93% since the end of 2003. In addition, EPA has undertaken a broader use of its 

regulatory authorities under FIFRA to progressively limit U.S. domestic use of stocks to 

critical uses. While it is not possible to predict the exact date by which all remaining preMoved (insertion) [3]

Moved (insertion) [6]
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2005 inventory will be exhausted, under the FIFRA process any small remaining 

quantities in 2015 will likely be entirely devoted to uses that have been identified as 

critical under the process developed since 2005 to address critical needs of developed

countries. EPA is allocating CSAs for the 2012 control period in the amount of 263,082

kg (1.0% of baseline). This is more than the difference between the total U.S. CUE 

amount approved by the Parties and the permitted level of U.S. production and 

consumption. For 2012, that difference is 100,000 kg (0.4% of baseline). 

One commenter stated that the Agency is incorrect to assume that 263,082 kg of 

pre-phaseout inventory will be available for critical uses in 2012. Instead, the commenter

stated that EPA should allocate only 100,000 kg from stocks. The commenter says that 

the distributors that own stocks are free to sell them for any purpose, including for nonCUE uses, and that EPA cannot control how or whether inventory is sold. EPA agrees 

that the allocation system allows distributors of inventory to respond to market conditions 

instead of requiring them to sell inventory to critical users. EPA issues CSAs as a 

mechanism to track the use of stocks for critical uses. Under section 82.4(p), stocks may 

not be sold for use on critical uses if the seller does not hold the corresponding amount of 

CSAs. Critical users may purchase either newly produced or imported critical use methyl 

bromide or stocks sold through the expenditure of CSAs. EPA chose this approach, at 

least in part, to promote market flexibility and efficiency. EPA’s formula for calculating 

the amount of “available stocks” contains a variable representing the drawdown of prephaseout inventory prior to the beginning of the relevant control period. EPA has 

attempted to estimate the amounts of pre-phaseout inventory expected to be sold to 

critical and non-critical users. EPA recognizes that its estimates have become 

Moved (insertion) [7]

Moved (insertion) [8]
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increasingly inexact in characterizing actual drawdown of pre-phaseout inventory, as the 

amounts in inventory have declined over time. EPA intends to consider the adequacy of 

using this formula to assess “available stocks” in a future action. However, the fact that 

distributors can choose to sell to non-critical users does not necessarily mean that the 

inventory is largely unavailable to critical users. In fact, regulatory changes under the 

FIFRA labeling requirements discussed above will likely mean that remaining stocks are 

increasingly only available to U.S. critical uses. End of year reported data show that the 

inventory on December 31, 2011, was 1,248,876 kg. EPA expects that holders of prephaseout inventory will be able to expend the full amount of CSA allocations to satisfy 

the needs of critical users.

One commenter also stated that inventory was disproportionately distributed 

among fewer distributors and thus is unavailable to critical users. EPA collects 

information annually on the number of companies that hold inventory. These data support 

the comment that some companies no longer maintain any pre-phaseout inventory. 

Recent mergers have also resulted in fewer companies holding pre-phaseout inventory. 

However, there has not been a significant change in the overall geographic distribution of 

inventory. It is still held by companies in large amounts in both California and the 

Southeast, the two largest markets for critical use methyl bromide. EPA will continue to 

consider the question of availability of stocks in light of declining inventory and

distributors in future actions. However, as noted above EPA believes that holders of prephaseout inventory will be able to expend the full amount of CSA allocations in 2012 to 

satisfy the needs of critical users.

Moved (insertion) [9]
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EPA’s allocation of CSAs is based on each company’s proportionate share of the 

aggregate inventory. In 2006, the United States District Court for the District of 

Columbia upheld EPA’s treatment of company-specific methyl bromide inventory 

information as confidential. NRDC v. Leavitt, 2006 WL 667327 (D.D.C. March 14, 

2006). Therefore, the documentation regarding company-specific allocation of CSAs is in 

the confidential portion of the rulemaking docket and the individual CSA allocations are 

not listed in the table in 40 CFR 82.8(c)(2). EPA notes that it is modifying the table in 40 

CFR 82.8(c)(2) to reflect the recent merger of three methyl bromide distributors who are 

also critical stock allowance holders. The revised table removes the individual entries for 

Hendrix & Dail, Hy-Yield Products, and Reddick Fumigants and adds an entry for TriEst 

Ag Group, Inc. EPA will inform the listed companies of their CSA allocations in a letter 

following publication of the rule. 

H. The Criteria in Decisions IX/6 and Ex. I/4

Paragraphs 2 and 5 of Decision XXII/6 request Parties to ensure that the 

conditions or criteria listed in Decisions Ex. I/4 and IX/6, paragraph 1, are applied to 

exempted critical uses for the 2012 control period. A discussion of the agency’s 

application of the criteria in paragraph 1 of Decision IX/6 appears in sections V.A., V.D., 

V.E., and V.G. of this preamble. EPA has solicited comments on the technical and 

economic basis for determining that the uses listed in this rule meet the criteria of the 

critical use exemption. The CUNs detail how each proposed critical use meets the criteria 

listed in paragraph 1 of Decision IX/6, apart from the criterion located at (b)(ii), as well 

as the criteria in paragraphs 5 and 6 of Decision Ex. I/4. 

Moved (insertion) [10]

Deleted: I
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The criterion in Decision IX/6(1)(b)(ii), which refers to the use of available stocks 

of methyl bromide, is addressed in sections V.E., V.F., and V.G. of this preamble. The 

agency has previously provided its interpretation of the criterion in Decision IX/6(1)(a)(i) 

regarding the presence of significant market disruption in the absence of an exemption, 

and EPA refers readers to the 2006 CUE rule (71 FR 5989) as well as to the memo in the 

docket titled “Development of 2003 Nomination for a Critical Use Exemption for Methyl 

Bromide for the United States of America” for further elaboration.

The remaining considerations are addressed in the nomination documents

including: the lack of available technically and economically feasible alternatives under 

the circumstance of the nomination; efforts to minimize use and emissions of methyl 

bromide where technically and economically feasible; the development of research and 

transition plans; and the requests in Decision Ex. I/4(5) and (6) that Parties consider and 

implement MBTOC recommendations, where feasible, on reductions in the critical use of 

methyl bromide and include information on the methodology they use to determine 

economic feasibility.

Some of these criteria are evaluated in other documents as well. For example, the 

U.S. has considered the adoption of alternatives and research into methyl bromide 

alternatives, criterion (1)(b)(iii) in Decision IX/6, in the development of the National 

Management Strategy submitted to the Ozone Secretariat in December 2005, and updated 

in October 2009. The National Management Strategy addresses all of the aims specified 

in Decision Ex.I/4(3) to the extent feasible and is available in the docket for this 

rulemaking.

Deleted: H

Deleted: I
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EPA received one comment that the Agency should adjust production and import 

levels in the 2012 CUE Rule to account for research amounts. EPA received a similar 

comment on the 2011 CUE Rule. The commenter implied that EPA had a previous policy 

of adjusting the production and import level upward to provide an allocation for research.

This is not an accurate characterization of EPA’s policy. Prior to 2010, the U.S. 

Nomination did contain a separate amount for research. While the Parties approved 

research as a critical use, their decisions encouraged the use of inventory to meet critical 

research needs. In the corresponding CUE rules, EPA responded to the Parties’ decisions 

by reducing the new production/import amounts by the research amount, leaving the 

research portion of the total critical use exemption to be met through the use of CSAs.

In the proposed rule, EPA discussed a supplemental critical use nomination of 

2,576 kg for research activities in 2012. This nomination was to have been discussed at 

the Meeting of the Parties in November 2011. EPA proposed to increase the final CSA 

allocation by up to 2,576 kg after consideration of the action taken by the Parties in 

November 2011 and comments on research needs. However, prior to the Meeting of the 

Parties, the U.S. Government withdrew the supplemental nomination. Therefore, EPA is 

not increasing the final CSA allocation. Nonetheless, the 2012 nomination and the 

decision the Parties took in 2010 are broad enough to cover both research and nonresearch uses. As discussed in the preamble to the 2010 CUE rule (75 FR 23179), 

research is a key element of the critical use process. Research on the crops shown in the 

table in Appendix L to subpart A remains a critical use of methyl bromide. While 

researchers may continue to use newly produced material for field, post-harvest, and 

emission minimization studies requiring the use of methyl bromide, EPA encourages 
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researchers to use pre-phaseout inventory purchased through the expenditure of CSAs. 

EPA also encourages distributors to make inventory available to researchers, to promote 

the continuing effort to assist growers to transition critical use crops to alternatives.

I. Emissions Minimization

Previous decisions have stated that Parties shall request critical users to employ 

emission minimization techniques such as virtually impermeable films, barrier film 

technologies, deep shank injection and/or other techniques that promote environmental 

protection, whenever technically and economically feasible. One commenter asks EPA to 

require emissions minimization techniques rather than simply encourage them. EPA 

notes that, although EPA considers application rates in determining CUAs, requiring 

specific emissions minimization techniques would be outside the scope of the proposed 

rule. EPA developed a comprehensive strategy for risk mitigation through the 2006

Reregistration Eligibility Decision (RED) for methyl bromide, which is implemented 

through restrictions on how methyl bromide products can be used. This approach does 

require that methyl bromide labels include directions that treated sites be tarped except 

for California orchard replant where EPA instead requires deep (18 inches or greater) 

shank applications. The RED also incorporated incentives for applicators to use highbarrier tarps, such as virtually impermeable film (VIF), by allowing smaller buffer zones 

around those sites. In addition to minimizing emissions, use of high-barrier tarps has the 

benefit of providing pest control at lower application rates. The amount of methyl 

bromide nominated by the United States reflects the lower application rates necessary 

when using high-barrier tarps, where such tarps are allowed.

Deleted: sell

Deleted: G
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EPA will continue to work with the U.S. Department of Agriculture –

Agricultural Research Service (USDA-ARS) to promote emission reduction techniques. 

The federal government has invested substantial resources into best practices for methyl 

bromide use, including emission reduction practices. USDA-ARS has a national outreach 

effort to publicize the best practices.

Users of methyl bromide should continue to make every effort to minimize 

overall emissions of methyl bromide to the extent consistent with State and local laws 

and regulations. EPA also encourages researchers and users who are successfully 

utilizing such techniques to inform EPA of their experiences and to provide such 

information with their critical use applications.

VI. 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 final 

rule is a “significant regulatory action” because it was deemed to raise 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 interagency recommendations 

have been documented in the docket for this action.

B. Paperwork Reduction Act

This action does not impose any new information collection burden. The 

application, recordkeeping, and reporting requirements have already been established 

under previous critical use exemption rulemakings and this action does not change any of 

Deleted: H.

Moved up [4]: Critical Use Allowance 

Allocations¶

EPA is allocating critical use allowances for new 

production or import of methyl bromide up to the 

amount of 

Deleted: 810,751 kg (3.2% of baseline) as shown 

in the table in 40 CFR 82.8(c)(1).

Moved up [5]: These allowances expire at the 

end of the control period and, as explained in the 

Framework Rule, are not bankable from one year to 

the next. The CUA allocation is subject to the 

trading provisions at 40 CFR 82.12, which are 

discussed in section V.G. of the preamble to the 

Framework Rule (69 FR 76982).¶

Paragraph 3 of Decision XXII/6 states “that Parties 

shall endeavor to license, permit, authorize or 

allocate quantities of critical-use methyl bromide as 

listed in tables A and C of the annex to the present 

decision.” This is similar to language in prior 

Decisions authorizing critical uses. The language 

from these Decisions calls on Parties to endeavor to 

allocate critical use methyl bromide on a sector 

basis. EPA’s Framework Rule proposed several 

options for allocating critical use allowances, 

including a sector-by-sector approach. The agency 

evaluated the various options based on their 

economic, environmental, and practical effects. After 

receiving comments, EPA determined that a lumpsum, or universal, allocation, modified to include 

distinct caps for pre-plant and post-harvest uses, was 

the most efficient and least burdensome approach 

that would achieve the desired environmental results, ... [5]

Deleted: I. Critical Stock Allowance Allocations¶

Moved up [6]: A preambular paragraph to 

Decision XXII/6 states “that parties should reduce 

their stocks of methyl bromide retained for ... [6]

Deleted: However, EPA believes that the agency’s

practice of encouraging the use of inventory by 

allocating CSAs equivalent to all “available stocks” ... [7]

Moved up [7]: This is more than the difference 

between the total U.S. CUE amount approved by the 

Parties and the permitted level of U.S. production ... [8]

Deleted: Instead, the commenters

Moved up [8]: stated that EPA should allocate 

only 100,000 kg from stocks. The commenter says 

that the distributors that own stocks are free to sell ... [9]

Deleted: The fact that distributors can choose to 

sell to non-critical users does not mean that the 

inventory is unavailable to critical users. End of year ... [10]

Moved up [9]: EPA expects that holders of prephaseout inventory will be able to expend the full ... [11]

Deleted: EPA does not determine where methyl 

bromide inventory should be used, but has always 

left such decisions to the market. For example, a ... [12]

Moved up [10]: EPA’s allocation of CSAs is 

based on each company’s proportionate share of the 

aggregate inventory. In 2006, the United States ... [13]

Deleted: (
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those existing requirements. The Office of Management and Budget (OMB) has 

previously approved the information collection requirements contained in the existing 

regulations at 40 CFR part 82 under the provisions of the Paperwork Reduction Act, 44 

U.S.C. 3501 et seq. and has assigned OMB control number 2060-0482. The OMB control 

numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

The RFA generally requires an agency to prepare a regulatory flexibility analysis 

of any rule subject to notice-and-comment rulemaking requirements under the 

Administrative Procedure Act or any other statute unless the agency certifies that the rule 

will not have a significant economic impact on a substantial number of small entities.

Small entities include small businesses, small organizations, and small governmental 

jurisdictions. For purposes of assessing the impacts of this rule on small entities, small 

entity is defined as: (1) a small business as defined by the Small Business 

Administration’s regulations at 13 CFR 121.201 (see Table below); (2) a small 

governmental jurisdiction that is a government of a city, county, town, school district or 

special district with a population of less than 50,000; and (3) a small organization that is 

any not-for-profit enterprise which is independently owned and operated and is not 

dominant in its field.

Category NAICS code SIC code NAICS Small business 

size standard (in 

number of employees 

or millions of dollars)

Agricultural 

production

1112- Vegetable and 

Melon farming

0171- Berry Crops $0.75 million

1113- Fruit and Nut 

Tree Farming

0172- Grapes

1114- Greenhouse, 0173- Tree Nuts
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Nursery, and 

Floriculture Production

0175- Deciduous Tree Fruits 

(except apple orchards and 

farms)

0179- Fruit and Tree Nuts, NEC

0181- Ornamental Floriculture 

and Nursery Products

0831- Forest Nurseries and 

Gathering of Forest Products

Storage Uses 115114- Postharvest 

Crop activities (except 

Cotton Ginning)

$7 million

311211- Flour Milling 2041- Flour and Other Grain 

Mill Products

500 employees

311212- Rice Milling 2044- Rice Milling 500 employees 

493110- General 

Warehousing and 

Storage

4225- General Warehousing and 

Storage

$25.5 million

493130- Farm Product 

Warehousing and 

Storage

4221- Farm Product 

Warehousing and Storage

$25.5 million

Distributors and 

Applicators

115112- Soil 

Preparation, Planting 

and Cultivating

0721- Crop Planting, Cultivation, 

and Protection

$7 million

Producers and 

Importers

325320- Pesticide and 

Other Agricultural 

Chemical 

Manufacturing

2879- Pesticides and Agricultural 

Chemicals, NEC

500 employees

Agricultural producers of minor crops and entities that store agricultural 

commodities are categories of affected entities that contain small entities. This rule only 

affects entities that applied to EPA for an exemption to the phaseout of methyl bromide

for 2012. In most cases, EPA received aggregated requests for exemptions from industry 

consortia. On the exemption application, EPA asked consortia to describe the number and 

size distribution of entities their application covered. EPA estimated that 3,218 entities 

petitioned EPA for an exemption for the 2005 control period. EPA revised this estimate 

in 2011 down to 1,800 end users of critical use methyl bromide. EPA believes that the 

number will continue to decline as growers stop applying for critical uses. Since many 

applicants did not provide information on the distribution of sizes of entities covered in 
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their applications, EPA estimated that, based on the above definition, between one-fourth 

and one-third of the entities may be small businesses. In addition, other categories of 

affected entities do not contain small businesses based on the above description.

After considering the economic impacts of today’s final rule on small entities, I 

certify that this action will not have a significant economic impact on a substantial 

number of small entities. In determining whether a rule has a significant economic impact 

on a substantial number of small entities, the impact of concern is any significant adverse

economic impact on small entities, since the primary purpose of the regulatory flexibility 

analyses is to identify and address regulatory alternatives “which minimize any 

significant economic impact of the proposed rule on small entities.” (5 U.S.C. §§ 603-

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 a regulatory burden, or 

otherwise has a positive economic effect on all of the small entities subject to the rule.

Since this rule exempts methyl bromide for approved critical uses after the phaseout date 

of January 1, 2005, this action confers a benefit to users of methyl bromide. EPA 

estimates in the Regulatory Impact Assessment found in the docket to this rule that the 

reduced costs resulting from the de-regulatory creation of the exemption are 

approximately $22 million to $31 million on an annual basis (using a 3% or 7% discount 

rate respectively). These reduced costs are dramatic due to the high value of methyl 

bromide for crop production and agriculture related activities. We have therefore 

concluded that this rule would relieve regulatory burden for all small entities.

D. Unfunded Mandates Reform Act
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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. The action imposes no enforceable duty on 

any State, local or tribal governments or the private sector. Instead, this action provides

an exemption for the manufacture and use of a phased out compound and would not 

impose any new requirements on any entities. 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. 

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 rule is expected to affect 

producers, suppliers, importers, and exporters and users of methyl bromide. Thus, 

Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, 

and consistent with EPA policy to promote communications between EPA and State and 

local governments, EPA specifically solicited comment on this 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 rule does not significantly or uniquely 
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affect the communities of Indian tribal governments nor does it impose any enforceable 

duties on communities of Indian tribal governments. Thus, Executive Order 13175 does 

not apply to this action. EPA specifically solicited additional comment on this action 

from tribal officials.

G. Executive Order No. 13045: Protection of Children from Environmental Health 

and Safety Risks

EPA interprets EO 13045 (62 F.R. 19885, April 23, 1997) as applying 

only to those regulatory actions that concern health or safety risks, such that the 

analysis required under section 5-501 of the EO has the potential to influence the 

regulation. This action is not subject to EO 13045 because it does not establish an 

environmental standard intended to mitigate health or safety risks.

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

Distribution, or Use

This rule is not a “significant energy action” as defined in Executive Order 13211, 

“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, 

or Use” (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 rule does not pertain to 

any segment of the energy production economy nor does it regulate any manner of energy 

use. Therefore, we have concluded that this rule is not likely to have any adverse energy 

effects.

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 

(“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use 
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voluntary consensus standards in its regulatory activities unless to do so would be 

inconsistent with applicable law or otherwise impractical. Voluntary consensus standards 

are technical standards (e.g., materials specifications, test methods, sampling procedures, 

and business practices) that are developed or adopted by voluntary consensus standards 

bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the 

agency decides not to use available and applicable voluntary consensus standards. This 

rulemaking does not involve technical standards. Therefore, EPA did not consider the use 

of any voluntary consensus standards.

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

Minority Populations and Low-Income Populations

Executive Order 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 rule does not have disproportionately high and 

adverse human health or environmental effects on minority or low-income populations, 

because it affects the level of environmental protection equally 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. Any ozone depletion that results from this rule will impact all affected 

populations equally because ozone depletion is a global environmental problem with 
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environmental and human effects that are, in general, equally distributed across 

geographical regions of the United States.

K. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a 

rule may take effect, the agency promulgating the rule must submit a rule report, which 

includes a copy of the rule, to each House of the Congress and to the Comptroller 

General of the United States. EPA will submit a report containing this rule and other 

required information to the U.S. Senate, the U.S. House of Representatives, and the 

Comptroller General of the United States prior to publication of the rule in the Federal 

Register. A Major rule cannot take effect until 60 days after it is published in the Federal

Register. This action not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be 

effective [Insert date of publication].

List of Subjects in 40 CFR Part 82

Environmental protection, Ozone depletion, Chemicals, Exports, Imports.

DATE: ____________________

______________________________________________

Lisa P. Jackson, 

Administrator.

Protection of Stratospheric Ozone: The 2012 Critical Use Exemption from the 

Phaseout of Methyl Bromide (Page 44 of 48)

Deleted: <sp>
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For the reasons stated in the preamble, 40 CFR Part 82 is amended 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.

2. Section 82.8 is amended as follows:

a. by revising the table in paragraph (c)(1);

b. by revising paragraph (c)(2) including the table.

§ 82.8 Grant of essential use allowances and critical use allowances.

* * * * *

(c) * * *

(1) * * * 

Company 2012 Critical use allowances for 

pre-plant uses* (kilograms)

2012 Critical use allowances for 

post-harvest uses* (kilograms)

Great Lakes Chemical Corp.

A Chemtura Company

425,197 36,499

Albemarle Corp. 174,851 15,009

ICL-IP America 96,626 8,294

TriCal, Inc. 3,009 258

Total** 699,683 60,061

* For production or import of Class I, Group VI controlled substance exclusively for the 

Pre-Plant or Post-Harvest uses specified in appendix L to this subpart.

** Due to rounding, numbers do not add exactly.

(2) Allocated critical stock allowances granted for specified control period. The 

following companies are allocated critical stock allowances for 2012 on a pro-rata basis 

in relation to the inventory held by each.

Deleted: 453,744

Deleted: 38,950

Deleted: 186,590

Deleted: 16,017

Deleted: 103,113

Deleted: 851

Deleted: 211

Deleted: 276

Deleted: 746,657

Deleted: 64,094
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Company

Albemarle Degesch America, Inc. Prosource One

Bill Clark Pest Control, Inc. Helena Chemical Co. Trical Inc.

Burnside Services, Inc. ICL-IP America Trident Agricultural Products

Cardinal Professional Products Industrial Fumigant Company TriEst Ag Group, Inc.

Chemtura Corp. Pacific Ag Supplies Inc. Univar

Crop Production Services Pest Fog Sales Corp. Western Fumigation

TOTAL –263,082 kilograms

3. Appendix L to Subpart A is revised to read as follows:

APPENDIX L TO SUBPART A OF PART 82 – APPROVED CRITICAL USES 

AND LIMITING CRITICAL CONDITIONS FOR THOSE USES FOR THE 2012

CONTROL PERIOD

Column A Column B Column C

Approved 

Critical Uses

Approved Critical User and Location 

of Use

Limiting Critical Conditions

that exist, or that the approved critical user reasonably 

expects could arise without methyl bromide fumigation:

PRE-PLANT USES

Cucurbits (a) Growers in Delaware and Maryland Moderate to severe soilborne disease infestation

(b) Growers in Georgia and Southeastern 

U.S. limited to growing locations in 

Alabama, Arkansas, Kentucky, 

Louisiana, Mississippi, North Carolina, 

South Carolina, Tennessee, and Virginia

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe soilborne disease infestation 

Moderate to severe root knot nematode infestation

Eggplant (a) Florida growers Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe soilborne disease infestation

Restrictions on alternatives due to karst topographical 

features and soils not supporting seepage irrigation

(b) Georgia growers Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe nematode infestation

Moderate to severe pythium collar, crown and root rot

Moderate to severe southern blight infestation

Restrictions on alternatives due to karst topographical 

features

Forest 

Nursery 

Seedlings

(a) Southern Forest Nursery 

Management Cooperative (Growers in 

Alabama, Arkansas, Florida, Georgia, 

Kentucky, Louisiana, Mississippi, North 

Carolina, Oklahoma, South Carolina, 

Tennessee, Texas, and Virginia)

Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Deleted: 212,075
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(b) Northeastern Forest and Conservation 

Nursery Association (Governmentowned seedling nurseries in Illinois,

Indiana, Kentucky, Maryland, Missouri, 

New Jersey, Ohio, Pennsylvania, West 

Virginia, and Wisconsin)

Moderate to severe weed infestation including purple and 

yellow nutsedge infestation

Moderate to severe Canada thistle infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

(c) Michigan Seedling Growers Moderate to severe soilborne disease infestation

Moderate to severe Canada thistle infestation

Moderate to severe nutsedge infestation

Moderate to severe nematode infestation

Nursery 

Stock (Fruit, 

Nut, Flower)

(a) Members of the California 

Association of Nursery and Garden 

Centers representing Deciduous Tree 

Fruit Growers

Moderate to severe nematode infestation

Medium to heavy clay soils

Local township limits prohibiting 1,3-dichloropropene

(b) California rose nurseries Moderate to severe nematode infestation

Local township limits prohibiting 1,3-dichloropropene

Orchard 

Replant

California stone fruit, table and raisin 

grape, wine grape, walnut, and almond 

growers

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Replanted orchard soils to prevent orchard replant 

disease

Medium to heavy soils

Local township limits prohibiting 1,3-dichloropropene

Ornamentals (a) California growers Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Local township limits prohibiting 1,3-dichloropropene

(b) Florida growers Moderate to severe weed infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical 

features and soils not supporting seepage irrigation

Peppers (a) Alabama, Arkansas, Kentucky, 

Louisiana, Mississippi, North Carolina, 

South Carolina, Tennessee, and Virginia 

growers

Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe nematode infestation

Moderate to severe pythium root, collar, crown and root 

rots

(b) Florida growers Moderate to severe yellow or purple nutsedge infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical 

features and soils not supporting seepage irrigation

(c) Georgia growers Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe nematode infestation, or moderate to 

severe pythium root and collar rots

Moderate to severe southern blight infestation, crown or 

root rot

Restrictions on alternatives due to karst topographical 

features

Strawberry 

Fruit

(a) California growers Moderate to severe black root rot or crown rot

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Local township limits prohibiting 1,3-dichloropropene

Time to transition to an alternative
*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review***

48 of 48

Deleted: Draft

(b) Florida growers Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Carolina geranium or cut-leaf evening primrose 

infestation

Restrictions on alternatives due to karst topographical 

features and soils not supporting seepage irrigation

(c) Alabama, Arkansas, Georgia, Illinois, 

Kentucky, Louisiana, Maryland, 

Mississippi, Missouri, New Jersey, North 

Carolina, Ohio, South Carolina, 

Tennessee, and Virginia growers

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Moderate to severe black root and crown rot

Strawberry

Nurseries

California growers Moderate to severe soilborne disease infestation

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Sweet Potato 

Slips

California growers Local township limits prohibiting 1,3-dichloropropene

Tomatoes (a) Alabama, Arkansas, Florida, Georgia, 

Kentucky, Louisiana, Mississippi, North 

Carolina, South Carolina, Tennessee, and 

Virginia growers

Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation 

Restrictions on alternatives due to karst topographical 

features and, in Florida, soils not supporting seepage 

irrigation

(b) Maryland growers Moderate to severe fungal pathogen infestation

POST-HARVEST USES

Food 

Processing

(a) Rice millers in the U.S. who are 

members of the USA Rice Millers 

Association

Moderate to severe beetle, weevil, or moth infestation

Presence of sensitive electronic equipment subject to 

corrosion

Time to transition to an alternative

(b) Pet food manufacturing facilities in 

the U.S. who are members of the Pet 

Food Institute

Moderate to severe beetle, moth, or cockroach infestation

Presence of sensitive electronic equipment subject to 

corrosion

Time to transition to an alternative

(c) Members of the North American 

Millers’ Association in the U.S.

Moderate to severe beetle infestation

Presence of sensitive electronic equipment subject to 

corrosion

Time to transition to an alternative

(d) Members of the National Pest 

Management Association treating cheese 

storage facilities

Mite infestation 

Commodities California entities storing walnuts, dried 

plums, figs, raisins, and dates (in 

Riverside county only) in California.

Rapid fumigation required to meet a critical market 

window, such as during the holiday season

Dry Cured 

Pork Products

Members of the National Country Ham 

Association and the Association of Meat 

Processors, Nahunta Pork Center (North 

Carolina), and Gwaltney and Smithfield 

Inc.

Red legged ham beetle infestation

Cheese/ham skipper infestation

Dermested beetle infestation

Ham mite infestation
Page 23: [1] Deleted Jeremy Arling 4/9/2012 9:33:00 AM

EPA employs the concept of “available stocks” to determine whether to allocate 

additional CSAs beyond the minimum stock amount stipulated by the Parties. In response to 

stakeholder questions about how EPA derived its CSA amounts, the 2008 CUE rule established a 

refined approach for determining the amount of existing methyl bromide stocks that is 

“available” for critical uses. The approach uses a tool called the supply chain factor (SCF). The 

SCF is EPA’s technical estimate of the amount of inventory that would be adequate to meet the 

need for critical use methyl bromide after an unforeseen domestic production failure, until 

imports became available. The SCF recognizes the benefit of allowing the private sector to 

maintain a buffer in case of a major supply disruption. However, the SCF is not intended to set 

aside or physically separate stocks as an inventory reserve.

2. Calculation of Available Pre-Phaseout Inventory

For 2012, EPA calculates the amount of “available” stocks as follows, using the 

formula adopted in the 2008 CUE rule: AS2012 = ES2011 – D2011 – SCF2012, where AS2012 is the 

available stocks on January 1, 2012; ES2011 is the existing pre-phaseout stocks of methyl bromide 

held in the United States by producers, importers, and distributors on January 1, 2011; D2011 is 

the estimated drawdown of existing stocks during calendar year 2011; and SCF2012 is the supply 

chain factor for 2012. Using this formula, EPA calculated in the proposed rule that there will be 

263,082 kg of pre-phaseout stocks of methyl bromide “available” on January 1, 2012. This final 

rule incorporates new information on the estimated drawdown and calculates 212,075 kg of 

“available” pre-phaseout stocks on January 1, 2012. This change is discussed below.

Existing Stocks In the above formula, “ES2011” is methyl bromide that was 

produced before the January 1, 2005, phaseout date but is still held by domestic producers, 

distributors, and third-party applicators as of January 1, 2011ES2011 does not include critical use 
methyl bromide that was produced after January 1, 2005, and carried over into subsequent years. 

Nor does it include methyl bromide produced 1) under the quarantine and preshipment (QPS) 

exemption, 2) with Article 5 allowances to meet the basic domestic needs of Article 5 countries, 

or 3) for feedstock or transformation purposes. EPA considers all pre-phaseout inventory to be 

suitable for both pre-plant and post harvest uses. Similarly, EPA considers inventory methyl 

bromide to be available to all users, including users in California and the Southeastern United 

States. These assumptions are discussed in the 2009 CUE rule (74 FR 19887).

Estimated Drawdown In past CUE rules, EPA either estimated the drawdown of 

existing stocks using a simple linear fit estimation of inventory data from all available years or 

used actual reported end of year data if available. A linear estimate would project that no methyl 

bromide would remain in inventory on January 1, 2012. EPA does not believe this estimate is

accurate because it does not consider that the use of inventory on critical uses is limited by the 

allocation of CSAs. A better estimate of drawdown would instead add the estimated amount of 

CSAs that will be expended in 2011 plus the estimated amount of methyl bromide that will be 

used in 2011 for non-critical uses.

The first element of EPA’s drawdown estimate is the amount of inventory that will be used in 

2011 on critical uses. This can be no more than the number of CSAs EPA allocated in the final 

CUE rule. 

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EPA agrees with the commenter that it is appropriate to use the value from the 

final 2011 rule. EPA has updated the estimate of drawdown using the new allocation amount 

from the 2011 rule and changed the allocation of CSAs and CUAs accordingly. 

As discussed in the Technical Support Document, on average only 58% of the 
historical pattern, EPA believes that not all of the CSAs will actually be expended in 2011 either. 

To estimate the number of expended CSAs in 2011, EPA conservatively assumes that 70% of the 

CSAs allocated for 2011 will be sold. This amount is greater than any year’s use of CSA 

allocations. With the revised 2011 allocation amount, EPA estimates that 388,640 kg of 

inventory will be sold for critical uses in 2011.

The second element in the drawdown estimate is the amount of methyl bromide 

used for non-critical uses in 2011. Under the 2006 reregistration decision for methyl bromide, 

seven non-critical uses remain on the pre-plant methyl bromide labels. The uses are caneberries, 

fresh market tomatoes grown in California, fresh market peppers grown in California, Vidalia 

onions grown in Georgia, ginger grown in Hawaii, soils on golf courses and athletic/recreational 

fields for resurfacing/replanting of turf, and tobacco seedling trays. Collectively these pre-plant 

uses are referred to as “Group II uses.” These Group II uses can continue to use methyl bromide 

but are restricted to pre-phaseout inventory. See 76 FR 7200. EPA proposed to estimate the 

amount of inventory that will be sold to these Group II uses in 2011 by averaging the amounts 

sold in 2006-2010 for all non-critical uses (including both pre-plant and post-harvest uses). There 

is no clear trend in the pattern of usage which is why EPA proposed to take an average. EPA is 

not including 2005 because it does not have data for that year. These data are contained in EPA’s 

annual Accounting Frameworks submitted to UNEP and are available in the docket. The average 

use of pre-phaseout inventory on all non-critical uses over the last five years is 773 MT. EPA 

believes that this estimate is conservative because it includes the use of inventory for all noncritical uses, not just for Group II uses. EPA is adopting this average as its estimate of noncritical use in 2011. 
In summary, EPA is estimating the potential drawdown of inventory in 2011 as 1) 

the projected sum of the use of CSAs for 2011 and 2) the estimate for Group II uses for 2011. 

Using this method, EPA projects that the pre-phaseout methyl bromide inventory will be drawn 

down by 1,161,640 kg (388,640 + 773,000) during 2011. This would result in a pre-phaseout 

inventory declining from 1,802,715 kg on January 1, 2011, to 641,075 kg on January 1, 2012.

Supply Chain Factor The SCF represents EPA’s technical estimate of the amount 

of pre-phaseout inventory that would be adequate to meet the need for critical use methyl 

bromide after an unforeseen domestic production failure. As described in the 2008 CUE Rule, 

and the Technical Support Document contained in the docket to this rule, EPA estimates that it 

would take 15 weeks for significant imports of methyl bromide to reach the U.S in the event of a 

major supply disruption. Consistent with the regulatory framework used in previous CUE 

allocation rules, the SCF for 2012 conservatively reflects the effect of a supply disruption 

occurring in the peak period of critical use methyl bromide production, which is the first quarter 

of the year. While this 15-week disruption is based on shipping capacity and does not change 

year to year, other inputs to EPA’s analysis do change each year including the total U.S. and 

global authorizations for methyl bromide and the average seasonal production of critical use 

methyl bromide in the U.S. EPA estimates that critical use production in the first 15 weeks of 

each year (the peak supply period) currently accounts for approximately 42% of annual critical 

use methyl bromide demand. EPA, therefore, estimates that the peak 15-week shortfall in 2012 

would be 429 MT.

Page 23: [3] Deleted Jeremy Arling 4/9/2012 9:33:00 AM

As EPA stated in previous CUE Rules, the SCF is not a “reserve” or “strategic 

inventory” of methyl bromide but is merely an analytical tool used to provide greater 

tdihthAdtiCSA tAdditil diif th
SCF is in the final 2008 CUE rule (72 FR 74118) and further detail about the analysis used to 

derive the value for the 2012 supply chain factor is provided in the Technical Support Document 

available on the public docket for this rulemaking.

In summary, using the following formula AS2012 = ES2011 – D2011 – SCF2012, EPA 

estimates that there will be 212,075 kg of pre-phaseout stocks of methyl bromide “available” on 

January 1, 2012. (212,075 = 1,802,715 – 1,161,640 – 429,000). Therefore, EPA is allocating

212,075 kg as critical stock allowances for 2012.

2. Approach for Determining New Production and Import Allowances

For the 2012 control period, EPA is applying the existing methodology

established in the Framework Rule. Under this approach, the amount of new production equals

the total amount authorized by the Parties to the Montreal Protocol in Decision XXII/6, minus 

the CSA amount calculated above, minus any reductions for either carryover or the uptake of 

alternatives. Applying this established approach, EPA is exempting limited amounts of new 

production and import of methyl bromide for critical uses in 2012 in the amount of 810,751 kg 

(3.2% of baseline). This final amount is greater than the amount proposed because EPA has 

revised the estimate of available stocks.

Carryover Material The Parties in paragraph 6 of Decision XXII/6 “urge parties operating 

under a critical-use exemption to put in place an effective system to discourage the accumulation 

of methyl bromide produced under the exemption.” As discussed in the Framework Rule, EPA 

does not permit the building of stocks of methyl bromide produced or imported after January 1, 

2005, under the critical use exemption. Quantities of methyl bromide produced, imported, 

exported, or sold to end-users under the critical use exemption in a control period must be 

reported to EPA the following year. EPA uses these reports to calculate the amount of methyl 
bromide produced or imported but not exported or sold to end-users in that year. EPA deducts an 

amount equivalent to this “carryover” from the total level of allowable new production and 

import in the year following the year of the data report. Carryover material (which is produced 

using critical use allowances) is not included in EPA’s definition of existing stocks (which was 

produced prior to the 2005 phaseout) because this would lead to a double-counting of carryover 

amounts, and a double reduction of critical use allowances (CUAs).

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3. Summary of Calculations

The calculations described above for determining the level of new production and 

critical stock allowances are summarized in the table below:

Step 1: Calculate supply chain factor Kilograms

U.S. authorization for 2012 in Decision XXII/6 1,022,826

- Reduction for uptake of alternatives 0

= One year's CUE need 1,022,826

x Percentage of year's production to recover from production failure 42%

= Supply Chain Factor 429,000

Step 2: Calculate available stocks

Existing pre-phaseout inventory on January 1, 2011 1,802,715

- Drawdown of inventory for critical uses 388,640

- Drawdown of inventory for non-critical uses 773,000

- Supply Chain Factor (Step 1) 429,000

= Available stocks = Critical Stock Allowance 212,075

Step 3: Calculate new production

Total U.S. authorization for 2012 1,022,826

- Critical Stock Allowance (Step 2) 212,075

- Carryover 0

- Uptake of alternatives 0 

= New production/import = Critical Use Allowance 810,751

F.

Page 37: [5] Moved to page 28 (Move #5) Jeremy Arling 4/9/2012 9:33:00 AM

These allowances expire at the end of the control period and, as explained in the 
the trading provisions at 40 CFR 82.12, which are discussed in section V.G. of the preamble to 

the Framework Rule (69 FR 76982).

Paragraph 3 of Decision XXII/6 states “that Parties shall endeavor to license, 

permit, authorize or allocate quantities of critical-use methyl bromide as listed in tables A and C 

of the annex to the present decision.” This is similar to language in prior Decisions authorizing 

critical uses. The language from these Decisions calls on Parties to endeavor to allocate critical 

use methyl bromide on a sector basis. EPA’s Framework Rule proposed several options for 

allocating critical use allowances, including a sector-by-sector approach. The agency evaluated 

the various options based on their economic, environmental, and practical effects. After 

receiving comments, EPA determined that a lump-sum, or universal, allocation, modified to 

include distinct caps for pre-plant and post-harvest uses, was the most efficient and least 

burdensome approach that would achieve the desired environmental results, and that a sector-bysector approach would pose significant administrative and practical difficulties.

One commenter states that EPA should allocate specifically to each of the Critical 

Use Categories as authorized by the Parties. The EPA’s “lump sum” approach, the commenter 

asserts, does not guarantee that critical users have access to methyl bromide and it instead allows 

those with the greatest ability to pay to garner methyl bromide away from other users with 

approved critical needs. Furthermore, developers of methyl bromide alternatives need assurance 

that methyl bromide will eventually exit a particular use segment. Allowing an open market for 

methyl bromide allocation is an economic disincentive for anyone developing alternatives. At a 

minimum, this commenter supports distinguishing between pre-plant and post-harvest sectors as 

EPA currently does. EPA received a separate comment favoring the universal allocation 

approach over a sector-specific allocation. The commenter states that by allocating up to 14 
types of allowances the sector specific approach would be overly complex to administer, would 

create problems for distributors, and would spread allowances among too many 

producer/importers and distributors. EPA has addressed these comments in prior rulemakings; 

those responses are available in the docket for this rulemaking. 

For the reasons discussed in the preamble to the 2009 CUE rule (74 FR 19894), 

the agency believes that under the universal allocation approach adopted in the Framework Rule, 

the actual critical use will closely follow the sector breakout listed in the Parties’ decisions.

Page 37: [6] Moved to page 30 (Move #6) Jeremy Arling 4/9/2012 9:33:00 AM

A preambular paragraph to Decision XXII/6 states “that parties should reduce their stocks of 

methyl bromide retained for employment in critical-use exemptions to a minimum in as short a 

time period as possible.” EPA notes that the U.S. Government does not retain pre-phaseout 

inventory. Pre-phaseout inventory is held by private companies that may sell or distribute it for 

any use that meets the labeling under FIFRA, whether critical or not. 

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However, EPA believes that the agency’s practice of encouraging the use of inventory by 

allocating CSAs equivalent to all “available stocks” is consistent with this statement by the 

Parties. EPA is allocating CSAs for the 2012 control period in the amount of 212,075 kg (0.8% 

of baseline).

Page 37: [8] Moved to page 31 (Move #7) Jeremy Arling 4/9/2012 9:33:00 AM

This is more than the difference between the total U.S. CUE amount approved by 

the Parties and the permitted level of U.S. production and consumption. For 2012, that difference 

is 100,000 kg (0.4% of baseline). 

One commenter stated that the Agency is incorrect to assume that 263,082 kg of pre-phaseout 

inventory will be available for critical uses in 2012. 
Page 37: [9] Moved to page 31 (Move #8) Jeremy Arling 4/9/2012 9:33:00 AM

stated that EPA should allocate only 100,000 kg from stocks. The commenter says that the 

distributors that own stocks are free to sell them for any purpose, including for non-CUE uses, 

and that EPA cannot control how or whether inventory is sold. EPA agrees that the allocation 

system allows distributors of inventory to respond to market conditions instead of requiring them 

to sell inventory to critical users. EPA issues CSAs as a mechanism to track the use of stocks for 

critical uses. Under section 82.4(p), stocks may not be sold for use on critical uses if the seller 

does not hold the corresponding amount of CSAs. Critical users may purchase either newly 

produced or imported critical use methyl bromide or stocks sold through the expenditure of 

CSAs. EPA chose this approach, at least in part, to promote market flexibility and efficiency. 

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The fact that distributors can choose to sell to non-critical users does not mean that the inventory 

is unavailable to critical users. End of year reported data show that the inventory on December 

31, 2010, was 1,802,715 kg. Of this amount, EPA estimates that 212,075 kg of stocks will be

available for use in 2012. EPA also notes that the final rule allocates fewer critical stock 

allowances than proposed, based on updates to the “available stocks” estimation.

Page 37: [11] Moved to page 32 (Move #9) Jeremy Arling 4/9/2012 9:33:00 AM

EPA expects that holders of pre-phaseout inventory will be able to expend the 

full amount of CSA allocations to satisfy the needs of critical users.

One commenter also stated that inventory was disproportionately distributed among fewer 

distributors and thus is unavailable to critical users. EPA collects information annually on the 

number of companies that hold inventory. These data support the comment that some companies 

no longer maintain any pre-phaseout inventory. Recent mergers have also resulted in fewer 

companies holding pre-phaseout inventoryHoweverthere has not been a significant change in 
the overall geographic distribution of inventory. It is still held by companies in large amounts in 

both California and the Southeast, the two largest markets for critical use methyl bromide. 

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EPA does not determine where methyl bromide inventory should be used, but has 

always left such decisions to the market. For example, a distributor might prefer to sell inventory

to non-critical users to satisfy prior contracts. EPA believes that the inability of a critical user to 

purchase inventory due to market decisions by distributors would not be a basis for adjusting the 

allocation of CSAs.

Page 37: [13] Moved to page 33 (Move #10) Jeremy Arling 4/9/2012 9:33:00 AM

EPA’s allocation of CSAs is based on each company’s proportionate share of the 

aggregate inventory. In 2006, the United States District Court for the District of Columbia 

upheld EPA’s treatment of company-specific methyl bromide inventory information as 

confidential. NRDC v. Leavitt, 2006 WL 667327 (D.D.C. March 14, 2006). Therefore, the 

documentation regarding company-specific allocation of CSAs is in the confidential portion of 

the rulemaking docket and the individual CSA allocations are not listed in the table in 40 CFR 

82.8(c)(2). EPA notes that it is modifying the table in 40 CFR 82.8(c)(2) to reflect the recent 

merger of three methyl bromide distributors who are also critical stock allowance holders. The 

revised table removes the individual entries for Hendrix & Dail, Hy-Yield Products, and Reddick 

Fumigants and adds an entry for TriEst Ag Group, Inc. EPA will inform the listed companies of 

their CSA allocations in a letter following publication of the rule.