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RESPONSE TO LATE COMMENTS

Supplemental Comments submitted September 20, 2006

Note: These comments (Docket ID Number OAR-2005-0538-0148) were received after the 

close of the comment period. Thus, section 307(6)(B), which states that a final rule “shall . . . be 

accompanied by a response to each of the significant comments . . . submitted in written or oral 

presentations during the comment period” does not apply. However, EPA is providing brief 

responses below.

Summary: One commenter addresses the August 29, 2006 opinion in the case NRDC v. EPA,

D.C. Cir. No. 04-1438. The commenter reads that opinion as stating that the critical use 

exemption decisions of the Parties are “political commitments,” not “law,” for purposes of the 

Montreal Protocol and the CAA. While the commenter indicates that it may seek rehearing or 

Supreme Court review of the August 29, 2006 opinion, the commenter states that if the opinion 

stands, it will have a number of impacts on the 2007 CUE rulemaking. According to the 

commenter, if the exemption decisions of the Parties are not legally binding, there is doubt as to 

whether the Parties or EPA can issue exemptions. The commenter cites Article 2H(5) of the 

Montreal Protocol as creating a legally-binding limit of “zero” production and consumption of 

methyl bromide (except for quarantine and pre-shipment use), and contends that, based on the 

August 29, 2006 D.C. Circuit opinion, there is no instrument for making critical exemptions 

under the Protocol. The commenter further states that “if the last sentence of Art. 2H is only a 

political commitment, then it cannot alter the zero production/consumption limit.” The 

commenter also cites Section 604(h) of the Clean Air Act as expressly adopting the Protocol’s 

phase-out schedule, making the zero production/consumption limit legally binding as a matter of 

domestic law. The commenter then points to Section 604(d)(6) of the Clean Air Act as 

providing for exemptions from the domestic legally-binding zero limit only through a 

rulemaking and to the extent consistent with the Montreal Protocol. [0148]

The commenter further states that if the Decisions are only political commitments, then they do 

not alter the legally-binding limit of zero in Article 2H. The commenter questions what criteria 

govern EPA’s critical use decisions under CAA 604(d)(6), and states that EPA has the obligation 

to define the meaning of the phrase “consistent with the Montreal Protocol” as used in that 

provision. 

Response:

On November 17, 2006, the commenter sought rehearing of the August 29, 2006 D.C. Circuit 

opinion. Given that this is still an active case, EPA has not yet explored the implications of the 

opinion in detail. However, EPA disagrees with the commenter’s assertion that “if the Panel 

decision stands,” then “neither the Parties nor EPA can issue any exemptions at all.” Nothing in 

the August 29, 2006 opinion calls into question either the Parties’ or EPA’s authority to issue 

critical use exemptions. These issues were not before the court. Nor does the court purport to 

address them, even in dicta. 
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The commenter refers to sections 604(h) and 604(d)(6) of the CAA. Section 604(h) instructs 

EPA to promulgate a rule terminating the production, import, and consumption of methyl 

bromide in accordance with the phaseout schedule under the Montreal Protocol as in effect on 

the date of enactment (i.e., in accordance with the 2005 phaseout that currently appears in Article 

2H). EPA has issued regulations implementing Section 604(h): the 2005 phaseout is codified at

40 CFR 82.4(b) and (d). Section 604(d)(6) of the CAA provides EPA authority to create an 

exemption to that phaseout: “[t]o the extent consistent with the Montreal Protocol, the 

Administrator, after notice and the opportunity for public comment . . . may exempt the 

production, importation, and consumption of methyl bromide for critical uses.” EPA has now 

used that authority three times, in each case acting through notice-and-comment rulemaking. 

Critical use exemptions appear at 40 CFR 82.8.

Like its predecessors, the 2007 CUE Rule is consistent with the Montreal Protocol. The Protocol 

provision that specifically addresses critical uses, Article 2H(5), states that the 2005 methyl 

bromide phaseout shall apply except “to the extent the Parties decide to permit the level of 

production or consumption that is necessary to satisfy uses agreed by them to be critical uses.” 

For 2007, the Parties decided to permit a level of consumption1 for the U.S. equivalent to 20.2% 

of the 1991 U.S. baseline. This is the “extent” to which the methyl bromide phaseout, as 

described in Article 2H, does not apply.

The 2007 CUE rule authorizes a level of new production or import equivalent to 16.9% of 

baseline. While this approach is more stringent than Article 2H(5) requires, Art. 2, para. 11 

specifically allows Parties to take more stringent measures: “Notwithstanding the provisions 

contained in this Article [Art.2] and Articles 2A to 2I Parties may take more stringent measures 

than those required by this Article and Articles 2A to 2I.” 

Several considerations led to EPA’s determination to take a more stringent approach. First, EPA 

reduced the total 2007 critical use amount to reflect uptake of sulfuryl fluoride in certain postharvest use categories. EPA made this reduction because the United States Government 

indicated, as part of its 2007 CUN, that it would do so in its domestic allocation process. The 

report of the Methyl Bromide Technical Options Committee (MBTOC) indicated that the 

MBTOC did not make any reductions in the relevant use categories for the uptake of sulfuryl 

fluoride in 2007 because of this assurance from the U.S. Government. Second, EPA reduced the 

amount of new production or import for 2007 to account for the carryover of critical use methyl 

bromide that had not been used by the end of 2005. EPA had announced its intent to perform 

this reduction in the Framework Rule. Third, EPA reduced the new production or import amount

because of a corresponding increase in the amount of CSAs. The reasons for the increase in the 

amount of CSAs are discussed in the preamble to the final 2007 CUE rule. 

 

1

 Consumption = Production + Imports - Exports
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EPA’s review of critical uses is based on criteria proposed and adopted in the Framework Rule. 

These criteria, which parallel the criteria used internationally, appear in the definition of “critical 

use” at 40 CFR 82.3. 

Comment: The commenter states that EPA “has failed to articulate a reasonable construction of 

its commitment to account for stocks – a construction that can be reasonably defended as 

‘consistent with the Montreal Protocol.’”

Response: EPA has addressed Decision language relating to stocks in the preamble to 2007 CUE 

Rule, previous Federal Register Notices, and the Response to Comments documents for the 

2007, 2006, and Framework rules. EPA disagrees with the commenter’s assumption that the 

phrase “take into account quantities of methyl bromide available from existing stocks” is 

susceptible to only one interpretation. EPA has taken available inventory into account by 

including inventory-related provisions in the Framework Rule, by continuing the allocation of 

CSAs at a level equal to 5% of baseline in the CUE allocation for 2006, and by issuing CSAs at a 

level equal to 7.5% of baseline in the CUE allocation for 2007.. 

Comment: According to the commenter, EPA only requires inventory holders to report amounts 

for which they desire CSAs. 

Response: This is not an accurate description of EPA’s reporting requirements. EPA is requiring 

entities to report on the amounts of unused critical use methyl bromide, as well as pre-phaseout 

inventory, on an annual basis, regardless of whether the entities desire CSAs for the pre-phaseout 

inventory. The preamble to the final 2005 Framework rule states “...on an annual basis, 

producers, importers, distributors, and third-party applicators are required to report to EPA... the 

amount of critical use methyl bromide that has not been sold to an approved critical user as of the 

end of the control period that the reporting entity owns [and] the amount of critical use methyl 

bromide that has not been sold to an approved critical user that the reporting entity is holding on 

behalf of another entity along with the name of the entity who owns the material” (69 FR 76996; 

see, e.g., 40 CFR 82.13(f)(3)(xvi). However, the 2005 CUE supplemental rule, published on 

Dec. 13, 2005 (70 FR 73604) expanded the reporting requirements so that entities must report 

not only amounts of critical use methyl bromide, but also all amounts of pre-phaseout inventory 

at the end of each year, without regard to whether the amounts will be sold for critical or noncritical uses (70 FR 73609). For example, 40 CFR 82.13(f)(3)(xviii) requires producers to report 

“On an annual basis, the amount of methyl bromide produced or imported prior to the January 1, 

2005, phaseout date owned by the reporting entity, as well as quantities held by the reporting 

entity on behalf of another entity, specifying the name of the entity on whose behalf the material 

is held.” This reporting requirement enables EPA to track the drawdown of the total methyl 

bromide pre-phaseout inventory. In addition, the section 114 requests issued to collect inventory 

data prior to the adoption of this reporting requirement were general in nature and did not 

exclude amounts destined for non-critical uses. As a result, the inventory figures released by 

EPA on September 7, 2006 reflect the total US pre-phaseout methyl bromide inventory, and do 

not omit inventories "held outside of the CSA-CUE system"
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Comment: The commenter includes a table in its submission that “presents a comparison of the 

stockpiles against critical use amounts authorized since 2005.”

Response: The majority of the figures in the commenter’s table were derived independently by 

the commenter, and do not represent EPA calculations. There are a number of errors and 

omissions in the commenter’s calculations and projections.

The commenter’s table does not account for carry-over methyl bromide. As discussed in the 

preamble to the Final Rule, 443 metric tons of newly produced or imported critical use methyl 

bromide went unused in 2005. This amount of methyl bromide was deducted from the amount 

allocated for new production/import for 2007. 

According to the commenter’s table, 8,074 metric tons of critical use methyl bromide was 

allocated by EPA for 2006. As discussed in the 2006 Allocation Rule, the correct allocation for 

2006 was 7,958 metric tons of methyl bromide (71 FR 5998).

The commenter projects that 6,681 metric tons of critical use methyl bromide will be allocated 

for 2007. As explained in the preamble to the Final Rule, EPA is allocating 6,231 MT of critical 

use methyl bromide for 2007.

As stated in a footnote to the commenter’s table, the table does not adequately address the use of 

pre-phaseout stocks for non-critical uses. The projected figures in the column labeled “Stock 

On-Hand Dec. 31” assume stock drawdown exclusively for critical uses. These omissions led 

the commenter to project larger inventory amounts than would be projected if non-critical uses 

were included. Furthermore, the commenter’s omission of non-critical uses inflates all of the 

derived figures in the column labeled “Stock Remaining if No New Production/Import.”

Comment: The commenter is concerned that some stocks have been used for non-critical 

purposes.

Response: The stocks language in the relevant decisions taken by the Parties to the Montreal 

Protocol does not require that individual Parties prohibit use of stocks by users whose uses fall 

outside the categories of agreed critical uses. One, low volume users or users in the midst of a 

transition may have been relying on the availability of inventory as they ease into alternatives 

and therefore decided not to apply for an exemption. Two, as a matter of policy use of inventory 

will cushion near term transition and as stocks are drawn down will allow a slow but steady price 

increase thus facilitating movement away from the ozone depleting chemicals, an 

environmentally positive outcome. This issue is further discussed in the preamble to the 2007 

CUE Final Rule.

Comment: According to the commenter, the total 2007 CUE amount should be met from stocks. 

The commenter objects to the approach to stock drawdown that the Agency has followed in past 

years and that is reflected in the 2007 proposal. 
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Response: EPA has addressed similar comments in the preamble to the 2007 CUE Final Rule 

and in previous Federal Register notices and Response to Comment documents. On September 7, 

2006 EPA released the aggregate inventory data for 2003-2005. EPA notes that these data, 

which are available on the docket EPA-HQ-OAR-2005-0538, show a continued decrease –

approximately 16,422 metric tons in 2003, 12,994 metric tons in 2004, and 9,974 metric tons in 

2005 - and demonstrate that the United States is managing its domestic inventory appropriately. 

The phaseout of new production and import and the orderly reduction in the existing inventory 

that facilitates transition to alternatives are proceeding in a manner consistent with previous 

successful phaseouts of ozone-depleting substances, such as chlorofluorocarbons (CFCs) and 

halons. 

Comment: The commenter does not support the concept of a one-year operational supply and 

believes that the normal supply-chain inventory for methyl bromide is less than two months.

Response: As the preamble to the 2007 CUE Final Rule states, EPA has not reached any 

conclusion regarding what amount of methyl bromide would be appropriate to maintain as a 

strategic inventory. The Agency intends to continue exploring the issue in future rulemakings, 

particularly in the context of the 2008 critical use exemption.