Via Email and U.S. Mail

June 7, 2012

Linda Irokawa

- Otani Regulations Coordinator Department of Pesticide Regulation

1001 I Street

Post Office Box 4015 Sacramento, California 95812

- 4015

Re : C OMMENTS OF S YNGENTA C ROP P ROTECTION

, LLC IN R ESPONSE T O
N OTICE OF P

ROPOSED R EGULATORY A CTION R ELATED TO V OLATILE O RGANIC C OMPOUNDS IN THE S AN J OAQUIN V

ALLEY O ZONE N

ON

A TTAINMENT A REA

Dear Ms. Irokawa

- Otani :

On April 20, 2012, the California Department of Pesticide Regulation (“DPR”) published a Notice of Proposed Regulatory Action (the “Notice”) related to “Volatile Organic Compounds in the San Joaquin Valley Ozone Non

- Attainment Area” (“Regulation No. 12

- 001” or the “proposed regulation”). That same day, DPR also released its rulemaking file related to the Notice, and solicited comments on the proposed regulation to be submitted no later than June 7, 2012.

The following comments are submitted by Syngenta Crop Protection, LLC (“Syngenta”). For the reasons stated below, Syngenta believes that the proposed regulation is flawed and should not be adopted in its current proposed form. If the regulation is adopted at all, it should be amended to take into account alternatives and possible excepti ons to certain provisions. With respect to the proposed regulation of abamectin in particular, the proposed threshold of 35% volatile organic compound (“VOC”) content as the upper bound of abamectin products considered to be “low VOC” is fundamentally unf

air, contrary to sound science and public policy, and unsupported by any evidence of environmental or economic necessity. Therefore, if “low VOC” formulations of abamectin are to be a part of any final regulation along the lines of this proposed regulatio n, the maximum VOC content of such low VOC abamectin products should be no more than 20%, and possibly as low as 6%. Debbie Stubbs Senior Regulatory Manager Tel: 336.632.2449 Debbie.Stubbs@syngenta.com Syngenta Crop Protection, LLC 410 S. Swing Road Greensboro, NC 27409 www.syngenta.comLinda Irokawa

- Otani

June 7, 2012 Page 2

1. T

HE P ROPOSED R EGULATION

For the sake of brevity, these comments will not summarize or extensively quote the proposed regulation. Syngen ta concurs generally with the summary of the proposed regulation in the written comments submitted to DPR by Dow AgroSciences on this same

date.

2. L

EGAL B ASES FOR S YNGENTA ’ S O BJECTIONS

The requirements for adopting, amending, or repealing regulations are established

under the California Administrative Procedure Act ( “ CAPA ” or “the Act” ). See Gov.

Code § 11340 et seq. Any re gulation or amendment to a regulation not promulgated in compliance with these re quirements is void and has no effect. Tidewate r Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 559.

Even where an agency complies with the CAPA, a regulation adopted pursuant to statutory authority is not valid or effective unless it is (1) “ consistent and not in conflict

with the statute ” an d (2) “ reasonably necessary to effectuate the purpose of the statute. ”

Gov. Code § 11342.2. The first criterion requires judicial construction of the claimed source of the agency’s rulemaking authority to determine whether the regulation is

“ consistent a nd not i n conflict” with that authority. As to the second criterion, when assessing whether the regulation is “ reasonably necessary ” to effectua te the purpose of the statute, a reviewing court must determine whether the agency’s action is “ arbitrary, capricious, lacking in evidentiary support, or contrary to procedures provided by law including the requirement of an accurate accounting of the economic impact of the regulation as a whole. ” Santa Cruz v. State Bd. of Forestry (1998) 64 C al .A p p .4th 826, 835. Regarding the economic impact requirement, DPR must provide in the record any

“ facts, evidence, documents, testimony, or other evidence ” upon which it relies for its initial determination and must base its evaluation on facts and not specu lation. California Ass’n. of Medical Products Suppliers v. Maxwell

- Jolly (2011) 199 Cal.App.4th 286.

3. S YNGENTA ’

S O BJECTIONS TO THE P ROPOSED R EGULATION

Syngenta understands that the underlying purpose of the proposed regulation is to

achieve reductions in t otal VOC emissions caused by applications of pesticides in the San Joaquin Valley, as one component of the State Implementation Plan’s (“SIP”) regimen to reduce VOC emissions from all significant sources in the San Joaquin Valley Ozone

Non

- Attainment Area. Syngenta acknowledges that DPR has done extensive studies of the many VOC

- containing pesticides used in the San Joaquin Valley, of the crops on which these products are used and the value of those crops, and of potential alternatives

to various VOC

- conta ining pesticides for such crops. The proposed regulation represents a calculated effort on DPR’s part to create a system of restrictions and prohibitions thatLinda Irokawa

- Otani

June 7, 2012 Page 3

will result in significant reductions of VOC emissions from the application of pesticides, and p articularly “nonfumigant” pesticides. Yet, the proposed regulation addresses VOC emissions only indirectly, imposing restrictions and prohibitions on just four pesticide active ingredients while leaving others totally unrestricted, and giving too little w eight to the economic importance of the four targeted ingredients. More specifically, Syngenta believes DPR has made the following errors and unjustified decisions in the proposed regulation:

 A fundamental mathematical error in calculating estimated cur rent VOC emissions from pesticides in the San Joaquin Valley;

 Reliance on data to estimate VOC emissions that are unreliable and in fact, are known to overestimate VOC emissions under “real world” conditions; and

 Unjustified and irrational assumptions in deciding to focus all the restrictions and prohibitions of the proposed regulation on just chlorpyrifos, abamectin, gibberellins and oxyfluorfen.

Fu r ther,

 The exemptions embodied in the proposed regulation are too narrow and too static; the proposed regulation does not provide DPR with the necessary discretion and flexibility to achieve the intended purpose; and

 The proposed 35% concentration limit as the upper boundary for “low VOC” abamectin formulations that would be exempt from all

use restricti ons is arbitrary, contrary to public policy, unsupported by evidence and unfair to Syngenta.

4. T HE E NTIRE P

ROPOSED R EGULATION I S B ASED ON A C

RITICAL
M ATH E RROR THAT O VERSTATES THE L IKELIHOOD OF E XCESSIVE VOC E MISSIONS FROM P

ESTICIDES

On May 17, 20 12

, DPR iss ued a one

- page e

- mail memorandum to the regulated community, indicating that a fundamental data point underlying the asserted need for the proposed regulation is incorrect. DPR’s previous calculations showing that the hypothetical VOC emissions in the San Joaquin Valley NAA were in danger of exceeding the triggers imposed under the SIP were mistaken. Total VOC emissions for 2010 were not 16.8 tons per day, but rather were 15.5 tons per day, resulting in a 24% reduction in VOC emissions from 1990, rather t han an 18% reduction as previously calculated. The source of the error was a mistake in a calculation of the hypotheticalLinda Irokawa

- Otani

June 7, 2012 Page 4

VOC emissions from use of nonfumigant products containing the active ingredient bifenthrin. With the calculations corrected, hypothe tical VOC emissions from products containing bifenthrin dropped from 1.55 tons per day to .24 tons per day, and total VOC emissions from all pesticides dropped from 16.8 tons per day to 15.5 tons per day.

The importance of this correction cannot be oversta ted. DPR has announced that

the “ goal in the pesticide element of the SIP is at least a 12% reduction from 1990, equivalent to emissions no greater than 18.1 tons per day. ” 1 With total estimated VOC

emissions in 2010 now calculated at 15.5 tons per day, equivalent to a 24% reduction from 1990 emissions, it is difficult to conclude from the data in the rulemaking record that VOC emissions from pesticide products are in danger of exceeding those allowed under the SIP. If the asserted goal of the rulemaking , as indicated in the I nitial Statement of Reasons, is to achieve an additional reduction of 2 tons per day, the discovery that VOC emissions were overstated by 1.31 tons per day (from bifenthrin products), means that the goal is no longer compelling, and that the method s by which DPR intended to reduce emissions by 2 tons per day are not nearly as necessary. By the logic that caused DPR to try to achieve a reduction of 2 tons per day, a reduction of only .69 tons per day

should be sufficient.

Similarly, one of the principal reasons for the proposed regulation was the perceived increase of VOC emissions to 16.8 tons per day in the 2010 VOC emissions inventory, compared to 13.77 tons per day in the 2009 inventory, and the concern that

emissions c ould exceed the 17.2 tons per day trigger, thus requiring restrictions on fumigant use. The miscalculated 2010 inventory showed that total VOC emissions were within 0.4 tons per day of the trigger, and 93% of the target imposed under the SIP. With

the VO C emissions from bifenthrin products now corrected, total VOC emissions are now 1.7 tons per day below the trigger and only 85% of the SIP target. Thus, the concern that precipitated the proposed regulation itself has been addressed

.

At a minimum, DPR sho uld reconsider the entire proposed regulation, including the necessity for draconian prohibitions on abamectin and other nonfumigant pesticides. According to the announcement, however, DPR does not intend to do so. Rather, DPR

indicates that the “ change will cause no revision to DPR’s proposed regulations for VOC emissions from nonfumigant pesticides. ” 2 Based on the reasoning above, Syngenta
request s that DPR reconsider that decision.

5. T HE D ATA R ELIED O N BY DPR A RE U NRELIABLE AND U

NTIMELY

Even aside from the foregoing issue related to the bifenthrin data, Syngenta

believes the VOC emissions data on which DPR relies overstate the actual extent of VOC

1 Email memorandum from DPR to “Interested Parties,” dated May 17, 2012.

2 Id

.Linda Irokawa

- Otani

June 7, 2012 Page 5

emissions from pesticide applications, calling into question the necessity of the restrictions and prohibiti ons in the proposed rule. In addition, if the proposed rule were adopted in its current form, the real world limitations on the collection, reporting and analysis of annual pesticide usage and estimated VOC emissions are such that the restrictions and pro hibitions imposed on “high VOC” pesticides by proposed Section 6884(c) would invariably be imposed in any given year not on the basis of that year’s conditions, but on the basis of data from three or even four or five years earlier.

The problem of overstat ed emissions estimates results from the proposed rule’s reliance on “hypothetical” VOC emissions figures based on laboratory analyses of each pesticide formulation using a method known as “Thermogravimetric Analysis” (the “TGA Method”). Syngenta will not discuss the technical issues related to the TGA Method in these comments; Syngenta concurs with Dow AgroSciences ’ discussion of the TGA Method in its comments submitted this same date. In summary, however, the TGA Method inevitably results in an estimate of hypothetical VOC emissions for any given product that is certain to exceed actual VOC emissions from actual applications of that product under normal ambient temperature and other climatic conditions. To its credit, DPR has conceded as much, and DPR ha s made certain statements of intent to make “adjustments” to the emission rates calculated by the TGA Method in certain cases. There is no indication in the proposed regulation or the rulemaking record as a whole that any such adjustments have been made i n calculating the “baseline” hypothetical VOC emissions data on which the proposed rule is based, however. Thus, it appears that the emissions estimates on which DPR is relying as the scientific basis for the proposed regulation are certain to be in exces s of actual pesticide VOC emissions and thus, are inadequate to support the proposed rule as a whole, as well as inadequate to make scientifically defensible determinations as to whether SIP target VOC emission levels in the San Joaquin Valley Ozone Non

- At tainment Area have been exceeded in future years.

The issue of stale and untimely data is also discussed in Dow AgroSciences ’ comments filed this same date. Syngenta concurs in those comments, and further states that the implementation and enforcement of the restrictions and prohibitions of proposed Section 6884(c) will be gravely handicapped and, likely, scientifically indefensible because DPR will always be in the position of imposing current restrictions based on

stale data.

6. T HE B ASIS ON W

HICH DPR H

AS S ELECTED O NLY F OUR A CTIVE
I NGREDIENTS
F OR R ESTRICTIONS AND P ROHIBITIONS IS A RBITRARY AND C APRICIOUS

Syngenta generally concurs with the comments submitted by Dow AgroSciences on this point. More particularly, Syngenta concurs with Dow AgroSciences that DP R appears to have given excessive weight to its own administrative convenience in selecting just four chemicals that had relatively high total VOC emissions because they are used in relatively large volumes, while not considering other factors such as the possible readyLinda Irokawa

- Otani

June 7, 2012 Page 6

availability of satisfactory low

- VOC alternatives for many of the other pesticides DPR has chosen not to include in the proposed regulation. Syngenta also concurs that the

selection of these four chemicals for restrictions due to their rela tively high volume of usage is a poor policy choice because that high level of usage reflects the fact that these

four chemicals are much more important to agriculture than the many other VOC

containing pesticides that are used in smaller volumes. The gre ater usage reflects their greater value. By restricting the use of these four chemicals and not others, DPR is restricting the use of the most valuable crop protection products at the expense of less valuable products.

7. T HE P ROHIBITIONS AND E XCEPTIONS OF S ECTION 6884( C ) A RE T

OO
R IGID AND L

ACK N EEDED D ISCRETION

Again, Syngenta generally concurs in the comments of Dow AgroSciences on the subject of the many deficiencies in Section 6884(c). Syngenta believes that the Section’s rigid formula requiring a minimu m two year period in which restrictions, once imposed,

must remain in effect could produce grossly irrational results. One example is suggested by DPR’s recently discovered “math error” involving bifenthrin products. It is possible

that a similar math er ror in the future could lead to a conclusion that total VOC emissions had exceeded the trigger level, requiring the restrictions and prohibitions of Section 6884(a) to be put in place. Suppose that happened, and that the math error was then

discovered in the first month of the first year of the two year period defined in 6884(c), leading to the clear conclusion that the trigger had not been exceeded and the restrictions and prohibitions should not have been imposed. According to the current language of

68 84(c), DPR would have no discretion, much less an obligation, to lift the restrictions that should never have been imposed until the two year period expired, and even then only if the formula in the section is satisfied. Clearly, DPR should have that disc retion or obligation to lift restrictions for that reason or any other reason indicating that total pesticide VOC emissions in the San Joaquin Valley Ozone Non

- Attainment Area were in fact within allowable SIP limits.

More generally, Syngenta agrees with D ow AgroSciences that DPR should have the discretion both to impose similar VOC

- content restrictions on other pesticide active ingredients if data indicate that such ingredients are producing significant and increasing VOC emissions contributing to total pe sticide VOC emissions above the SIP trigger level, and to allow critical use exemptions on reasonable grounds.Linda Irokawa

- Otani

June 7, 2012 Page 7

8. T

HE P ROPOSED 35% U PPER B OUNDARY FOR “L OW VOC”

F ORMULATIONS OF A BAMECTIN I S A RBITRARY

, C APRICIOUS

, C ONTRARY TO THE P URPOSES OF THE P ROPOSED R EGULATION

, C ONTRARY TO P UBLIC P OLICY , AND U

NSUPPORTED BY S UBSTANTIAL
E VIDENCE IN THE R ULEMAKING R ECORD

As DPR is aware, while this proposed regulation has only recently been issued for public comment, the underlying project of identifying high

- VOC pestici des used in the San Joaquin Valley and encouraging or requiring pesticide manufacturers to develop low

VOC alternatives has been underway for several years. DPR issued a “Notice to Begin Reevaluation of Certain Agricultural and Commercial Use Pesticide Pr oducts” on February 16, 2005. This Notice was essentially a data call

- in, requiring product registrants to submit VOC emission

- potential data based on the TGA method for all liquid products actively registered as of August 30, 2004 for which DPR did not a lready

have TGA

- based emission potential data on file. The purpose of this requirement was to enable DPR to accurately assess the VOC emission potential of each product and thus, eventually, to better estimate the total VOC emissions resulting from the us e of all the products in the San Joaquin Valley and elsewhere.

DPR issued a subsequent notice on May 31, 2005, entitled “Notice of Decision to Begin Reevaluation of Certain Pesticide Products.” This Notice applied to all agricultural and commercial struct ural

- use pesticide products that were formulated as liquids and actively registered with DPR as of April 30, 2005, that had a TGA Value of greater than 20%. DPR explained that the “list of pesticides included in this reevaluation

differs somewhat from the list of products included in the previous VOC data call

- in reevaluation . . . . The goal of the earlier reevaluation was to obtain data on emissions . . . . The goal of this reevaluation is to reduce VOC emissions.”

More specifically, the purpose was to “ reduce the VOC emission potential of the pesticide products included in this reevaluation to 20% or less. ” The Department thus required all registrants of the products described above to comply with one of the following three options:

 Submit a written commitment to reformulate the pesticide product

to a VOC emission level of 20% or less . . .

 Submit a request for an exemption . . . or

 Submit a detailed explanation as to why the pesticide product cannot be reformulated, including why reformulation i s not chemically feasible or proof that reformulation would be contrary to VOC reduction and pest management goals.Linda Irokawa

- Otani

June 7, 2012 Page 8

The initiative stayed on this course until February 11, 2010, when the Department sent a letter to registrants announcing a “ New Direction for DPR’s VOC Reformulation

Reevaluation. ” In this n otice, DPR abandoned its initiative to impose VOC limits on all products, and announced instead its intention to impose requirements on products containing seven active ingredients : abamectin, chloryrif os, dimethoate, gibberellins, oxyfluorfen, permethrin, and trifluralin. The February 11, 2010 n otice informed registrants of products that contained other active ingredients that they no longer would be required to do anything to reduce VOC emis sions to c omply with the SIP. Nothing in this notice stated or implied, however, that registrants of nonfumigant products containing any of the seven active ingredients named above would not still be required to reformulate their liquid products to achieve an emiss ions potential of less than 20%.

Like other responsible pesticide manufacturers with products subject to these DPR notices and the underlying DPR program to encourage and require development of products with reduced VOC emissions potential, Syngenta partic ipated actively in the reevaluation project between 2005 and the present. In response to the 2005 Notices, Syngenta communicated to DPR its lengthy prior experience in attempting to develop low VOC formulations of abamectin, and the difficulties Syngenta had encountered in developing such formulations that did not suffer unacceptable efficacy defects. Syngenta’s product development efforts between 1998 and 2005 had cost at least $5 million, and had resulted in a series of formulations that had proved unsa tisfactory due to one or more of the following factors: reduced efficacy (knock down and/or residual), increased crop phytotoxicity, unacceptable cost, unacceptable handler toxicity, unsatisfactory product stability, unacceptable crop residues, increased V OC emissions potential and undesirable or non

- registerable inert ingredients. Based on this experience, Syngenta’s initial communications to DPR in 2005 expressed a low degree of confidence in the probability of ever meeting DPR’s target of a VOC emission s potential below 20%.

Still, DPR remained insistent on the 20% upper limit, and Syngenta renewed and continued formulation development efforts to attempt to meet DPR’s target while at least maintaining the desirable performance characteristics of Syngenta ’s Emulsifiable Concentrate product. Years of additional effort and expenditure culminated in the development of the aqueous

- based formulation Agri

- Mek SC which met or exceeded all aspects of the targeted product design including a VOC emissions potential of just 5.6%, significantly below DPR’s 20% target. Agri

- Mek SC was registered with DPR in 2010. Syngenta has subsequently developed and registered (with EPA) Epi

- Mek SCL, another abamectin low VOC product with the same performance and emissions potenti al as Agri

Mek SC. Epi

- Mek SCL is currently pending registration approval with DPR.

Syngenta’s development costs between 2006 and 2011 for these low VOC products conservatively exceeded $5 million including manufacturing refit costs, in addition to the $5 million spent prior to 2005, which provided Syngenta with a substantial body of experience in attempting to develop a satisfactory low VOC formulation. Throughout the duration of this costly and time

- consuming effort, Syngenta understoodLinda Irokawa

- Otani

June 7, 2012 Page 9

that DPR was insistent on its target of 20% VOC emissions potential or less. Syngenta made its ultimately succ essful investments based on that understanding. Had DPR even once communicated that a less aggressive VOC emissions target of 35% would be satisfactory, Syngenta would likely have made entirely different investments and may well have developed a reformula ted product with 30

- 35% VOC content at far less expense than was actually incurred.

The only discussion Syngenta has been able to find in the rulemaking record that purports to explain the abrupt change from 20% to 35% as the upper boundary of what

would b e considered a “low VOC” abamectin product is a single phrase stated in a memorandum dated March 26, 2012 from Randy Segawa to David Duncan. After some general discussion of DPR’s perceived options to obtain the desired VOC emissions reductions by various means, and DPR’s discretion to set particular percentage thresholds for “low VOC” versions of products containing different active ingredients, the

memorandum states:

Two abamectin liquid products from a single registrant have EPs of approximately 6%. Th ree liquid products from two other registrants have EPs of approximately 30%. All other abamectin liquid products have EPs of 55% or greater. An abamectin EP threshold of 10% would achieve the most VOC reduction, but this could cause market disruptions

b ecause products would only be available from one registrant. An abamectin EP threshold of 35% would be less stringent and achieve less VOC reduction, but have less market disruption.

Segawa memo, at p. 10.

Syngenta objects strenuously to the establishment of an EP thresholds of 35% for “low VOC” abamectin products, on what appears to be the sole basis of potential “market disruption.” Given the history of this project dating back to at least 2005, a 35% threshold is indefensible for several reasons, inclu ding:

 It is fundamentally unfair and contrary to public policy to “force” registrants to develop, at high cost, technological advances to meet the 20% VOC target, and then to reward parties that did not meet that threshold at the conforming party’s expen se. It would not be unfair or violate public policy to allow a raised ceiling if the 20% target had been unattainable, but that is not the case here

– Syngenta attained it.

 It is contrary to the purposes of the proposed regulation to allow

30% VOC abame ctin formulations as “low VOC” when formulations below 6% are available for use. If and when triggers are exceeded and use restrictions are imposed pursuant to theLinda Irokawa

- Otani

June 7, 2012 Page 10

proposed regulation, the purpose of the restrictions and

prohibitions is to reduce VOC emis sions, and the greater the reductions, the better. See, e.g., Clean Air Constituency v. Cal.

State Air Resources Bd. (1974) 11 Cal.3d 801 (Board’s discretion in granting exceptions and delays limited to purposes consistent

with intent of Act to achieve su bstantial pollution reductions.) It is

obvious that far greater VOC reductions would be achieved by use of only 6% VOC abamectin formulations than by use of 30%

formulations.

 There is nothing in the statute that suggests that DPR should be concerned about potential “market disruptions” resulting from the restrictions and prohibitions it may impose, at least as long as there is not substantial evidence of significant adverse eff ects on farmers and crops, such as might result if no acceptable pest control product or alternative is available in a particular case. In this regard, there is no indication in the record or otherwise the Syngenta’s low

- VOC abamectin formulation, in our view the only product that meets the low

- VOC criteria, is not available in sufficient amounts to meet the market need, and thus to ensure that California growers have adequate access to a low

- VOC abamectin product do protect California crops. If DPR is re ferring to the possible absence of price competition in one product line during potential “trigger” periods, this is not evidence of damage to agriculture. DPR as an agency is not charged with attempting to

ensure that there are at least two or three vend ors for all pesticide active ingredients. Moreover, the absence of price competition in this product would provide other registrants to produce genuine

low

- VOC products to fill this need. DPR’s concern for “market disruptions” instead creates an inapprop riate market incentive for registrants not to produce a genuine low

- VOC product, and to

emulate the 30% formulation instead.

 As discussed above, a fundamental principle of rulemaking is that key decisions, such as the establishment of a particular VOC li mit, be based not only on sound principles and reasons but also on adequate evidence in the rulemaking record. There is nothing in
the record here to substantiate the claim that there will be “market disruptions” unless DPR arbitrarily raises the VOC limi t for low VOC abamectin products to 30% so that two other vendors whose products have over 5 times the VOC content of Syngenta’s low VOC product will be allowed to sell in competition with Syngenta.Linda Irokawa

- Otani

June 7, 2012 Page 11

C ONCLUSION

For the reasons discussed above, Syngenta s uggests that DPR consider withdrawing the proposed regulation in its entirety due to the proposal’s fundamental reliance on an incorrect calculation of estimated total pesticide VOC emissions in the San Joaquin Valley Ozone Non

- Attainment Area, and its int ended continuing reliance on a method for estimating hypothetical VOC emissions that is known to be inaccurate. If DPR decides to continue with some version of the proposed regulation, Syngenta submits that the proposed regulation should be modified subst antially to allow more flexibility for exceptions and for the elimination or adjustment of the restrictions and prohibitions of proposed Section 6884(c). Finally, Syngenta submits that the proposal to define abamectin formulations containing in excess of 20% VOCs as “low VOC” and as such, exempt from any use restrictions under Section 6884(c) is clearly unlawful.

Respectfully submitted

,

Debra S. Stubbs Senior Regulatory Manager Regulatory Affairs Department

Syngenta Crop Protection, LLC