Docket!ID!No.!EPA

. HQ

. OAR

. 2010

. 1040!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 09/01 /11

Air!and!Radiation!Docket!and!Information!Center U.S.!Environmental!Protection!Agency
Mail!Code:!6102T 1200!Pennsylvania!Avenue,!NW Washington,!DC!20460

TO!W HOM IT!MAY!CONCERN :

As!a!direct!result!of!the! overestimated projected!dem and!volume!for!R

. 22,! combined!with!the unanticipated!discontinuation!of!the!manufacturing!of R

. 22!equipment!in! 2010

. 201 1,! the!market!is!
overstocked!with!R

. 22!inventories.!!This!is!pu tting!downward!pressure!on!any!need!whatsoever,!to! recover!and!reclaim.!!To!further!exacerbate!the!oversupply!situation,!the!Inter im!Final!Rule!adds!the! dynamic!of!added!inventory to!distribute!in!an!already!overproduced,!oversupplied!and!overstocked
R

. 22! market,!resulting!in!further!negative!pressure!on!main taining!any!sort!of!refrigerant! reclamation!industry.

As!a!national!refrigerant!reclaimer/distributor!that!relies!heavily!on!proper!R

. 22!recovery!and! reclamation!channels,!it!is!becoming!very!clear!tha t!the!necessity!for!reclamation!of!R

. 22!is!non

. existent from!a!supply!perspective .!!It!is!far!less!expensive!to!purchase!newly!manufactured,! packaged!virgin!material!within!the!United!States!than!it!is!to!recover,!consolidate,!transport,! reclaim,!repackage ,!inventory!and!ultimately,!redistribute!reclaimed!R

. 22.!!Currently,!there!are!no!
incentives!to!reclaim!R

. 22!that!outweigh!the!cost!associated!with!operating!a!reclamation!facility.

In!addition,!R

. 22!was!considered!for!inclusion!in!H.R.!1112!1989.!!As!par t!of!the!Omnibus!Budget! Reconciliation!Act!of!1989,!the!United!States!Congress!levied!an!excise!tax!on!the!sale!of!CFC’s!and! other!chemicals,!which!deplete!the!ozone!layer,!with!specific!exemptions!for!exports!and!recycling.!! The!tax!went!into!effect!on!Ja nuary!1,!1990,!and!increases!annually.!!By!raising!the!cost!of!virgin! controlled!substances,!the!tax!had!created!an!incentive!for!industry!to!shift!away!from!these! substances!and!increase!recycling!activities.!!It!has!also!encouraged!the!development!of!a!m arket!for! alternative!chemicals!and!processes.!!The!original!excise!tax!was!amended!by!the!Omnibus!Budget! Reconciliation!Act!of!1990!to!include!methyl!chloroform,!carbon!tetrachloride!and!other!CFCs! regulated!by!the!amended!Montreal!Protocol!and!title!VI!o f!the!Clean!Air!Act,!as!amended!in!1990.!! The!energy!Policy!Act!of!1992!revised!and!further!increased!the!excise!tax!effective!January!1,!1993.!!
It!is!al ready!on!the!books and!now!it!must!become!policy.!! This!tax!must!be!assessed without!haste!to! help!fost er!a!healthy,!competitive!re clamation!industry.

Alternatively,!a ll!rights!holders!are!known! entities!and!should!be!encouraged to!voluntarily!pay!a! production/importation!exc ise!tax!at!a!rate!of!no!less!than $3.00/lb.!beginning!with!any!new!
alloc ation!adju stment beginning!on!January 1,!2012.!!This!would!require!100%!participation!by!all! rights!holders.!!These!rights!are!a!privilege,!not!a!mandatory!giveaway

, and!as!such

, should! be! responsibly attended!to,!if!for!nothing!else!than!to!promote!and!foster!a!rob ust!refrigerant!
reclamation!industr y

.!! We!suggest!that!the!twenty!rights!holders!would!seriously!consider!this! proposal!if!presented!with!a!voluntary!tax!proposal.

### 2 Another!major!factor!for!consideration!is!the!viable!alternatives!to!R

. 22!market.!! These!pro ducts!will! remedy!any!potential!R

. 22!shortfall.!! This!market!will!continue!to!flounder and!any!slim!speculative! incentives!to!continue!to!produce!products!for!this!market!will!evaporate!if!the!R

. 22 market ,!as!a! whole,!is!not!addressed.! Replacements!will! not!sell!u ntil!their!price!point!is!lower than!that!of!R

. 22.!

Finally,!refe rring to the!ICF!Report!of! 2008 :!!It!was!not!until!December!23 rd ,!2008,!that!the!EPA! unveiled!the!proposal!to!eliminate!R

. 22!equipment.!!! As!much!as!we!are!able!to!ascertain,!t his! factor!

was! not! included!in!the! ICF! Consumption!Production!Allowances! Report. The!reduction!in!the!
amount!of!R

. 22!that!was!formerly!required!for!OE!applications,!in!our!estimation!was!not!removed!
from!th e!final!allowances!calculation.

In!conclusion,!the!g oal!to! phase!out!R

. 22!can! be! achieved by!implementing! tax!policy,!which!is! already!on!the!books

,! in conjunction!with! reduced! reallocation allowances!to!rights!holders.!! By! impleme nting! both ,!a!robust!refrig erant!reclamation!industry!will! reemerge,!alterna t ive!products! will!be!produced!and R

. 22!will!be!phased!out!on time

.!!! I f!this!tax does!not!become!policy, please allow!the!industry!to!self

. impose!an!appropriate!consumpt ion!production!tax!of!between! $3.00/lb.!

. $8.00/lb

.!! If!rights!are!not!reallocated!at! a!reduced!rate,!R

. 22!will!remain in!an!oversupply!situation! resulting!in negative!effects!on!the!reclamation!industry.

T he!acquisition!price ,!whether!imported!or!produced!domestically, of!R

. 22!for!allocation!holders!has! remained!virtually!unchanged,!despi te!t he!years!of!rhetoric!touting!price!increases,!increased! manufacturing!costs!and!shortages!etc .!!The!playing!field!for!reclaimers!is!uneven.!! Please!g ive! reclaimers!an!opportunity!to!do!the!important!work!that!must!be!done!or!risk!that!none!of!it!will! b e! done!to!the!detriment!of!the!environment.

Please!consider!our!proposal!as!submitted!and!feel!free!to!contact!us!for!further!clarification!of!our! viewpoints.

Sincerely,

Michael!Mulligan USA!Refrigerants 155!Airport!Executive!Park Nanuet,!New!York! 10954

Document! Contributors:! Theodore!Broudy,!President!

. USA!Refrigerants James!Burke,!Finance!Secretary!

. USA!Refrigerants Mike!Mulligan,!Vice!President!Marketing!and!Sales!

– USA!Refrigerants