### No. 10-1347 (consolidated with Nos. 10-1348, 10-1349, 10-1350) 

# United States Court of Appeals for the D.C. Circuit

H ONEYWELL 

### I NTERNATIONAL 

### I NC



### . AND 

### E.I. DU 

### P ONT DE 

### N EMOURS AND 

### C OMPANY 

### , Petitioners , v. E NVIRONMENTAL 

### P ROTECTION 

### A GENCY AND 

### L ISA 

### P. J ACKSON 

### , A DMINISTRATOR 

### , Respondents

. On Petitions for Review from the United States Environmental Protection Agency JOINT MOTION OF ARKEMA INC., SOLVAY FLUORIDES LLC, AND SOLVAY SOLEXIS, INC. TO DISMISS PETITIONS

FOR LACK OF JURISDICTION

David M. Williamson Gia V. Cribbs A NDREWS 

### K URTH 

### LLP 1350 I Street, N.W., Suite 1100 Washington, DC 20005 (202) 662-2700 Of Counsel: Carlos R. Escobar S OLVAY 

### N ORTH 

### A MERICA 

### , LLC 3333 Richmond Avenue Houston, TX 77098 Counsel for Solvay Fluorides, LLC and Solvay Solexis, Inc. Dan Himmelfarb John S. Hahn Roger W. Patrick Stephen E. Sachs M AYER 

### B ROWN 

### LLP 1999 K Street, N.W. Washington, DC 20006 (202) 263-3000 Of Counsel: William J. Hamel A RKEMA 

### I NC



### . 2000 Market Street Philadelphia, PA 19103 Counsel for Arkema Inc. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1

### CERTIFICATE OF PARTIES AND AMICI CURIAE

PURSUANT TO CIRCUIT RULES 27(a)(4) AND 28(a)(1)(A) The parties to this proceeding are:

 Petitioners Honeywell International Inc. (“Honeywell”) and E. I. du Pont de Nemours and Company (“DuPont”);

 Respondents United States Environmental Protection Agency (“EPA” or “the Agency”) and Lisa P. Jackson, Administrator; and

 Arkema Inc. (“Arkema”), Solvay Fluorides, LLC, and Solvay Solexis, Inc. (collectively, “Solvay”), which have been granted leave to intervene as respondents in this proceeding.

There are no amici

. Arkema and Solvay have previously filed with the Court their Corporate Disclosure Statements pursuant to Circuit Rule 26.1.

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### Pursuant to Federal Rule of Appellate Procedure 27 and D.C. Circuit Rule

27(g), Intervenors Arkema and Solvay move to dismiss the consolidated petitions for lack of jurisdiction. In support of their motion, Intervenors state as follows: INTRODUCTION In Spring 2008, EPA approved Arkema and Solvay’s applications to transfer some of their allowances to produce and consume hydrochlorofluorocarbons (“HCFCs”) from one chemical to another. Honeywell and DuPont received notice of these transfers in December 2008, when EPA published a related notice of proposed rulemaking in the Federal Register. They argued in comments to EPA that the transfers were unlawful under the Clean Air Act. In response, EPA attempted to undo these completed transactions, but this Court vacated its action as impermissibly retroactive. Arkema Inc. v. EPA , 618 F.3d 1, 8-10 (D.C. Cir. 2010). Honeywell and DuPont disagree with the Arkema decision. They believe that EPA’s action was authorized, and they tried (and failed) to intervene in

Arkema out-of-time. But in an attempted collateral attack on that decision, Honeywell and DuPont now seek review of the underlying transfers themselves— challenging, in the instant petitions, EPA’s approvals of the transfers more than two and a half years ago. This Court lacks jurisdiction to consider the petitions. Challenges to final EPA action under the Clean Air Act must be brought within 60 days after notice of

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the action is published in the Federal Register. 42 U.S.C. § 7607(b)(1). This limitation is jurisdictional and cannot be extended by the Court. See Am. Rd. & Transp. Builders Ass’n v. EPA ( ARTBA ), 588 F.3d 1109, 1112 (D.C. Cir. 2009),

cert. denied , 131 U.S. 388 (2010); Natural Res. Defense Council v. EPA ( NRDC ), 571 F.3d 1245, 1265 (D.C. Cir. 2009) ( per curiam ); see also Fed. R. App. P. 26(b)(2). As Honeywell and DuPont have conceded elsewhere, notice of the factual basis of their claim was published in the Federal Register on December 23, 2008. Accordingly, the petitions are 612 days late. To evade the time bar, Honeywell and DuPont assert that this Court’s

decision in Arkema provides “new grounds for petitioning for review.” Pet. for Review 1. That argument is meritless. Arkema invalidated EPA’s attempted reversal of these transfers, but did not in any way modify the underlying transfers or their legal consequences. The decision therefore cannot provide “new grounds * * * for review” of the transfers themselves. Honeywell and DuPont’s objections to Arkema cannot be pursued through this collateral proceeding. The petitions must be dismissed. BACKGROUND A. Statutory and Regulatory Framework The Clean Air Act (“Act”) protects the ozone layer by limiting total U.S. output of HCFCs. 42 U.S.C. §§ 7671c(d), 7671f. Under the Act’s cap-and-trade

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program, EPA issues allowances for HCFC production and consumption, which can be transferred among different companies or chemicals. § 7671f(a)-(c). EPA issued implementing regulations in 2003. Protection of Stratospheric Ozone: Allowance System for Controlling HCFC Production, Import and Export, 68 Fed. Reg. 2820 (Jan. 21, 2003) (“2003 Rule”). The 2003 Rule assigns various companies “baseline” allowances representing their shares of the then-existing

market. Id . at 2823; see also 40 C.F.R. §§ 82.17, 82.19. To determine a company’s allowance for a specific calendar year, EPA multiplies that company’s baseline allowance by a fixed percentage stated in the Rule. § 82.16. EPA can reduce the total output of HCFCs—and each company’s allocation pro rata

— simply by decreasing the percentages over time. Thus, each company’s allocation “remain[s] the same from * * * one calendar year to the next,” unless “the percentage of baseline allowances is reduced to ensure compliance with the [Montreal] Protocol cap” or the baselines themselves are changed “through permanent transfers of allowances.” 68 Fed. Reg. at 2823. The 2003 Rule also permits transfers of allowances between companies and between HCFCs. § 82.23(a)-(c). (These transfers must be structured so that they do not increase total ozone depletion, meaning that the relative distribution of allowances has no environmental consequence.) A company may apply to transfer an allowance for a specific calendar year or a portion of its baseline allowance

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( e.g. , the right to produce 1 kg of HCFC-22 per year, as diminished by the percentages in § 82.16). See § 82.23(d). EPA reviews applications and either allows or disallows them, notifying the parties to the transfer and giving the transferor 10 days to appeal. § 82.23(a)(ii), (b)(4)(ii). While calendar-year allowances cannot be traded from one year to another, EPA decided to allow

“trades of annual and permanent allowances between HCFCs and between companies” (Ex. 1 at 1 (emphasis added)), so as to achieve “maximum flexibility” in the marketplace (68 Fed. Reg. at 2833). What distinguished these baseline trades from calendar-year trades is “[t]he permanent nature of the [baseline]

transfer.” Id . at 2835 (emphasis added).

B. The Interpollutant Baseline Transfers Arkema and Solvay hold substantial baseline allowances to produce and consume HCFC-22 and HCFC-142b. So do Honeywell and DuPont, their major competitors. In April 2008, Arkema applied to convert baseline allowances from HCFC-142b to HCFC-22. Ex. 2. EPA issued “non objection notices” approving Arkema’s “baseline” transfers. Exs. 3-4. In subsequent letters, EPA re-confirmed that Arkema’s baseline allocations reflected the 2008 transfers. Exs. 5-6. Solvay, too, chose to convert HCFC-142b baseline allowances to HCFC-22. Exs. 7-8. EPA approved those transfers in February and March 2008. Exs. 9-10. These approvals entitled Arkema and Solvay to produce or consume greater amounts of

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HCFC-22, in exchange for giving up the right to produce a certain amount of HCFC-142b. C. The Proposed Rule and the Final Rule On December 23, 2008, EPA initiated a rulemaking to reduce HCFC output. EPA’s “preferred” option was “to apportion company-specific baselines * * * equivalent to those currently published * * *, adjusted as necessary to reflect permanent transfers of baseline allowances.” Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import and Export, 73 Fed. Reg. 78,680, 78,686 (Dec. 23, 2008) (“Proposed Rule”). The Agency then would “grant[] a certain percent of that baseline as necessary to achieve compliance with the cap.” Id . Because “[b]oth inter-pollutant and intercompany transfers of allowances are possible, either on a calendar-year or permanent basis” ( id . at 78,701), EPA listed company-specific baselines“reflect[ing] adjustments resulting from approved inter-pollutant and/or intercompany transfers of baseline allowances (i.e., permanent rather than calendar-year allowances)” ( id . at 78,693). The figures printed in the Federal Register reflected Arkema’s and Solvay’s 2008 baseline transfers. Id . at 78,694. Honeywell and DuPont did not challenge Arkema’s and Solvay’s transfers in court within 60 days after the publication of the Proposed Rule. Instead, 76 days later (on March 9, 2009), they submitted comments to EPA arguing that the Act

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and EPA regulations forbade inter-pollutant transfers of baseline allowances.Honeywell stated in its comments that under the Act, EPA could “approve interpollutant transfers of allowances only on a current year basis,” not as baseline transfers. Ex. 11 at 2. Likewise, DuPont Fluoroproducts complained that “EPA’s authority relating to inter-pollutant transfers is limited to annual adjustments” and that EPA was “inappropriately allowing selected companies to convert allowances from the HCFC-142b baseline into permanent baseline allowances for HCFC-22.” Ex. 12 at 3. The companies therefore called on EPA to disregard those transfers and to re-calculate each company’s baselines—which, of course, would increase

their own market shares in HCFC-22. On December 15, 2009, EPA reversed its prior stance and adopted this new interpretation of the Act. Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export, 74 Fed. Reg. 66,412, 66,421 (Dec. 15, 2009) (“Final Rule”). Rather than acknowledge the change, EPA claimed that its past statements were all “consistent with this interpretation.” Id . at 66,422. Interpreting the Act to require “that all interpollutant transfers * * * be conducted on a yearly—and thus temporary—basis,” the Agency applied that interpretation to Petitioners’ prior baseline transfers, prescribing a new allocation “reflect[ing] the changes * * * from inter-company

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transfers” only. Id. As a result, EPA allocated fewer HCFC-22 allowances to Arkema and Solvay and more to Honeywell and DuPont.

D. This Court’s Decision Arkema and Solvay timely sought review of the Final Rule. They argued, in part, that the Final Rule had an impermissibly retroactive effect, rejecting permanent baseline transfers “that took place in 2008 and were approved by the Agency at that time.” Petrs’ Br. at 61-65, 2010 WL 1535910, Arkema , 618 F.3d 1 (No. 09-1318). On August 27, 2010, this Court held that the Final Rule was impermissibly retroactive and vacated it in part. Arkema , 618 F.3d at 10. The Court agreed with the Agency’s revised position on appeal, that the Act was ambiguous and that “‘Congress [had] left it to the broad discretion of EPA to determine how transfers

of baselines are to be treated.’” Id . at 7 (quoting Resp. Br. at 48, 2010 WL 1535912, Arkema , 618 F.3d 1 (No. 09-1318)). But it held that the Agency could not adopt a different interpretation of the statute and, at the same time, apply that new interpretation “to undo what the EPA had, in practice, approved under the 2003 Rule.” Id . at 9. Because EPA already had “approved permanent changes to the baseline as a result of inter-pollutant transfers,” it could not, “without Congress’ express authorization, use its new statutory interpretation to undo these completed transactions.” Id

.

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Honeywell and DuPont were not parties to Arkema . In mid-October 2010, they sought leave to intervene out-of-time; those motions were denied. See Order of Dec. 7, 2010, Arkema , 618 F.3d 1 (No. 09-1318). EPA has sought rehearing of the panel decision, and its petition remains pending.

E. The Instant Petitions for Review On October 26, 2010, Honeywell and DuPont filed these four petitions, since consolidated, seeking review of EPA’s approvals of Arkema’s and Solvay’s interpollutant baseline transfers. Each petition alleged that it had been “filed within 60 days of new grounds for petitioning for review, which arose no earlier than August 27, 2010.” Pet. for Review 1. The same day, Honeywell and DuPont petitioned EPA to reconsider and rescind all four transfers. Ex. 13. They acknowledged that the Proposed Rule had “publicly disclosed the Solvay and Arkema interpollutant transfers from earlier in 2008” ( id. at 2), but argued that “new grounds * * * arose no earlier than the date of the Panel’s decision” ( id. at 4). EPA has not yet responded to that petition. ARGUMENT The petitions are jurisdictionally out of time. Under 42 U.S.C. § 7607(b)(1), Petitioners cannot obtain review more than 60 days after notice of the challenged actions was published in the Federal Register. Thus, any petition was barred after February 21, 2009.

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Petitioners do not seem to dispute this. Instead, they assert that their petitions were filed “within 60 days of new grounds for petitioning for review” (Pet. for Review 1)—presumably the decision in Arkema , published on August 27, 2010. Their theory apparently relies on § 7607(b)(1)’s exception for petitions “based solely on grounds arising after such sixtieth day,” which must be filed “within sixty days after such grounds arise.” Yet Petitioners’ claims are not “based solely” (or even partially) on grounds arising after the 60-day period expired, but rather on grounds that have been available since December 2008. This Court’s

decision in Arkema cannot afford “new grounds for * * * review” of transfers it did

not alter. A. The Petitions Were Filed Outside the Statutory Period for Review A petition for review of “any * * * nationally applicable * * * final action taken” by EPA under the Clean Air Act must be filed in this Court “within sixty days from the date notice of such promulgation, approval, or action appears in the Federal Register.” § 7607(b)(1). The “action[s]” challenged here are EPA’s approvals, in early 2008, of Arkema’s and Solvay’s inter-pollutant baseline allowance transfers. See Pet. for Review 1 & Ex. 1. Notice of these actions appeared in the Federal Register on December 23, 2008, when the Proposed Rule referenced the effect of the Arkema and Solvay inter-pollutant baseline trades that had been previously approved and reported increased HCFC-22 baselines (and

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diminished HCFC-142b baselines) for Arkema and Solvay. See 73 Fed. Reg. at 78,693-94. At that point, the factual basis of Honeywell and DuPont’s claim was, as Petitioners themselves have conceded, “publicly disclosed” in the Federal Register. Ex. 13 at 2. But Honeywell and DuPont did not file their petitions by February 21, 2009, when the 60-day judicial-review period under the Clean Air Act ended. Because this time limit is jurisdictional ( see NRDC , 571 F.3d at 1265), the petitions must be dismissed.

B. The Petitions Are Not Based Solely on Grounds Arising After the Statutory Period for Review The only exception from the 60-day limitation is for petitions “based solely on grounds arising after” the limitations period had closed. § 7607(b)(1). As this Court has held, § 7607(b)(1) “amount[s] to an explicit decision to preclude review” of claims “that could have been brought to our attention” earlier. ARTBA , 588 F.3d at 1113; cf

. Eagle-Picher Indus., Inc. v. EPA , 759 F.2d 905, 913 (D.C. Cir. 1985) (permitting review where new events “essentially create a challenge that did not previously exist”). Petitioners suggest that Arkema created “new grounds” for invalidating the challenged transfers. Pet. for Review 1. That suggestion is both implausible and irrelevant: Petitioners’ claims rest entirely on old grounds. A judicial decision that merely declares existing law can hardly provide “new grounds” for challenge, and to the extent Petitioners argue that Arkema changed the law, entertaining such a

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suggestion would require this Court to question a prior panel’s opinion. In any case, whatever “new grounds” Petitioners identify must be presented in the first instance to EPA, not to this Court. Petitioners’ collateral attack on Arkema is not cognizable here.

1. Petitioners’ claims do not rely on “new grounds * * * for review”

a. The holding in Arkema cannot provide “new grounds” for review when that decision did not alter, or even purport to alter, the transfers challenged

here. Arkema addressed a challenge to the Final Rule, which applied a new interpretation of the Clean Air Act—one that forbade inter-pollutant baseline transfers—to transactions the Agency had approved under a previous, contrary interpretation of the text. The Court recognized that Congress, by writing an ambiguous statute, had “left it to the broad discretion of EPA to determine how transfers of baselines are to be treated.’” 618 F.3d at 7 (internal quotation marks omitted). But it held that the Final Rule, by “revisit[ing] the baseline transactions [EPA] previously approved,” violated traditional principles of retroactivity. Id. at 10. This holding addresses the lawfulness of the Final Rule, and it does not in any way modify the underlying transfers themselves. Nothing in the Arkema decision suggests that EPA’s 2008 approvals of the transfers could be unlawful today if they were not unlawful at the time.

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b. As one would expect, Petitioners’ claims do not depend on Arkema

. The gravamen of Petitioners’ complaint is that EPA’s approvals of the transfers were illegal at the time they occurred . For example, Petitioners raise a variety of procedural challenges to EPA’s actions, arguing that EPA approved the transfers without “a written record of evidence” or “a reasoned explanation”; that EPA did so in contravention of miscellaneous executive orders and statutes (such as the Congressional Review Act) imposing procedural requirements on agency action; and that EPA “fail[ed] to provide notice” of its approvals to Petitioners, violating their rights under the Due Process Clause. Petrs’ Statement of Issues 2. All of these claims are, of course, no more valid today than they were two years ago: the procedures that EPA followed are part of the historical record, and the facts have not changed. 1 

### Petitioners also raise a substantive claim, that EPA “improperly approv[ed] the interpollutant transfers in a manner that perpetuated those transfers beyond 2009”—namely as transfers of baseline allowances rather than calendar-year

allowances. Petrs’ Statement of Issues 2. Petitioners’ argument that the transfers were unlawful, under the Clean Air Act or then-current EPA regulations, neither emerged for the first time with Arkema nor rested on that decision for its

1 

### Nor were those procedures a surprise: as the 2003 Rule made clear, EPA provides notice of its transfer decisions only to those privy to the transfer. See 40 C.F.R. § 82.23(a)(ii), (b)(4). The time for challenging that Rule has expired also.

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foundation. As it happens, Arkema held that the Act could be read either way, and in fact that EPA had read the Act to permit inter-pollutant baseline transfers before the Agency changed course in the Final Rule. 618 F.3d at 7-8. But as this Court has made clear, a “claim that the [agency action] is ultra vires ” is a “ground[] clearly available within 60 days of [its] promulgation.” Nat’l Mining Ass’n v. Dep’t of Interior , 70 F.3d 1345, 1350 (D.C. Cir. 1995). The “manner” in which EPA approved the transfers, just like the procedures it followed in doing so, was a matter of record as of 2008, and the requirements of the Clean Air Act have not changed. Thus, “all the arguments [Petitioners] make * * * were available to them at the time” each transfer was approved. Id

.

c. Petitioners in fact made these very arguments in their comments to EPA in March 2009. See Ex. 11 at 2; Ex. 12 at 3. They could have made the same argument in timely petitions for review to this Court. On Petitioners’ theory of standing, “EPA’s approval of these transfers” entitled Arkema and Solvay to produce a greater amount of HCFC-22, thereby “dilut[ing]” the value of allowances held by Honeywell and DuPont. Petrs’ Docketing Statement, Attach. at 3. That was as true in 2008 as it is today. The approvals immediately increased the number of HCFC-22 allowances on the market (and decreased the number of HCFC-142b allowances). Through the normal functioning of the HCFC allocation system, this change necessarily “dilut[ed]” the value of HCFC-22 allowances

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owned by Honeywell and DuPont. Those alleged injuries could have equally well supported a suit to challenge the approvals within the 60-day period. The issue presented was “purely legal”; the agency’s action in approving the transfers was “sufficiently final”; and no “more concrete setting” would have improved consideration of the issue: either the transfers were unlawful or they were not. Reckitt Benckiser Inc. v. EPA , 613 F.3d 1131, 1137 (D.C. Cir. 2010) (internal quotation marks omitted). The exception for after-arising grounds simply “does not apply * * * [when] the substantive grounds for the petitions arose, if at all, before the time limit expired.” Petro-Chem Processing, Inc. v. EPA , 866 F.2d 433, 437 n.4 (D.C. Cir. 1989).

d. The only ground Petitioners have advanced that is founded on Arkema has nothing whatsoever to do with the agency actions under review. According to the motion to hold this case in abeyance, filed jointly by Petitioners and EPA, “Petitioners in this action assert, inter alia , that in order to restore baseline allowances for HCFCs to Arkema [and Solvay], EPA will necessarily have to take allowances from Petitioners and other HCFC suppliers or take other action that will have a similar effect.” Joint Mot. to Hold Case in Abeyance 2-3. Petitioners

claim that this “cannot be done because the decision in Arkema * * * created vested rights in the HCFC allowances held by those companies.” Id . at 3.

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This argument was not raised in Petitioners’ Statement of Issues. Assuming that it has not been abandoned, the claim is entirely unrelated to the underlying transfers. Once EPA takes remedial action in response to Arkema , Petitioners will have 60 days to challenge that action, and to raise any argument not foreclosed by previous agency decisions or already decided by Arkema

. Cf. ARTBA , 588 F.3d at 1113. But they cannot argue that Arkema should have ordered a different remedy (or none at all) in a petition to review EPA actions taken long before the Court’s

decision issued.

2. Arkema did not create “new grounds” simply by clarifying existing law

a. In their reconsideration petition before EPA, Petitioners suggest that

Arkema ’s clarification of the law justifies their new challenge. They say that before the decision was issued, “EPA ha[d] never taken the position [presumably adopted in Arkema ] that the four interpollutant transfers created vested rights that EPA was required to carry forward to the 2010-2014 stepdown period.” Ex. 13 at

4. 2 

### Assuming that it is true that EPA had never taken this position, and assuming

further that this is an accurate description of the Court’s holding in Arkema , the essence of Petitioners’ argument is that they did not anticipate, before this Court

2 

### Petitioners presumably make such arguments because, under 42 U.S.C. § 7607(d)(7)(B), EPA reconsideration is unavailable once “the time specified for judicial review” has expired.

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ruled, what the full legal consequences of EPA’s 2008 approval of the Arkema and Solvay baseline transfers might be. It is well established, however, that “a plaintiff's ignorance of his legal rights” will not toll a statutory time limit. United States v. Kubrick , 444 U.S. 111, 122 (1979). Petitioners might not have thought of their current arguments before

Arkema was issued, but that would not make those arguments “new grounds * * * for review.” Petitioners “could have investigated” EPA’s transfer approval “as soon as they were put on notice of it * * * and filed a timely lawsuit based on the

results thereof.” Hardin v. Jackson , 625 F.3d 739, 744 (D.C. Cir. 2010). “To excuse [them] from promptly doing so by postponing the accrual of [their] claim would undermine the purpose of [§ 7607(b)], which is to require the reasonably diligent presentation” of petitions for review. Kubrick , 444 U.S. at 123. No rule or other agency action would be safe from challenge if a judicial decision construing it reopened the period for review. As EPA successfully argued

in Cement Kiln Recycling Coalition v. EPA , No. 00-1302, 2000 WL 1946580 (D.C. Cir. Dec. 19, 2000) (

per curiam ), “[a]llowing periods of limitation to be reopened every time a new, possibly precedential opinion was issued would result in a constant revisiting of years-old regulations and * * * an end to the very concept of finality.” Reply Supp. Mot. for Order to Show Cause at 5 (filed Oct. 10, 2000), Cement Kiln (No. 00-1302) (Ex. 14). Even if Arkema had clarified previously

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unsettled law, that would not delay the accrual of Petitioners’ claim ( see Commc’ns Vending Corp. v. FCC , 365 F.3d 1064, 1074 (D.C. Cir. 2004))—nor would Petitioners’ “legal doubts” toll the deadline ( Atchison, Topeka & Santa Fe Ry. v.

ICC , 851 F.2d 1432, 1439 (D.C. Cir. 1988) (internal quotation marks omitted)), especially given that a jurisdictional time bar may not be equitably tolled ( see John R. Sand & Gravel Co. v. United States , 552 U.S. 130, 134 (2008)).

b. By suggesting that the Court’s decision in Arkema affords “new grounds * * * for review,” Petitioners necessarily allege that Arkema in some way altered the previous legal landscape—that it did something other than apply existing law to existing facts. But that is not what the opinion said. It asked whether the Final Rule violated traditional standards of retroactivity. 618 F.3d at 7. Petitioners’ implicit argument that Arkema did change the law, notwithstanding the panel’s claims to the contrary, is an argument that the panel got it wrong—that

Arkema departed from existing law without realizing it. That argument is not cognizable here. Honeywell and DuPont obviously believe that the panel’s analysis was incorrect. Under Union Electric Co. v. EPA , 427 U.S. 246 (1976), however, if the Administrator of EPA is barred from relying on particular grounds in reconsidering agency action, a court likewise may not rely on those “new ‘grounds’” to establish jurisdiction under the Clean Air Act. Id . at 256. Surely EPA could not base a

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decision to revisit these transfers on the supposition that this Court’s decision in

Arkema was wrong. For the same reasons, an allegation of error on the part of this Court cannot be the “new grounds” supporting Petitioners’ challenge. To the extent that these petitions address a consequence of Arkema at all, they directly conflict with a necessary predicate of the Court’s holding. As

Arkema noted, Congress had written an ambiguous statute and had “left it to the broad discretion of EPA to determine how transfers of baselines are to be treated.” 618 F.3d at 7 (internal quotation marks omitted). This description of EPA’s authority was not merely dicta : Arkema ’s core holding was that EPA had lawfully interpreted the Act to permit these transfers, then changed its tune when it adopted

the Final Rule. Id . at 7-8. By applying the new interpretation to previously approved transactions, the Agency retroactively and unlawfully changed “the past legal consequences of past actions.” Id . at 7 (internal quotation marks omitted). Petitioners here argue that the Act unambiguously forbids inter-pollutant baseline transfers, and that EPA never had authority to approve them. But if Petitioners were right, then the Final Rule could not have “change[d] the legal landscape” ( id. ): the transfers never would have been lawful in the first place, and EPA’s decision to undo them could not have had retroactive effect. It was necessary to the holding in Arkema that EPA had a choice about how to apply the statute, and that the Agency’s first reading was not unambiguously foreclosed.

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Petitioners’ claim to jurisdiction amounts to a collateral attack on Arkema

. Arkema could not have provided “new grounds” for review in 2010 simply by describing accurately the law as it stood in 2008. Moreover, Arkema is the law of the Circuit, and will remain so unless the opinion is vacated or withdrawn. See Ass’n of Civilian Technicians, Montana Air Chapter v. FLRA , 756 F.2d 172, 176 (D.C. Cir. 1985) (“[W]e are bound by the principle of stare decisis to abide by a recent decision of one panel of this court unless the panel has withdrawn the opinion or the court en banc has overruled it.” (internal quotation marks omitted)).

Because Arkema remains controlling authority, this Court cannot exercise jurisdiction on the premise that Arkema is in error.

3. Any “new grounds” must be presented to EPA in the first instance Even assuming that the petition were “based solely on grounds arising after” the period for review, § 7607(b)(1), this Court could not address those new grounds in the first instance. Instead, any new developments that might support subsequent review must be presented to the Agency first. See Columbia Falls Aluminum Co. v. EPA , 139 F.3d 914, 921 (D.C. Cir. 1998); Oljato Chapter of the Navajo Tribe v. Train , 515 F.2d 654, 665-67 (D.C. Cir. 1975). That is because the “‘grounds arising after’” exception was “designed to ‘assure that standards were revised whenever necessary’ on the basis of new information” by the

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Administrator of EPA, not by the courts. Columbia Falls , 139 F.3d at 921 (quoting Oljato , 515 F.2d at 660); see also Union Elec. , 427 U.S. at 255-56. This rule, too, is jurisdictional. Natural Res. Defense Council, Inc. v.

Thomas , 845 F.2d 1088, 1091-92 (D.C. Cir. 1988); cf. ARTBA , 588 F.3d at 1114. Although Honeywell and DuPont have filed a petition before EPA, the Agency has not yet responded to it. Review in this Court is therefore premature. See Western Union Tel. Co. v. FCC , 773 F.2d 375 (D.C. Cir. 1985). CONCLUSION The petitions for review should be dismissed for lack of jurisdiction.

Dated: January 11, 2011 /s/ David M. Williamson ( with permission ) David M. Williamson Gia V. Cribbs A NDREWS 

### K URTH 

### LLP 1350 I Street, N.W., Suite 1100 Washington, DC 20005 (202) 662-2700 Of Counsel: Carlos R. Escobar S OLVAY 

### N ORTH 

### A MERICA 

### , LLC 3333 Richmond Avenue Houston, TX 77098 Counsel for Solvay Fluorides, LLC and Solvay Solexis, Inc. Respectfully submitted. /s/ Dan Himmelfarb Dan Himmelfarb John S. Hahn Roger W. Patrick Stephen E. Sachs M AYER 

### B ROWN 

### LLP 1999 K Street, N.W. Washington, DC 20006 (202) 263-3000 Of Counsel: William J. Hamel A RKEMA 

### I NC



### . 2000 Market Street Philadelphia, PA 19103 Counsel for Arkema Inc. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 22

### CERTIFICATE OF SERVICE

I hereby certify, pursuant to Fed. R. App. P. 25(d), that on January 11, 2011, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system, which will send a notification to the attorneys of record in this matter, who are registered with the Court’s CM/ECF system. I also certify that on January 11, 2011, the foregoing was served by U.S. Mail, first-class delivery, on: Richard E. Ayres Ayres Law Group 1615 L Street, NW Suite 650 Washington, DC 20036

Dated: January 11, 2011 /s/ Dan Himmelfarb Dan Himmelfarb Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 23

# Exhibit 1

EPA, Proposed Rule Fact Sheet, EPA-HQ-OAR-2008-0496-0081 (Jan. 16, 2009) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4

# Exhibit 2

Arkema Inc., Class II Controlled Substance Transfer Form

(Apr. 18, 2008) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 6Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 7Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 8

# Exhibit

3

Non-Objection Notice from Ross Brennan, EPA, to Dawn Mattia, Arkema Inc., concerning transfer dated Apr. 18, 2008 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2

# Exhibit 4

Non-Objection Notice from Ross Brennan, EPA, to Dawn Mattia, Arkema Inc., concerning transfer dated Apr. 19, 2008 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2

# Exhibit

5

Letter from Ross Brennan, EPA, to Dawn Mattia, Arkema Inc. (Aug. 14, 2008) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 6

# Exhibit

6

Letter from Ross Brennan, EPA, to Dawn Mattia, Arkema Inc. (Jan. 9, 2009) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2

# Exhibit 7

Letter from Charles M. Jones, Solvay Solexis, Inc., to Mike James, EPA (Feb. 15, 2008) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5

# Exhibit 8

Letter from Chuck Jones, Solvay Solexis, Inc., to Mike James, EPA (Mar. 4, 2008) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5

# Exhibit

9

Non-Objection Notice from Ross Brennan, EPA, to Charles Jones, Solvay Solexis, Inc., and Don Magid, Solvay Fluorides, LLC, concerning transfer dated Feb. 15, 2008

Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3

# Exhibi t

10

Non-Objection Notice from Ross Brennan, EPA, to Charles Jones, Solvay Solexis, Inc., and Don Magid, Solvay Fluorides, LLC, concerning transfer dated Mar. 5, 2008 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3

# Exhibi t

11

Comment by Steven H. Bernhardt, Ph.D., Honeywell Specialty Materials, to Cindy Axinn Newberg, EPA, EPA-HQ-OAR-2008-0496-0118.1 (Mar. 9, 2009) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 6Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 7Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 8Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 9Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 10Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 11

# Exhibit 12

Comment by DuPont Fluoroproducts to EPA, EPA-HQ-OAR-2008-0496-0097.1 (Mar. 9, 2009) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 11/21



## DuPont Fluoroproducts DuPont Fluoroproducts Chestnut Run Plaza Building 702 P.O. Box 80702 Wilmington, DE 19880-0702 Docket ID No. EPA-HQ-OAR-2008-0496 Air and Radiation Docket and Information Center U.S Environmental Protection Agency Mail Code: 6102T 1200 Pennsylvania Avenue, NW Washington, DC 20460 DuPont Fluoroproducts provides these comments on th e proposed rule published in the Federal Register on December 23, 2008 on pages 7868 0-78705 (73 FR 78681, December 23, 2008): “Protection of Stratospheric Ozone: Adjustme nt to the Allowance System for Controlling HCFC Production, Import, and Export.” DuPont congratulates EPA on its continued leadershi p in ozone protection. The Montreal Protocol is widely recognized as the most successfu l multilateral environmental agreement ever benefiting both stratospheric ozone and the gl obal climate. The U.S. has consistently led in developing the Protocol and its subsequent amend ments and adjustments including the acceleration of the HCFC phaseout agreed in Septemb er 2007. The EPA has implemented the Protocol and the Clean Air Act amendments of 1990 i n a manner that protects both stratospheric ozone and climate and minimizes both disruption to the industry and burdens on consumers. This rule is the next step in EPA leade rship. Except for the few issues discussed below, we belie ve that with this proposed rule EPA has done an excellent job of ensuring U.S. compliance w ith the Montreal Protocol, protecting the global ozone layer and taking into account needs of consumers regarding these products. EPA has acquired adequate data on market needs thro ugh the Servicing Tail report to appropriately allocate different percentages of bas eline production allowances and baseline consumption allowances to HCFC-22 and HCFC-141b on a chemical-by-chemical basis. Appropriately setting baselines and allocating allo wances for all HCFCs will ensure compliance with the Montreal Protocol now and in th e future and will allow adequate time for business planning. EPA has appropriately chosen no t to abandon the baseline allowances set in the 2003 rule as a basis for allocating HCFC-22 and HCFC-142b allowances for 2010- 2014. The addition of the direct use prohibitions contemplated in 1993 will facilitate enforcement of the rule. The sunset of provisions for export production allowances for HCFC-141b is entirely appropriate to be consistent with the fact that use of the chemical has been banned in the U.S., except for limited and scr utinized exemption needs, since 2003. We have one major objection (Increasing Baseline Al lowances for HCFC-22) and suggest two other modifications (Export of HCFCs and Annual HCFC-22 Allocation) to the proposed rule. We provide detailed comments on these three issues and then comment on the specific issues upon which EPA requested comment. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 22/21

We strongly encourage EPA to publish the final rule as early as possible. Producers, importers and distributors of HCFCs will begin sour cing planning for 2010 as early as the middle of 2009. The uncertainty created by the lac k of a final allocation rule will complicate this planning process. Delays in publishing the fi nal rule could cause sourcing problems during the first quarter of 2010 when the supply ch ain is preparing for spring, the time of highest demand for HCFCs for servicing. Please contact Mack McFarland by e-mail at mack.mcfarland@usa.dupont.com or by phone at 302 999 2505 if there are questions on these com ments. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 33/21

Increasing Baseline Allowances : Summary : EPA’s Proposed Rule to adjust the allowance system for control of U.S. consumption and production of hydrochlorofluorocarbons (HCFCs), spe cifically HCFC-22 and HCFC-142b, for the control periods 2010–2014 (73 FR 78681, Dec ember 23, 2008) is in error, an error we believe may be inadvertent. This error contravenes EPA’s stated policy goals of avoiding disruption of the current HCFC market. The propose d approach would artificially modify market shares and improperly advantage foreign prod ucers over domestic producers in a way that will serve to offshore US jobs. While EPA has the authority to reduce production an d consumption allowances to comply with limits under the Montreal Protocol, EPA's auth ority relating to inter-pollutant transfers is limited to annual adjustments. EPA is improperly p roposing to make previously temporary inter-pollutant transfers permanent, resulting in r adical increases in one company’s HCFC-22 production baseline and two companies’ HCFC-22 cons umption baselines. The proposed increase in the production baseline has the effect of increasing the HCFC-22 production allocations for the period 2010-2014 for one foreig n producer and decreasing the HCFC-22 production allocations for three domestic producers . The proposed increases in consumption baselines increase the consumption allocations for two companies and decrease the HCFC-22 consumption allocations of nineteen companies, incl uding the three domestic producers. The net result is a shift in proposed HCFC-22 consumpti on allocations of almost six million kg per year from nineteen companies to the two foreign producers. Thus the proposal would have the effect of shifting 12% market share from n ineteen companies to the two foreign producers. Such a shift in market share is inconsi stent with the Clean Air Act. To comply with the Montreal Protocol, the EPA estab lished a chemical-by-chemical phaseout system . The 2003 Final Rule established, on a one-time basis , an aggregate baseline amount

of production and consumption allowances for HCFC- 22. The Clean Air Act allows EPA, through inter-pollutant transfers, to adjust an entity’s annual allowance allocation. However, the Proposed Rule would impro perly change two companies' baselines by allowing previously temporary inter-pollutant tr ansfers to become permanent, increasing the aggregate amount of baseline production allowan ces for HCFC-22 by 17% and the aggregate amount of baseline consumption allowances for HCFC-22 by 19% in a nonuniform manner that shifts market share. In the pr ocess, the EPA is inappropriately allowing selected companies to convert allowances from the H CFC-142b baseline into permanent baseline allowances for HCFC-22. EPA should not create a permanent change of a compa ny’s baseline allocation of any HCFC chemical established in the 2003 Final Rule based o n any inter-pollutant transfers that occurred in the control periods prior to 2010. If finalized as proposed, the Proposed Rule would not only be in contradiction with the 2003 Final Rule governing the control periods 2003–2009, but would also violate the Clean Air Act with respect to inter-pollutant transfer of allowances. Background : Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 44/21

“In 1992, a graduated consumption phaseout was esta blished under the Montreal Protocol for industrialized countries and in 1993 the EPA establ ished a chemical-by-chemical phaseout system to implement the graduated consumption phase out (58 FR 65018, December 10, 1993).” i In its 2003 Final Rule, EPA established “the chemical-by-chemical absolute kilogram system to allocate and transfer allowances in the HCFC al lowance system.” ii

EPA stated that it was “ allocating HCFC allowances on a one-time basis . This would mean the allocations would remain the same from control peri od to control period (one calendar year to the next) until each chemical is p hased out or until the percentage of baseline allowances is reduced to ensure compliance with the Protocol cap.” iii EPA considered but rejected proposals to “allocate on a year-by-year o r period-by-period basis”. iv In the explanatory language to the 2003 Final Rule, it was stated that “EPA recognizes the need to determine the allocation level for the 2010 reduction step in HCFC–22 and HCFC– 142b allowances and will monitor the market to dete rmine the quantity needed for servicing equipment manufactured before December 31, 2009. EP A intends to achieve this reduction step through notice and comment prior to 2010 and will likely implement the reduction by simply listing a percent of baseline allowances to be granted in Section 82.16 for years after 2009 .” v “ EPA is therefore distributing baseline HCFC allowan ces only for HCFC– 141b , HCFC–22 and HCFC–142b on a one-time basis .” vi EPA allocated “consumption allowances to listed individual companies only for HCFC–141b, HCFC–22, and HCFC– 142b. ” vii “Only through permanent transfers of allowances w ould a company’s baseline allocation be changed.” viii

“ The permanent transfer of baseline allowances is a lasting shift of some quantity of a company’s allowances to another company . The permanent nature of the transfer makes it different from the transfer of current-year allowan ces . In all relevant subsequent years, the transferor’s quantity of baseline allowances wo uld be permanently reduced, while the transferee’s quantity of baseline allowances would be permanently increased. For example, if a person transfers baseline allowances of HCFC– 22, their baseline would be decreased permanently by the transfer amount, and the recipie nt would gain HCFC–22 baseline allowances, minus the offset, on a permanent basis. Subsequent inter-pollutant transfers of these baseline allowances would also be permitted. However, at the time of a reduction step or a phaseout of the substance, the current holder of baseline allowances that were received in a permanent transfer would be the person who would ha ve them deducted .” ix The total number of allowances for the HCFC chemical does not increase as a result of a permanent transfer because, as the number of allowances of a transferee increases, the number of allowances of the transferor correspondingly decrea ses. x In the 2003 Final Rule, EPA allowed inter-pollutant transfers (or intra-company transfers) in conjunction with the chemical-by-chemical tracking system. xi However, under Section 607 (b) and (d) of the Clean Air Act, the inter-polluta nt transfer of allowances must be “ for the same year ”. “Inter-pollutant transfers, also known as intra -company transfers or trades, allows a company to shift allowances internally fro m one HCFC to another to respond to market forces, e.g. HCFC–142b allowances for HCFC–22 allowances.” xii “ Current-year Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 55/21

trades are temporary trades and are reflected in a company’s balance of allowa nces in the control period in which the trade occurs .” xiii In other words, an inter-pollutant transfer of a consumption allowance of one chemical for 2008 may only occur in conjunction with a consumption allowance of another chemical for 2008. In effect, each inter-pollutant transfer expires at the end of the calendar year in which th e transfer occurred. The 2003 Final Rule clearly explains the way in whi ch a permanent change to a company’s baseline allocations can be made. xiv There was no suggestion that inter-pollutant transfers (or intra-company transfers) could cause a permanent change to a company’s baseline allocations . To the contrary, it was intended that, “as the p haseouts and reductions in consumption proceed, the opportunities for inter-po llutant transfers will decrease over time. This tightening of the ability to transfer allowanc es parallels the tightening of the overall quantity of allowances, leading to greater incentiv es for research into and development of alternatives.” xv The fact that an inter-pollutant transfer cannot ca rry forward into another calendar year is also reflected in the following statements: “EPA will allow permanent transfers of baseline all owances with those allowances disappearing at the phaseout date for th e specific HCFC, regardless of what inter-pollutant transfers had ta ken place .” xvi “Because the consumption and production allowances for a specific HCFC disappear after its phaseout date, inter-pollu tant transfers of those allowances will no longer be possible after t he phaseout date. For example, after HCFC–141b is phased out on January 1 , 2003, a company cannot transfer ODP-weighted HCFC–141b prod uction or consumption allowances for HCFC–22 allowances. No p roduction or consumption allowances for HCFC– 141b will exist af ter December 31, 2002.” xvii Description of the Problem : In the Proposed Rule the EPA states, “To meet the 2 010 cap for the 2010– 2014 control periods, EPA is proposing to continue its past prac tice of apportioning company-specific production and consumption baselines for individual HCFCs, and granting a certain percent of that baseline as necessary to achieve compliance wi th the cap.” xviii The 2003 allocation rule assigned an individual consumption baseline year to each company on a chemical-bychemical basis . EPA assigned individual production baseline years in the same manner. EPA purports that “ EPA is not proposing to revisit decisions made in t he 2003 allocation rule ....” xix And yet, EPA now proposes to increase HCFC-22 produ ction and consumption baselines for selected companies, thus increasing the aggregate p roduction and consumption baselines for HCFC-22 by 17% and 19% respectively. This result o ccurs because EPA has proposed allowing two companies to convert 2008 approved int er-pollutant transfers that were Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 66/21

originally intended to be temporary, into permanent transfers. EPA provides no explanation why it proposes to make this dramatic departure fro m the decisions made in the 2003 allocation rule. EPA merely states:

The proposed company-specific baselines also reflect ad justments resulting from approved inter-pollutant and/or inter-company transfers of baseline allowances (i.e., permanent r ather than calendaryear allowances) through the process described in § 82.23. xx EPA points out that inter-company transfers of baseline allowances were intended to be “permanent rather than calendar-year allowances,” a s contemplated by the Final Rule in 2003. But EPA does not justify the proposal to make selec ted calendar-year allowances permanent as well.

Discussion: Contrary to many of EPA’s stated beliefs, permanent changes to allowances based on temporary intra-company transfers have been propose d. Surprisingly, and without explanation, EPA proposes converting selected trans fers that were intended to be only calendar-year allowances into permanent adjustments to the baselines established in 2003. The absolute amounts of production and consumption baselines for individual HCFCs were intended to be fixed. EPA established “ a baseline on a one-time basis , whereby the allowance allocations would remain consistent (or be moved through permanent trades) from control period to control period (one calendar year to the next), until each chemic al is phased out via subtraction of its commensurate allo wances, or until the percentage of baseline allocated is changed to ensure compliance with the Protocol cap.” xxi “As under the class I system, the allowances for any control period can only be used during that control period and cannot be carried over into the following calen dar year .” xxii In the 2003 Final Rule, EPA issued baseline consump tion allowances for HCFC–22 totaling 119,384,852 kilograms. EPA, taking into considerat ion market demand for the product, has now proposed that it is appropriate to allocate con sumption allowances for HCFC–22 of only 49,936,614 kilograms. This proposed allocation for HCFC-22 equals 41.83% of the total 2003 baseline consumption allowances. Nonetheless, EPA now proposes that §82.16(a) be amended to reflect a 35.2% allocation of baseline c onsumption allowances for HCFC–22, because EPA is proposing to increase the baseline consumption allo wances for HCFC–22 by 22,480,529 kilograms . There is absolutely no need for EPA to increase the baseline consumption allowances for HCFC–22.

The 22,480,529 kilograms EPA is now proposing to add to the origin al baseline consumption allowances for HCFC–22 would be a result of making “adjustments resulting from approved inter-pollutant” transfers that expired on December 31, 2008. There is no legislative basis for this proposal. Under the 2003 Final Rule, and more importantly, under the Clean Air Act, inter-pollutant transfers were to be temporary, rev erting back at the end of the calendar year Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 77/21

of the transfer. Section 607 (b) of the Clean Air Act clearly states, “The rules under this section shall permit a production allowance for a s ubstance for any year to be transferred for a production allowance for another substance for the same year on an ozone depletion weighted basis.” xxiii Inter-pollutant transfers of consumption allowanc es also expire at the end of end of the calendar year of the transfer. xxiv The permanent baseline consumption allowances for H CFC–142b assigned in 2003 were 21,044,929 kilograms. However, under the proposed rule, EPA would change the baseline consumption allowances for HCFC–142b to 2,046,979 k ilograms. This is less than 10% of the original “permanent” baseline. Changing the nu mber of baseline allocations is unprecedented. Without basis or authority, the EPA is, in effect, trying to convert 90.27% of the permanent baseline consumption allowances for HCFC–142b assigned in 2003 into permanent baseline consumption allowances for HCFC–22 . This is totally inconsistent with “the chemical-by-chemical absolute kilogram system to allocate and transfer allowances in the HCFC allowance system” that has been established. xxv “EPA believes for these control periods, maintaining a constant number of allowances would reduce the overall burden for the allowance holders and would ease business practices .” xxvi Indeed, strategic business decisions have been ma de by many individual chemical producers and importers relying on the pre vious decision of the EPA that the baseline allowances for HCFC-22 were fixed and perm anent. EPA’s analysis shows that there will be a significa ntly greater need for HCFC–22 than for HCFC–142b during the control periods 2010-2014. xxvii EPA has projected servicing needs in the period 2010 – 2014 for HCFC–142b is extremely l ow: Approximately 100,000 kilograms. This amount is less than one-half of one percent (0 .5%) of the 2003 HCFC–142b baseline consumption allowances of 21,044,929 kilograms. In contrast, it is estimated that approximately 62,500,000 kilograms of HCFC–22 will be needed for servicing in 2010. This is more than fifty percent (50%) of the original 20 03 HCFC–22 baseline consumption allowances of 119,384,852 kilograms.

It is obvious that those who decided to manufacture or import HCFC–142b did not select a chemical for which there remains a strong market de mand, as is the case with respect to HCFC–22. If EPA were to allow conversion of HCFC–1 42b permanent baseline allowances into permanent HCFC–22 baseline allowances, it woul d unnecessarily interfere with the momentous past business decisions made by the indiv idual chemical producers. It would allow those who have received virtually all of the value to be extracted from their past decisions to build a business based on HCFC–142b, t o now receive additional value from a business based on HCFC–22, without making a commens urate investment. This would most certainly create an ‘‘uneven playing field’’ and wo uld skew allocations. To illustrate with specific examples, the 2003 Fina l Rule allocated to Arkema [formerly Elf Atochem (ATOFINA)] 24.73% of the aggregate HCFC–22 baseline consumption allowances for 2003-09. The 2008 Proposed Rule would allocate to Arkema 34% of the new aggregate Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 88/21

HCFC–22 baseline consumption allowances for 2010-14 . [Note that the Proposed Rule appropriately continues to include allowances origi nally related to Arkema’s only U.S. HCFC-22 production plant, even though Arkema closed that U.S. plant in 2002.] In other words, the percentage of the aggregate HCFC–22 base line consumption allowances for Arkema for 2010-14 would be 138.6% of its percentag e for 2003-09. Similarly, for 2003-09, Solvay Solexis [formerly Au simont] and Solvay Fluorides (together, hereinafter, “the Solvay Group”) were allocated 0.3 5% of the total HCFC–22 baseline consumption allowances. The 2008 Proposed Rule wou ld allocate to the Solvay Group 2.67% of the HCFC–22 baseline consumption allowances. In other words, the percentage of the HCFC–22 baseline consumption allowances for the Sol vay Group for 2010-14 would be 769% of the allowances for 2003-09. Only two companies would receive increases in HCFC– 22 consumption baselines allowances under the Proposed Rule: Arkema and the Solvay Grou p. Those increases would adversely affect the nineteen other HCFC-22 allowance holders . Each of these nineteen companies would receive only 84.15% of the allowances they wo uld receive if the aggregate HCFC–22 consumption baselines allowances are not increased. Of these nineteen allowance holders whose percentage of the aggregate HCFC-22 baseline consumption allowances would decrease, the largest impact, in terms of absolute allowances, would be on two U.S. based companies , DuPont and Honeywell. The tables provided below quantify the impact of th e proposed inter-pollutant transfers on the four companies with baseline HCFC-22 production all owances and the twenty-one companies with HCFC-22 consumption allowances. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 99/21 HCFC-22 Production

Person (a)

2008 proposed baseline (kg) (b)

2003 baseline (kg) (c)

Proposed allocation (kg) (d)

Allocation using 2003 baseline (kg) (e)

Difference (kg) (f)

Percentage impact on allocation Arkema 46,692,336 28,219,223 16,435,702 11,803,692 4,632,010 139.24% DuPont Company 42,638,049 42,638,049 15,008,593 17, 834,878 -2,826,285 84.15% Honeywell 37,378,252 37,378,252 13,157,145 15,634, 781 -2,477,637 84.15% MDA Manufacturing 2,383,835 2,383,835 839,110 997,124 -158,014 84.15% Total 129,092,472 110,619,359 45,440,550 46,270,47 6 -829,926 98.21% HCFC-22 Consumption

Person (a)

2008 proposed baseline (kg) (b)

2003 baseline (kg) (c)

Proposed allocation (kg) (d)

Allocation using 2003 baseline (kg) (e)

Difference (kg) (f)

Percentage impact on allocation

ABCO Refrigeration Supply 279,366 279,366 98,337 116,855 -18,518 84.15%

Altair Partners 302,011 302,011 106,308 126,327 -20 ,019 84.15% Arkema 48,637,642 29,524,481 17,120,450 12,349,663 4,770,787 138.63% Auto Equipment Sales 54,088 54,088 19,039 22,624 -3,585 84.15% Condor Products 74,843 74,843 26,345 31,306 -4,961 84.15% Coolgas Investment Property 590,737 590,737 207,939 247,097 -39,157 84.15%

Discount Refrigerants 375,328 375,328 132,115 156,994 -24,879 84.15% DuPont Company 38,814,862 38,814,862 13,662,831 16, 235,695 -2,572,863 84.15% Full Circle 14,865 14,865 5,232 6,218 -985 84.15% HG Refrigeration Supply 40,068 40,068 14,104 16,760 -2,656 84.15% Honeywell 35,392,492 35,392,492 12,458,157 14,804, 167 -2,346,010 84.15% Ineos Fluor Americas 2,546,305 2,546,305 896,299 1,065,083 -168,783 84.1 5% Kivlan & Company 2,081,018 2,081,018 732,518 870,46 0 -137,941 84.15% MDA Manufacturing 2,541,545 2,541,545 894,624 1,063,091 -168,468 84.1 5% Mondi-Global 281,824 281,824 99,202 117,883 -18,681 84.15% National Refrigerants 5,528,316 5,528,316 1,945,967 2,312,415 -366,447 84 .15%

Refricenter of Miami 381,293 381,293 134,215 159,489 -25,274 84.15% Refricentro 45,979 45,979 16,185 19,232 -3,048 84.1 5% R-Lines 63,172 63,172 22,237 26,424 -4,187 84.15% Saez Distributors 37,936 37,936 13,353 15,868 -2,51 5 84.15% Solvay Fluorides 3,781,691 413,509 1,331,155 172,96 5 1,158,190 769.61% Total 141,865,381 119,384,038 49,936,614 49,936,61 4 0 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1010/21

Explanatory Notes for each column: (a) Baseline allowances taken from 73 FR 78681, Decembe r 23, 2008 that include both permanent intercompany transfers and proposed inter-pollutant tran sfers. (b) Baseline allowances taken from 68 FR 2833, January 21, 2003 corrected for name changes and permanent inter-company transfers. (c) Proposed allocations based on 73 FR 78681, December 23, 2008; calculated by multiplying the value in column (a) by 0.352. (d) Allocations based on 2003 baseline allowances corre cted for name changes and permanent intercompany transfers and keeping total allocations at 49,936,614 kg; calculated by multiplying the value in column (a) by 0.418285517. Note that the factor wo uld be 0.4188 if total allocations were 50,000,000 as stated in preamble to 73 FR 78681, December 23, 2008. (e) Difference between the values in columns (c) and (d ); calculated by subtracting the value in column (d ) from the value in column (c). The values in this c olumn show each “person’s” gain or lose, in kilograms of HCFC-22, by allowing the proposed inte r-pollutant transfers to impact baseline allowances. (f) Percentage impact on allocation; calculated by mult iplying 100% by the value in column (c) and dividing by the value in column (d). The values in this column show percentage impacts of the baselin e adjustments resulting from the proposed inter-pollu tant transfers. EPA has stated that allocation of allowances for HC FC–22 and HCFC–142b at less than 100 percent of the respective baselines during the cont rol periods 2010–2014 is the most appropriate method of allocation. “ This approach offers a transparent design and provides stability in that it uses a well-vetted ba seline .” xxviii However, these statements are only true if there is no change of that well-ve tted baseline for HCFC–22. Based on HCFC-22 consumption data released by EPA a nd DuPont market estimates, we believe that none of the inter-pollutant transfers approved in 2008 were needed to meet HCFC-22 demand nor were they actually used in 2008. Nor would such inter-pollutant transfers be needed in 2009. EPA said it considere d but rejected alternative approaches such as considering the differences between expended all owances versus allowances acquired via inter-pollutant transfers. xxix Instead, EPA has inexplicably proposed creating a new and larger permanent HCFC-22 baseline allocation based on inte r-pollutant transfers that were approved but neither needed to serve market demands nor expe nded. Conclusion : Conversion of inter-pollutant transfers , that were originally intended to be temporary and intended to expire at the end of 2008, into permanent transfers that would increase the total number of kilograms of baseline allowances is not permitted by the Clean Air Act and is not consistent with the 2003 Final Rule

. It is appropriate for EPA to avoid unnecessary disr uptions in the marketplace and to promote a smooth transition for industry. xxx It is also appropriate that EPA should consider projected servicing needs for air-conditioning and refrigerat ion, so as to best protect the interests of consumers who are directly and indirectly affected by the regulations. The final rule should attempt to avoid shortages of chemicals for which t here is a demand when this can be done in a manner consistent with EPA’s mandate to achieve c ompliance with US obligations under the Montreal Protocol. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1111/21

The regulatory allowance allocation plan laid out i n the 2003 Final Rule for years after 2009 was to implement the required reduction by simply l isting a percent of baseline allowances granted in 2003 under Section 82.16. There was nev er a suggestion that the aggregate number of baseline allocations for any single chemical cou ld be increased. Proposing to increase a company’s permanent baseline allowances to “reflect adjustments resulting from approved inter-pollutant” transfers that were originally int ended to be temporary is a huge departure from decisions made in the 2003 allocation rule and is in conflict with the Clean Air Act. Making permanent changes to baseline allocation amo unts would have significant impact on all individual companies, rewarding two and penaliz ing nineteen. EPA should endeavor to avoid affecting the competitive balances in the mar ketplace if this can be done in a manner consistent with EPA’s mandate to achieve compliance with US obligations under the Montreal Protocol. This error can easily be correc ted if, “The company-specific baselines only reflect adjustments resulting from approved in ter-company transfers of baseline allowances (i.e., permanent rather than calendar-ye ar allowances) through the process described in § 82.23.” Modified Tables: The three tables in the proposed rule should be cha nged to those shown below to remove the proposed inter-pollutant transfer adjustment to bas eline allocations and to provide for yearover-year reductions in HCFC-22 allowances as descr ibed later in these comments.

Control period HCFC-141b HCFC-22 HCFC-142b HCFC-123 HCFC-124 HCFC-225ca HCFC-225cb 2003 0 100 100 ................. .................

................. ................. 2004 0 100 100 .................

................. ................. ................. 2005 0 100 100 .................

................. ................. ................. 2006 0 100 100 .................

................. ................. ................. 2007 0 100 100 .................

................. ................. ................. 2008 0 100 100 .................

................. ................. ................. 2009 0 100 100 .................

................. ................. ................. 2010 0 41.88 0.475 125 125 125 125 2011 0 38.15 0.475 125 125 125 125 2012 0 34.41 0.475 125 125 125 125 2013 0 30.68 0.475 125 125 125 125 2014 0 26.94 0.475 125 125 125 125 PRODUCTION ALLOWANCES Person Controlled substance Baseline Allowances (kg.) AGC Chemicals Americas ......................... HCFC-225 ca............ HCFC-225cb............ 266,608 373,952 Arkema ................................................ HCFC-22................ HCFC-141b............. HCFC-142b............. 28,219,223 24,647,925 16,131,096 DuPont .................................................... H CFC-22................ HCFC-124............... 42,638,049 2,269,210 Honeywell........................................ HCFC-22................ HCFC-141b............. HCFC-142b............. HCFC-124............... 37,378,252 28,705,200 2,417,534 1,804,121 MDA Manufacturing............................ HCFC-22................ 2,383.835 Solvay Solexis.................................... HCFC-142b... .......... 6,541,764 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1212/21 CONSUMPTION ALLOWANCES Person Controlled substance Baseline Allowances (kg.) ABCO Refrigeration Supply................... HCFC-22................ 279, 366 AGC Chemicals Americas..................... HCFC-225ca............ HCFC-225cb............ 285,328 286,832 Altair Partners.....................

............... HCFC-22................ 302,011 Arkema............................................ HCFC-22................ HCFC-141b............. HCFC-142b............. HCFC-124............... 29,524,481 25,405,570 16,672,675 3,719 Auto Equipment Sales........................... HCFC-22................ 54,08 8 Condor Products................................. HCFC-22................ HCFC-124...

............ 74,843 3,746 Continental Industry Group..................... HCFC-141b............. 20,315 Coolgas, Inc....................................... HCFC-141b............. HCFC-123............... 16,097,869 20,000 Coolgas Investment Property................... HCFC-22................ 59 0,737 Discount Refrigerants........................... HCFC-22......

.......... HCFC-141b............. 375,328 994 DuPont............................................. HCFC-22................ HCFC-141b............. HCFC-142b............. HCFC-123............... HCFC-124............... 38,814,862 9,049 52,797 2,933,906 743,312 Full Circle......................................... HCFC-22................ 14,865 H.G. Refrigeration Supply.................. .... HCFC-22................ 40,068 Honeywell......................................... HCFC-22................ HCFC-141b............. HCFC-142b............. HCFC-124............... 35,392,492 20,749,489 1,315,819 1,284,265 ICC Chemical Corp.............................. HCFC-141b............. 81,225 ICOR.............................................. HCFC-124............... 81,220 Ineos Fluor Americas............................ HCFC-22................ 2,546, 305 Kivlan & Company.............................. HCFC-22................ 2,081,018 MDA Manufacturing............................ HCFC-22................ 2,541,545 Mondy Global.................................... HCFC-22................ 281,824 National Refrigerants............................ HCFC-22................ HCFC-123............... HCFC-124............... 5,528,316 72,600 50,380 Refricenter of Miami............................ HCFC-22................ 381,29 3 Refricentro........................................ HCFC-22................ 45,979 R-Lines............................................ HCFC-22................ 63,172 Saez Distributors................................. HCFC-22................ 37,936 Solvay Fluorides................................. HCFC-22................ HCFC-141b............. 413,509 3,940,115 Solvay Solexis.................................... HCFC-142b............. 3,047,3 86 Tulstar Products................................. HCFC-141b............. HCFC-123............... HCFC-124............... 89,913 34,800 229,582 Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1313/21

OTHER ISSUES: A. Export of Refrigerant HCFCs: DuPont believes that it was not the intent of the d rafters of Section 605(a) of the Clean Air Act to prohibit exports of HCFC refrigerants to non-Articl e 5 countries that would otherwise be allowed both under the Montreal Protocol and by the importi ng countries. The proposed definition of interstate commerce and proposed language at § 82.1 5(g) (2) and § 82.15(g) (3) would prohibit export to non-Article 5 countries of HCFC-22 and HC FC-142b and blends thereof beginning 1/1/2010 and of HCFC-123 and HCFC-124 and blends th ereof beginning 1/1/2015. All of these compounds are used as refrigerants either neat and/ or in blends. The exception in Section 605(a) (3), “Is used as a refrigerant in appliances manufa ctured prior to January 1, 2020” is not limited to appliances within the borders of the U.S. and, henc e, export of HCFCs should be allowed to service such appliances outside of the U.S. Exclud ing U.S. HCFC producers from participating in export markets, as allowed both under the Montre al Protocol and by the importing countries, lessens U.S. international competitiveness and adve rsely affects our country’s balance of trade. Furthermore, it does nothing to enhance protection of stratospheric ozone since the requirements for these HCFCs will simply be sourced with HCFCs f rom other countries. We encourage EPA to add to both § 82.15(g) (2) and § 82.15(g) (3) th e language “for other export as allowed under provisions of the Montreal Protocol” as shown below

. § 82.15(g) “(2) Effective January 1, 2010, no person may intro duce into interstate commerce or use HCFC–22 or HCFC– 142b (unless used, recovered, and recycled) for any purpose other than for use in a process resulting in its transformatio n or its destruction, for use as a refrigerant in equipment manufactured before January 1, 2010; for export to Article 5 Parties under § 82.18(a); for other export as allowed under provisi ons of the Montreal Protocol ; as a transshipment or heel; or for exemptions permitted in § 82.15(f). (3) Effective January 1, 2015, no person may introd uce into interstate commerce or use HCFC–141b (unless used, recovered, and recycled) fo r any purpose other than for use in a process resulting in its transformation or its dest ruction; for export to Article 5 Parties under § 82.18(a); for other export as allowed under provisi ons of the Montreal Protocol; as a transshipment or heel; or for exemptions permitted in § 82.15(f).” B. Annual HCFC-22 Allocation: Under the current rule, effective 2010, new product ion of HCFC-22 and HCFC-142b will be limited to use in servicing equipment manufactured before 1/1/2010. In anticipation of this reduction step, EPA stated in the 2003 final rule t hat it would continue to monitor the market to determine the quantity needed for servicing equipme nt manufactured before December 31, 2009. To that end, EPA proactively issued draft reports, in November 2005 and revised in September 2006 and June 2008, entitled The US Phaseout of HCFCs Projected Servicing Needs in the US Air-Conditioning and Refrigeration Sector . These reports provided projections for servicing needs in the US air conditioning and refrigeration sector post 2010. Figure ES-1 of the June 2008 draft report clearly shows the need to move the mar ket toward higher recovery and reuse rates to avoid significant shortages of HCFC-22 in 2015 and beyond. Furthermore, in the proposed rule Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1414/21

EPA estimates that 20% of the demand for service re frigerant can be met with recovered (recycled or reclaimed) HCFC-22. Yet, EPA proposes a constant annual allocation of HCFC-22 of about 50 million kg for the period 2010-2014 to meet this projected demand. We believe that this allocation is adequate for the year 2010 and i n excess for subsequent years. To prevent a shortfall of material required to meet market demand in 2015 and beyond, DuPont urges EPA to take action that will encourage a grad ual reduction of demand for virgin product and increase recovery and reuse by assigning HCFC-2 2 allocations over the period 2010-2014 that will steadily move the market toward the lower consumption of virgin HCFC-22 that will be allowed under the requirements of the Montreal Prot ocol. Allocations for HCFC-22 in 2010 should be 50 thousand metric tons as proposed by EP A. For the years 2011-2014, allocations for HCFC-22 should be reduced year over year toward 90% of the ODP-weighted HCFC consumption cap in 2015. Such an allocation is con sistent with EPA’s estimate that 20% of the service demand can be met with recovered (recycled or reclaimed) HCFC-22. These allocations, as shown in the table, would send a strong signal t o the market to increase recovery and reuse activities and encourage gradual reductions in HCFC -22 demand avoiding “shock” to the US economy caused by significant shortages of HCFC-22 in 2015 (or undercutting the regulation by allowing stock piling of HCFC-22 inventories at the end of 2014). Furthermore, such a gradual reduction schedule would reduce the amount of HCFC- 22 consumed in the U.S. over the period 2010-2014 by 44,580 metric tons, 2,452 metric ODP t ons, enhancing protection of stratospheric ozone. The table shows recommended total HCFC-22 c onsumption allocations and percentage of baseline consumption and production (excluding base line adjustments attributable to interpollutant transfers that we believe are inappropria te and unwarranted) assigned to each entity for the years 2010-2014.

2010 2011 2012 2013 2014 Recommended consumption allocations (metric tons) 50,000 45,542 41,084 36,626 32,168 Recommended percentage of baseline consumption and production assigned to each entity 41.88% 38.15% 34.41% 30.68% 26.94% Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1515/21

Comments on issues raised by the EPA:

1. FR Page 78686: “Please provide information and docu mentation on newly emerging uses of HCFCs and other uses of HCFCs, if any, that are not accounted for by EPA currently. EPA is especially interested in information pertaining to the years 2010 through 2014.” DuPont is not aware of any “newly emerging uses of HCFCs and other uses of HCFCs, if any, that are not accounted for by EPA currently.”

2. FR Page 78688: “EPA requests comments regarding whe ther it should consider other sources of information in addition to the required reports, the Servicing Tail report, and stakeholder comments. In particular, EPA is interested in whet her these sources provide sufficient information to allow EPA to reasonably estimate ser vicing needs for 2010–2014, especially for HCFC–22, which accounts for the majority of the mar ket.”

DuPont believes that the information available to E PA, and in particular the Servicing Tail report, provides an adequate basis to reasonably es timate servicing needs for 2010-2014.

3. FR Page 78689: “EPA requests comments on allocating different percentages of baseline production allowances and baseline consumption allo wances for HCFC–22 and HCFC–142b.” EPA previously established a chemical-by-chemical p haseout system. Each chemical should continue to be viewed independently, looking at the projected marketplace needs and the impact to the economy that would be caused if supplies are unavailable. DuPont supports the proposal by EPA to allocate different percentages of baseline production and consumption allowances on a chemical-by-chemical ba sis for HCFC-22 and HCFC-142b based on the much higher projected demand to meet s ervicing needs for HCFC-22 than for HCFC-142b. Specifically, DuPont supports reduc ing the total HCFC-142b consumption allocation from the current amount of 2 1,044,929 kg to the proposed amount of 100,302 kg; a 99.52% reduction. The justificati on for this reduction is the dramatically lower projected demand for HCFC-142b resulting from the ban on its use as a foam expansion agent. As described in detail above, we do not support the EPA proposal to allow HCFC-22 baseline increases by effectively converting baseli ne HCFC-142b consumption and production allowances into baseline HCFC-22 allowan ces. DuPont believes that annual HCFC-22 allocations of 50,000,000 kg each year over the entire 2010-2014 period leads to allowances in the later years greatly in excess of market demand. We support an allocation for HCFC-22 consu mption consistent with projections in the Servicing Tail report and the estimate that 20% of total projected servicing needs can be met with recovered refrigerants. Thus, a li near reduction in annual HCFC-22 consumption allocation as proposed above is appropr iate. Making the phaseouts gradual rather than precipitous will result in a smoother t ransition in the marketplace. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1616/21

4. FR Page 78692: “EPA requests comments on the amount of the total servicing need for HCFC–22 that can be met with recovered refrigerants , which is between 15 and 25 percent of total estimated servicing need.” and “EPA requests comments on its application of a 20 percent rate of availability of recovered (recycled or recl aimed) HCFC–22.” DuPont supports the EPA conclusion that between 15 and 25 percent of total HCFC-22 estimated servicing need can be met with recovered refrigerants and supports the assumption of a 20 percent rate of availability of recovered HCFC-22. Allocations should be on a chemical-by-chemical basis using the baseli nes established in the 2003 rule and, as described in detail above, excluding adjustments based on inter-pollutant transfers. Furthermore, total HCFC-22 allocations should decli ne year-over-year consistent with projected servicing needs and an estimated 20 perce nt rate of availability of recovered (recycled or reclaimed) HCFC–22. Such a schedule i s described above. 5. FR Page 78694: “EPA requests comments on the propos ed method and calculations for allocating allowances on an entity-by-entity basis for HCFC–22 and HCFC–142b production and consumption.”

EPA’s Proposed Rule to adjust the allowance system for control of U.S. consumption and production of hydrochlorofluorocarbons (HCFCs), specifically HCFC-22 and HCFC-142b, for the control periods 2010–2014 (73 FR 78681, December 23, 2008) is in error, an error we believe may be inadvertent. This error contravenes EPA’s stated policy goals of avoiding unnecessary interference w ith the current HCFC market by artificially modifying market share. The proposed approach would improperly advantage foreign producers over domestic producers in a way that will serve to offshore US jobs. While EPA has the authority to reduce production an d consumption allowances to comply with limits under the Montreal Protocol, EPA 's authority relating to interpollutant transfers is limited to annual adjustment s. EPA is improperly proposing to make permanent inter-pollutant transfers resulting in increases in one company’s HCFC-22 production baseline and two companies’ HCFC -22 consumption baselines. The proposed increase in production baseline has th e effects of increasing the HCFC22 production allocations for the period 2010-2014 for one foreign producer and decreasing the HCFC-22 production allocations for t hree domestic producers. The proposed increases in consumption baselines increas e the consumption allocations for two companies and decrease the HCFC-22 consumption allocations of nineteen companies, including the three domestic producers. The net result is a shift in proposed HCFC-22 consumption allocations of almost six million kg per year from nineteen companies to the two foreign producers. T hus the proposal would have the effect of shifting 12% market share from nineteen c ompanies to the two foreign producers. Such a shift in market share is inconsi stent with the Clean Air Act. To comply with the Montreal Protocol, the EPA estab lished a chemical-by-chemical phaseout system . The 2003 Final Rule established, on a one-time basis, an aggregate baseline amount of production and consumption allowances for HCFC- 22. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1717/21

The Clean Air Act allows EPA, through inter-polluta nt transfers, to adjust an entities annual allowance allocation. However, the Proposed Rule would improperly change two companies' baselines by allowing previously tem porary inter-pollutant transfers to become permanent, increasing the aggregate amount o f baseline production allowances for HCFC-22 by 17% and the aggregate amo unt of baseline consumption allowances for HCFC-22 by 19% in a non-uniform mann er that shifts market share. In the process, the EPA is inappropriately allowing se lected companies to convert allowances based on the HCFC-142b baseline into per manent baseline allowances for HCFC-22. EPA should not create a permanent change of a compa ny’s baseline allocation of any HCFC chemical established in the 2003 Final Rule ba sed on any inter-pollutant transfers that occurred in the control periods prior to 2010. If finalized as proposed, the Proposed Rule would not only be in contradiction with the 2003 Final Rule governing the control periods 2003–2009, but would also violate the Clean Air Actwith respect to interpollutant transfer of allowances.

6. FR Page 78695: “EPA requests comment on the need to establish baselines for these four additional HCFCs at this time. In particular, EPA i s interested in comments concerning whether establishing and apportioning a baseline for these four HCFCs, and allocating a percentage of that baseline for the 2010–2014 control periods, is necessary to ensure that the United States does not exceed the 25 percent HCFC cap under the 2 007 Montreal Adjustment. EPA requests comments on the appropriateness of using each compa ny’s highest reported consumption and production for 2005– 2007 rather than the lowest or an average.” DuPont supports EPA’s proposal to establish and app ortion baselines on a chemical-bychemical and entity-by-entity basis for HCFC–123, H CFC–124, HCFC–225ca, and HCFC–225cb and to allocate a percentage of those ba selines for the 2010–2014 control periods. With the reductions in consumption and pr oduction of HCFCs allowed under the Montreal Protocol in 2010, 2015, 2020 and 2030 it i s important to establish baselines for all HCFCs in this rule to provide adequate planning time for industry to adjust to the phase-down and -out and to ensure the U.S. meets it s Montreal Protocol obligations. Establishing the chemical-by-chemical baselines usi ng each company’s highest reported consumption and production for 2005– 2007 is consis tent with the procedure already successfully used by the EPA to establish chemical- by-chemical baselines for HCFC141b, HCFC-22 and HCFC-142b.

7. FR Page 78697: “EPA requests comments on its propo sed approach of allocating baseline allowances for HCFC–141b, HCFC–22, HCFC–142b, HCFC– 123, HCFC–124, HCFC–225ca, and HCFC–225cb based on the projected need for virg in material in the U.S., which would have the effect of not allocating allowances for the rem aining amount under the 3,810 ODP-ton cap.” EPA’s Proposed Rule to adjust the allowance system for control of U.S. consumption and production of HCFC-22 and HCFC-142b for the control periods 2010–2014 is not only inconsistent with the 2003 Final Rule governing the control periods 2003–2009, but also violates the Clean Air Act with respect to inter-po llutant transfer of allowances. The Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1818/21

chemical-by-chemical and entity-by-entity baselines established in 2003, adjusted only for permanent inter-company transfers, should be used a s the basis for the 2010-2014 entity specific allocations. In addition, entity-by-entit y and total HCFC-22 allocations should decline year-over-year consistent with projected se rvicing needs and 20 percent rate of availability of recovered (recycled or reclaimed) H CFC–22. Both of these issues are described in detail earlier in these comments. With these two exceptions, DuPont supports the gene ral approach proposed by EPA of allocating baseline allowances based on the project ed need for virgin material in the U.S. The approach ensures compliance with the Montreal P rotocol and sets the stage for the reductions in production and consumption that must occur in 2015 and 2020. Furthermore, the approach demonstrates the U.S. commitment to pr otection of stratospheric ozone.

8. FR Page 78698: “EPA requests comments on its propos ed revisions to § 82.18(a).” EPA established chemical-by-chemical and entity-by- entity baselines for HCFC-22, HCFC-142b and HCFC-141b in the 2003 Final Rule and used that as the basis for assigning chemical and entity specific Article 5 al lowances at 15% of those baselines. Consistent with the precedent set in the 2003 Final Rule and the adjustments to the Montreal Protocol HCFC phaseout agreed in 2007, DuP ont supports the proposal to apportion entities 10% of their chemical-by-chemica l production baselines established in 2003, adjusted only for permanent inter-company tra nsfers. To comply with the Montreal Protocol, the EPA estab lished a chemical-by-chemical phaseout system . The 2003 Final Rule established, on a one-time basis , an aggregate baseline amount

of production and consumption allowances for HCFC- 22. The Clean Air Act allows EPA, through inter-pollutant transfe rs, to adjust an entities annual allowance allocation. However, the Proposed Rule w ould improperly change two companies' baselines by proposing to allow inter-po llutant transfers to be permanent, increasing the aggregate amount of baseline product ion allowances for HCFC-22 by 17% and the aggregate amount of baseline consumption a llowances for HCFC-22 by 19% in a non-uniform manner that shifts market share. In the process, the EPA is inappropriately allowing selected companies to conv ert allowances based on the HCFC142b baseline into permanent baseline allowances fo r HCFC-22. It should be noted that the proposed increase in HCFC-22 production baselin e resulting from inter-pollutant transfers positively affects one foreign producer t hat does not even have HCFC-22 production facilities in the U.S. The chemical-by- chemical and entity-by-entity production baselines established in 2003, adjusted only for permanent inter-company transfers, should be used as the basis for the 2010 -2014 entity specific Article 5 allocations.

9. FR Page 78698: “EPA requests comments on adding thi s definition of interstate commerce to subpart A.” DuPont supports “ adding this definition of interstate commerce to su bpart A.” Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1919/21

However, DuPont believes that it was not the intent of the drafters of Section 605(a) of the Clean Air Act to prohibit exports of refrigerant HC FCs to non-Article 5 countries that would otherwise be allowed, both under the Montreal Protocol and by the importing countries. The proposed definition of interstate c ommerce and proposed language at § 82.15(g) (2) and § 82.15(g) (3) would prohibit expo rt to non-Article 5 countries of HCFC22 and HCFC-142b and blends thereof beginning 1/1/2 010 and of HCFC-123 and HCFC124 and blends thereof beginning 1/1/2015. All of these compounds are used as refrigerants either neat and/or in blends. The exc eption in Section 605(a) (3) “Is used as a refrigerant in appliances manufactured prior to Jan uary 1, 2020.” is not limited to appliances within the borders of the U.S. and, henc e, export of HCFCs should be allowed. Excluding U.S. HCFC producers from participating in export markets as allowed under the Montreal Protocol and by the importing countrie s lessens U.S. international competitiveness and adversely affects our balance o f trade. Furthermore, it does nothing to enhance protection of stratospheric ozone since the requirements for these HCFCs will simply be sourced with HCFCs from other countries. We encourage EPA to add to both § 82.15(g) (2) and § 82.15(g) (3) the language “for o ther export as allowed under provisions of the Montreal Protocol.”

10. FR Page 78700: “EPA requests comments on adding the se prohibitions and on its interpretation of section 605(a).” We do support the addition of “the direct use prohi bitions contemplated in 1993” to facilitate enforcement of the rule. Other than lab eling of HCFC containers and specifying on invoices that the product should only be used as specified in the rule, manufacturers and importers of HCFCs have little ability to contr ol how the product is used once it is sold to distributors. Adding the direct use prohib itions would appropriately allow enforcement at the point in the value chain where t he product is actually used.

To allow use of reclaimed HCFC-22 that cannot easil y be purified to required specifications, it is standard industry practice to mix such reclaimed product with virgin HCFC-22 to achieve the required purity. EPA should clarify that the mere mixing of virgin HCFC-22 with reclaimed HCFC-22 does not cons titute use of virgin HCFC-22 under § 82.15. However, the use of the resulting m ixture should be limited only to those permitted uses of virgin HCFC-22. Without such cla rification there would be a strong incentive to not recover HCFC-22 that cannot be eas ily purified since it would need to be destroyed. Lack of such clarification could also d ecrease the amount of reclaimed HCFC22 available to meet market demand. 11. FR Page 78700: “EPA seeks comment on the sunset of provisions for export production allowances.”

DuPont believes that it was not the intent of the d rafters of Section 605(a) of the Clean Air Act to prohibit exports of refrigerant HCFCs to non -Article 5 countries that would be allowed both under the Montreal Protocol and by the importing countries. The proposed definition of interstate commerce and proposed lang uage at § 82.15(g) (2) and § 82.15(g) (3) would prohibit export to non-Article 5 countrie s of HCFC-22 and HCFC-142b and Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2020/21

blends thereof beginning 1/1/2010 and of HCFC-123 a nd HCFC-124 and blends thereof beginning 1/1/2015. All of these compounds are use d as refrigerants either neat and/or in blends. The exception in Section 605(a) (3) “Is us ed as a refrigerant in appliances manufactured prior to January 1, 2020.” is not limi ted to appliances within the borders of the U.S. and, hence, export of HCFCs should be allo wed. Excluding U.S. HCFC producers from participating in export markets as a llowed under the Montreal Protocol and by the importing countries lessens U.S. interna tional competitiveness. Furthermore, it does nothing to enhance protection of stratospheric ozone since the requirements for these HCFCs will simply be sourced with HCFCs from other countries. We encourage EPA to add to both § 82.15(g) (2) and § 82.15(g) (3) the l anguage “for other export as allowed under provisions of the Montreal Protocol.”

However, the case for HCFC-141b is different. HCFC -141b is not used as a refrigerant and its use has been banned in the U.S. except for limited and scrutinized exemption needs. Consistent with that ban in the U.S., DuPon t supports EPA’s interpretation of section 605(a) for HCFC-141b and the proposed langu age in § 82.15(g) (1) to effect sunset provisions for export production allowances. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2121/21 END NOTES

i 68 FR 2820, January 21, 2003. ii 68 FR 2822, January 21, 2003, emphasis added. iii 68 FR 2823, January 21, 2003, emphasis added. iv 68 FR 2820, January 21, 2003.

v Id ., emphasis added. vi 68 FR 2823, January 21, 2003, emphasis added. vii 68 FR 2823-2824, January 21, 2003. viii 68 FR 2823, January 21, 2003, emphasis added. ix 68 FR 2835, January 21, 2003, emphasis added.

x See 68 FR 2835, January 21, 2003. xi 68 FR 2833, January 21, 2003. xii 68 FR 2846, January 21, 2003, emphasis added. xiii Id. , emphasis added. xiv See 68 FR 2834, January 21, 2003.

xv 68 FR 2833, January 21, 2003. xvi 68 FR 2835, January 21, 2003. xvii 68 FR 2833, January 21, 2003. xviii 73 FR 78686, December 23, 2008. xix 73 FR 78687, December 23, 2008, emphasis added.

xx 73 FR 78693, December 23, 2008, emphasis added. xxi 66 FR 38070, July 20, 2001, emphasis added. xxii Id. , emphasis added. xxiii Clean Air Act §607 (b), emphasis added. xxiv Section 607(d) of the Clean Air Act states “Consum ption. The rules under this section shall also provide for the issuance of consumption allowances in accordance with the requirements of this title and for the trading of s uch allowances in the same manner as is applicable under this section to the trading of pro duction allowances under this section.”.

xxv 68 FR 2822, January 21, 2003, emphasis added. xxvi 73 FR 78691, December 23, 2008, emphasis added. xxvii 73 FR 78687, December 23, 2008. xxviii Id. , emphasis added. xxix 73 FR 78693, December 23, 2008.

xxx Id

. Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 22

# Exhibit 13

Honeywell International Inc. & E. I. du Pont de Nemours and Co., Petition to Reconsider and Rescind Four Interpollutant Transfers Made Pursuant to Section 607(b) of the Clean Air Act

(EPA Oct. 26, 2010) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 6Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 7

# Exhibit 14

EPA’s Reply in Support of Its Motion for an Order to Show Cause (filed Oct. 10, 2000), Cement Kiln Recycling Coal. v. EPA , No. 00-1302, 2000 WL 1946580 (D.C. Cir. Dec. 19, 2000) ( per curiam ) Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 1Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 2Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 3Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 4Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 5Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 6Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 7Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 8Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 9Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 10Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 11Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 12Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 13Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 14Case: 10-1347 Document: 1287346 Filed: 01/11/2011 Page: 15