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September 26, 2011

Docket # EPA-HQ-OAR-2010-1040

Air and Radiation Docket and Information Center, U.S.

Environmental Protection Agency

Mail Code: 6102T

1200 Pennsylvania Ave., NW

Washington, DC 20460

Re: Comments On August 2011 Interim Final Rule Adjusting Allocation System for

 HCFC-22 (EPA-HQ-OAR-2010-1040)

On behalf of the Natural Resources Defense Council (NRDC), I respectfully submit the 

following comments regarding EPA’s interim final rule, “Protection of Stratospheric Ozone: 

Adjustment to the Allowance System for Controlling HCFC Production, Import, and Export, 76 

Fed. Reg. 47,451 (Aug. 5, 2011) (“IFR”). NRDC encourages EPA to accelerate the phase-out 

schedule for HCFC-22 in its rulemaking for 2012 and beyond.

I. EPA Should Not Increase Production Allowances

As I expressed in our June 2, 2011, letter to the Administrator regarding EPA’s response 

to Arkema v. EPA (attached), NRDC opposes any increase in allowances of HCFC-22 for 2011 

or any subsequent year. NRDC appreciates EPA’s decision in the IFR to maintain total 

allocation levels for 2011 and urges EPA not to make any upward adjustments to current 

production allocations in response to comments. Increasing HCFC-22 production, whether for 

domestic use or export, would result in additional burdens on the stratosphere, public health, and 

the natural environment. 

Arguments that increasing production allocations will result in net environmental benefits 

are counterintuitive and unfounded. Some commenters have claimed that greater US production 

allocations will allow increased exports and displace dirtier HCFC-22 production abroad –

production that takes place with more HFC-23 byproduct emissions. The claimed benefit occurs 

only if it is assumed that increased HCFC-22 exports would be counterbalanced by reduced 

foreign production. Recent history of the HCFC-22 market suggests this would not be the case –

that increasing domestic exports would only increase the global HCFC-22 supply and push down 

HCFC-22 prices. Because total current HCFC-22 production is below Montreal Protocol caps, 

NATURAL RESOURCES DEFENSE COUNCIL
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increasing exports of HCFC-22 will not push foreign competitors out of the international market. 

Instead, increased exports will only worsen the glut of HCFC-22 on the market and further 

depress prices. This is especially true considering the carbon offset projects under the Clean 

Development Mechanism of the Kyoto Protocol incentivize participating plants in developing 

countries to continue production of HCFC-22 in order to receive compensation for destruction of 

the unwanted byproduct, HFC-23. 

Because increasing production allowance allocations will increase worldwide production, 

increasing allocations would result in environmental harm. Increasing oversupply of HCFC-22 

would further drive down prices. Cheap prices correspond with an increase in demand that would 

prolong dependence on this harmful substance. In fact, low prices have already encouraged 

equipment manufacturers to return to producing HCFC-22 based equipment. Even worse, low 

prices are hampering HCFC-22 reclamation from becoming competitive in the marketplace. We 

should be encouraging reclamation and re-use of already existing HCFC-22 in preference to new 

production. Permitting any increase in production allocations would work in exactly the wrong 

direction. 

Additionally, increasing production allocations is not warranted by the Clean Air Act. 

Title VI states that the “[transfer] rules shall insure that the transactions under the authority of 

this section will result in greater total reductions in the production in each year of class I and II 

substances than would occur in that year in the absence of such transactions.”1This IFR adjusts 

allocations as a result of the transfers made by Arkema and Solvay. In the process of that 

transfer, EPA took into account this provision such that the transfer resulted in a net reduction of 

emissions. This proceeding is an incident of that transfer transaction. Increasing production 

allowances now would conflict with the requirement for the transfer transaction to result in 

reductions. 

II. EPA Should Accelerate the Phase Out Schedule

The comments already filed reflect a general consensus that there is a glut of HCFC-22 

on the market and that the oversupply is driving down prices and increasing production of 

HCFC-22 based equipment. The current glut and low prices are compelling evidence that the 

current HCFC-22 phase-down schedule is not rapid enough. The glut is bad for both business 

and the environment, and the EPA should solve this problem by accelerating the phase-out and 

reducing allocations.

The EPA has a statutory mandate under Clean Air Act §606 to accelerate phase out of an 

Ozone Depleting Substance (ODS) where it is both necessary and feasible. The “necessary” 

component requires the EPA Administrator to determine if “such or more stringent schedule may 

be necessary to protect human health and environment.”2 The science has long established the 

need to phase out ODS emissions as soon as possible. ODS emissions increase the risk of fatal 

and non-fatal skin cancers, cataracts, and immunological disorders across the globe. The sooner 

emissions are phased out, the sooner the ozone will be able to repair itself.

 

1 Clean Air Act 42 U.S.C. §7671f(a).

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Id. at §7671e(a)(1).
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Current evidence demonstrates that a faster HCFC-22 phase-out is also “feasible.” This

component requires the Administrator to determine whether a “more stringent schedule is 

practicable” based on “availability of substitutes,” in addition to “technology achievability, 

safety and other relevant factors.”3The present glut of HCFC-22 and the unused consumption 

allocations demonstrates that more stringent standards are practicable taking into account all 

these factors. Further supporting the practicability of more stringent standards is that current 

HCFC-22 prices are too low to incentivize reclamation or conversion to non-HCFC-22 

dependant products. This means that it is the HCFC-22 oversupply, not concerns about the 

availability of substitutes that is preventing a timely transition from HCFC-22 dependence.

Since more stringent standards are both necessary and feasible, EPA should accelerate 

the phase out schedule and implement larger reductions in the 2012-2014 allocation period. 

NRDC urges EPA to include this accelerated phase-out in its next allocation rulemakings.

Sincerely,

David D. Doniger

Policy Director

NRDC Climate and Clean Air Program

 

3

Id. at §7671e(a)(2).