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!WHOM IT!MAY!CONCERN:

As!a!direct!result!of!the!overestimated projected!demand!volume!for!R.22,!combined!with!the

unanticipated!discontinuation!of!the!manufacturing!of R.22!equipment!in!2010.2011,!the!market!is!

overstocked!with!R.22!inventories.!!This!is!putting!downward!pressure!on!any!need!whatsoever,!to!

recover!and!reclaim.!!To!further!exacerbate!the!oversupply!situation,!the!Interim!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!maintaining!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!that!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!part!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!January!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!market!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!of!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!already!on!the!books and!now!it!must!become!policy.!!This!tax!must!be!assessed without!haste!to!

help!foster!a!healthy,!competitive!reclamation!industry.

Alternatively,!all!rights!holders!are!known!entities!and!should!be!encouraged to!voluntarily!pay!a!

production/importation!excise!tax!at!a!rate!of!no!less!than $3.00/lb.!beginning!with!any!new!

allocation!adjustment 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!robust!refrigerant!

reclamation!industry.!!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!products!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!until!their!price!point!is!lower than!that!of!R.22.!

Finally,!referring to the!ICF!Report!of!2008:!!It!was!not!until!December!23rd,!2008,!that!the!EPA!

unveiled!the!proposal!to!eliminate!R.22!equipment.!!!As!much!as!we!are!able!to!ascertain,!this!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!the!final!allowances!calculation.

In!conclusion,!the!goal!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!

implementing!both,!a!robust!refrigerant!reclamation!industry!will!reemerge,!alternative!products!

will!be!produced!and R.22!will!be!phased!out!on time.!!!If!this!tax does!not!become!policy, please

allow!the!industry!to!self.impose!an!appropriate!consumption!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.

The!acquisition!price,!whether!imported!or!produced!domestically, of!R.22!for!allocation!holders!has!

remained!virtually!unchanged,!despite!the!years!of!rhetoric!touting!price!increases,!increased!

manufacturing!costs!and!shortages!etc.!!The!playing!field!for!reclaimers!is!uneven.!!Please!give!

reclaimers!an!opportunity!to!do!the!important!work!that!must!be!done!or!risk!that!none!of!it!will!be!

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