## R ESPONSES TO 

## P UBLIC 

## C OMMENTS FOR THE 

## N OTICE OF



## P ROPOSED 

## R ULEMAKING 

## : T HE 

## 2008 C RITICAL 

## U SE



## E XEMPTION FROM THE 

## P HASEOUT OF 

## M ETHYL 

## B ROMIDE

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF AIR AND RADIATION

DECEMBER 19, 2007- 2 -



### TABLE OF CONTENTS

Section 

### Page

1. PROPOSED CRITICAL USES ...........................................

............. 

### 3

1.1 Approved Critical Uses................................................. 

### 3

1.1.1. Pre-Plant Approved Critical Uses......................... 

### 3

1.1.1.A. Golf Courses and Turf Producer s.................. 

### 3

1.1.2. Post-Harvest Approved Critical Uses..................... 

### 4

1.2 Approved Critical Users and Locations of Use.........

............ 

### 5

1.3 Limiting Critical Conditions........................................... 

### 6

1.3.1. Pre-plant Limiting Critical Conditions..................

. 

### 6

1.3.2. Post-Harvest Limiting Critical Conditions.........

...... 

### 6

2. PROPOSED CRITICAL USE AMOUNTS.................................

... 

### 8

3. PROPOSED CALCULATION OF AVAILABLE STOCKS..............

... 

### 12

3.1 The Supply Chain Factor............................................... 

### 12

4. PROPOSED TREATMENT OF CARRYOVER MATERIAL.............. 

### 23

4.1 The Petition Submitted By Chemtura Corporation...

............... 

### 26

4.2 Reporting Requirements to Calculate Carryover A mounts........ 

### 28

5. CRITICAL USE METHYL BROMIDE FOR RESEARCH PURPOSE S. 

### 30

6. METHYL BROMIDE ALTERNATIVES...................................... 

### 31

6.1 Post-Harvest Alternatives.............................................. 

### 31

6.2 Pre-Plant Alternatives................................................... 

### 34

7. THE CRITERIA IN DECISIONS IX/6 and EX.I/4.....................

...... 

### 40

8. EMISSIONS MINIMIZATION.................................................. 

### 41

9. PROPOSED CRITICAL USE ALLOWANCE ALLOCATIONS.......... 

### 43

10. PROPOSED CRITICAL STOCK ALLOWANCE ALLOCATIONS

AND TOTAL VOLUMES OF CRITICAL USE METHYL BROMIDE..... 

### 46

11. STOCKS OF METHYL BROMIDE.......................................... 

### 48

11.1 Treatment of Stocks................................................... 

### 48

11.2 Confidentiality of Aggregate Pre-Phaseout Inve ntory Data...... 

### 49

12. RULEMAKING AND THE REGULATORY PROCESS.................. 

### 51

Appendix. Commenters at the Public Hearing for This Rulemaking.......... 

### 54- 3 -



### 1. Comments Relating to the SECTION V.C. 1 

### PROPOSED CRITICAL

USES

What We Proposed:

The comments in this section correspond to Section V.C. of the preamble to the proposed rule and address approved critical uses, a pproved critical users and locations of use and limiting critical conditions as listed in T able I of the preamble.

Comments relating to this section

Commenter Organization Document ID # Gene Harrington National Pest Management Associatio n OAR-2006-1016-0137 David Mueller Fumigation Service & Supply, Inc. OAR -2006-1016-0144 Bruce Houtman Dow AgroSciences, LLC OAR-2006-1016-0 152 Dan Haley Walnut, Prune, and Fig Industry Hearing 1

Joel Jackson Florida Golf Course Superintendents

Association Hearing 8

Bryan Unruh University of Florida Hearing 10

1.1 Approved Critical Uses

1.1.1. Pre-Plant Approved Critical Uses

1.1.1.A. Golf Courses and Turf Producers

Comment:

At the public hearing for this action, the Florida Golf Course Superintendents Association (FGCSA) and a researcher from the Unive rsity of Florida noted that the golf and turf industry has been identified as a critical user of methyl bromide in Caribbean and Latin American countries, but not in the U.S. The commenters asserted that golf and turf uses are unfairly judged as frivolous, but that the y are legitimate businesses and deserve

consideration under the Protocol. The commenters s tated that golf and turf was an approved Critical Use Exemption (CUE) user during t he initial cycle of the CUE review process, since which the state of alternatives has not changed for the industry. [Document ID: Hearing 8, Hearing 10]

Our Response:

As the commenter correctly noted, EPA nominated tu rf as a critical user of methyl bromide in every nomination up to and including the 2008 Critical Use Nomination (CUN). In 2006, the Parties to the Protocol did no t include golf or turf as a critical use in table C of the annex to Decision XVIII/13, which se t forth the agreed critical-use categories for 2008. EPA did not submit a nominati on for turf or golf uses in 2007 for the 2009 growing season. EPA however, notes its di sagreement with the categorization

1 Refers to Section V.C. of the August 27, 2007, Pro posed 2008 CUE Rule (72 FR 48956)- 4 -

that the golf and turf industries are critical user s in Caribbean and Latin American

countries. The Protocol establishes 2015 as the da te by which Article 5 countries must phase out the use of methyl bromide. Thus, as of ye t, there is no critical use exemption process for Article 5 countries.

Comment:

At the public hearing for this rulemaking, FGCSA c ommented that golf and turf is the only sector to have shown actual market disrupt ion figures (in an amended CUE application). The commenter further stated that wi thout a supply of pre-plant methyl bromide, the golf industry has to use larger quanti ties of traditional pesticides to fight weeds, diseases, and insects, which runs counter to EPA’s mission to protect the environment. [Hearing 8]

Our Response :

The Methyl Bromide Technical Options Committee (MBT OC) did not recommend turf as an approved critical use for 2008 in its report published September 2006. MBTOC’s rationale for not recommending turf as an approved critical use was that effective alternatives are available, and that alternatives such as dazomet provide comparable control of off-type grasses. Furthermor e, recent research presented at the 2006 Methyl Bromide Alternatives Outreach conferenc e by Robert Walker and Jason Belcher of Auburn University suggests that there ar e effective alternatives to methyl bromide for sod production. This presentation is a vailable online at http://www.mbao.org/2006/06Proceedings/mbrpro06.htm l , or upon request from the contact listed for this rulemaking. While EPA is c oncerned about the environmental effects of alternatives, EPA does not believe that the environmental effects of using traditional pesticides, especially when used in acc ordance with their FIFRA labeling, is a technical barrier to their adoption.

1.1.2. Post-Harvest Approved Critical Uses

Comment:

Fumigation Service & Supply, Inc. (FSS) noted that post harvest application requests by North American Millers Association (NAM A), NPCA, Pet Food Institute, and U.S. Rice Millers Association were for applicat ions for which methyl bromide is not necessary, and stated that they should not receive CUE allocations. [OAR-2006-1016- 0144]

Our Response:

EPA is aware that sulfuryl fluoride is a feasible a lternative for some post-harvest applications in the sectors mentioned by the commen ter. However, in assessing the need for methyl bromide for these applicants, the U.S. G overnment (USG) and the Parties to

the Montreal Protocol on Substances that Deplete the Oz one Layer (Parties) have agreed- 5 -

that given certain limiting critical conditions, su lfuryl fluoride is not currently a feasible alternative for all applications in these post-harv est sectors. In the 2008 CUN, USG included annual transition rates for sulfuryl fluor ide between 12-18% for the sectors that

the commenter referred to. These transition rates were applied because EPA’s analysis suggests that more time will be needed for these se ctors to fully transition.

The 2008 U.S. CUN assessed the feasibility of meth yl bromide alternatives for each of these uses, and found that the specific use s listed in column B of Table I in the preamble to the proposed rule, with limiting critic al conditions listed in Column C, should qualify for critical use methyl bromide in 2 008. Section V.C. of the preamble to the proposed rule explained that those uses were al so approved by the Methyl Bromide Technical Options Committee (MBTOC), an advisory bo dy to the Parties, and were agreed to by the Parties in Decision XVIII/13. Wit h the exception of NPMA cocoa bean fumigation, discussed more in Section V.D.6. of the proposed rule, the approved critical uses that the commenter objected to were also recom mended for critical use methyl bromide in the 2009 U.S. CUN, which EPA considers t he best available assessment of methyl bromide alternatives. Furthermore, in Septe mber 2007 the Parties agreed, in Decision XIX/9, that these uses should qualify for critical use methyl bromide in 2009.

As demonstrated by the case of NPMA cocoa bean fum igation, EPA continues to assess the feasibility of alternatives, and will ad just critical use nominations and allocations accordingly, based on the best availabl e information.

1.2 Approved Critical Users and Locations of Use

Comment:

The National Pest Management Association (NPMA) req uested that EPA revise the description of NPMA’s use pattern in Column B o f Appendix L on page 48980. The commenter stated that the following language more a ccurately describes the NPMA use patterns, and is also consistent with the language from the final allocation rules in the 2005 supplemental rule and the 2006 and 2007 alloca tion rules:

“Members of the National Pest Management Associatio n treating cocoa beans in storage and associated spaces and equipmen t and processed food, cheese, dried milk, herbs and spices and spaces and equipment in associated processing facilities.” [OAR-2006-1016-0 137]

Our Response:

EPA agrees with the commenter and has incorporated this suggestion in the Final Rule, because it clarifies that commodities shall b e fumigated as part of space fumigations.

1.3 Limiting Critical Conditions- 6 -

1.3.1. Pre-plant Limiting Critical Conditions

Comment:

Dow AgroSciences, Inc. (Dow) requested that some o f the pre-plant limiting

critical conditions be removed or modified in the f inal rule. For example, the commenter stated that with the availability of 1,3-Dichloropr opene (1,3-D) as a nematicide, “nematode infestations” should not qualify as a lim iting critical condition. [OAR-2006- 1016-0152]

Our Response :

The 2008 CUN explains that 1,3-D is effective agai nst nematodes, but 1,3-D is not a feasible alternative for many growers. For e xample, the 2008 CUN states that approximately 40% of Florida tomato land has karst geology, which precludes the use of 1,3-D because of groundwater contamination that cou ld result. For many growers that can not use 1,3-D, nematode infestation is a condit ion for which methyl bromide is the only feasible treatment option. Therefore, nematod e infestation remains a legitimate limiting critical condition for many growers. As d iscussed more below, EPA has adjusted pre-plant critical use exemption amounts t o account for the fact that 1,3-D is

often a feasible alternative for land without karst geology. As a result, EPA assumes that market forces will dictate that critical use methyl bromide will not be used against nematodes for growers that can use 1,3-D instead.

1.3.2. Post-Harvest Limiting Critical Conditions

Comment:

Dow commented that some post-harvest use limiting critical conditions are no longer relevant and should be removed. The comment er also noted that sufluryl fluoride has superseded phosphine and heat as the preferred alternative in post-harvest use categories. The conditions that the commenter requ ested for removal were: 1) Time to transition to an alternative; 2) older structures t hat cannot be properly sealed; 3) presence of sensitive electronic equipment subject to corros ion by phosphine; and 4) rapid fumigation. [OAR-2006-1016-0152]

Our Response :

EPA addresses the transition rate and overall feas ibility of sulfuryl fluoride for post-harvest sectors in Section V.D.6. of the pream ble to the final rule. Section V.C. of the preamble to the final rule explains that EPA ha s removed “the inability to seal older structures” as a limiting critical condition from t he rule text. As discussed in the 2008 CUN, research is still ongoing regarding the effica cy of sulfuryl fluoride for the postharvest critical uses listed in Table I of the prea mble, and EPA must ensure that postharvest sectors have sufficient time to validate an d adopt the new technology. Therefore, the presence of sensitive electronic equipment rema ins a proper limiting critical condition- 7 -

for critical use applications that would otherwise use phosphine, which corrodes electronic equipment.

Regarding the rapid fumigation limiting critical c ondition for certain post-harvest sectors, the United States Department of Agricultur e (USDA) Agriculture Research Service (ARS) is currently conducting research on t he efficacy and practicality of using alternative fumigants, including sulfuryl fluoride, to control post-harvest pests of durable

commodities such as nuts and dried fruit. While ac knowledging that sulfuryl fluoride appears to have the potential to provide effective and rapid vacuum fumigation of nuts and dried fruit, the Agency must ensure that the tr ee nut and dried fruit industry has sufficient time to validate and adopt the new techn ology. Therefore, rapid fumigation remains a valid limiting critical condition for the sectors where it is listed in Table I of the preamble.- 8 -



### 2. Comments Relating to Section V.D. PROPOSED CRITI CAL USE

AMOUNTS

What We Proposed:

The comments in this section correspond to Section V.D. of the preamble to the proposed rule and address proposed critical use amo unts. EPA proposed 4,816,515 kg of methyl bromide to satisfy critical uses in 2008, wi th 3,101,075 kg from new production or import, and 1,715,438 kg supplied from existing pre-phaseout inventory. In Section V.D. EPA proposed to reduce the amount of 2008 new production agreed to by the

Parties to account for: the amount of stocks availa ble for critical uses, the amount of methyl bromide for research purposes, carryover cri tical use material from 2006, and new information about the feasibility of alternatives.

Comments relating to this section

Commenter Organization Document ID Daniel Botts Florida Fruit & Vegetable Association OAR-2006-1016-0134 Edward Ruckert Crop Protection Coalition OAR-2006-1 016-0135 Steven Hensley USA Rice Federation OAR-2006-1016-01 36

James Bair North American Millers’ Association OAR- 2006-1016-0143 David Mueller Fumigation Service & Supply, Inc. OAR -2006-1016-0144 David Doniger Natural Resources Defense Council OAR -2006-1016-0145 Charles Hall Georgia Fruit and Vegetable Growers As soc. OAR-2006-1016-0146

Charles Franklin and Paul

Gutterman Chemtura Corporation OAR-2006-1016-0147

Shawn Crocker Florida Strawberry Growers Associatio n Hearing 7 Reggie Brown Florida Tomato Exchange Hearing 9

Comment:

Seven commenters objected to EPA’s proposed maximu m allowable amount of methyl bromide to be used for critical uses in 2008 on the grounds that it is lower than required by the Parties to the Montreal Protocol an d that it underestimates the actual methyl bromide need for crops. [OAR-2006-1016-0134, 0135, 0136, 0143, 0146, 147, Hearing7, Hearing9]

Our Response:

EPA is implementing reductions to the total amount of methyl bromide authorized for critical uses by the Parties in Decision XVIII/ 13 for two reasons. First, EPA is making reductions of 27,769 kg to account for new i nformation about the feasibility of iodomethane and sulfuryl fluoride, as discussed in Section V.D.6. of the preamble to the final rule. Second, EPA is making reductions of 49 9,234 kg to account for carryover critical use material from 2006, as discussed in Se ction V.D.4. of the preamble to the

final rule.- 9 -

In the preamble to the proposed rule, EPA sought n ew information about the feasibility of alternatives and stated that such in formation had the potential to alter EPA’s determination as to what amounts of methyl bromide qualify for the critical use exemption in 2008 (72 FR 48960). As discussed in S ection V.D. of the preamble to the final rule, EPA received new information about alte rnatives after the proposed rule was published, and is making appropriate adjustments in the final rule to account for that information. New information justifying increased uptake of methyl bromide alternatives

warrants reductions in the overall amount authorize d by the Parties because it reduces the overall need for methyl bromide to satisfy critical needs in 2008.

In the Framework Rule (69 FR 76982), EPA establish ed a system to reduce critical use amounts to account for unused carryove r amounts of critical use methyl bromide from previous years. The implementation of this policy is discussed in detail in Section V.D.4. of the preamble to the final rule. It is appropriate to reduce the total critical use amount to account for carryover, becau se the pool of critical use material unused in previous years is available for critical uses in subsequent years. Therefore, carryover amounts can offset the need for a certain amount of new production, import or supplies from pre-phaseout inventory.

Comment:

Two commenters stated that the methyl bromide allo cations are reduced at each stage of the review process and should not be furth er reduced by the Agency. [OAR2006-1016-0135, 0136]

Our Response:

The commenters are correct that methyl bromide amo unts for critical uses are adjusted as EPA prepares nominations, the Parties a pprove critical use amounts, and EPA allocates CUEs in a notice-and-comment rulemaking. Each of these steps in the exemption process represents an independent assessm ent of the critical need for methyl bromide, and adjustments are made accordingly. 200 8 requests for critical use methyl

bromide were 62.4% of the 1991 baseline. After tho rough technical and economic analysis described in the 2008 CUN, the USG nominat ed 23.1% of baseline for 2008. As described in more detail in the preamble of the fin al rule, the Parties to the Montreal Protocol authorized the equivalent of 21.0% of base line for 2008 critical uses. For reasons described in the preamble of the final rule , further reductions were taken to account for new information about the feasibility o f alternatives and carryover critical use methyl bromide not used in 2006. The final rule al location amounts of critical use methyl bromide are equivalent to 18.8% of baseline (with 6 .7% coming from pre-phaseout inventory). While the USG endeavors to allow the p rivate sector to supply adequate levels of methyl bromide for critical users by nomi nating and negotiating for adequate amounts of critical use methyl bromide, it will not allocate to uses for which there are feasible alternatives. Reductions are informed by the best available information, and recommendations from relevant technical experts.- 10 -

Comment:

The commenter believes that the Agency should not change the amounts of CUE methyl bromide approved by the Parties because this allocation is the amount that U.S. economic competitors believe is necessary. The com menter believes that only substantial changes in the technical and economic feasibility o f potential alternatives should cause the Agency to alter the Parties’ allocations. [OAR -2006-1016-0143]

Our Response:

EPA explains the reasons for reducing the amount of methyl bromide authorized by the Parties in the preamble to the final rule. The Agency reiterates that critical use exemptions are only for those areas where technical ly and economically feasible alternatives are not available, and thus EPA change s the amount authorized by the Parties based upon new information about the technical and economic feasibility of alternatives. For example, in this final rule, EPA is altering th e amounts authorized by the Parties due to additional information about the feasibility of the alternatives sulfuryl fluoride and iodomethane. See Section V.D.6 of the preamble for further discussion. EPA is also making adjustments based on the amount of carryover critical use methyl bromide from previous years, as discussed in Section V.D.4. of t he preamble to the final rule, because that material, which can be used for critical uses, offsets the need for additional critical use allowances (CUAs) or critical stock allowances (CSAs).

Comment:

At the public hearing for this action, a represent ative of the Florida Strawberry Growers Association commented that foreign markets that have access to methyl bromide will out-compete the U.S. as U.S. methyl bromide us ers lose access. Therefore, the commenter requested that EPA approve larger amounts of methyl bromide under the critical use exemption. [Hearing 7]

Our Response:

The Parties to Protocol agreed to phase out use of methyl bromide in industrialized countries and ultimately set 2005 as the date for completion of that phaseout. The Parties set 2015 as the date for the phaseout in Article 5 (developing) countries. Therefore, the Parties to the Protocol recognized that developing countries may have access to methyl bromide for a longer peri od of time.

When the Parties negotiated the definition of the CUE they included economic feasibility as a major criterion, which should limi t some of the competitive disadvantage that could result from the 10-year methyl bromide p haseout lag for Article 5 countries. Concerns about the competitiveness of U.S. specialt y crop growers may be tempered because U.S. acreage for crops affected by the meth yl bromide phaseout, such as strawberries, continues to grow.- 11 -

Comment:

Fumigation Service & Supply, Inc. (FSS) commented that the Copenhagen Amendment was signed by the U.S. to phaseout methyl bromide 14 years ago, and believes that this time period has been adequate fo r all users of methyl bromide to switch to alternative fumigation methods. The commenter b elieves that no methyl bromide CUEs should be allocated, and that such allocations penalize companies that already phased out methyl bromide. [OAR-2006-1016-0144]

Our Response:

While EPA continues to support the transition to m ethyl bromide alternatives it does not support an artificial deadline for the pha se-out of critical use methyl bromide. The Montreal Protocol continues to allow for methyl bromide use when there are no technically or economically feasible alternatives. This is emblematic of the pragmatic nature of the Protocol, which has contributed to it s great success. However, the USG continues to support research and adoption of alter natives. In an effort to speed adoption of alternatives, the USG has invested over $150 mil lion in research on potential methyl

bromide substitutes and alternatives. Promotion of alternatives through education and extension, and robust testing and assessment of alt ernatives continue to be USG priorities.

Comment:

One commenter requests that EPA make a reduction i n the 2008 CUE allocations of at least 1,275 metric tons (5% of the baseline), and by larger amounts in 2009 due to advancements in using sulfuryl fluoride and iodomet hane. [OAR-2006-1016-0145]

Our Response:

As discussed above, EPA is reducing the total 2008 CUE allocations by 17,690 kg to account for the increased uptake of sulfuryl flu oride for cocoa bean fumigation and by 14,472 kg to account for the uptake of iodomethane in 2008. It would be inappropriate, at this time, to estimate whether additional reduct ions will be made for either of these alternatives in the 2009 CUE allocation rulemaking.- 12 -



### 3. Comments Relating to the Section V.D.2. CALCULAT ION OF

AVAILABLE STOCKS

What We Proposed:

The comments in this section correspond to Section V.D.2. of the preamble to the proposed rule and address EPA’s proposed refined me thod for determining available stocks. In this section EPA proposed to include a supply chain factor (SCF) in its determination of the amount of pre-phaseout invento ry available for critical uses in 2008.

Comments relating to this section

Commenter Organization Document ID Pamela Peckman The Industrial Fumigant Company OAR- 2006-1016-0133 Edward Ruckert Crop Protection Coalition OAR-2006-1 016-0135 Steven Hensley USA Rice Federation OAR-2006-1016-01 36

James Bair North American Millers’ Association OAR- 2006-1016-0143 David Mueller Fumigation Service & Supply, Inc. OAR -2006-1016-0144 David Doniger Natural Resources Defense Council OAR -2006-1016-0145 Charles Hall Georgia Fruit and Vegetable Growers As soc. OAR-2006-1016-0146

Charles Franklin and Paul

Gutterman Chemtura Corporation OAR-2006-1016-0147

Bruce Houtman Dow AgroSciences, LLC OAR-2006-1016-0 152 Jim McBriarty Ameribrom Inc. Hearing 2

Comment:

One commenter noted that EPA made a mathematical e rror in its calculation of available stocks in the proposed rule by listing ex isting stocks as 7,671,091 kg, which is the correct value, but using the value 7,671,000 kg in its calculation. As a result, EPA underestimated available stocks by 91 kg. [OAR-2006 -1016-0149]

Our Response:

As discussed in Section V.D.2. of the preamble to t he final rule, EPA has

corrected the calculations in the final rule.

3.1 The Supply Chain Factor

Comment:

One commenter believes that EPA’s proposal to draw down stocks jeopardizes the U.S.’s ability to address a catastrophic supply disruption. [OAR-2006-1016-0149]

Our Response:

EPA proposed a SCF in its analysis of available sto cks to accommodate a catastrophic supply disruption such as the one ment ioned by the commenter. EPA used- 13 -

conservative assumptions in the scenario analyzed f or the SCF estimate, which is described in the Technical Support Document (TSD) o n the docket. EPA believes that this final rule provides suppliers with the opportu nity to maintain an adequate supply buffer to satisfy critical needs in the event of su ch an emergency.

Comment:

Seven commenters supported the creation of an SCF, but asserted that the 15 week SCF suggested for use in the event of a supply disruption is inadequate and recommend a one-year supply instead. [OAR-2006-1010 6-0135, 0136, 0143, 0146, 0147, 0149, Hearing2]

Our Response:

The commenters may have misunderstood EPA’s analys is as described in the TSD. We found that it would take up to 15 weeks fo r adequate amounts of methyl bromide imports to reach the U.S. if there is a dom estic production failure. However, we also considered the variability of production volum es throughout the year, and proposed an SCF that would provide insurance against a produ ction failure during the peak production season (i.e. the beginning of the calend ar year). The Agency’s proposed SCF is actually equivalent to about 51% of the 5,355,94 6 kg authorized for U.S. critical uses in 2008, or roughly a six-month supply if demand we re constant throughout the year. Section V.D.2. of the preamble to the final rule ex plains EPA’s justification for this SCF size, as opposed to the one-year supply that the co mmenters requested.

Comment:

Four commenters stated that the SCF should be a on e year supply because of (1) the global ramifications that the supply disruption from the U.S.’s one plant would have and (2) concerns about the ability of the Israeli p lant to divert methyl bromide to the U.S., especially in light of the conflicts occurring in t he Middle East. [OAR-2006-1016-0135, 0136, 0143, 0146]

Our Response:

EPA agrees that a supply disruption in the U.S. cou ld have important global ramifications. The Agency considered international factors in its SCF analysis, which is described in the TSD. For example, after close scr utiny, EPA estimated that foreign production capacity is capable of meeting global de mands for all methyl bromide. EPA also found that, given the conservative assumptions of the production failure scenario, existing shipping containers would be sufficient to maintain the global distribution system for methyl bromide. Therefore, based on the assumptions described in the TSD, EPA estimates that the proposed SCF would be large enough to mitigate the global

ramifications that the commenters raised for concer n.- 14 -

Regarding the commenters’ second concern, EPA’s an alysis, described in the TSD, found that based on previous production levels , and also considering current conditions, the Israeli production facility would b e able to ramp-up production rapidly enough to provide significant amounts of methyl bro mide to the U.S. in 15 weeks or less. EPA also estimates that existing container capacity would be sufficient to transport that methyl bromide to the U.S. and other destinations. The Agency’s analysis found that Israel would not be forced to divert methyl bromide from any previous customers in order to satisfy increased demand from North America foll owing a U.S. production failure.

The TSD requires a determination about which conti ngencies to use as the basis for the analysis. Contingencies that are too specu lative, such as a simultaneous U.S. and Israeli production failure, or whose effects cannot readily be quantified, were not included in the SCF analysis described in the TSD. However, EPA adopted a conservative approach in recognition that its analy sis could not address all possible contingencies. EPA believes that its analysis addr esses the commenters’ concerns and that therefore, the size of the SCF that EPA is fin alizing for 2008 is sufficient to serve its stated purpose.

Comment:

The North American Millers’ Association commented that the U.S. would not be sacrificing environmental goals by maintaining a on e-year SCF because stockpiled methyl bromide that is not in use can do no harm to the environment. [OAR-2006-1016- 0143]

Our Response:

EPA notes that using existing methyl bromide can d isplace the need for new production, with corresponding environmental benefi ts.

Comment:

Chemtura and MBIP requested that EPA ensure a one- year methyl bromide SCF that is capable of supporting all methyl bromide us es. The commenters contended that EPA’s technical analysis does not accurately estima te assumptions regarding the time required to import methyl bromide. The commenters stated that EPA should have considered QPS, feedstock, and Article V methyl bro mide uses in addition to critical uses, which account for only 50 percent of U.S. met hyl bromide use. The commenters also stated that importing the methyl bromide neces sary to meet U.S. demand would take far longer than 15 weeks due to 1) an inflexible sh ipping system, 2) limited storage capacity and unavailability of ISO shipping contain ers, 3) inability to ramp up production in a short time period, 4) the need to receive gove rnment approval before a foreign producer may increase production. Finally, the com menters quoted the technical limitations discussed in EPA’s analysis and argued that these limitations render EPA’s final calculation invalid. [Document ID: OAR-2006-0 147, 0149]- 15 -

Our Response:

We do not believe that the technical limitations i n our estimate, as described in the TSD, render the final SCF calculation invalid, or instead support a one-year supply

chain factor. Our SCF determination is an estimate, and we think it is appropriate to be

candid about the limitations of our calculations. To account for the uncertainties in our estimate, we are using the conservative end of our technical estimate.

EPA believes that methyl bromide for quarantine an d pre-shipment (QPS), feedstock, and exempted Article 5 country (developi ng country) uses would not have to be supplied from pre-phaseout inventory after a sup ply disruption, because, as explained in the proposed rule, existing regulations allow ma nufacturers and distributors to manage inventories of methyl bromide designated for those purposes (72 FR 48968).

In response to the concerns regarding the flexibil ity of the shipping system, the possibility that methyl bromide distributors have n ot conducted emergency response planning does not invalidate the SCF estimate descr ibed in the TSD. The Agency carefully considered physical shipping constraints that dictate how rapidly methyl bromide distribution patterns can shift, including ISO container capacity, the length and timing of shipping routes, and the volume of methyl bromide that would be shipped internationally to maintain the global distribution system following a U.S. production failure. However, the TSD does not assume that dis tributors will need long periods of time to redesign their distribution patterns in ord er to respond. Since each shipping route takes weeks to complete, the Agency believes that i ndustry would have ample planning time to re-route containers as necessary.

In response to concerns regarding storage capacity and capacity of the existing ISO container fleet, EPA disagrees that the current fleet of ISO containers would be unable to maintain the global distribution system f or methyl bromide within the 15-week period estimated by the Agency. The conclusions de scribed in the TSD are based, in part, on a detailed analysis of the capacity of the existing ISO container fleet, and other shipping logistics. EPA can not reconcile the diff erences between the Agency’s estimate and MBIP’s estimate, because MBIP did not provide d etails about how it concluded that the existing fleet of containers would be inadequat e.

Chemtura, on the other hand, submitted diagrams to support their claim that the existing ISO container fleet would be insufficient. In their public comments Chemtura stated, “To assist the Agency further in understand ing the logistical challenges raised by a shut-down of U.S. production, Chemtura is submittin g, as business-confidential exhibits, two diagrams showing its estimates of the current g lobal distribution map, and how the distribution map would change if U.S. production we re suddenly disrupted.” After close analysis, EPA found a number of points of disagreem ent with the assumptions in Chemtura’s confidential submission. In general, th ese disagreements are related to concerns that Chemtura raised in its public comment s, which EPA addresses in the preamble for the final rule. For confidentiality r easons, the Agency is unable to elaborate

on how Chemtura’s submission conflicts with the ana lysis explained in the TSD. The- 16 -

Agency closely analyzed Chemtura’s confidential sub missions and did not find a specific reason therein to revise the TSD, or the size of th e proposed SCF. EPA’s detailed response to Chemtura’s confidential comments has be en placed on a confidential docket

because it includes information claimed as confiden tial business information.

In response to concerns about time and approvals r equired to ramp-up foreign production, EPA built in a certain amount of time — starting from the time of disruption of the U.S. supply chain—for foreign producers to m ake arrangements and adjustments to their production schedules before they would need t o ramp-up production. EPA’s analysis assumed that the first container carrying methyl bromide from Israel to the U.S. would leave Israel approximately 45 days after a hy pothetical U.S. production failure. This would give Israel a number of weeks to produce or make available extra methyl bromide to ship to the U.S. EPA considers the abili ty of foreign producers to ramp-up production, including gaining access to raw materia ls and storage capacity, and estimates that this timeframe would be adequate.

Regarding governmental approval for extra producti on, foreign producers could increase production and exports to the United State s without approval from the Parties to the Montreal Protocol, so long as U.S. entities hol ding CUA allowances are willing to expend their CUAs to import that material. The com menters did not provide specific information about other governmental approvals that may be necessary, or whether there are steps that foreign producers could take in adva nce as contingency measures that

would alleviate these concerns.

In conclusion, EPA’s analysis, in combination with information provided from comments, finds that the SCF that the Agency is fin alizing (2,717,051 kg) is sufficient to alleviate shortages in the scenario that EPA analyz ed. The Agency is not persuaded that a one-year SCF, as the commenters requested, would be necessary.

Comment:

Chemtura commented that the U.S. delegation reques ted a six month SCF from the Parties in September, thus acknowledging the ne ed for a larger SCF than is now suggested. This commenter stated that EPA needs to acknowledge methyl bromide’s role as a tool in responding to catastrophic events such as widespread re-fumigation after a

natural disaster. The commenter also stated that m ethyl bromide has security as well as economic importance. [OAR-2006-1016-0147]

Our Response:

EPA acknowledges methyl bromide’s role in respondi ng to the situations described by the commenter. Methyl bromide’s role in responding to such challenges is one of the reasons EPA proposed a SCF in its analys is of available stocks, and based its estimate of the SCF on conservative assumptions. E PA, though, disagrees with

Chemtura’s characterization of the events at the Se ptember 2007 Meeting of the Parties (MOP), and with Chemtura's assertion that the event s at the MOP contradict this- 17 -

rulemaking. A negotiating position does not consti tute a factual basis for a rulemaking, or a specific policy or technical finding of the US G. Furthermore, as explained in the proposed rule (72 FR 48966), EPA's proposed SCF pro vides a technical basis for calculating available stocks that is consistent wit h the Montreal Protocol, and clearly within EPA's authority under Section 604(d)(6) of t he Clean Air Act.

Comment:

MBIP and Industrial Fumigant Company (IFC) comment ed that chloropicrin is premixed in “virtually the entire” U.S. inventory o f existing stocks. The commenter stated that this is problematic for post-harvest, Q PS, and feedstock methyl bromide users because these uses require pure methyl bromide. Th erefore, an SCF comprising existing

stocks would not be useful to these sectors. Additi onally, regulations regarding the import, export, and labeling of chloropicrin could delay the import of methyl bromide to the U.S. following a supply disruption. [OAR-2006-1 016-0133, 0149]

Our Response:

MBIP did not provide detailed information to suppor t their claim about the prevalence of chloropicrin in the remaining pre-pha seout inventory, and EPA’s current reporting requirements do not request information a bout all of the characteristics, or composition, of that inventory. Just prior to publ ishing the proposed rule, the Agency received anecdotal information suggesting that a la rge percentage of the remaining inventory is mixed with chloropicrin, and therefore unsuitable for post-harvest uses. EPA has also heard conflicting reports stating that a s ubstantial portion of the pre-phaseout inventory is pure methyl bromide.

The Agency is currently considering options to obta in more information about the characteristics of the pre-phaseout inventory, incl uding but not limited to, requesting information from holders of pre-phaseout inventory using its information-gathering authority under section 114 of the Clean Air Act. If the prevalence of chloropicrin in the pre-phaseout inventory becomes a serious problem fo r post-harvest critical users, and because the CUA amount in today’s final rule is les s than the production amount authorized by the Parties, EPA may consider allowin g the conversion of some CSAs to CUAs in appropriate circumstances.

The Agency also recognizes that if pre-phaseout in ventories contain very small amounts of pure methyl bromide, then allowing for a larger supply buffer, or SCF, composed of that inventory would not remedy the com menters’ concerns.

Comment:

Ameribrom and MBIP commented that the distribution system for methyl bromide in the U.S. is complex and expressed concer n that imports would not reach all repackaging locations in the same timeframe. MBIP stated that 500,000 kilograms of methyl bromide must remain in the system (a minimum of 3,231 metric tons of pre-- 18 -

phaseout stocks) to keep the domestic distribution system functional. [OAR-2006-1016- 0149, Hearing 2]

Our Response:

EPA specifically accounted for this concern in the proposed SCF analysis. The SCF would replace lost production for 15 weeks unti l imports arrive. Assuming these imports are all shipped to the location where methy l bromide is currently produced in the U.S., imported methyl bromide could be expected to reach repackaging locations in the same amount of time as if there were no production failure. EPA recognizes that the timely distribution of pre-phaseout stocks after a domestic production failure would depend upon business decisions made by suppliers. However, the proposed SCF is large enough to give suppliers the opportunity to provide uninterrupted distribution in the analyzed scenario.

Comment:

MBIP asserted that EPA’s assumption that all of th e pre-2005 inventory of methyl

bromide would be available for critical uses in the event of a production failure is inaccurate. The commenter stated that companies ho lding stocks are permitted to sell them for any use and that critical users that do no t have contracts with inventory holders could have a difficult time obtaining methyl bromid e from stocks. [OAR-2006-1016- 0149]

Our Response:

The commenter is correct that EPA lets firms respo nd to market conditions, instead of requiring them to sell methyl bromide to critical users. In the December 24, 2004, Framework Rule (69 FR 76989), EPA finalized a system that allows for market forces to dictate the distribution of pre-phaseout inventory to specific end-users. EPA chose this approach, at least in part, to promote m arket flexibility and efficiency. Based on EPA’s estimate that there are significant amount s (approximately 1,729 metric tons) of pre-phaseout inventory available for critical us es in 2008, the Agency expects that holders of pre-phaseout inventory will be able to e xpend the full amount of 2008 CSA allocations in order to satisfy the needs of critic al users.

Comment:

MBIP commented that EPA did not consider regulator y obstacles under FIFRA that may delay the availability of alternate supply . This commenter asserted that if production is shifted to another location, the sour ce information, manufacturing process data, and labels for all affected products would ha ve to be updated before the products could be imported or distributed in the U.S. [OAR-2 006-1016-0149]- 19 -

Our Response:

Data about sales of critical use methyl bromide sh ows that imported methyl bromide is used in the U.S. This suggests that at least some foreign production practices, formulations and locations are registered with the USG. EPA does not obligate producers to register their products for all U.S. critical us es, but the Agency expects that firms will respond to market conditions, and undertake appropr iate emergency response planning (e.g. seeking amendments to registrations to allow for alternative production processes/production locations in the event of a su pply disruption). A firm’s decision about whether to register its product for critical uses is similar to business planning

decisions under the established critical stock allo wance policy noted above; in which EPA let firms respond to market conditions, instead of requiring them to sell methyl bromide to critical users (69 FR 52376). The Agenc y believes that the added transparency of the SCF approach will help companie s respond to market conditions more rapidly and appropriately.

Comment:

Dow commented that the SCF should be based on the actual 2008 methyl bromide demand (4,816,514 kg) as determined by the USG and as proposed in the rule rather than the amount approved by the Parties (5,355,946 kg). The commenter stated that a SCF calculated upon a methyl bromide volume that exceed s the critical need for 2008 renders

the SCF value and basis for the calculation nonsens ical. The commenter concluded that this simple recalculation would reduce overall new MB production demand in 2008 by more than 250,000 kg. [OAR-2006-1016-0150]

Our Response:

It appears that the commenter’s figure for “actual methyl bromide demand” is derived by subtracting the proposed 539,432 kg carr yover amount (72 FR 48969), from the 2008 critical use amount agreed to by the Parti es (5,355,946 kg) in Decision XVIII/13. EPA reduces new production to account fo r carryover critical use material in order to prevent companies from building inventorie s of newly produced critical use methyl bromide. EPA reduces new production amounts to account for carry over, but in doing so the Agency is not reopening the issue of t he overall amount of total critical need. EPA expects that critical users will satisfy the remainder of their critical needs by using the critical use methyl bromide that was unus ed in previous control periods. EPA only considers valid, for the purposes of determini ng the total critical need, those

reductions that account for new information about t he feasibility of alternatives. Accordingly, for the reasons explained in Section V .D.6. of the preamble to the final rule, EPA is reducing the total 2008 CUE by 27,769 kg to account for the increased uptake of sulfuryl fluoride and iodomethane. The Agency has re-calculated the SCF with a total 2008 demand for critical uses of 5,338,256 kg. Thi s adjustment reduces the SCF by 14,161 kg.

To clarify, EPA proposed that the SCF should repre sent about 51% of the total critical need in 2008. In the proposed rule, the A gency assumed that the total critical- 20 -

need in 2008 would be 5,355,946 kg, as agreed to by the Parties in Decision XVIII/13. Therefore, EPA proposed an SCF of 2,731,211 kg (5,3 55,946 kg * 50.994% = 2,731,211 kg). As explained in Section V.D.6. of this preamb le, EPA now estimates that the total critical need in 2008 will be 27,769 kg less than t he Parties authorized in Decision XVIII/13, because EPA is making further reductions to account for the uptake of sulfuryl fluoride for cocoa bean fumigation, and for the new ly registered fumigant iodomethane. Therefore, in this final rule EPA estimates that th e total critical need in 2008 will be 5,328,177 kg. Accordingly, EPA now calculates an S CF of 2,717,051 kg (5,328,177 kg * 50.944% = 2,717,051 kg).

Comment:

Dow, FSS and NRDC objected to EPA’s proposal to cr eate an SCF and stated that the methyl bromide in question should be used to re duce or eliminate the need for new production and import allocations for 2008. [OAR-20 06-1016-0144, 0145, 152]

Our Response:

The supply chain factor is intended to provide a t ransparent analytical tool that will foster greater understanding of the Agency’s p rocess in determining CSA amounts. By including a supply chain factor in its calculati on of available stocks, EPA is considering the drawdown of pre-phaseout inventory and allocating critical use amounts that reflect the size of the remaining pre-phaseout inventory. EPA expects pre-phaseout inventory to be used to “fill the distribution chai n” and simultaneously provide some buffer in case of a major supply disruption. Given the small number of methyl bromide production facilities around the world, and the con tinued drawdown of pre-phaseout inventory, a major supply disruption is an importan t issue for Agency consideration.

Comment:

FSS commented believes that the SCF will be equiva lent to existing stockpiles and will be easy to get and use by those with restr icted use pesticide licenses. The commenter stated that stockpiles or SCFs are counte rproductive to the phase out of methyl bromide and offer disincentives to companies to invest in using alternatives. [OAR-2006-1016-0144]

Our Response:

The commenter is correct that this supply buffer w ould be composed of methyl bromide produced before the January 1, 2005, phaseo ut. The commenter is also correct that non-critical users are not barred from purchas ing the pre-phaseout stocks of methyl bromide. In the Final Framework Rule, EPA explaine d its rationale and authority for allowing non-critical users to access stocks (69 FR 76988). EPA is not revisiting that issue in this rulemaking.- 21 -

The Agency does not believe that the fact that pro ducers and distributors may sell stocks to non-critical users invalidates the propos ed SCF, or EPA’s proposed estimation

of the amount of available stocks in 2008. The com menter is speculating about what suppliers will do given the opportunity to maintain a buffer, which is something that has not yet been tested. Information on stock drawdown during 2008 will inform EPA’s future CUE rulemakings.

While EPA did not propose to require that distribu tors keep the SCF amount as a supply buffer for critical users, Section V.D.3. of the proposed rule laid out an approach in which the Agency would stop drawing down stocks faster than the minimum agreed by the Parties, if EPA determines that available stock s will be less than the SCF amount. By considering a SCF in its analysis of the amount of stocks that are available for critical uses, EPA is giving producers and distributors the opportunity to provide a reasonable supply buffer to satisfy critical needs.

Comment:

NRDC objected to the SCF because the commenter bel ieves that (1) the Parties and Congress did not intend for EPA to designate st ocks as “unavailable;” (2) there is not a basis for the assumed risk of catastrophic loss a t the U.S. methyl bromide production plant, as no such even has ever occurred at this lo cation; (3) the chance of such an event happening right after the first of the year is even less likely; (4) no chemical company keeps more than a two or three month supply of a ch emical, yet the SCF is nearly a four month supply; (5) temporary adjustments at a manage able cost can be made by methyl bromide users in the event of a supply disruption, such as the use of alternatives or a shift in fumigation schedules; and (6) the Parties reject ed the U.S. proposal to allow maintenance of a half-year supply chain reserve at the 19 th Meeting of the Parties. [OAR2006-1016-0145]

Our Response:

First, EPA did not propose to designate any amount of stocks, or any specific holdings, as “unavailable.” EPA proposed to recogn ize the amount of existing stocks that is available. As discussed above and in the propos ed rule, in paragraph 4 of Decision XVIII/13, and similar Decisions, the Parties indica ted that each individual Party has discretion to recognize the amount of existing stoc ks that are available for critical uses. Most recently, Table D of the Annex to Decision XIX /9 explicitly indicated that the United States should reduce authorized new producti on levels to account for the amount of available stocks. Thus, EPA’s proposed approach is consistent with the practice under the Montreal Protocol. It is also an appropriate e xercise of the discretion granted by Congress under Section 604(d)(6) of the Clean Air A ct.

Second, the methyl bromide industry is unlike many others because there is only one active production facility in the United States . EPA recognizes that a catastrophic loss is unlikely, but this does not obviate the nee d to plan for such a scenario. While EPA expects private entities to take prudent steps to p rotect themselves, EPA does not wish to- 22 -

render them incapable of maintaining a reasonable s upply buffer.

Third, though unlikely that a disruption will occu r at the beginning of the year, EPA adopted a conservative approach in recognition that its analysis can not address all possible contingencies.

Fourth, the commenter provides no evidence for its assertion that no chemical company keeps more than a two to three month supply of a chemical. As stated above, the methyl bromide industry is unusual because ther e is only one production facility in the United States, which is also the lone productio n facility in the Western Hemisphere. EPA proposed that the SCF for 2008 should be 2,731, 211 kg, or roughly a six-month supply of critical use methyl bromide if demand wer e constant throughout the year.

Fifth, EPA agrees that depending on when a supply disruption occurs, it is possible that a limited number of entities might be able to delay scheduled fumigations. It is also possible that some non-critical users mi ght need to access the pre-phaseout inventory for security or other emergency purposes. We do not know whether these effects would occur or to what extent they would of fset each other. Such speculation does not change the validity of EPA’s proposal that 2,731,211 kg is a reasonable supply buffer for 2008. EPA disagrees with the commenter’ s assertion that critical users could readily switch to alternatives following a supply d isruption. By definition, and as confirmed by several rounds of expert review, entit ies that qualify for critical use methyl bromide do not have access to technically and econo mically feasible alternatives.

Sixth, EPA disagrees with the assertion that the P arties at the Nineteenth MOP rejected a half-year supply chain reserve because t he Parties neither adopted nor rejected the creation of such a reserve. Furthermore, as me ntioned above, a negotiating position

does not constitute a factual basis for a rulemakin g, or a specific policy or technical finding of the USG. More information about the 200 7 MOP is provided in the Report of the Nineteenth MOP, available on the docket for thi s action.

Comment:

At the public hearing for this rulemaking Ameribro m commented that the SCF needs to be held by manufacturers and importers bec ause distributors, who hold most of the current stocks, do not distribute the methyl br omide when it is needed. [Hearing2]

Our Response:

The supply of pre-phaseout inventories to critical users is based upon private business decisions that the Agency does not control . However, EPA expects all holders of methyl bromide to respond to market conditions to d istribute methyl bromide to users as

needed.- 23 -



### 4. Comments Relating to Section V.D.4. PROPOSED TRE ATMENT

OF CARRYOVER MATERIAL

What We Proposed:

The comments in this section correspond to Section V.D.4. of the preamble to the proposed rule and address the proposed treatment of carryover critical use methyl bromide from 2006. EPA proposed to reduce the tota l amount of the 2008 CUE allocation by 539,433 to account for that carryover material. EPA also sought detailed comments on a petition submitted by Chemtura, and s ubsequently made available on the docket, that proposed several changes to EPA’s calc ulation and implementation of

carryover amounts.

Comments relating to this section

Commenter Organization Document ID Pamela Peckman The Industrial Fumigant Company OAR- 2006-1016-0133 Daniel Botts Florida Fruit & Vegetable Association OAR-2006-1016-0134 Edward Ruckert Crop Protection Coalition OAR-2006-1 016-0135 Steven Hensley USA Rice Federation OAR-2006-1016-01 36 David Doniger Natural Resources Defense Council OAR -2006-1016-0145

Charles Franklin and Paul

Gutterman Chemtura Corporation OAR-2006-1016-0147

David Markert American Chemistry Council’s Methyl Bromide Industry Panel OAR-2006-1016-0149

Jim McBriarty Ameribrom Inc. Hearing 2

Comment:

IFC expressed dissatisfaction with the method by w hich carryover is calculated and supported alternative measures for assessing ca rryover. This commenter stated that increased transparency of the supply chain would al low EPA to better understand where reporting is incomplete and allow for production re ductions (i.e. CUA reductions) to be more fairly assessed. [OAR-2006-1016-0133]

Our Response:

We respond to specific proposals to change the way carryover is calculated in the preamble to the final rule, and below in this docum ent. The Agency agrees that increased transparency of the supply chain, through supplemen tal information collection, would probably help EPA obtain more definitive informatio n about whether there is underreporting, and could allow EPA to respond more quickly to specific instances of potential underreporting. In early 2008 EPA intend s to use its information gathering authority under section 114 of the Clean Air Act to ask all entities that sell critical use methyl bromide to report the names of all non-end u ser entities (i.e. producers, importers, distributors and third-party applicators) to which they sold critical use methyl bromide during the 2007 control period. Collecting the nam es of these entities would facilitate- 24 -

Agency follow-up with non-reporters, allowing colle ction of necessary information in a more targeted manner than collecting detailed infor mation from all entities.

Comment:

Ameribrom commented that a significant amount of m ethyl bromide reported as carryover was in fact sold to end users but not rep orted. The commenter stated that larger suppliers and distributors should be able to take m ore responsibility for reporting the critical sales of smaller distributors, because the se smaller entities struggle to keep-up with their own paperwork. [Hearing2]

Our Response:

The commenter did not provide specific, verifiable information to support the claim that 80 percent of the carry over is actually unreported sales. The Agency is

concerned with the commenter’s statement that some small distributors are not reporting.

EPA continues to educate stakeholders about critica l use exemption reporting requirements through outreach programs. For exampl e, EPA posts instructional material on its website, holds informational sessions about reporting at the annual Methyl Bromide Alternatives Outreach Conference, and provi des staff contacts to assist with reporting requirements. Most recently, EPA provided a letter template to members of MBIP that explains the importance of full reporting , provides information about how to acquire official reporting forms, and a contact per son to answer questions. EPA encouraged MBIP’s members to customize the letter a nd send it to all of their customers; especially entities that larger suppliers claim to know did not file a sales report.

The current recordkeeping and reporting system doe s not preclude larger distributors from working closely with smaller dist ributors in their distribution chains to ensure that the reporting requirements are fully an d accurately discharged. In fact, EPA has encouraged more cooperation between regulated e ntities that would all benefit from full and accurate reporting. One example of this w as a letter template, mentioned above,

that EPA sent to members of MBIP to send to their c ustomers.

Comment:

MBIP commented that EPA should have been aware of the underreporting of

critical use sales and that EPA’s data set for calc ulating the carryover set is deficient.

The commenter claimed that information it received in response to its FOIA request of May 2007 clearly showed that some companies filed r eports in 2005 and not in 2006. Nonetheless, MBIP stated, EPA has mistakenly assume d that 100 percent of the unreported sales of critical use methyl bromide are held in inventory. According to the commenter, an independent auditor found that approx imately 20 methyl bromide suppliers failed to provide EPA with sales reports, which accounted for approximately 80 percent of EPA’s calculated carryover. [OAR-2006-1 016-0149]- 25 -

Our Response:

Though commenters have raised the issue of underre porting, they have not provided EPA with verifiable information that we ca n use to recalculate the proposed carryover amount. MBIP has not provided the result s of its audit, or the names of the suppliers that it stated did not fulfill reporting obligations in 2006. As a result, EPA can not confirm the veracity of the commenter’s claims. Therefore, at this time and for purposes of this rulemaking, EPA is relying on the information that it has collected through the official reporting process. As explain ed further in the preamble of the final rule, the Agency is unwilling to revise its methodo logy for determining the previously calculated 2006 carry over amount, which was report ed internationally on March 16, 2007. EPA has taken a number of steps to work with MBIP and other stakeholders to encourage full reporting. Full reporting is in eve ryone’s interest, and the Agency will continue to work with industry with outreach and ed ucational programs toward that end.

Comment:

Chemtura commented that Ameribrom acknowledged tha t the majority of the 2008 carryover originated within Ameribrom’s supply chain in the form of unreported sales. The commenter stated that Ameribrom suggest ed that it had failed to reach users with portions of its 2006 allocation, citing an ina bility to move product through its supply chain during 2006. The commenter also stated that Ameribrom has suggested that distributors in its supply chain are “probably neve r going to be able to comply” with EPA’s reporting requirements. [OAR-2006-1016-0147]

Our Response:

A careful reading of the transcript from the publi c hearing does not confirm

Chemtura’s assertion that Ameribrom claimed that 80 percent of the 2006 carryover originated from Ameribrom’s supply chain. The comm enter from Ameribrom said that he “ma[d]e a couple of calls around,” and found tha t, “of our 539 metric tons carryover...80 percent of it, approximately, was not reported as sold, even though it was

sold.” When the commenter said “of our 539 metric tons carry over,” he was clearly not referring to carryover solely from his company, bec ause the total carryover amount in the proposed rule was 539 metric tons. Therefore, EPA reads the commenter’s statement to mean that his understanding is that of the total ca rryover reported in the proposed rule, 80 percent was the result of unreported sales. This i s very similar to the comments submitted by MBIP, of which Ameribrom is a member, which also claimed that 80 percent of the 2006 carry over was the result of un reported sales. The Agency suspects that the commenter from Ameribrom was restating res ults from MBIP’s audit. We respond to MBIP’s audit in the preamble to the fina l rule and in above in this document.

We are concerned by the notion that distributors o f critical use methyl bromide are somehow unable to comply with EPA’s reporting r equirements, as the commenter from Ameribrom suggested at the public hearing for this action. At every step in the development of the CUE program, EPA has complied wi th Paperwork Reduction Act- 26 -

(PRA) requirements, and designed the reporting requ irements in a manner that minimizes the overall burden on respondents. We will continu e our efforts to provide outreach and education to entities that may be struggling to mee t the reporting requirements for this program. However, as mentioned above, the CUE prog ram does not preclude larger suppliers from assisting smaller entities in meetin g their requirements. This kind of cooperation is in everyone’s interest if it ensures full and accurate reporting. Furthermore, MBIP was consulted when the framework for the CUE program was established, and they were fully aware of, and had a chance to comment on, the reporting regime that was adopted. This is to say that they were aware of the key role that distributors would play in this reporting system.

Comment:

Chemtura commented that EPA lacks authority to red uce the 2008 CUE amount based on carryover from a previous year. [OAR-2006- 1016-0147]

Our Response:

In the December 23, 2004, Framework Rule (69 FR 769 97), EPA announced its determination that it would not permit entities to build stocks of methyl bromide produced or imported after January 1, 2005, under t he critical use exemption. We believe this is a reasonable policy approach for a need-bas ed exemption to a phaseout. The carryover amounts reduce the amount that is needed from new production and stocks in a subsequent year. We also believe this approach is consistent with the Montreal Protocol, and an appropriate exercise of EPA’s authority unde r Section 604(d)(6) of the Clean Air

Act.

4.1 The Petition Submitted By Chemtura Corporation

Comment:

Six commenters supported Chemtura’s petition that proposes to strengthen the current accounting framework and recordkeeping proc ess to prevent underreporting of methyl bromide use. These companies stated that th e critical use material calculated as carryover for 2006 is actually unaccounted sales ra ther than inventory held at the end of the year. Chemtura’s petition requested that EPA:

1. Use the best data available to calculate the carryo ver subtracted from the critical use production allocation to ensure that o nly actually carryover is counted;

2. Apportion carryover penalties to hold accountable o nly the producer(s) responsible for the carryover originating in its su pply chain;

3. Rigorously enforce compliance with supplier reporti ng requirements; and

4. Modify carryover penalties assessed to reflect actu al responsibility for supplychain carryover.- 27 -

These requests were based on assertions that:

1. EPA’s contention that “carryover increased while al locations and stocks have plummeted is not credible.” The commenters pointed to the reductions between the quantities of methyl bromide in origina l CUE applications and the EPA allocations, as well as declines in methyl bromide stocks, as proof that carryover is unlikely.

2. “EPA’s reporting data is incomplete.” The commente rs stated that an independent auditor found that approximately 20 end -use suppliers failed to provide EPA with sales-to-user reports, which accou nted for approximately 80% of EPA’s calculated carryover.

3. “Cutting the CUE allocation is not a substitute for enforcement.” The

commenters contended that EPA should not alter CUE allocations based on noncompliance in reporting, but rather increase rep orting enforcement.

4. “EPA must adjust its methodology for calculating ca rryover.” The

commenters stated that EPA should use the best data available for calculating carryover. They asserted that this data is the qua ntities of methyl bromide that companies report as being held in inventory on the Sales to Critical

Users forms. The calculations would thus be based on data from the suppliers. A conservative margin for error could b e achieved by calculating the average carryover for all reported sales and ap plying the average to any remaining unreported volume.

The petition further stated that “EPA’s process fo r apportioning carryover penalties among producers is unfair and perpetuates poor stewardship.” This statement was supported by the following points:

1. “Apportioning carryover penalties based on 1991 con sumption share is arbitrary and capricious.” The commenters stated t hat critical use production allocation penalties due to carryover are distribut ed among the four U.S. methyl bromide producers based on their 1991 consum ption baseline market shares. The commenters stated that an equal alloca tion of the penalties would be fairer and that using the 1991 data is now incon sistent with the available supply chain information and would maximize future distortions in the critical

use market.

2. “EPA can not ignore relevant data in making carryov er decisions.” The commenters stated that the U.S. methyl bromide supp liers have documented the compliance of their supply chains and have prov ided this information to EPA. The information does not support using the 19 91 baseline market shares for penalty allocation.

3. “EPA has received ample notice of the flaws in the framework.” The commenters stated that EPA has received multiple pa st comments regarding- 28 -

the issues surrounding carryover calculation and sh ould therefore be equipped to address the reporting and penalty apportioning i ssues in the final 2008 rule.

4. “The opt-out system proposed [in the petition] prov ides an appropriate method for apportioning carryover penalties.” The comment ers referred to an “optout” system previously provided to EPA that would a llow producers to voluntarily submit supply chain data in exchange fo r EPA’s removal of the individual producer from the default penalty pool. [Document ID: OAR-2006- 1016-0134, 0135, 0136, 0145, 0147, 0149]

Our Response:

We appreciate Chemtura’s thoughtful petition and t he commenters that provided feedback on the proposals it presented. In general , the petition proposed a number of policies that would significantly increase reportin g requirements, and thus administrative burden hours, for the respondent com munity and EPA. Generally speaking, we prefer to continue programs that facil itate full and accurate reporting under the current requirements at 40 CFR 82.3. Thi s approach would not increase administrative burdens for entities that routinely file complete and accurate reporting.

In order to focus and streamline our outreach and f ollow-up efforts, in early 2008 EPA intends to use its information gathering author ity under section 114 of the Clean

Air Act to ask all entities that sell critical use methyl bromide to report the names of all non-end user entities (i.e. producers, importer s, distributors and third-party applicators) to which they sold critical use methyl bromide during the 2007 control period.

For a complete discussion of Chemtura’s petition, see Section V.D.4. of the preamble to the final rule.

4.2 Reporting Requirements to Calculate Carryover A mounts

Comment:

NRDC commented that EPA should require the reporti ng of the names of distributors and third-party applicators to which t hey have sold any methyl bromide, including pre-2005 stocks, in order to get accurate data to track amounts sold for all purposes (including non-critical purposes). The co mmenter stated that the costs of such reporting would be minimal and would be justified b y the benefits of better tracking of CAA and Protocol compliance. [OAR-2006-1016-0145]

Our Response:

In 2008 we will be renewing our recordkeeping and r eporting requirements, as required by the PRA. As we move forward with that process we intend to give further consideration to the commenter’s suggestion that EP A collect the names of distributors and applicators that buy pre-phaseout inventory. H owever, because the Agency did not- 29 -

specifically seek comment on this additional requir ement in the proposed rule, EPA would like to gather more input before deciding whe ther to implement the commenter’s proposal.

Comment:

MBIP suggested two methods for calculating carryov er: (1) as the sum of all critical use methyl bromide that companies report a s being held in inventory, though this would not completely solve the underreporting issue , or (2) modify the reporting system in a manner that would allow it to identify non-rep orting companies and the amount of critical use sales attributable to each non-reporti ng company. The second option could be achieved by requiring each entity in the supply cha in—from the manufacturer to the company that sells to the end user—to file a report stating who that entity sold critical use

material to and how much material it sold. This co mmenter additionally believes that any material that stays in the distribution system past the end of a control period should be considered part of the SCF rather than carryover, a nd that no carryover should be subtracted from CUEs in 2008 and beyond. [OAR-2006- 1016-0149]

Our Response:

We respond to the first suggestion, that EPA use a n “inventory method” to calculate the carryover amount, in detail in the pr eamble of the final rule.

EPA does not agree that it should require informat ion that would allow the Agency to quantify the amount of critical use sales attributable to each non-reporting company. Instead of imposing additional burden on entities that do report in order to obtain detailed information about non-reporters, a more straightforward and practical approach is to encourage full reporting. EPA, thou gh, believes it would be beneficial to acquire the names of all distributors and third-par ty applicators with critical use exemption reporting requirements under 40 CFR 82.13 . Collecting the names of these entities will facilitate Agency follow-up with non- reporters, and thus diminish any advantages of collecting more detailed information from all entities. Therefore, in early 2008 EPA intends to use its information gathering a uthority under section 114 of the

Clean Air Act to ask all entities that sell critica l use methyl bromide to report the names of all non-end user entities (i.e. producers, impor ters, distributors and third-party applicators) to which they sold critical use methyl bromide during the 2007 control period.- 30 -



### 5. Comments Relating to Section V.D.5. CRITICAL USE METHYL

BROMIDE FOR RESEARCH PURPOSES

What We Proposed:

The comments in this section correspond to Section V.D.5. of preamble to the proposed rule, which discussed the treatment of cri tical use methyl bromide for research purposes. EPA proposed to “allow sale of 15,491 kg of existing stocks for research purposes in 2008 to account for the amount authoriz ed for those purposes” (72 FR 48970). In other words, EPA proposed to reduce the amount of allowable new production and import by 15,491 kg and to encourage researchers to purchase critical use methyl bromide from pre-phaseout inventory to meet their needs.

Comments relating to this section

Commenter Organization Document ID #

David Markert American Chemistry Council’s Methyl Bromide Industry Panel (MBIP) OAR-2006-1016-0149

Comment:

MBIP objected to EPA’s proposal to issue CSAs for sale of pre-phaseout stocks for exempted research purposes. The commenter stat ed that the stockpile is too low to warrant further drawdown for research purposes and that new production should be increased by 15,491 kilograms to account for resear ch needs. [OAR-2006-1016-0149]

Our Response:

We do not agree that the remaining pre-phaseout inv entory is too low to warrant its use for exempted research purposes. The Agency estimates that more than 1,700,000 kg of pre-phaseout inventory is available for criti cal uses whereas EPA is allowing the sale of 15,491 kg of methyl bromide from existing s tocks for research purposes, and adjusting new production accordingly. Decision XVII /9(7) “request[ed] Parties to endeavor to use stocks, where available, to meet an y demand for methyl bromide for the purposes of research and development.” EPA believe s pre-phaseout inventory is available in sufficient quantity to continue to enc ourage researchers to procure methyl bromide from inventory.- 31 -



### 6. Comments Relating to Section V.D.6. METHYL BROMI DE

ALTERNATIVES

What We Proposed:

The comments in this section correspond to Section V.D.6. of preamble to the proposed rule, which discussed the technical and ec onomic feasibility of methyl bromide alternatives. In particular, EPA sought comment on whether the Agency should reduce allowable new production and import levels to accou nt for new information about the feasibility of sulfuryl fluoride for post-harvest c ocoa bean fumigations. In addition, EPA sought comments on whether the Agency should make a ny other reductions to account for the uptake of feasible alternatives.

List of comments relating to Section V.D.6.

Commenter Organization Document ID # Gene Harrington National Pest Management Associatio n OAR-2006-1016-0137 David Mueller Fumigation Service & Supply, Inc. OAR -2006-1016-0144 David Doniger Natural Resources Defense Council OAR -2006-1016-0145 Charles Hall Georgia Fruit and Vegetable Growers As soc. OAR-2006-1016-0146

Charles Franklin and Paul

Gutterman Chemtura Corporation OAR-2006-1016-0147

Suresh Prabhakaran Dow AgroSciences, LLC OAR-2006-1 016-0150 Bruce Houtman Dow AgroSciences, LLC OAR-2006-1016-0 152 Dan Haley Walnut, Prune, and Fig Industry Hearing 1 John Tipton Florida Farmer Hearing 3 Lynn Gayle Virginia Tomato Farmer Hearing 5 D.C. McClure West Coast Tomato Hearing 6 Bryan Unruh American Farm Bureau Hearing 10

6.1 Post-Harvest Alternatives

Comment:

The National Pest Management Association (NPMA) co mmented that an Oklahoma State University study has shown that the cost of using sulfuryl fluoride to treat post-harvest cocoa is not substantially great er than the cost of using methyl bromide. However, the commenter stated that some transition time is needed for smaller companies in the industry to transition to sulfuryl fluoride. This transition time includes the completion of a manufacturer’s stewardship prog ram as well as an education process

with customers to receive their consent to a differ ent treatment. Additionally, while most states in which cocoa is processed have a special 2 4(C) label to allow for higher Concentration and Time (CT) dosage allocations for use of sulfuryl fluoride on cocoa, New York has not obtained that label. Therefore, t he commenter requested that at least

75% of the 53.188 metric tones of critical use meth yl bromide authorized by the Parties for cocoa fumigation be allocated for 2008. The co mmenter stated that its application to use critical use methyl bromide in 2009 for cocoa b ean fumigations had been withdrawn, as the transition to sulfuryl fluoride should be co mplete by that time. [OAR-2006-1016- 0137]- 32 -

Our Response:

The Agency appreciates NPMA for voluntarily coming forward to agree to a more rapid transition to methyl bromide alternatives for cocoa fumigation. With this final rule, EPA is approving 39,891 kg of critical use methyl b romide for this sector, or 75 percent of the amount agreed to by the Parties in Decision XVIIII/13. Therefore, EPA is reducing the total amount authorized for 2008 criti cal uses by 13,297 kg to account for increased uptake of sulfuryl fluoride for cocoa fum igation. EPA’s response to this

comment is discussed further in Section V.D.6. of t he preamble to the final rule.

Comment:

A representative of the walnut, prune and fig indu stry commented that the numbers in 2008 NPRM incorrectly assume that ProFum e is an alternative for methyl

bromide for use with dried fruit and walnuts. The commenter stated that ProFume is not effective against eggs, resulting in the need for m ultiple applications and therefore significant cost. [Hearing1]

Our Response:

The proposed allocation amounts in the NPRM for dri ed fruit and walnut fumigations were based on the 2008 U.S. CUN, and th e Decision XVIII/13, which authorized 58,921 kg for fumigations of commodities such as walnuts and dried fruits. The 2008 CUN, and the 2006 Report of the MBTOC, whi ch both assessed the efficacy of sulfuryl fluoride for commodity fumigations, consid ered the concerns that the commenter raised. In order to revise the proposed numbers fo r commodity fumigations, EPA would

need new information about the critical need for th at sector.

Comment:

Three commenters stated that sulfuryl fluoride is a viable and affordable fumigant alternative for all post-harvest structural fumigat ions. These commenters stated that methyl bromide allocations for these applications s hould therefore be significantly reduced or eliminated. [OAR-2006-1016-0144, 0145, 0 150]

Our Response:

The Agency believes that some efficacy and validati on issues remain that need to be adequately addressed before sulfuryl fluoride ca n be fully adopted by the food processing industry. Sulfuryl fluoride fumigation integrates temperature (requires less product as temperature increases), dosages (choice of only post-embryonic stages or all life stages), and exposure time. Sulfuryl fluoride efficacy on insect eggs requires higher concentrations, except at optimal temperatures. It s use also requires extensive training of applicators to proficiently use the computerized fu migation guide. Although many flour- 33 -

and rice mills have indeed fumigated their faciliti es with sulfuryl fluoride in 2006, the food processing industry is still learning how to i ncorporate sulfuryl fluoride fumigation into its pest management strategies. We appreciate the commenters’ input, and we will continue to closely monitor developments in the pos t-harvest fumigation industry and adjust our transition rates for sulfuryl fluoride a ccordingly.

Comment:

FSS commented that nearly 50% of the 220 flour mil ls in the U.S. are fumigated with sulfuryl fluoride. The commenter stated that the 15%-20% transition of new technology stated by EPA may apply to farm applicat ions but believes that it is too low for structural applications. Additionally, the comm enter noted that sulfuryl fluoride has proved successful even after multiple applications with no return to methyl bromide, and that fumigation failures can happen with all materi als, including methyl bromide. [OAR2006-1016-0144]

Our Response:

We appreciate this input and refer to the commenter to our response above.

Comment:

NRDC requested that EPA reduce the proposed CUE am ount for all structural uses by at least half for 2008 and eliminate exempt ions for such uses in 2009. The commenter stated that CUEs for post-harvest cocoa u ses in particular should be reduced. [OAR-2006-1016-0145]

Our Response:

We appreciate this input, and refer to the comment er to our response above.

Comment:

Dow commented that sulfuryl fluoride (ProFume) is registered in all 50 states as well as in key countries outside the U.S., and prov ides broad spectrum, all life stage pest control without depleting the ozone layer. The com menter states that ProFume is technically and economically viable as a methyl bro mide alternative, and provides 19 documents containing data to support this assertion . [OAR-2006-1016-0150]

Our Response:

We appreciate Dow’s continued efforts to develop an d market methyl bromide alternatives, and its willingness to provide EPA wi th valuable data about the technical and economic viability of those alternatives. This is not the first time EPA has reviewed- 34 -

information very similar to the documents provided by the commenter. We refer the commenter to our response above, and to the most re cent U.S. critical use nominations, available on EPA’s website at http://www.epa.gov/oz one/mbr/2009_nomination.html

, which contain the USG’s most recent assessment of t he feasibility of sulfuryl fluoride as a methyl bromide alternative.

Comment:

One commenter expresses support for EPA’s proposal not to make further reductions in 2008 to account for the uptake of met hyl bromide alternatives. The commenter notes that some fumigation companies need more time to transition to sulfuryl fluoride, including the purchase of new eq uipment and training in its use. Specifically, the commenter believes that allowing CUEs for cocoa in 2008 will enable a smoother transition to sulfuryl fluoride and would help to guarantee methyl bromide availability to guard against unforeseen problems w ith the transition. [OAR-2006-1016- 0149]

Our Response:

Besides the issues regarding post-harvest cocoa fu migation, and the newly registered pre-plant fumigant iodomethane, EPA is n ot making any additional reductions in critical use allowances to account for the uptak e of alternatives. Uptake of alternatives was already considered in the 2008 U.S. CUN, adopte d by MBTOC, and reflected in the

2008 CUE authorization amounts that EPA is finalizi ng with this action. However, for the reasons explained in Section V.D.6. of the prea mble to the final rule, EPA is reducing the total 2008 CUE by 27,769 kg to account for the increased uptake of sulfuryl fluoride for cocoa bean fumigation.

6.2 Pre-Plant Alternatives

Comment:

One commenter notes that USDA and CSREES are fundi ng research into alternatives for golf and turf purposes, but that E PA is not. [Hearing10]

Our Response:

EPA’s primary role is to lead the assessment of me thyl bromide alternatives, the development of annual U.S. critical use nominations , and to administer the critical use exemption. EPA often meets with researchers and de velopers of alternatives, and provides guidance about the critical use exemption. EPA also provides financial assistance to the annual Methyl Bromide Alternative s Outreach Conference, which brings together researchers and growers from around the wo rld to share the latest findings from methyl bromide alternatives research.- 35 -

Comment:

NRDC commented notes that EPA recently approved th e use of iodomethane for field uses, which will reduce the need for methyl b romide CUE allocations. The commenter stated that iodomethane is a drop-in subs titute for methyl bromide and that while it is more costly per kilogram; less of it is require to achieve the same efficacy. The commenter also stated that while iodomethane po ses direct toxicity issues, the toxicity issues associated with methyl bromide are worse. [OAR-2006-1016-0145]

Our Response:

After considering new information about iodomethane , EPA estimates that 11,578 to 17,367 kg of methyl bromide will be replaced by iodomethane in 2008. As discussed in Section V.D.6. of the preamble to the final rule , EPA is taking the midpoint of this technical range and reducing the overall allocation of CUAs by 14,472 kg to account for the increased uptake of iodomethane. EPA’s technic al estimate is described in a

memorandum on the docket for this action. In its t echnical estimate, the Agency

considered the best available information as of Dec ember 11, 2007, the last day that EPA could reasonably consider information for this rule making. As of December 11, 2007, 14 states had registered iodomethane. If more states register after that date, EPA will consider that information in next year’s CUE alloca tion rulemaking.

EPA has information that suggests that in general iodomethane will be more expensive than methyl bromide on a per pound basis, but that application rates of iodomethane will be lower on a pound per acre basis . While it is difficult to estimate exactly how these factors will offset each other, t he Agency expects that through 2008 the overall cost of iodomethane for growers will re main higher than the overall cost of using methyl bromide. This notion is corroborated by the observation that of the 1,000 acres eligible for experimental use permits granted as part of the registration process, only 200 acres, or 20% of the available area, actua lly used them, in part this limited uptake was due to economic feasibility. Given the limited time between registration decisions and publication of the final allocation f or 2008, for this year EPA is using this 20% uptake rate as a proxy for the share of “eligib le’ acres where it will be economically feasible to use iodomethane to replace methyl bromi de. In future years, EPA may conduct an economic feasibility assessment for iodo methane in a crop and regional specific manner taking into account pricing data fr om the most recent calendar year.

At this time, and for the purposes of this rulemak ing, it would be inappropriate for EPA to comment on the relative toxicity of methyl b romide and iodomethane. EPA is currently re-assessing a group or soil fumigants, i ncluding methyl bromide and iodomethane. More information about that process i s available at the following website, http://www.epa.gov/pesticides/reregistration/soil_f umigants/ , or from the contact person

for this action.- 36 -

Comment:

Four commenters stated that while significant rese arch efforts into methyl bromide alternatives are underway, long term tests are needed to know if an alternative will hold up over a multiple-year period without an y methyl bromide treatments. [0146, Hearing3, Hearing4, Hearing7] The Georgia Fruit an d Vegetable Growers Association expressed concern about adverse economic and operat ional impacts of implementing these alternatives too quickly. [OAR-2006-1016-0146 ]

Our Response:

We recognize that agricultural pest pressures can b uild over multiple-year periods. The annual CUE process, which includes th e submission of CUE applications, development of the nomination, and the CUE allocati on rulemaking, provides EPA with many opportunities to adjust the CUE program to acc ount for changes in the status or efficacy of alternatives. To track agricultural de velopments, including pest pressures and economic conditions, EPA often meets with stakehold ers and works closely with USDA.

Comment:

Chemtura requested that EPA assess the technical a nd economic feasibility of iodomethane for no fewer than two years before fact oring its availability into future CUE

decisions. The commenter stated that the controver sial nature of the registration combined with the proximity of the registration tim ing to the end of the comment period on the CUE rule provide reason to delay considering this alternative when allocating

CUEs. The commenter also stated that iodomethane i s not yet registered in California because of safety questions and that there is anecd otal evidence of efficacy problems with the chemical. The commenter expressed the opinion t hat at least two growing seasons are necessary to review and assess viability. [OAR-2006 -1016-0147]

Our Response:

In the proposed rule EPA sought “information regar ding changes to the registration or use of alternatives that may have t ranspired after the 2008 U.S. nomination was written.” The Agency stated that, “Such inform ation has the potential to

alter...EPA’s determination as to which uses and what amounts of methyl bromide qualify for the critical use exemption.” In this f inal rule, EPA is following through with that statement, and reducing pre-plant critical use amounts by 14,472 kg to account for new information about the uptake of iodomethane. E PA’s estimate of feasible 2008 iodomethane uptake is described in a memorandum on the docket for this action.

We recognize the time constraints of our analysis, and may seek additional information in the future that will provide a more accurate and complete picture of the technical and economic feasibility of iodomethane. Based on this information, additional analysis may be performed to assess the potential f or iodomethane to serve a viable- 37 -

alternative to methyl bromide for future critical u se exemption nominations and

allocations.

Comment:

Three tomato growers from Florida and Virginia com mented that alternatives are not yet effective enough to replace methyl bromide. The commenters stated that without methyl bromide many farmers will be forced out of b usiness. The commenters noted that new plastics are not yet useful and that impermeabl e films are non-recyclable, and that alternatives in production can reduce production by 15%-25%. The commenters also stated that alternatives can only be used if soil c onditions are optimal (not too wet or dry) and often for only one or two crop cycles before me thyl bromide is needed again. [Hearing3, Hearing5, Hearing6]

Our Response:

EPA appreciates the commenters’ input, and will con tinue to consider these concerns in future critical use nominations (CUNs). We refer the commenters to the 2009 CUN chapter on tomatoes, available on the dock et for this action, which found that there are alternatives such as 1,3-Dichloropropene (1,3-D), chloropicrin and metamsodium that are technically and economically feasib le alternatives for southeastern tomato growers under certain conditions.

Comment:

Dow provided extensive comments objecting to EPA’s assessment of the label restriction on 1,3-D product use near karst topogra phical features in Florida. The Agency’s assessment of those restrictions was part of the basis for the 2008 and 2009 CUN for pre-plant critical uses in Florida. The co mmenter asserted that EPA’s karst impact assessment represents an unnecessarily simpl ified, regional assessment inappropriate to assess a site-specific restriction . The commenter asserted that EPA’s

2007 assessment is not an accurate reflection of th e current 1,3-D product label restrictions which specifies that a particular fiel d is not impacted unless there is a karst surface feature within 100’ of the edge of that fie ld, independent of the percentage of the surrounding area which may contain karst surface fe atures.

The commenter referenced two field-level evaluatio ns of occupied structures that have been conducted in rural and urban agricultural areas of Florida and Georgia. The

commenter stated that EPA should use the methods in those studies as a surrogate for

karst surface features. The commenter also stated that results of these analyses indicate that restrictions on product use associated with fe atures (either occupied structures or karst surface features) at distances of ≤100’ can b e expected to have an impact on agricultural ranging from 1% to 5.5% compared to th e proposed impact of up to 93% that is assigned to the 1,3-D karst restriction in the 2 007 U.S. assessment. The commenter

also mentioned that additional information on this further characterization of the karst impact was presented to EPA by Dow at a meeting on July 25, 2007 and submitted that- 38 -

information as separate documents into the public d ocket associated with this rule.

Dow also stated that the 2007 USG assessment concl uded that the soils restriction causes 23% to 100% of agricultural land in Florida to be unsuitable for 1,3-D uses due to the state-specific (“Special Local Need” registrati ons for 1,3-D products) soil requirements. The commenter stated that the USG inc luded agricultural land (in Alachua, Gadsden, and Jackson counties) in their assessment that is not subject to the specific Florida soil restrictions. In addition, the comment er stated that the 2007 soils assessment relies on a simplified soil assessment that charact erizes the percentage of soil areas, by county, which are non-suitable for 1,3-D applicatio ns. The county-specific percentage values are then used to determine the percentage of agricultural land within that county that is unsuitable for 1,3-D uses. The commenter as serted that this represents a significant overestimation of impact, in the commenter’s opinio n, because non-agricultural land is

considered into the assessment. The commenter said that a more refined assessment utilizing GIS and land-use data, provided by Dow Ag roSciences in 2002, indicates that the southern Florida soil restriction has the poten tial to impact up to only 24.6% of agricultural land in the key south Florida counties . The commenter mentioned that this

information was shared with EPA in 2002 and 2007 an d is placed in separate documents into the public docket that is associated with this proposed rule. [OAR-2006-1016-0152]

Our Response:

EPA agrees with the commenter on one point: Three c ounties that the commenter states are not subject to the second “seepage irrig ation” SLN restriction should be removed from this portion of the analysis done for the CUNs. These counties would be Alachua, Gadsden and Jackson counties.

Even completely removing these counties from our a nalysis of soil restrictions would remove only a relatively small amount of crop acreage. Our analysis only considered the strawberry crop in that county, a to tal of 22 acres harvested, and a total of 2,513 acres of tomato in Gadsden and Jackson counti es (out of a total of 43,790 acres harvested in the state). Crop acreage information i s taken from Appendix B of the 2006 CUN for tomatoes, eggplants, peppers, and strawberr y fruit. Note, however, that these three counties are still affected by the ‘karst’ restriction on 1,3- D (Telone ®)use.

EPA disagrees with other aspects of the commenter’ s statements or finds those statements to be inadequately supported by informat ion provided to the Agency. First, regarding the statements on the karst portion of ou r analysis:

Dow said that occupied structures can be used as a proxy for karst surface features, and that therefore analyses that examine the presence of occupied structures as a restriction to fumigant use are appropriate to use for estimates of the karst impact. However, this seems to presume that karst features will occur with a frequency and distribution similar to that of occupied structures in all agricultural counties of Florida. Unless Dow has data to support this presumption, in formation which they have not- 39 -

presented, we do not see how using occupied structu res as a proxy for karst topological features is valid. Therefore, we believe that our m ethodology of using geological maps which identify “sensitive karst areas” is superior. Furthermore, according to the label 1,3- D also cannot be applied within 100 feet of an occu pied structure. This suggests that even EPA’s analysis underestimates areas affected by reg ulatory restrictions on 1,3-D, since it did not account for the additional prohibition near occupied structures.

Second, regarding Dow’s comments on the technical aspects of the Floridaspecific “seepage irrigation” portion of EPA’s soil s analysis described:

EPA examined information supplied by Dow at its me eting with Agency staff in July 2007. EPA presumes that this is the informatio n that Dow indicates was submitted in 2002 and again in 2007.

In addition to the differences in methods for esti mating the impact of the karst restriction that are discussed above, a major diffe rence between the Dow analysis of seepage irrigation restrictions and the EPA analysi s is that EPA’s analysis assumes that the agricultural land is distributed within the cou nty in proportion to its overall percentage rather than looking at the specific loca tion of agricultural land used in the production of row crops.

Dow is correct in stating that using the actual lo cation of agricultural land would provide a refined estimate of potential Telone® use . However, this refinement would change the overall assessment very little.

Particularly in counties which are largely agricul tural, the difference between the EPA and Dow estimates is very small. The fact that the estimates of karst-restricted areas must be overlaid on the areas affected by seepage i rrigation restrictions reduces the differences still further. The county where the di fference is the most pronounced is Palm Beach, a county where agricultural use makes up a r elatively small proportion of land use. Palm Beach County is approximately the 5 th most important tomato-producing county in Florida, producing 7-8% of the 2002 tomat o crop (2002 is the most recent year for which such data were available and thus the yea r used for the analysis). Palm Beach County is not a significant producer of strawberrie s. Strawberries and tomatoes are the Florida crops for which the largest methyl bromide request is put forward in the critical use nominations. Thus, changing the estimate of th e proportion of land in Palm beach County that is eligible to use Telone® will make v ery little difference to the overall assessment of the proportion of Florida cropland w here Telone® can be used in place of methyl bromide.

EPA emphasizes that it is very interested in refin ing its estimates of the impact of soil related restrictions on 1,3 D use in Florida, and is open to working with Dow to do so for future methyl bromide CUE assessments.- 40 -



### 7. Comments Relating to Section V.E. the CRITERIA I N DECISIONS

IX/6 and EX.I/4

What We Proposed:

The comments in this section correspond to Section V.E. of preamble to the proposed rule, which discussed the criteria in cons ensus Decisions IX/6 and Ex. I/4 of the

Parties to the Montreal Protocol. In this section the Agency explained how its proposals

are in accordance with the criteria in those Decisi ons.

Comments relating to this section

Commenter Organization Document ID David Doniger Natural Resources Defense Council OAR -2006-1016-0145

Comment:

NRDC expressed support for EPA’s decision to reduce the production/import

authorization below the 18% of baseline maximum to 12.2%. However, the commenter stated that EPA should dedicate the entire pre-phas eout inventory to CUEs as set forth in Section 604(d)(6) of the Protocol for the following reasons: (1) Decision IX/6 of the Protocol allows production and import of critical u se methyl bromide only after using up stocks; and (2) Neither the Parties nor Congress wo uld support EPA’s designation of “unavailable” stocks that can be used by persons wi thout CUEs, despite the Protocol’s use of the term “available stocks.” [OAR-2006-1016- 0145]

Our Response:

In response to the commenter’s first concern, the Agency has responded to the first part of this comment in the Final Framework R ule (69 FR 76988), the Final 2007 CUE Rule (71 FR 75400), and in response to NRDC’s l ate submission of supplemental comments on the Proposed 2007 CUE Rule. EPA also a ddresses this comment in Section V.E. of the preamble to the final rule. In this ru lemaking, EPA is not revisiting the issue of whether Decision IX/6 obligates EPA to allocate the entirety of the remaining prephaseout inventory for CUEs before allowing new pro duction.

In response to the commenter’s second concern, EPA did not propose to designate any amount of pre-phaseout inventory, or any specif ic holdings, as “unavailable.” EPA proposed to recognize the amount of existing stocks that is available. As discussed above and in the proposed rule, in paragraph 4 of Decisio n XVIII/13, and similar Decisions, the Parties indicated that each individual Party has di scretion to recognize the amount of existing stocks that is available for critical uses . Most recently, Table D of the Annex to Decision XIX/9 explicitly indicates that for the 20 09 control period the United States will reduce authorized new production levels to account for the amount of available stocks. Thus, EPA’s proposed approach is consistent with th e practice under the Montreal Protocol. It is also an appropriate exercise of th e discretion granted by Congress under Section 604(d)(6) of the Clean Air Act.- 41 -



### 8. Comments Relating to Section V.F. EMISSIONS MINI MIZATION

What We Proposed:

The comments in this section correspond to Section V.F. of preamble to the proposed rule, which discussed the use of technolog ies that minimize emissions from the use of methyl bromide for critical uses. In partic ular, the preamble discussed EPA’s response to paragraph 8 of Decision XVIII/13, which states that Parties shall request critical users to employ emissions minimization tec hnologies whenever technically and economically feasible.

Comments relating to this section

Commenter Organization Document ID # David Doniger Natural Resources Defense Council OAR -2006-1016-0145

David Markert American Chemistry Council’s Methyl Bromide Industry Panel OAR-2006-1016-0149

Rick Tomlinson California Strawberry Commission Hea ring 4 D.C. McClure West Coast Tomato Hearing 6

Comment:

NRDC commented that the most effective way to achi eve further emission minimization is to require the use of emission mini mization techniques such as virtually impermeable films (VIF), barrier films, and deep sh ank injection. The commenter stated that these techniques offer the concurrent benefit of reducing the amount of methyl bromide needed for fumigations. [Document ID: OAR-2 006-1016-0145]

Our Response:

EPA encourages the use of emissions reduction tech niques and agrees that utilizing these techniques can result in needing le ss methyl bromide for efficacious fumigations. As the supply of critical use methyl bromide is reduced, the Agency expects that use minimization techniques and thus emissions limitation techniques will be adopted.

Comment:

MBIP commented that (1) applications for future CU Es submitted to EPA by growers and (2) the CUNs are good repositories of i nformation on the current status of various emission minimization techniques. [OAR-2006 -1016-0149]

Our Response:

EPA appreciates this comment and recommends users t o review these sources for emission reduction practices. We also point-out th at research presented at the annual MBAO Conference is also a strong source of informat ion about emissions minimization technologies.- 42 -

Comment:

At the public hearing for this action, a represent ative of the California Strawberry Commission commented that EPA should create a regul atory incentive for emissions reduction. [Hearing4]

Our Response:

We believe that by restricting the supply of methyl bromide available for critical uses, the phaseout and the critical use exemption p rovide regulatory incentives for the adoption and diffusion of emissions reduction techn ology. This is because emissions minimization technologies, such as tarps, reduce th e amount of methyl bromide needed per fumigation. To the extent that the phaseout in creases the price of methyl bromide, it also provides an economic incentive for these techn ologies.

Comment:

At the public hearing for this action, a represent ative of West Coast Tomato commented VIF keeps the methyl bromide applied in t he soil longer so it is metabolized in the soil rather than escaping into the atmospher e. The commenter stated that methyl bromide that is used in this way should not be decr eased since it is not reaching the ozone. [Hearing6]

Our Response:

In compiling annual critical use nominations, the USGconsiders the feasibility of VIF, and other more permeable tarps, because the us e of these technologies can reduce required dosage rates and the critical need for met hyl bromide to treat certain crops. The commenter may be proposing a different type of exem ption for methyl bromide use that does not result in emissions to the stratosphere, b ut this would require a change in the Montreal Protocol, which is outside the scope of th e present rulemaking. Until EPA fully reviews the research that the commenter refers to, it would be inappropriate for the Agency to respond further.- 43 -



### 9. Comments Relating to Section V.G. PROPOSED CRITI CAL USE

ALLOWANCE ALLOCATIONS

What We Proposed:

The comments in this section correspond to Section V.G. of preamble to the proposed rule, which proposed company-specific crit ical use allowance allocations (CUAs) for 2008. CUAs grant their holders the priv ilege of producing or importing critical use methyl bromide during the control peri od in question. EPA also discussed the allocation system established in the December 2004, Framework Rule (69 FR 76982). EPA did not propose to change the established alloc ation system which includes distinct caps for pre-plant and post-harvest uses. However, EPA did indicate that it would consider additional comment on the Agency’s existin g allocation framework.

Comments relating to this section

Commenter Organization Document ID Daniel Botts Florida Fruit & Vegetable Association OAR-2006-1016-0134 Gene Harrington National Pest Management Associatio n OAR-2006-1016-0137

David Markert American Chemistry Council’s Methyl Bromide Industry Panel OAR-2006-1016-0149

Dan Haley Walnut, Prune, and Fig Industry Hearing 1 Rick Tomlinson California Strawberry Commission Hea ring 4

Comment:

NPMA and MBIP commented that the universal system is working well and stated that the concept of the pre-plant/post-harve st allocations is simple and easy for

stakeholders to understand. The commenters also st ated that the system has not disrupted the supply chain and has been easy for distributors to implement. The commenters discouraged the Agency from switching to a sector-b y-sector allocation system. [Document ID: OAR-2006-1016-0137, 0149]

Our Response:

EPA determined in the final Framework Rule (69 FR 7 6989) that a lump-sum, or universal, allocation, modified to include distinct caps for pre-plant and post-harvest uses, was the most efficient and least burdensome approac h that would achieve the desired environmental results, and that a sector-specific a pproach would pose significant administrative and practical difficulties. EPA app reciates these comments, and is maintaining the existing allocation system in the f inal rule.

Comment:

The Florida Fruit and Vegetable Association (FFVA) and a representative of the Walnut, Fig and Prune Industry commented that the g eographical distribution of methyl bromide has created shortfalls resulting in the ina bility of individual growers to access or afford material to fumigate their fields in accorda nce with their production schedules.- 44 -

FFVA stated that this was particularly noticeable d uring the 2005 and 2006 fall fumigation periods. [0134, Hearing1]

Our Response:

EPA appreciates this input about regional and local critical use methyl bromide shortages. The current allocation system, which do es not place distinct use caps on geographical regions, allows suppliers flexibility to determine how much critical use methyl bromide to sell in each geographic region. We think this remains the most desirable system because it is a simple approach th at allows suppliers to respond to market signals and agricultural circumstances that may arise, such as shifting pestpressures across regions. We will continue to seek more information about the geographic distribution of critical use methyl brom ide, and to consider options for addressing the issue of regional shortages.

Comment:

At the public hearing for this action, a represent ative of the Walnut, Fig and Prune Industry commented that the universal system does n ot work well because of regional and local shortages, but believes that a sector-by- sector allocation system would be equally flawed due to insufficient allocations in c ertain sectors and unequal holding of pre-phaseout inventory. [Hearing1]

Our Response:

In the Framework Rule EPA determined that a univer sal allocation system, modified to include distinct caps for pre-plant and post-harvest uses, was the most efficient and least burdensome approach that would achieve the desired environmental results, and that a sector-specific approach would pose significant administrative and practical difficulties. A summary of the options a nalysis conducted by EPA is available on the docket for this rulemaking. We have monitor ed the operation of this allocation system, and believe that the benefits of this syste m outweigh the concerns that have been

raised about it.

Comment:

At the public hearing for this action, the Califor nia Strawberry Commission (CSC) commented that EPA should explore a hybrid be tween a regional and a lump-sum allocation system. Specifically, the commenter sug gested that EPA consider creating several large regional areas (such as the EPA regio ns) that combine all of the sectors within each region to create a regional lump-sum. The commenter further stated that the methyl bromide users who most frequently face diffi culty obtaining methyl bromide are small, minority growers, making the harm caused by the allocation of methyl bromide disproportionately distributed. [Hearing 4]- 45 -

Our Response:

In the Framework Rule, EPA did not consider a regi onal allocation approach. EPA may consider and seek comment on such an approa ch in a future proposed CUE rule. It would be inappropriate for EPA to adopt s uch an approach in this rulemaking, as other interested parties have not had an opportunit y to comment on it.

Our initial reaction to the commenter’s proposal f or a geographic allocation system is that it would restrict the flexibility an d efficiency of the current system. Placing geographic or other artificial restrictions on the operation of the market for critical use methyl bromide is likely to reduce the efficiency of the system, and create

additional administrative burden for affected entit ies. Furthermore, we are not convinced at this time that geographic restrictions would all eviate the economic impacts on the small and minority growers to which the commenter r efers. We will continue to seek more information about these issues, and to conside r options for addressing them.- 46 -



### 10. Comments Relating to Section V.H. PROPOSED CRIT ICAL

STOCK ALLOWANCE ALLOCATIONS AND TOTAL VOLUMES

OF CRITICAL USE METHYL BROMIDE

What We Proposed:

The comments in this section correspond to Section V.H. of preamble to the proposed rule, which proposed to allocate 1,715,438 kg of critical stock allowances (CSAs), which give their holders the privilege of s elling pre-phaseout inventory for

critical uses. In this section EPA also invited CS A holders, on a voluntary basis, to permanently relinquish their allowances through wri tten notification to EPA.

List of comments relating to Section V.H.

Commenter Organization Document ID # Pamela Peckman The Industrial Fumigant Company OAR- 2006-1016-0133 Edward Ruckert Crop Protection Coalition OAR-2006-1 016-0135 Steven Hensley USA Rice Federation OAR-2006-1016-01 36

James Bair North American Millers’ Association OAR- 2006-1016-0143 Charles Hall Georgia Fruit and Vegetable Growers As soc. OAR-2006-1016-0146

David Markert American Chemistry Council’s Methyl Bromide Industry Panel OAR-2006-1016-0149

Jim McBriarty Ameribrom Inc. Hearing 2 Rick Tomlinson California Strawberry Commission Hea ring 4

Comment:

At the public hearing for this action, Ameribrom a nd the CSC commented that private companies that own pre-phaseout methyl brom ide inventory have no obligation to

sell it. The commenters stated that stocks are not available when needed because distributors hold these stocks so that the price wi ll rise. Therefore, the commenters asserted, some entities with critical needs are una ble to get the methyl bromide they need. [Hearing2, Hearing4]

Our Response:

EPA lets firms respond to market conditions, inste ad of requiring them to sell prephaseout inventory to critical users. In the Decem ber 24, 2004 Framework Rule (69 FR 76989), EPA finalized a system that allows for mark et forces to operate in the distribution of inventory. EPA chose this approach , at least in part, to promote market flexibility and efficiency. Based on EPA’s estimat e that there will be significant amounts (approximately 1,729 metric tons) of pre-phaseout i nventory available for critical uses in 2008, the Agency expects that holders of pre-phaseo ut inventory will be able to expend

the full amount of 2008 CSA allocations in order to satisfy the needs of critical users.- 47 -

Comment:

Seven commenters expressed concern about the propo sed level of critical stock allowances of methyl bromide for 2008. The comment ers stated that the proposed increase in the amount of methyl bromide to come fr om pre-phaseout inventory is beyond the level authorized by the Parties in Decision XVI II/13 and that an adequate emergency stockpile must be maintained. [OAR-2006-1016-0133, 0135, 0136, 0143, 0146, 0149, Hearing4]

Our Response:

Section V.D. of the preamble to the proposed rule p rovided a complete discussion of EPA’s rationale for proposing to allow more meth yl bromide to come from prephaseout inventory than the minimum levels agreed t o by the Parties in Decision XVIII/13. Section V.D. of the preamble to the fina l rule addresses comments on this issue and provides EPA’s justification for issuing 1,729,689 kg of CSAs with this action. EPA believes its approach is consistent with the Mo ntreal Protocol and an appropriate exercise of the Agency’s authority under Section 60 4(d)(6) of the Clean Air Act.

With regard to maintaining an “adequate emergency stockpile,” we refer the commenters to Section V.D.4.2. of the preamble to p roposed rule, and Section V.D.2. of the preamble to the final rule, which explain the A gency’s use of a SCF to estimate the amount of pre-phaseout inventory available in 2008. By including the SCF in this estimate, the Agency is using a transparent analyti cal tool to determine allocation amounts that gives suppliers an opportunity to main tain an adequate supply buffer to respond to a severe supply disruption, such as a do mestic production failure.- 48 -



### 11. Comments Relating to the Section V.I. STOCKS OF METHYL

BROMIDE

What We Proposed:

The comments in this section correspond to Section V.H. of preamble to the proposed rule, which discussed EPA’s treatment of t he inventory of pre-phaseout methyl

bromide. This section also discussed the confident iality of aggregated data about the size of the remaining pre-phaseout inventory.

Comments relating to this section

Commenter Organization Document ID Daniel Botts Florida Fruit & Vegetable Association OAR-2006-1016-0134

James Bair North American Millers’ Association OAR- 2006-1016-0143

David Markert American Chemistry Council’s Methyl Bromide Industry Panel OAR-2006-1016-0149

11.1 Treatment of Stocks

Comment:

Two commenters questioned EPA’s understanding of s tocks. At the public hearing for this action, a representative of the Am erican Farm Bureau (AFB) commented that EPA does not know how to measure existing stoc ks, where the stocks are held, or how the stocks exist. [Hearing11] The North Americ an Millers Association (NAMA) stated that the mechanisms for reporting stocks and usage are imprecise, and therefore the Agency’s calculations of stock levels are likely in accurate. [OAR-2006-1016-0143]

Our Response:

Through the record keeping and reporting requiremen ts at 40 CFR 82.13, EPA annually collects company-specific information abou t the amount of remaining prephaseout inventory. EPA has collected that informa tion for each year starting with 2003. Aggregate inventory data, which is available on the docket for this action, shows a fairly steady decline in the amount of pre-phaseout invent ory at the beginning of each year. EPA is unaware of any specific reasons to question the accuracy of the data it has collected about the size of that inventory. It is correct that the Agency does not require information about where the inventory is held geogr aphically. We do not believe it is necessary to collect that information, because supp liers are allowed great flexibility with regard to where they distribute their inventory hol dings in order to respond to market

forces.

Comment:

The Florida Fruit and Vegetable Association commen ted that as existing stocks are depleted, companies with large CUEs will be dis proportionately affected. The commenter stated that a timely and accurate account ing system for use during the control- 49 -

period for both new production and CSAs should be d eveloped and should be available to CUE holders. This accounting system would be impor tant as CSAs decrease and would allow the Agency flexibility to shift from CSA’s to new production during the control period if necessary. The commenter asserted that w ithout this flexibility the Agency should authorize the total quantity approved for th e 2008 control period as new production with the understanding that the portion of material not used as a result of the use of pre-existing stocks during 2008 would be ded ucted from future authorizations as the current practice for unused new production auth orized as CUAs. [OAR-2006-1016- 0134]

Our Response:

If EPA understands correctly, the commenter is conc erned that at some point existing stocks will not be able to satisfy all of the CSAs issued by EPA for a given control period, and that if this happens during a c ontrol period, EPA should convert CSAs to CUAs. We believe that the proposed approach for determining CUA and CSA amounts, which accounts for the amount of available stocks, is a major step towards decreasing the probability that EPA would issue mor e CSAs than existing stocks are able to satisfy in a given control period. Currently, E PA collects annual data about critical sales of new production and stocks. EPA agrees wit h the commenter that collecting this data more often, quarterly for example, could have certain benefits related to monitoring stockpile information. As the commenter stated, mo re timely data could help EPA more rapidly determine if it would be appropriate to all ow the conversion of some CSAs to CUAs. However, by increasing the repetition of rep orting, the commenter’s proposal would impose extra administrative burden upon the r egulated community. Considering the approach that EPA is finalizing in this rule, w hich should decrease the likelihood of impractically large CSA allocations, we do not beli eve the benefits of the commenter’s proposal would justify the additional costs it woul d impose.

11.2 Confidentiality of Aggregate Pre-Phaseout Inve ntory Data

Comment:

MBIP commented that it does not object to EPA’s pr oposal to release aggregate stockpile data in future years without first notify ing entities by letter. However, the commenter stated that it reserves the right to obje ct in the future should the number of competitors in the industry dwindle to two or fewer in order to protect confidentiality. [Document ID: OAR-2006-1016-0149]

Our Response:

As long as there are a sufficient number of competi tors in the industry, EPA will not treat the aggregate of methyl bromide stockpile data collected under the reporting requirements at 40 CFR 82.13 as confidential inform ation and may release such data in the future without further notice. However, if the number of competitors in the industry were to dwindle appreciably, EPA would revisit the question of whether the aggregate is- 50 -

entitled to treatment as confidential information a nd would not release the aggregate

without notice.- 51 -



### 12. Comments Relating to RULEMAKING AND THE REGULAT ORY

PROCESS

Comments relating to this section

Commenter Organization Document ID # Gene Harrington National Pest Management Associatio n OAR-2006-1016-0137

Charles Franklin and Paul

Gutterman Chemtura Corporation OAR-2006-1016-0147

Dan Haley Walnut, Prune, and Fig Industry Hearing 1 Jim McBriarty Ameribrom Inc. Hearing 2 Rick Tomlinson California Strawberry Commission Hea ring 4 Rebecca Adcock American Farm Bureau Hearing 11

Comment:

NPMA suggested the use of a chart tracking the pro cess from the allocation by the Parties to the allocation by the Agency. The comme nter stated that the current process is confusing, and points to a technical correction in the 2006 CUE Allocation rule as an example. [OAR-2006-1016-0137]

Our Response:

Consistent with previous years, EPA has made its ca lculations available on the docket in a spreadsheet entitled Allowance Allocati on Calculation for Proposed 2008 CUE Rule (Document ID: OAR-2006-1016-0105). In add ition, to enhance the transparency of this rulemaking, EPA is including a n extra spreadsheet on the docket that compares the allocation amounts proposed in the NPR M with the amounts that EPA is allocating in the final rule, and provides an itemi zed breakout of each reduction taken as compared to the Parties’ authorization in Decision XVIII/13 (Insert Document ID).

Comment:

NPMA and Chemtura commented that the Agency should be more transparent in the CUE allocation process and explain in detail ho w each allocation reduction is made. [OAR-2006-1016-0137, 0147]

Our Response:

We appreciate this comment, as we strive to make th ese CUE rulemakings as transparent as possible. To enhance the transparen cy of this year’s rulemaking EPA is placing an extra spreadsheet on the docket which co mpares the allocation amounts proposed in the NPRM with the amounts that EPA is a llocating in the final rule.

Comment:

At the public hearing for this action a representa tive of the Walnut, Prune, and Fig Industry commented that the CUE process is an exemp tion to the Montreal Protocol that- 52 -

does not have quantity or time limits. The comment er stated that methyl bromide needs

in certain sectors increase and decrease based on c rop success each year and objects to the continuous decrease of methyl bromide allocated . [Hearing1]

Our Response:

The commenter is correct that Article 2H(5) of the Montreal Protocol authorizing the Critical Use Exemption to the phaseout of methy l bromide does not have quantity or time limits written into it. However, the Parties stated in Decision XV/54 and reiterated it again in Decision Ex.I/3 that “exemptions must f ully comply with decision IX/6, and are intended to be limited, temporary derogations f rom the phase-out of methyl bromide.” Decision Ex.I/3 further stated that “each Party sho uld aim at significantly and progressively decreasing its production and consump tion of methyl bromide for critical uses with the intention of completely phasing out m ethyl bromide as soon as technically and economically feasible alternatives are availabl e.” EPA continues to work with USDA and the U.S. State Department to nominate and negotiate for critical use methyl bromide where no technically and economically feasi ble alternatives exist.

Comment:

At the public hearing for this action, Ameribrom c ommented that when the CUE approvals come in “late in the season” obtaining an d distributing the full amount is

difficult. The commenter also stated that the rule making framework assumes that everybody involved has access to the Federal Regist er and knows what reports to file and

how to file them. The commenter asserted that this is not the case for many small distributors. [Hearing 2]

Our Response:

EPA recognizes that critical use allowances allocat ed for 2008 can only be expended in the 2008 calendar year and that stakeho lders have a need to produce and distribute their methyl bromide promptly. EPA endea vors to allocate CUE methyl bromide as expeditiously as possible while ensuring adequate time for stakeholders to provide comments.

EPA recognizes the need to educate stakeholders, i ncluding small distributors, to ensure full compliance with the recordkeeping and r eporting requirements of the rule. In collaboration with major methyl bromide producers a nd distributors, the reporting forms were updated, simplified, and posted on EPA’s websi te in 2006. EPA included instructional materials with the updated forms, and held compliance assistance meetings to teach stakeholders how to use the new forms, inc luding sessions at the Methyl

Bromide Alternatives Outreach conferences in 2006 a nd 2007. Most recently, EPA provided a letter template to members of MBIP that explains the importance of full reporting, provides information about how to acquir e official reporting forms, and a contact person to answer questions. EPA encouraged MBIP’s members to customize the

letter and send it to all of their customers.- 53 -

The current recordkeeping and reporting system doe s not preclude larger distributors from working closely with smaller dist ributors in their distribution chains to ensure that the reporting requirements are fully an d accurately discharged. In fact, EPA has encouraged more cooperation between regulated e ntities that would all benefit from full and accurate reporting. One example of this w as a letter template, mentioned above,

that EPA sent to members of MBIP to send to their c ustomers.

Comment:

At the public hearing for this action, CSC comment ed that the California Department of Pesticide Regulation is currently iss uing a VOC regulation that could restrict all fumigants, therefore affecting methyl bromide and its alternatives. [Hearing4]

Our Response:

EPA’s 2008 CUE rule does not preempt other federal , state, or local laws or regulations governing actions including, but not li mited to, the sale, distribution, transfer, and use of methyl bromide. If such a rule is enact ed by the State of California, EPA will study the impacts, and may adjust the CUE program a s appropriate with a notice and comment rulemaking.

Comment:

At the public hearing for this action, ABF comment ed that the international process is “fatally flawed, both in the scientific review and the transparency and in fairness,” and that these flaws filter down to the EPA. The commenter further stated that, at the international level, EPA should focus on saf e handling of fruit and vegetable imports rather than on methyl bromide reduction. [H earing11]

Our Response:

EPA supports the CUE process to allow continued met hyl bromide production to satisfy critical needs beyond the phaseout agreed t o under the Montreal Protocol. We appreciate the commenters’ concerns about the inter national process. We will continue to work with our colleagues at USDA and especially the U.S. Department of State to maintain scientific integrity, transparency and fai rness in the international implementation of the Montreal Protocol.- 54 -



### Appendix. Commenters at the Public Hearing for This Rulemaking

Commenter Organization Document ID Hearing Transcript OAR-2006-1016-0127 Dan Haley Walnut, Prune, and Fig Industry Hearing 1 Jim McBriarty Ameribrom Inc. Hearing 2 John Tipton Florida Farmer Hearing 3 Rick Tomlinson California Strawberry Commission Hea ring 4 Lynn Gayle Virginia Tomato Grower Hearing 5 D.C. McClure West Coast Tomato Hearing 6 Shawn Crocker Florida Strawberry Growers Associatio n Hearing 7

Joel Jackson Florida Golf Course Superintendents

Association Hearing 8

Reggie Brown Florida Tomato Exchange Hearing 9 Bryan Unruh University of Florida Hearing 10 Rebecca Adcock American Farm Bureau Hearing 11