*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review *** Formatted: Centered

EO12866 MeBr2011 2060-AP92 NPRM 20110330 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 82 [EPA-HQ-OAR-2008-0321; FRL-] RIN: 2060-AP92 Protection of Stratospheric Ozone: The 2011 Critical Use Exemption from the Phaseout of Methyl Bromide AGENCY:Environmental Protection Agency (EPA). ACTION:Proposed rule. SUMMARY:EPA is proposing uses that qualify for the 2011 critical use exemption and the amount of methyl bromide that may be produced, imported, or supplied from existing pre-phaseout inventory for those uses in 2011. EPA is taking action under the authority of the Clean Air Act to reflect a recent consensus decision taken by the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer at the Twenty-First Meeting of the Parties. EPA is seeking comment on the list of critical uses and on EPA’s determination of the amounts of methyl bromide needed to satisfy those uses. DATES: Comments must be submitted by [Insert date 30 days after date of publication] . Any party requesting a public hearing must notify the contact person listed below by 5 p.m. Eastern Standard Time on [Insert date 5 days after date of publication] . If a hearing is requested it will be held on [Insert date 15 days after date of publication] and comments will be due to the Agency [Insert date 45 days after publication] . EPA will post information regarding a hearing, if one is requested, on the Ozone Protection website www.epa.gov/ozone/strathome.html . Persons interested in Deleted: EPA is also seeking comment on a proposal to end the critical use exemption program after the 2013 control period.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

2 of 40 attending a public hearing should consult with the contact person below regarding the location and time of the hearing. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR2008-0321 , by one of the following methods:

• www.regulations.gov : Follow the on-line instructions for submitting

comments.

• Email: a-and-r-Docket@epa.gov

• Fax: 202-566-1741

• Mail: Docket EPA-HQ-OAR-2008-0321, Air and Radiation Docket and Information Center, U.S. Environmental Protection Agency, Mail code: 6102T, 1200 Pennsylvania Ave., NW. Washington, DC 20460

.

• Hand Delivery: Docket EPA-HQ-OAR-2008-0321, Air and Radiation Docket at EPA West, 1301 Constitution Avenue NW, Room B108, Mail Code 6102T, Washington, D.C. 20004. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2008-0321. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or e-mail. The www.regulations.gov website is*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

3 of 40 an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through www.regulations.gov your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA’s public docket visit the EPA Docket Center homepage

at http://www.epa.gov/epahome/dockets.htm

. FOR FURTHER INFORMATION CONTACT:For further information about this proposed rule, contact Jeremy Arling by telephone at (202) 343-9055, or by e-mail at arling.jeremy@epa.gov or by mail at U.S. Environmental Protection Agency, Stratospheric Protection Division, Stratospheric Program Implementation Branch (6205J), 1200 Pennsylvania Avenue, N.W., Washington, D.C., 20460. You may also visit the methyl bromide section of the Ozone Depletion website of EPA’s Stratospheric Protection Division at www.epa.gov/ozone/mbr for further information about the methyl bromide critical use exemption, other Stratospheric Ozone Protection regulations, the science of ozone layer depletion, and related topics. SUPPLEMENTARY INFORMATION:*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

4 of 40 This proposed rule concerns Clean Air Act (CAA) restrictions on the consumption, production, and use of methyl bromide (a Class I, Group VI controlled substance) for critical uses during calendar year 2011. Under the Clean Air Act, methyl bromide consumption (consumption is defined under the CAA as production plus imports minus exports) and production was phased out on January 1, 2005, apart from allowable exemptions, such as the critical use exemption and the quarantine and preshipment (QPS) exemption. With this action, EPA is proposing and seeking comment on the uses that will qualify for the 2011 critical use exemption as well as specific amounts of methyl bromide that may be produced, imported, or sold from pre-phaseout inventory for proposed critical uses in 2011. Table of Contents
I. General Information
A. Regulated Entities
B. What Should I Consider When Preparing My Comments? II. What Is Methyl Bromide? III. What Is the Background to the Phaseout Regulations for Ozone-Depleting Substances? IV. What Is the Legal Authority for Exempting the Production and Import of Methyl Bromide for Critical Uses Authorized by the Parties to the Montreal Protocol?
V. What Is the Critical Use Exemption Process?
A. Background of the Process
B. How Does This Proposed Rule Relate to Previous Critical Use Exemption Rules? Deleted: EPA is also proposing to end the critical use exemption program on December 31, 2013. EPA notes that this proposal applies solely to the critical use exemption and not other exempted uses of methyl bromide under the Montreal Protocol andthe Clean Air Act such as quarantine and preshipment uses or laboratory uses.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

5 of 40 C. Proposed Critical Uses
D. Proposed Critical Use Amounts
E. The Criteria in Decisions IX/6 and Ex. I/4
F. Emissions Minimization
G. Critical Use Allowance Allocations
H. Critical Stock Allowance Allocations
I. Stocks of Methyl Bromide
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with Indian Tribal
Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations I. General Information Deleted: 1. Approach for Determining Critical Stock Allowances¶ 2. Approach for Determining New Production and Import Amounts¶ 3. Summary of Calculations¶

Deleted:

. How Will EPA Implement the CUE Program in the Future?¶ VII*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

6 of 40 A. Regulated Entities Entities potentially regulated by this proposed action are those associated with the production, import, export, sale, application, and use of methyl bromide covered by an approved critical use exemption. Potentially regulated categories and entities include producers, importers, and exporters of methyl bromide; applicators and distributors of methyl bromide; users of methyl bromide, e.g., farmers of vegetable crops, fruits and nursery stock; and owners of stored food commodities and structures such as grain mills and processors. This list is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be regulated by this proposed action. To determine whether your facility, company, business, or organization could be regulated by this proposed action, you should carefully examine the regulations promulgated at 40 CFR part 82, subpart A. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding section. B. What Should I Consider When Preparing My Comments? 1. Confidential Business Information . Do not submit confidential business information (CBI) to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

7 of 40 includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket.
2. Tips for Preparing Your Comments. When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date, and page number).

• Follow directions - The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment period deadline identified. II. What Is Methyl Bromide?Methyl bromide is an odorless, colorless, toxic gas which is used as a broadspectrum pesticide and is controlled under the CAA as a Class I ozone-depleting*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

8 of 40 substance (ODS). Methyl bromide was once widely used as a fumigant to control a variety of pests such as insects, weeds, rodents, pathogens, and nematodes. Information on methyl bromide can be found at http://www.epa.gov/ozone/mbr. Methyl bromide is also regulated by EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and other statutes and regulatory authority, as well as by States under their own statutes and regulatory authority. Under FIFRA, methyl bromide is a restricted use pesticide. Restricted use pesticides are subject to Federal and State requirements governing their sale, distribution, and use. Nothing in this proposed rule implementing the Clean Air Act is intended to derogate from provisions in any other Federal, State, or local laws or regulations governing actions including, but not limited to, the sale, distribution, transfer, and use of methyl bromide. Entities affected by provisions of this proposal must continue to comply with FIFRA and other pertinent statutory and regulatory requirements for pesticides (including, but not limited to, requirements pertaining to restricted use pesticides) when importing, exporting, acquiring, selling, distributing, transferring, or using methyl bromide for critical uses. The regulations in this proposed action are intended only to implement the CAA restrictions on the production, consumption, and use of methyl bromide for critical uses exempted from the phaseout of methyl bromide. III. What Is the Background to the Phaseout Regulations for Ozone-Depleting Substances? The regulatory requirements of the stratospheric ozone protection program that limit production and consumption of ozone-depleting substances are in 40 CFR part 82, subpart A. The regulatory program was originally published in the Federal Register on*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

9 of 40 August 12, 1988 (53 FR 30566), in response to the 1987 signing and subsequent ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). The Montreal Protocol is the international agreement aimed atreducing and eliminating the production and consumption of stratospheric ozonedepleting substances. The U.S. was one of the original signatories to the 1987 Montreal Protocol and the U.S. ratified the Protocol on April 12, 1988. Congress then enacted, and President George H.W. Bush signed into law, the Clean Air Act Amendments of 1990 (CAAA of 1990) which included Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States could satisfy its obligations under the Protocol. EPA issued regulations to implement this legislation and has since amended the regulations as needed. Methyl bromide was added to the Protocol as an ozone-depleting substance in 1992 through the Copenhagen Amendment to the Protocol. The Parties to the Montreal Protocol (Parties) agreed that each industrialized country’s level of methyl bromide production and consumption in 1991 should be the baseline for establishing a freeze in the level of methyl bromide production and consumption for industrialized countries. EPA published a final rule in the Federal Register on December 10, 1993 (58 FR 65018), listing methyl bromide as a Class I, Group VI controlled substance, freezing U.S. production and consumption at this 1991 baseline level of 25,528,270 kilograms, and setting forth the percentage of baseline allowances for methyl bromide granted to companies in each control period (each calendar year) until 2001, when the complete phaseout would occur. This phaseout date was established in response to a petition filed in 1991 under Sections 602(c)(3) and 606(b) of the CAAA of 1990, requesting that EPA*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

10 of 40 list methyl bromide as a Class I substance and phase out its production and consumption. This date was consistent with Section 602(d) of the CAAA of 1990, which for newly listed Class I ozone-depleting substances provides that “no extension [of the phaseout schedule in section 604] under this subsection may extend the date for termination of production of any class I substance to a date more than 7 years after January 1 of the year after the year in which the substance is added to the list of class I substances.” At the Seventh Meeting of the Parties (MOP) in 1995, the Parties made adjustments to the methyl bromide control measures and agreed to reduction steps and a 2010 phaseout date for industrialized countries with exemptions permitted for critical uses. At that time, the U.S. continued to have a 2001 phaseout date in accordance with Section 602(d) of the CAAA of 1990. At the Ninth MOP in 1997, the Parties agreed to further adjustments to the phaseout schedule for methyl bromide in industrialized countries, with reduction steps leading to a 2005 phaseout. IV. What Is the Legal Authority for Exempting the Production and Import of Methyl Bromide for Critical Uses Authorized by the Parties to the Montreal Protocol? In October 1998, the U.S. Congress amended the CAA to prohibit the termination of production of methyl bromide prior to January 1, 2005, to require EPA to bring the U.S. phaseout of methyl bromide in line with the schedule specified under the Protocol, and to authorize EPA to provide certain exemptions. These amendments were contained in Section 764 of the 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and were codified in section 604 of the CAA, 42 U.S.C. 7671c. The amendment that specifically addresses the critical use*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

11 of 40 exemption appears at section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout schedule for methyl bromide production and consumption in a direct final rulemaking on November 28, 2000 (65 FR 70795), which allowed for the phased reduction in methyl bromide consumption specified under the Protocol and extended the phaseout to 2005. EPA again amended the regulations to allow for an exemption for quarantine and preshipment (QPS) purposes on July 19, 2001 (66 FR 37751), with an interim final rule and with a final rule on January 2, 2003 (68 FR 238). On December 23, 2004 (69 FR 76982), EPA published a final rule (the “Framework Rule”) that established the framework for the critical use exemption; set forth a list of approved critical uses for 2005; and specified the amount of methyl bromide that could be supplied in 2005 from stocks and new production or import to meet the needs of approved critical uses. EPA subsequently published rules applying the critical use exemption framework for each of the control periods from 2006 to 2010. Under authority of section 604(d)(6) of the CAA, this action proposes the uses that will qualify as approved critical uses in 2011 and the amount of methyl bromide that may be produced, imported, or supplied from inventory to satisfy those uses. This proposed action on critical uses for 2011 reflects Decision XXI/11, taken at the Twenty-First Meeting of the Parties in November 2009. In accordance with Article 2H(5), the Parties have issued several Decisions pertaining to the critical use exemption. These include Decisions IX/6 and Ex. I/4, which set forth criteria for review of proposed critical uses. The status of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, D.C. Cir. 2006) and in EPA’s “Supplemental Brief for the Respondent,” filed in NRDC v.
EPA and available in the docket for this action. In this proposed rule on critical uses for*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

12 of 40 2011, EPA is honoring commitments made by the United States in the Montreal Protocol

context. V. What is the Critical Use Exemption Process? A. Background of the Process The critical use exemption is designed to permit the production and import of methyl bromide for uses that do not have technically and economically feasible alternatives and for which the lack of methyl bromide would result in significant market disruption (40 CFR 82.3). The criteria for the exemption initially appeared in Decision IX/6. In that Decision, the Parties agreed that “a use of methyl bromide should qualify as ‘critical’ only if the nominating Party determines that: (i) The specific use is critical because the lack of availability of methyl bromide for that use would result in a significant market disruption; and (ii) there are no technically and economically feasible alternatives or substitutes available to the user that are acceptable from the standpoint of environment and public health and are suitable to the crops and circumstances of the nomination.” These criteria are reflected in EPA’s definition of “critical use” at 40 CFR 82.3. In response to EPA’s request for critical use exemption applications published in the Federal Register on May 2, 2008 (73 FR 24282), applicants provided data on the technical and economic feasibility of using alternatives to methyl bromide. Applicants also submitted data on their use of methyl bromide, research programs into the use of alternatives to methyl bromide, and efforts to minimize use and emissions of methyl bromide.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

13 of 40 EPA’s Office of Pesticide Programs reviews the data submitted by applicants, as well as data from governmental and academic sources, to establish whether there are technically and economically feasible alternatives available for a particular use of methyl bromide, and whether there would be a significant market disruption if no exemption were available. In addition, EPA reviews other parameters of the exemption applications such as dosage and emissions minimization techniques and applicants’ research or transition plans. This assessment process culminates in the development of a document referred to as the critical use nomination (CUN). The U.S. Department of State has submitted a CUN annually to the United Nations Environment Programme (UNEP) Ozone Secretariat. The Methyl Bromide Technical Options Committee (MBTOC) and the Technology and Economic Assessment Panel (TEAP), which are independent advisory bodies to Parties to the Montreal Protocol, review the CUNs of the Parties and make recommendations to the Parties on the nominations. The Parties then take Decisions to authorize critical use exemptions for particular Parties, including how much methyl bromide may be supplied for the exempted critical uses. As required in section 604(d)(6) of the CAA, for each exemption period, EPA consults with the United States Department of Agriculture (USDA) and other departments and institutions of the Federal government that have regulatory authority related to methyl bromide, and provides an opportunity for public comment on the amounts of methyl bromide that the Agency is proposing to exempt for critical uses and the uses that the Agency is proposing as approved critical uses. More on the domestic review process and methodology employed by the Office of Pesticide Programs is available in a detailed memorandum titled “Development of 2003*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

14 of 40 Nomination for a Critical Use Exemption for Methyl Bromide for the United States of America,” contained in the docket for this rulemaking. While the particulars of the data continue to evolve and administrative matters are further streamlined, the technical review itself remains rigorous with careful consideration of new technical and economic conditions. On January 23, 2009, the U.S. Government (USG) submitted the seventh Nomination for a Critical Use Exemption for Methyl Bromide for the United States of
America to the Ozone Secretariat of the UNEP. This nomination contained the request for 2011 critical uses. In February 2009, MBTOC sent two sets of questions to the USG concerning technical and economic issues in the 2011 nomination, one for post-harvest uses and one for pre-plant uses. The USG transmitted responses to MBTOC on April 10, 2009. These documents, together with reports by the advisory bodies noted above, are in the public docket for this rulemaking. The proposed critical uses and amounts reflect the analysis contained in those documents. B. How Does This Proposed Rule Relate to Previous Critical Use Exemption Rules? The December 23, 2004, Framework Rule (69 FR 76982) established the framework for the critical use exemption program in the U.S., including definitions, prohibitions, trading provisions, and recordkeeping and reporting obligations. The preamble to the Framework Rule included EPA’s determinations on key issues for the critical use exemption program. Since publishing the Framework Rule, EPA has annually promulgated regulations to exempt from the phaseout of methyl bromide specific quantities of production and import for each control period (each calendar year), to determine the amounts that may be*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

15 of 40 supplied from pre-phaseout inventory, and to indicate which uses meet the criteria for the exemption program for that year. See 71 FR 5985 (calendar year 2006), 71 FR 75386 (calendar year 2007), 72 FR 74118 (calendar year 2008), 74 FR 19878 (calendar year 2009), and 75 FR 23167 (calendar year 2010). Today’s action proposes to utilize the existing regulatory framework to determine critical uses for 2011 and the amounts of Critical Use Allowances (CUAs) and Critical Stock Allowances (CSAs) to be allocated for those uses. A CUA is the privilege granted through 40 CFR part 82 to produce or import 1 kg of methyl bromide for an approved critical use during the specified control period. These allowances expire at the end of the control period and, as explained in the Framework Rule, are not bankable from one year to the next. A CSA is the right granted through 40 CFR part 82 to sell 1 kg of methyl bromide from inventory produced or imported prior to the January 1, 2005, phaseout date for an approved critical use during the specified control period. The critical uses that EPA is proposing to approve as 2011 critical uses are the uses included in the USG’s seventh CUN and authorized by the Parties in Decision XXI/11. EPA is utilizing the existing regulatory framework for critical uses. This framework is discussed in Section V.D.1 of the preamble. C. Proposed Critical Uses In Decision XXI/11, taken in November 2009, the Parties to the Protocol agreed “to permit, for the agreed critical use categories for 2011 set forth in table C of the annex to the present decision for each Party, subject to the conditions set forth in the present decision and decision Ex.I/4 to the extent that those conditions are applicable, the levels Deleted: Today’s action also proposes that the last year of allocations under the methyl bromide critical use exemption program be the 2013 control period. EPA seeks comment on that proposal, which is discussed in more detail below.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

16 of 40 of production and consumption for 2011 set forth in table D of the annex to the present decision which are necessary to satisfy critical uses ...” The following uses are those set forth in table C of the annex to Decision XXI/11 for the United States:

 Commodities

 NPMA food processing structures (cocoa beans removed) 1

 Mills and processors

 Dried cured pork

 Cucurbits

 Eggplant – field

 Forest nursery seedlings

 Nursery stock – fruit, nut, flower

 Orchard replant

 Ornamentals

 Peppers – field

 Strawberries – field

 Strawberry runners

 Tomatoes – field

 Sweet potato slips The Decision XXI/11 critical use levels for 2011 total 2,055,200 kilograms (kg), which is equivalent to 8.1% of the U.S. 1991 methyl bromide consumption baseline of 25,528,270 kg. The maximum amount of allowable new production and import for U.S. critical uses in Table D of Decision XXI/11 is 1,855,200 kg (7.3% of baseline), minus available stocks. EPA is proposing a total critical use exemption in 2011 of 1,982,333 kg (7.8% of baseline) with new production or import of methyl bromide for critical uses up to 1, 500,000 kg (5.9 % of baseline), and with up to 482,333 kg (1. 9 % of baseline) coming from pre-phaseout inventory (i.e., stocks).

1 NPMA, National Pest Management Association, includes both food processing structures and processed foods. Deleted: 635,335 Deleted: 6.4 Deleted: 346,998 Deleted: 4*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

17 of 40 EPA is seeking comment on the technical analysis contained in the U.S. nomination (available for public review in the docket to this rulemaking), and seeks information regarding changes to the registration or use of alternatives that have transpired after the 2011 U.S. nomination was written. Specifically, California has recently registered Iodomethane and EPA has recently registered DMDS.EPA is unable to estimate uptake of Iodomethane in California due to uncertainties created by the California label, specifically impacts of larger buffer zones and the lack of efficacy studies at the California label’s lower use rates. Second, each state must register DMDS before that alternative may be used in that state . None of the states where critical use methyl bromide is used have registered DMDS, though EPA anticipates that states will likely do so. While EPA is not proposing a specific amount of reduction to account for the uptake of these alternatives, EPA will consider new data received during the comment period . EPA recognizes that as the market for alternatives evolves, the thresholds for what constitutes “significant market disruption” or “technical and economic feasibility” change. Comments on the technical data contained in the nomination or new information could potentially alter the Agency’s analysis on the uses and amounts of methyl bromide qualifying for the critical use exemption. The Agency may, in response to new information, reduce the proposed quantities of critical use methyl bromide, or decide not to approve uses authorized by the Parties. However, the Agency will not increase the quantities or add new uses in the final rule beyond those authorized by the Parties. EPA is also proposing to modify the table in 40 CFR part 82, subpart A, appendix L to reflect the agreed critical use categories identified in Decision XXI/11. The Agency is amending the table of critical uses based in part on the technical analysis contained in Deleted: proposed to register Deleted: Because Deleted: has not yet finalized

Deleted: registration of Iodomethane for

Deleted: in that state and

Deleted: , EPA is currently unable to calculate

Deleted: uptake in 2011. However, if California completes its registration of iodomethane or other states complete their registrations of DMDS prior Deleted: the publication of the final rule, EPA is proposing to estimate and Deleted: that Deleted: in the final rule*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

18 of 40 the 2011 U.S. nomination that assesses data submitted by applicants to the CUE program. EPA is proposing to remove ornamental growers in New York. MBTOC did not recommend this use for 2011, concluding that alternatives are available for replacing methyl bromide use in Anemone coronaria . The Parties did not authorize this use. EPA agrees with the Parties’ conclusion, and proposes not to list this use as critical for 2011. Second, EPA is proposing to remove Michigan cucurbit growers, Michigan eggplant growers, Michigan ornamental growers (specifically, herbaceous perennial growers), Michigan tomato growers, Michigan pepper growers, and members of the Western Raspberry Nursery Consortium operating in Washington State. These users did not submit applications and were not part of the CUN. The Parties have not authorized them as critical uses for 2011 , and EPA proposes not to list this use as critical for this control period. EPA seeks comment on these proposed changes to Appendix L. EPA is not proposing other changes to the table but is repeating the following clarifications made in previous years for ease of reference. The “local township limits prohibiting 1,3-dichloropropene” are prohibitions on the use of 1,3-dichloropropene products in cases where local township limits on use of this alternative have been reached. In addition, “pet food” under subsection B of Food Processing refers to food for domesticated dogs and cats. Finally, “rapid fumigation” for commodities is when a buyer provides short (two working days or fewer) notification for a purchase or there is a short period after harvest in which to fumigate and there is limited silo availability for using alternatives. D. Proposed Critical Use Amounts Deleted: curcurbit

Deleted: Therefore the

Deleted:

.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

19 of 40 Table C of the annex to Decision XXI/11 lists critical uses and amounts agreed to by the Parties to the Montreal Protocol. When added together, the total authorized critical use for 2010 is 2,055,200 kg, which is equivalent to 8.1% of the U.S. 1991 methyl bromide consumption baseline. The maximum amount of authorized new production or import authorized by the Parties is 1,855,200 kg (7.3% of baseline) as set forth in Table D of the annex to Decision XXI/11. The difference between the total authorized amount and the authorized amount of new production is the minimum that the Parties expect the U.S. to use from pre-phaseout inventory. This difference is 200,000 kg (0.8% of baseline). EPA is proposing to allocate 482,333 kg (1. 9 % of baseline) of existing prephaseout inventory for critical uses in 2011. EPA is also proposing to exempt limited amounts of new production and import of methyl bromide for critical uses for 2011 in the amount of 1, 500,000 kg (5.9 % of baseline). EPA has calculated the proposed allocation amounts differently than in past CUE allocation rulemakings. Initially, EPA used the “available stocks” methodology to calculate the allocation amounts for new production/import and stocks. As described in previous CUE allocation rules, one of the inputs to this methodology is the previous year’s inventory drawdown. Consistent with past practice, EPA prepared an estimate of the pre-phaseout inventory on December 31, 2010. Due to the timing of the 2011 CUE rulemaking, EPA issued a No Action Assurance letter December 22, 2010, to allow Critical Use Allowance holders to continue producing and importing methyl bromide beyond December 31, 2010, in the absence of allowances, subject to certain conditions. The amounts authorized in the December 22, 2010, letter, and a subsequent clarification letter dated January 13, 2011, were based on Deleted: 346,998 Deleted: 4

Deleted: 635,335 Deleted: 6.4*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

20 of 40 the estimates of the 2010 inventory drawdown. Specifically, EPA clarified that producers and importers “may assume that the allocations for production and import will equal at least 1,500 MT.” Following the development of the No Action Assurance letter, companies submitted end of year reports to EPA detailing how much pre-phaseoutinventory they held on December 31, 2010. These data show that the amount of prephaseout inventory is larger than the estimated amounts that formed the basis of the No Action Assurance letter. If EPA were to use these data in the existing methodology for calculating “available stocks,” this would result in more “available stocks” and fewer allowances for new production or import as compared to the December 2010 – January 2011 estimates. However, because regulated entities have been acting on the estimate developed for the No Action Assurance letter in good faith, EPA believes it would be inappropriate to propose less than the amount provided for in the No Action Assurance letter, as clarified by the January 2011 letter. Therefore, EPA is proposing to allocate 1,500,000 kg for new production and import. EPA is also proposing a critical stock allowance allocation of 482,333 kg. Together the total allocation equals 1,982,333 kg. EPA is seeking comment on the proposed total levels of exempted new production and import for critical uses and the amount of material that may be sold from pre-phaseout inventory for critical uses. In addition, EPA is taking comment on how to account for the fact that the proposed critical-use allowance allocation of 1,500,000 kg is greater than what would be allocated if it were based on the “available stocks” calculation using end of year inventory data. One possibility is that EPA could reduce critical-use allowances for new production and import in the 2012 allocation rule. More information on the Deleted: The following sub-sections explain EPA’s reasons for proposing the above critical use amounts for 2011*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

21 of 40 available stocks calculation and the estimate that preceded it is available in the docket for this rulemaking

.

E. The Criteria in Decisions IX/6 and Ex. I/4 Paragraphs 2 and 6 of Decision XXI/11 request Parties to ensure that the conditions or criteria listed in Decisions Ex. I/4 and IX/6, paragraph 1, are applied to exempted critical uses for the 2011 control period. A discussion of the Agency’s application of the criteria in paragraph 1 of Decision IX/6 appears in sections V.A., V.C., V.D., and V.H. of this preamble. In section V.C. the Agency solicits comments on the technical and economic basis for determining that the uses listed in this proposed rule meet the criteria of the critical use exemption. The CUNs detail how each proposed critical use meets the criteria listed in paragraph 1 of Decision IX/6, apart from the criterion located at (b)(ii), as well as the criteria in paragraphs 5 and 6 of Decision Ex.
I/4. The criterion in Decision IX/6(1)(b)(ii), which refers to the use of available stocks of methyl bromide, is addressed in sections V.D., V.G., and V.H. of this preamble. The Agency has previously provided its interpretation of the criterion in Decision IX/6(1)(a)(i) regarding the presence of significant market disruption in the absence of an exemption, and EPA refers readers to the 2006 CUE final rule (71 FR 5989) as well as to Deleted: 1. Approach for Determining Critical Stock Allowances¶ Moved down [1]: The 2004 Framework Ruleestablished the provisions governing the sale of prephaseout inventories for critical uses, including the concept of Critical Stock Allowances (CSAs) and a prohibition on the sale of pre-phaseout inventories for critical uses in excess of the amount of CSAsheld by the seller. In addition, EPA noted that prephaseout inventories were further taken into account through the trading provisions that allow CUAs to be converted into CSAs. EPA is not proposing changes to these basic CSA provisions.¶ Previous decisions further addressed pre-phaseout inventory of methyl bromide. For example, Decision XX/5 states “that a Party with a critical use exemption level in excess of permitted levels of production and consumption for critical uses is to make up any such differences between those levels by using quantities of methyl bromide from stocks that the Party has recognized to be available.” In the Framework Rule (69 FR 52366), EPA issued CSAs in an amount equal to the difference between the total authorized CUE amount and the amount of new production or import authorized by the Parties. In each of the subsequent CUE Rules, EPA allocated CSAs in amounts that represented not only the difference between the total authorized CUE amount and the amount of authorized new production and import but also an additional amount to reflect available stocks. After determining the CSA amount, EPA reduced the portion of CUE methyl bromide to come from new production and import in each of the 2006-2010 control periods such that the total amount of methyl bromide exempted for critical uses did not exceed the total amount authorized by the Parties for that year. ¶ As established in the earlier rulemakings, EPA views the inclusion of these additional amounts in the calculation of the year’s overall CSA level as an appropriate exercise of discretion. The Agency is not required to allocate the full amount of authorized new production and consumption. The Parties only agree to “permit” a particular level of production and consumption; they do not – and cannot – mandate that the U.S. authorize this level, or any level, of production and consumption domestically. Nor does ... [1] Deleted: EPA employs the concept of “available stocks” to determine how many additional CSAs to allocate beyond the minimum stock amount stipulated by the Parties. EPA calculates “available” stocks using the following formula: AS 2011 = ES 2010 – D2010, – SCF2011 , where AS 2011 is the available stocks on January 1, 2011; ES 2010 is the existing prephaseout stocks of methyl bromide held in the United States by producers, importers, and distributors on January 1, 2010; D 2010 is the estimated drawdown of existing stocks during calendar year 2010; and SCF2011 is the supply chain factor for 2011. Using this formula, EPA calculates that there will be 364,536 kilograms of pre-phaseout stocks of methyl bromide “available” on January 1, 2011.¶ Existing Stocks In the above formula, “ES 2010” refers to pre-phaseout inventory – methyl bromide that was produced before the January 1, 2005, phaseout date but was reported to EPA by domestic producers, distributors, and third-party applicators as still being held as of December 31, 2009. It does not include ... [2]*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

22 of 40 the memo on the docket titled “Development of 2003 Nomination for a Critical Use Exemption for Methyl Bromide for the United States of America” for further elaboration. The remaining considerations, including the lack of available technically and economically feasible alternatives under the circumstance of the nomination; efforts to minimize use and emissions of methyl bromide where technically and economically feasible; the development of research and transition plans; and the requests in Decision Ex. I/4(5) and (6) that Parties consider and implement MBTOC recommendations, where feasible, on reductions in the critical use of methyl bromide and include information on the methodology they use to determine economic feasibility, are addressed in the nomination documents. Some of these criteria are evaluated in other documents as well. For example, the U.S. has further considered matters regarding the adoption of alternatives and research into methyl bromide alternatives, criterion (1)(b)(iii) in Decision IX/6, in the development of the National Management Strategy submitted to the Ozone Secretariat in December 2005 and in ongoing consultations with industry. The National Management Strategy addresses all of the aims specified in Decision Ex.I/4(3) to the extent feasible and is available in the docket for this rulemaking. As discussed in the 2010 CUE Rule, EPA is no longer making an additional reduction to new production to account for approved research amounts. In the 2011 CUN, as in the 2010 CUN, the USG did not nominate a separate, additional amount specifically for research purposes; thus, EPA is not proposing to adjust the production level to subtract this amount. The nomination was again broad enough to cover both research and non-research uses. As discussed in the 2010 CUE rule, research is a key element of the*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

23 of 40 critical use process. EPA therefore is retaining research on the critical use crops shown in the table in Appendix L to subpart A as a critical use of methyl bromide. Therefore, researchers may continue to use newly produced methyl bromide, as well as pre-phaseout inventory purchased through the expenditure of CSAs, for field studies requiring the use of methyl bromide. F. Emissions Minimization Previous decisions have stated that Parties shall request critical users to employ emission minimization techniques such as virtually impermeable films, barrier film technologies, deep shank injection and/or other techniques that promote environmental protection, whenever technically and economically feasible. Through the recent Reregistration Eligibility Decision (RED) for methyl bromide, the Agency requires that methyl bromide applications be tarped except for California orchard replant where EPA instead requires deep (18 inches or greater) shank applications. The RED also encourages the use of high-barrier tarps, such as virtually impermeable film (VIF), by providing credits that applicators can use to minimize their buffer zones. In addition to minimizing emissions, use of high-barrier tarps has the benefit of providing pest control at lower application rates. The amount of methyl bromide nominated by the USG reflects the lower application rates necessary when using high-barrier tarps, where such tarps are allowed. Emissions minimization efforts should not be limited to pre-plant fumigations. While the RED addresses emissions minimization only in the context of pre-plant fumigation, EPA also urges users to reduce emissions from structures and port facilities through the use of recapture technologies. Deleted: The USG may or may not nominate additional amounts for research in future years.*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

24 of 40 Users of methyl bromide should continue to make every effort to minimize overall emissions of methyl bromide to the extent consistent with State and local laws and regulations. The Agency encourages researchers and users who are successfully utilizing such techniques to inform EPA of their experiences as part of their comments on this proposed rule and to provide such information with their critical use applications. In addition, the Agency welcomes comments on the implementation of emission minimization techniques and whether and how emissions could be reduced further. G. Critical Use Allowance Allocations EPA is proposing to allocate 2011 critical use allowances for new production or import of methyl bromide up to the amount of 1,500,000 kg (5.9 % of baseline) as shown in the proposed changes to the table in 40 CFR 82.8(c)(1). EPA is seeking comment on the total levels and allocations of exempted new production or import for pre-plant and post-harvest critical uses in 2011. Each critical use allowance (CUA) is equivalent to 1 kg of critical use methyl bromide. These allowances expire at the end of the control period and, as explained in the Framework Rule, are not bankable from one year to the next. The proposed CUA allocation is subject to the trading provisions at 40 CFR 82.12, which are discussed in section V.G. of the preamble to the Framework Rule (69 FR 76982).Paragraph three of Decision XXI/11 states “that Parties shall endeavor to license, permit, authorize or allocate quantities of critical-use methyl bromide as listed in tables A and C of the annex to the present decision.” This is similar to language in Decisions authorizing prior critical uses. The language from these Decisions calls on Parties to endeavor to allocate critical use methyl bromide on a sector basis. Deleted: 635,335 Deleted: 6.4*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

25 of 40 The Framework Rule proposed several options for allocating critical use allowances, including a sector-by-sector approach. The Agency evaluated the various options based on their economic, environmental, and practical effects. After receiving comments, EPA determined that a lump-sum, or universal, allocation, modified to include distinct caps for pre-plant and post-harvest uses, was the most efficient and least burdensome approach that would achieve the desired environmental results, and that a sector-by-sector approach would pose significant administrative and practical difficulties. For the reasons discussed in the preamble to the 2009 CUE rule (74 FR 19894), the Agency believes that under the approach adopted in the Framework Rule, the actual critical use will closely follow the sector breakout listed in the Parties’ decisions , but continues to welcome comments on this issue

. H. Critical Stock Allowance AllocationsThe 2004 Framework Rule established the provisions governing the sale of prephaseout inventories for critical uses, including the concept of Critical Stock Allowances (CSAs) and a prohibition on the sale of pre-phaseout inventories for critical uses inexcess of the amount of CSAs held by the seller. In addition, EPA noted that prephaseout inventories were further taken into account through the trading provisions that allow CUAs to be converted into CSAs. EPA is not proposing changes to these basic CSA provisions. Previous decisions further addressed pre-phaseout inventory of methyl bromide. For example, Decision XX/5 states “that a Party with a critical use exemption level in excess of permitted levels of production and consumption for critical uses is to make up any such differences between those levels by using quantities of methyl bromide from Deleted: Moved (insertion) [1]*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

26 of 40 stocks that the Party has recognized to be available.” In the Framework Rule (69 FR 52366), EPA issued CSAs in an amount equal to the difference between the total authorized CUE amount and the amount of new production or import authorized by the Parties. In each of the subsequent CUE Rules, EPA allocated CSAs in amounts that represented not only the difference between the total authorized CUE amount and the amount of authorized new production and import but also an additional amount to reflect available stocks. After determining the CSA amount, EPA reduced the portion of CUE methyl bromide to come from new production and import in each of the 2006-2010 control periods such that the total amount of methyl bromide exempted for critical uses did not exceed the total amount authorized by the Parties for that year. As established in the earlier rulemakings, EPA views the inclusion of these additional amounts in the calculation of the year’s overall CSA level as an appropriate exercise of discretion. The Agency is not required to allocate the full amount of authorized new production and consumption. The Parties only agree to “permit” a particular level of production and consumption; they do not – and cannot – mandate that the U.S. authorize this level, or any level, of production and consumption domestically. Nor does the CAA require EPA to allow the full amount permitted by the Parties. Section 604(d)(6) of the CAA does not require EPA to exempt any amount of production and consumption from the phaseout, but instead specifies that the Agency “may” create an exemption for critical uses, providing EPA with substantial discretion. When determining the CSA amount for a year, EPA considers what portion of existing stocks is “available” for critical uses. As discussed in prior CUE rulemakings, the Parties to the Protocol recognized in their Decisions that the level of existing stocks*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

27 of 40 may differ from the level of available stocks. For example, Decision IX/6 states that “production and consumption, if any, of methyl bromide for critical uses should be permitted only if . . . methyl bromide is not available in sufficient quantity and quality from existing stocks.” Previous decisions refer to use of “quantities of methyl bromide from stocks that the Party has recognized to be available.” Thus, it is clear that individual Parties have the ability to determine their level of available stocks. Decision XXI/11 further reinforces this concept by including the phrase “minus available stocks” as a footnote to the United States’ authorized level of production and consumption in Table D. Section 604(d)(6) of the CAA does not require EPA to adjust the amount of new production and import to reflect the availability of stocks; however, as explained in previous rulemakings, making such an adjustment is a reasonable exercise of EPA’s discretion under this provision. EPA is proposing to allocate CSAs to the entities shown in the proposed table for the 2011 control period in the amount of 482,333 kg (1. 9 % of baseline). EPA proposes to update the table by incorporating information from recent mergers. Therefore, EPA proposes to list a single entry for Royster Clark, UAP Southeast (NC), and UAP Southeast (SC) called Crop Production Services. The CSA allocation for Crop Production Services would be the sum of the three allocations that would have gone to Royster Clark and the two UAP Southeast entities. EPA’s proposed allocation of CSAs is based on each company’s proportionate share of the aggregate inventory. In 2006, the United States District Court for the District of Columbia upheld EPA’s treatment of company-specific methyl bromide inventory information as confidential. NRDC v. Leavitt, 2006 WL 667327 (D.D.C. March 14, Formatted: Indent: First line: 0.5"

Deleted: 346,998 Deleted: 4*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

28 of 40 2006). Therefore, the documentation regarding company-specific allocation of CSAs is in the confidential portion of the rulemaking docket and the individual CSA allocations are not listed in the table in 40 CFR 82.8(c)(2). EPA will inform the listed companies of their CSA allocations in a letter following publication of the final rule. I. Stocks of Methyl Bromide An approved critical user may purchase methyl bromide produced or imported with CUAs as well as limited inventories of pre-phaseout methyl bromide, the combination of which constitute the supply of “critical use methyl bromide” intended to meet the needs of agreed critical uses. The Framework Rule established provisions governing the sale of pre-phaseout inventories for critical uses, including the concept of CSAs and a prohibition on the sale of pre-phaseout inventories for critical uses in excess of the amount of CSAs held by the seller. It also established trading provisions that allow CUAs to be converted into CSAs. EPA is not proposing to change these provisions. The aggregate amount of pre-phaseout methyl bromide reported as being in inventory at the beginning of 2010 was 3,062,674 kg. The Agency continues to closely monitor CUA and CSA data. End of year reporting shows that the inventory at the beginning of 2011 was 1,802,705 kg. Given this amount, EPA believes there is sufficient inventory to allocate 482,333 kg as critical stock allowances. As stated in the final 2006 CUE Rule, if an inventory shortage occurs, EPA may consider various options including authorizing the conversion of a limited number of CSAs to CUAs through a rulemaking, bearing in mind the upper limit on U.S. production/import for critical uses. In sections V.D. and V.G. of this preamble, EPA seeks comment on the amount of critical use methyl bromide to come from stocks compared to new production and import. Deleted: is Deleted: As in prior years, the Deleted: will continue Deleted: Further,*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

29 of 40 As explained in the 2008 CUE Rule, the Agency intends to continue releasing the aggregate of methyl bromide stockpile information reported to the Agency under the reporting requirements at 40 CFR 82.13 for the end of each control period. EPA notes that if the number of competitors in the industry were to decline appreciably, EPA would revisit the question of whether the aggregate is entitled to treatment as confidential information and whether to release the aggregate without notice. EPA is not proposing to change the treatment of submitted information but welcomes information concerning the composition of the industry in this regard. The aggregate information for 2003 through 2009 is available in the docket for this rulemaking. VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this proposal is a “significant regulatory action.” This action is likely to result in a rule that may raise novel legal or policy issues. Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under EO 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act This action does not impose any new information collection burden. The application, recordkeeping, and reporting requirements have already been established under previous Critical Use Exemption rulemakings and this action does not propose to change any of those existing requirements. The Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the Deleted: How Will EPA Implement the CUE Program in the Future?¶ The recent Federal Register notice requesting applications for the 2013 control period (75 FR 41177) noted that EPA believes it is appropriate at this time to consider a year in which the Agency will stop requesting applications for critical use exemptions. The notice clarified that EPA would provide additional information and invite comment on possible end dates in this proposed rulemaking. In today’s notice, EPA is proposing that 2013 be the final year of the CUE program in the U.S. ¶ EPA has several reasons for proposing to establish a date certain for ending the CUE program at this time. The U.S. government and private entities have invested substantial time and resources in developing alternatives, and as a result many sectors have already successfully completed their transition. Overall, the nominated amount has decreased 88% since 2005, reflecting the successful transition of many sectors and uses. Since the U.S. has historically been the largest user of methyl bromide worldwide, and given the scope and complexity of U.S. agriculture as it relates to affected niche crops including tree fruits and nuts, solanaceous crops, and specialty crops, this is a considerable achievement and a notable success. ¶ Further, the international context for the CUE program is changing. Other developed countries are ending their own CUE programs, and the phaseout date for developing countries is 2015. Many developing countries, with assistance from the Montreal Protocol’s Multilateral Fund, have already ended their reliance on methyl bromide. These developments will complicate USG efforts to successfully negotiate further amounts of exempted methyl bromide from the Parties in the future. A clear end date to the U.S. CUE program acknowledges this changed context, saves significant work and effort on applications for future CUEs on the part of the small number of remaining methyl bromide users, and facilitates their transition to ozone-safe alternatives by providing certainty. ¶ Finally, the three remaining years until 2013 provide an appropriate transition time. The developed country phaseout occurred in 2005. The U.S., along with other developed countries requesting critical use methyl bromide since that date, have benefited from an additional five years – in the case of successful requests – to cushion the transition to alternatives. Given the years that have already elapsed since the phaseout and the even longer period since the methyl bromide phaseout was first announced, EPA believes that establishing 2013 as the last year of the CUE program is reasonable. ¶ The critical use exemption from the phaseout of methyl bromide is authorized in the United States through section 604(d)(6) of the CAA. This section is clear that exempting the production and import of methyl bromide for critical uses is discretionary. As EPA noted in the Framework Rule, as well as previous CUE rulemakings, section 604(d)(6) of the CAA does not require EPA to exempt any amount of production and consumption from the phaseout, but instead specifies that the Agency “may” create an exemption for critical uses. (See, e.g. 69 FR 76985 and 74 FR 19866). This discretion granted to the Administrator to authorize the production of methyl bromide for critical uses contrasts with the mandatory language used in the same section of the ... [3]*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

30 of 40 existing regulations at 40 CFR part 82 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0482. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) a small business that is identified by the North American Industry Classification System (NAICS) Code in the Table below; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special districtwith a population of less than 50,000; and (3) a small organization that is any not-forprofit enterprise which is independently owned and operated and is not dominant in its field. Category NAICS code SIC code NAICS Small business size standard (in number of employees or millions of dollars) Agricultural production 1112- Vegetable and Melon farming 0171- Berry Crops $0.75 million
1113- Fruit and Nut Tree Farming 0172- Grapes 1114- Greenhouse, Nursery, and Floriculture Production 0173- Tree Nuts 0175- Deciduous Tree Fruits (except apple orchards and farms) 0179- Fruit and Tree Nuts, NEC 0181- Ornamental Floriculture and Nursery Products*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

31 of 40 0831- Forest Nurseries and Gathering of Forest Products Storage Uses 115114- Postharvest Crop activities (except Cotton Ginning) $7 million

311211- Flour Milling 2041- Flour and Other Grain Mill Products 500 employees 311212- Rice Milling 2044- Rice Milling 500 employees 493110- General Warehousing and Storage 4225- General Warehousing and Storage $25.5 million

493130- Farm Product Warehousing and Storage 4221- Farm Product Warehousing and Storage $25.5 million

Distributors and Applicators 115112- Soil Preparation, Planting and Cultivating 0721- Crop Planting, Cultivation, and Protection $7 million

Producers and Importers 325320- Pesticide and Other Agricultural Chemical Manufacturing 2879- Pesticides and Agricultural Chemicals, NEC 500 employees

Agricultural producers of minor crops and entities that store agricultural commodities are categories of affected entities that contain small entities. This proposed rule would only affect entities that applied to EPA for an exemption to the phaseout of methyl bromide. In most cases, EPA received aggregated requests for exemptions from industry consortia. On the exemption application, EPA asked consortia to describe the number and size distribution of entities their application covered. EPA estimated that 3,218 entities petitioned EPA for an exemption for the 2005 control period. EPA revised this estimate in 2008 down to 2,000 end users of critical use methyl bromide. EPA believes that the number continues to decline as growers cease applying for critical uses. Since many applicants did not provide information on the distribution of sizes of entities covered in their applications, EPA estimated that, based on the above definition, between one-fourth and one-third of the entities may be small businesses. In addition, other*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

32 of 40 categories of affected entities do not contain small businesses based on the above description. After considering the economic impacts of this proposed rule on small entities, EPA certifies that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” (5 U.S.C. §§ 603- 604). Thus, an Agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves a regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. Since this rule would exempt methyl bromide for approved critical uses after the phaseout date of January 1, 2005, this action would confer a benefit to users of methyl bromide. We have therefore concluded that this proposed rule would relieve regulatory burden for all small entities. D. Unfunded Mandates Reform Act This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or the private sector. The action imposes no enforceable duty on any State, local or tribal governments or the private sector. Instead, this action would provide an exemption for the manufacture and use of a phased out compound and would not impose any new requirements on any entities. Therefore, this action is not subject to*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

33 of 40 the requirements of sections 202 or 205 of the UMRA. This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed rule is expected to primarily affect producers, suppliers, importers, and exporters and users of methyl bromide. Thus, Executive Order 13132 does not apply to this proposed rule. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed action from State and local officials. F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This rule does not significantly or uniquely affect the communities of Indian tribal governments nor does it impose any enforceable duties on communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this action. G. Executive Order No. 13045: Protection of Children from Environmental Health and Safety Risks EPA interprets EO 13045 (62 F.R. 19885, April 23, 1997) as applying*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

34 of 40 only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use This proposed rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This proposed rule does not pertain to any segment of the energy production economy nor does it regulate any manner of energy use. Therefore, we have concluded that this proposed rule is not likely to have any adverse energy effects. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

35 of 40 proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards. J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations, because it affects the level of environmental protection equally for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. Any ozone depletion that results from this proposed rule will impact all affected populations equally because ozone depletion is a global environmental problem with environmental and human effects that are, in general, equally distributed across geographical regions.

List of Subjects in 40 CFR Part 82 Environmental protection, Ozone depletion, Chemicals, Exports, Imports.

DATE: ____________________

Protection of Stratospheric Ozone: The 2011 Critical Use Exemption from the Phaseout of Methyl Bromide (Page 35 of 40)

Deleted: <sp>

Formatted: Indent: First line: 0.5"*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

36 of 40 ______________________________________________ Lisa P. Jackson, Administrator.
For the reasons stated in the preamble, 40 CFR Part 82 is proposed to be amended as follows: PART 82- PROTECTION OF STRATOSPHERIC OZONE 1. The authority citation for part 82 continues to read as follows: Authority : 42 U.S.C. 7414, 7601, 7671-7671q. 2. Section 82.8 is amended as follows: a. by revising the table in paragraph (c)(1); b . by revising paragraph (c)(2) including the table. § 82.8 Grant of essential use allowances and critical use allowances

. * * * * * (c) * * * (1) * * *

Company 2011 Critical use allowances for pre-plant uses* (kilograms) 2011 Critical use allowances for post-harvest uses* (kilograms) Great Lakes Chemical Corp. A Chemtura Company 839,966 71,584

Albemarle Corp. 345,413 29,437 ICL-IP America 190,883 12,267 TriCal, Inc. 5,943 507 Total** 1, 382,206 117,794 * For production or import of Class I, Group VI controlled substance exclusively for the Pre-Plant or Post-Harvest uses specified in appendix L to this subpart. ** Due to rounding, numbers do not add exactly. Deleted: ) introductory text; Deleted: b. by revising the table in paragraph (c)(1);¶ c Deleted: (c) Effective January 1, 2005, through December 31, 2013, critical use allowances are apportioned as set forth in paragraph (c)(1) of this section for the exempted production and import of class I, Group VI controlled substances specifically for those approved critical uses listed in appendix L to this subpart for the applicable control period. Critical use allowances for the control period specified in paragraph (c)(1) of this section expire at the end of that control period. Every kilogram of production and import in excess of the total number and type of unexpended critical use allowances held for a particular type of use constitutes a separate violation of this subpart. Effective January 1, 2005, through December 31, 2013, critical stock allowances are issued as set forth in paragraph (c)(2) of this section for the sale of class I, Group VI controlled substances from inventory produced or imported before the January 1, 2005, phaseout date specifically for those approved critical uses listed in appendix L to this subpart for the applicable control period. Critical stock allowances for the control period specified in paragraph (c)(2) of this section expire at the end of that control period.¶ Deleted: 915,751 Deleted: 78,042 Deleted: 376,578 Deleted: 32,093 Deleted: 208,105 Deleted: 17,735 Deleted: 6,480 Deleted: 552 Deleted: 506,913 Deleted: 128,422*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

37 of 40 (2) Allocated critical stock allowances granted for specified control period. The following companies are allocated critical stock allowances for 2011 on a pro-rata basis in relation to the inventory held by each.

Company Albemarle Helena Chemical Co. Prosource One Bill Clark Pest Control, Inc. Hendrix & Dail Reddick Fumigants Burnside Services, Inc. Hy Yield Products Trical Inc. Cardinal Professional Products ICL-IP America Trident Agricultural Products Chemtura Corp. Industrial Fumigant Company Univar Crop Production Services Pacific Ag Supplies Inc. Western Fumigation Degesch America, Inc. Pest Fog Sales Corp. TOTAL –482,333 kilograms 3. Appendix L to Subpart A is revised to read as follows: APPENDIX L TO SUBPART A OF PART 82 – APPROVED CRITICAL USES AND LIMITING CRITICAL CONDITIONS FOR THOSE USES FOR THE 2011 CONTROL PERIOD

Column A Column B Column C
Approved Critical Uses Approved Critical User and Location of Use Limiting Critical Conditions that exist, or that the approved critical user reasonably expects could arise without methyl bromide fumigation: PRE-PLANT USES Cucurbits (a) Growers in Delaware and Maryland Moderate to severe soilborne disease infestation (b) Growers in Georgia and Southeastern U.S. limited to growing locations in Alabama, Arkansas, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee, and Virginia Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Moderate to severe root knot nematode infestation

Eggplant (a) Florida growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Restrictions on alternatives due to karst topographical features and soils not supporting seepage irrigation Deleted: 346,998*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

38 of 40 (b) Georgia growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation Moderate to severe pythium collar, crown and root rot Moderate to severe southern blight infestation Restrictions on alternatives due to karst topographical features Forest Nursery Seedlings (a) Growers in Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Moderate to severe nematode infestation
(b) International Paper and its subsidiaries limited to growing locations in Alabama, Arkansas, Georgia, South Carolina, and Texas Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation

(c) Government-owned seedling nurseries in Illinois, Indiana, Kentucky, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Wisconsin Moderate to severe weed infestation including purple and yellow nutsedge infestation Moderate to severe Canada thistle infestation Moderate to severe nematode infestation Moderate to severe soilborne disease infestation (d) Weyerhaeuser Company and its subsidiaries limited to growing locations in Alabama, Arkansas, North Carolina, and South Carolina Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Moderate to severe nematode or worm infestation (e) Weyerhaeuser Company and its subsidiaries limited to growing locations in Oregon and Washington Moderate to severe yellow nutsedge infestation Moderate to severe soilborne disease infestation (f) Michigan growers Moderate to severe soilborne disease infestation Moderate to severe Canada thistle infestation Moderate to severe nutsedge infestation Moderate to severe nematode infestation Nursery Stock (Fruit, Nut, Flower) (a) Members of the California Association of Nursery and Garden Centers representing Deciduous Tree Fruit Growers Moderate to severe nematode infestation Medium to heavy clay soils Local township limits prohibiting 1,3-dichloropropene

(b) California rose nurseries Moderate to severe nematode infestation Local township limits prohibiting 1,3

- dichloropropene Orchard Replant California stone fruit, table and raisin grape, wine grape, walnut, and almond growers Moderate to severe nematode infestation Moderate to severe soilborne disease infestation Replanted orchard soils to prevent orchard replant disease Medium to heavy soils Local township limits prohibiting 1,3-dichloropropene Ornamentals (a) California growers Moderate to severe soilborne disease infestation Moderate to severe nematode infestation Local township limits prohibiting 1,3-dichloropropene (b) Florida growers Moderate to severe weed infestation Moderate to severe soilborne disease infestation Moderate to severe nematode infestation Restrictions on alternatives due to karst topographical features and soils not supporting seepage irrigation*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

39 of 40 Peppers (a) Alabama, Arkansas, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee, and Virginia growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation Moderate to severe pythium root, collar, crown and root rots (b) Florida growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Moderate to severe nematode infestation Restrictions on alternatives due to karst topographical features and soils not supporting seepage irrigation (c) Georgia growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation, or moderate to severe pythium root and collar rots Moderate to severe southern blight infestation, crown or root rot Restrictions on alternatives due to karst topographical features Strawberry Fruit (a) California growers Moderate to severe black root rot or crown rot Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation Local township limits prohibiting 1,3-dichloropropene Time to transition to an alternative (b) Florida growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation Moderate to severe soilborne disease infestation Carolina geranium or cut-leaf evening primrose infestation Restrictions on alternatives due to karst topographical features and soils not supporting seepage irrigation (c) Alabama, Arkansas, Georgia, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, South Carolina, Tennessee, and Virginia growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation Moderate to severe black root and crown rot

Strawberry Nurseries (a) California growers Moderate to severe soilborne disease infestation Moderate to severe yellow or purple nutsedge infestation Moderate to severe nematode infestation (b) North Carolina and Tennessee growers Moderate to severe black root rot Moderate to severe root-knot nematode infestation Moderate to severe yellow and purple nutsedge infestation Sweet Potato Slips California growers Local township limits prohibiting 1,3-dichloropropene

Tomatoes (a) Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia growers Moderate to severe yellow or purple nutsedge infestation Moderate to severe soilborne disease infestation Moderate to severe nematode infestation Restrictions on alternatives due to karst topographical features and, in Florida, soils not supporting seepage irrigation (b) Maryland growers Moderate to severe fungal pathogen infestation
POST

-HARVEST USES*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review ***

40 of 40 Food Processing (a) Rice millers in the U.S. who are members of the USA Rice Millers Association Moderate to severe beetle, weevil, or moth infestation Presence of sensitive electronic equipment subject to corrosion Time to transition to an alternative (b) Pet food manufacturing facilities in the U.S. who are members of the Pet Food Institute Moderate to severe beetle, moth, or cockroach infestation Presence of sensitive electronic equipment subject to corrosion Time to transition to an alternative (c) Members of the North American Millers’ Association in the U.S. Moderate to severe beetle infestation Presence of sensitive electronic equipment subject to corrosion Time to transition to an alternative (d) Members of the National Pest Management Association treating processed food, cheese, herbs and spices, and spaces and equipment in associated processing and storage facilities. Moderate to severe beetle or moth infestation Presence of sensitive electronic equipment subject to corrosion Time to transition to an alternative

Commodities California entities storing walnuts, beans, dried plums, figs, raisins, and dates (in Riverside county only) in California. Rapid fumigation required to meet a critical market window, such as during the holiday season
Dry Cured Pork Products Members of the National Country Ham Association and the Association of Meat Processors, Nahunta Pork Center (North Carolina), and Gwaltney and Smithfield Inc. Red legged ham beetle infestation Cheese/ham skipper infestation Dermested beetle infestation Ham mite infestationPage 21: [1] Moved to page 25 (Move #1) Jeremy Arling 3/31/2011 2:51:00 PM 

### The 2004 Framework Rule established the provisions governing the sale of pre-phaseout inventories for critical uses, including the concept of Critical Stock Allowances (CSAs) and a prohibition on the sale of pre-phaseout inventories for critical uses in excess of the amount of CSAs held by the seller. In addition, EPA noted that pre-phaseout inventories were further taken into account through the trading provisions that allow CUAs to be converted into CSAs. EPA is not proposing changes to these basic CSA provisions. Previous decisions further addressed pre-phaseout inventory of methyl bromide. For example, Decision XX/5 states “that a Party with a critical use exemption level in excess of permitted levels of production and consumption for critical uses is to make up any such differences between those levels by using quantities of methyl bromide from stocks that the Party has recognized to be available.” In the Framework Rule (69 FR 52366), EPA issued CSAs in an amount equal to the difference between the total authorized CUE amount and the amount of new production or import authorized by the Parties. In each of the subsequent CUE Rules, EPA allocated CSAs in amounts that represented not only the difference between the total authorized CUE amount and the amount of authorized new production and import but also an additional amount to reflect available stocks. After determining the CSA amount, EPA reduced the portion of CUE methyl bromide to come from new production and import in each of the 2006-2010 control periods such that the total amount of methyl bromide exempted for critical uses did not exceed the total amount authorized by the Parties for that year. As established in the earlier rulemakings, EPA views the inclusion of these additional amounts in the calculation of the year’s overall CSA level as an appropriate exercise of discretion. The Agency is not required to allocate the full amount of authorized new production and consumption. The Parties only agree to “permit” a particular level of production and

### consumption; they do not – and cannot – mandate that the U.S. authorize this level, or any level, of production and consumption domestically. Nor does the CAA require EPA to allow the full amount permitted by the Parties. Section 604(d)(6) of the CAA does not require EPA to exempt any amount of production and consumption from the phaseout, but instead specifies that the Agency “may” create an exemption for critical uses, providing EPA with substantial discretion. When determining the CSA amount for a year, EPA considers what portion of existing stocks is “available” for critical uses. As discussed in prior CUE rulemakings, the Parties to the Protocol recognized in their Decisions that the level of existing stocks may differ from the level of available stocks. For example, Decision IX/6 states that “production and consumption, if any, of methyl bromide for critical uses should be permitted only if . . . methyl bromide is not available in sufficient quantity and quality from existing stocks.” Previous decisions refer to use of “quantities of methyl bromide from stocks that the Party has recognized to be available.” Thus, it is clear that individual Parties have the ability to determine their level of available stocks. Decision XXI/11 further reinforces this concept by including the phrase “minus available stocks” as a footnote to the United States’ authorized level of production and consumption in Table D. Section 604(d)(6) of the CAA does not require EPA to adjust the amount of new production and import to reflect the availability of stocks; however, as explained in previous rulemakings, making such an adjustment is a reasonable exercise of EPA’s discretion under this provision.

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### EPA employs the concept of “available stocks” to determine how many additional CSAs to allocate beyond the minimum stock amount stipulated by the Parties. EPA calculates “available” stocks using the following formula: AS 2011 

### = ES 2010 

### – D2010, 

### – SCF2011 

### , where AS 2011 

### is the available stocks on January 1, 2011; ES 2010 

### is the existing pre-phaseout stocks of methyl

### bromide held in the United States by producers, importers, and distributors on January 1, 2010;
D2010 

### is the estimated drawdown of existing stocks during calendar year 2010; and SCF2011 

### is the supply chain factor for 2011. Using this formula, EPA calculates that there will be 364,536 kilograms of pre-phaseout stocks of methyl bromide “available” on January 1, 2011. Existing Stocks In the above formula, “ES 2010

### ” refers to pre-phaseout inventory – methyl bromide that was produced before the January 1, 2005, phaseout date but was reported to EPA by domestic producers, distributors, and third-party applicators as still being held as of December 31, 2009. It does not include material held by end users. ES 2010 

### also does not include critical use methyl bromide that was produced after January 1, 2005, and carried over into subsequent years. Nor does it include methyl bromide produced 1) under the QPS exemption, 2) with Article 5 allowances to meet the basic domestic needs of Article 5 countries, or 3) for feedstock or transformation purposes. EPA considers all pre-phaseout inventory to be suitable for both pre-plant and post harvest uses. Similarly, EPA considers pre-phaseout inventory to be accessible by all users, including users in California and the Southeastern United States. These assumptions are discussed in the preamble to the 2009 CUE rule (74 FR 19887). Estimated DrawdownIn its proposed rule for 2010 CUEs, EPA proposed to estimate the drawdown of existing stocks (the D2010 

### term in the above equation) by using a simple linear fit estimation of inventory data from all available years. In the 2010 final rule, however, EPA used end-of-year reporting data and did not need to estimate drawdown. For 2011, EPA is proposing to estimate the drawdown of inventory in 2010 by estimating the amount of CSAs likely to have been expended in 2010 for critical uses plus an additional amount for non-critical uses. EPA believes that the proposed method would produce a more accurate estimate of drawdown than the linear estimation that EPA has used in earlier CUE

### rules. A linear estimate would project that only 13 MT of methyl bromide would remain in inventory on January 1, 2011. This estimate does not consider that the use of inventory on critical uses is limited by the allocation of CSAs. The first factor in EPA’s proposed drawdown estimate is the amount of inventory used in 2010 on critical uses. This amount can be no greater than the number of CSAs allocated in the 2010 CUE Rule, which is 1,028,108 kg. EPA believes, however, that not all the CSAs allocated in 2010 will be used. End of year reporting data show that every year there are unexpended CSAs. In 2009, EPA allocated 1,919,193 kg as CSAs but only 1,127,490 kg of inventory was used. This is equivalent to 59% of the CSAs allocated. In 2006, the year which had the highest proportion of CSAs allocated to CSAs used, EPA allocated 1,136,008 kg and 784 MT was used. This is equivalent to 69%. These data are contained in EPA’s annual Accounting Frameworks submitted to UNEP and are available in the docket. EPA therefore believes that not all of the CSAs allocated in 2010 will be expended. Therefore, EPA proposes to estimate that, at most, 70% of the CSAs allocated in 2010 will be used for critical uses. This amounts to 719,676 kg (1,028,108 kg x 70%). The second factor in EPA’s proposed drawdown estimate is the amount of methyl bromide used on non-critical uses in 2010. These are uses that are allowed under existing methyl bromide labeling. While this labeling has been changed under the reregistration decision for methyl bromide pesticides under FIFRA, the new labeling does not take effect until after 2010. These non-critical uses are limited to using pre-phaseout inventory, not newly produced methyl bromide. EPA proposes to estimate the amount used on these non-critical uses by averaging the non-critical use amounts from 2006-2009. EPA is not including 2005 because it does not have data for that year. These data are contained in EPA’s annual Accounting Frameworks submitted

### to UNEP and are available in the docket. The average use of pre-phaseout inventory on noncritical uses over the last four years is 804 MT. Therefore, EPA proposes to adopt this average as its estimate of non-critical use in 2010. EPA proposes to estimate the maximum potential drawdown of inventory in 2010 as the sum of 1) the estimated use of CSAs for 2010 and 2) the estimate for non-critical uses for 2010. Using this method, EPA projects that the pre-phaseout methyl bromide inventory, which was 3,062,674 kg on January 1, 2010, will be drawn down by 1,523,676 kg (719,676 + 804,000) during 2010. This would result in a pre-phaseout inventory of 1,538,998 kg on January 1, 2011. EPA’s proposed methodology for estimating the inventory drawdown is described in more detail in the Technical Support Document available in the public docket for this rulemaking. EPA specifically welcomes comment on this proposed method of calculating inventory drawdown. As an alternative means of estimating the drawdown, EPA is also considering a simple linear fit estimation of inventory data from all available years, as described in the proposed 2010 CUE rule. The linear estimate is contained in the Technical Support Document in the docket. In addition, while EPA intends to make every effort to publish a final 2011 rule by the end of 2010, EPA may use actual end-of-the year data if such data are available within a reasonable time before the final rule is signed. Supply Chain FactorThe SCF represents EPA’s technical estimate of the amount of pre-phaseout inventory that would be adequate to meet a need for critical use methyl bromide after an unforeseen domestic production failure. As described in the 2008 CUE Rule, and the Technical Support Document contained in the docket to this rule, EPA estimates that it would take 15 weeks for significant imports of methyl bromide to reach the U.S in the event of a major supply disruption. Consistent with the regulatory framework used in the 2008 through 2010

### rules, the SCF for 2011 conservatively reflects the effect of a supply disruption occurring in the peak period of critical use methyl bromide production, which is the first quarter of the year. While this 15-week disruption is based on shipping capacity and does not change year to year, other inputs to EPA’s analysis do change each year including the total U.S. and global authorizations for methyl bromide and the average seasonal production of critical use methyl bromide in the U.S. Using updated numbers, EPA estimates that critical use production in the first 15 weeks of each year (the peak supply period) currently accounts for approximately 58% of annual critical use methyl bromide demand for 2011. EPA, therefore, estimates that the peak 15- week shortfall in 2011 could be 1,192,000 kg (2,055,200 kg x 58%). As EPA stated in the 2008, 2009, and 2010 CUE Rules, the SCF is not a “reserve” or “strategic inventory” of methyl bromide but is merely an analytical tool used to provide greater transparency. A general discussion of the SCF is in the final 2008 CUE rule (72 FR 74118) and further detail about the analysis used to derive the value for the 2011 supply chain factor is provided in the Technical Support Document in the public docket for this rulemaking. Using the following formula: AS 2011 

### = ES 2010 

### – D 2010, 

### – SCF2011 

### , EPA calculates that there will be 346,998 kilograms of pre-phaseout stocks of methyl bromide “available” on January 1, 2011. (346,998 = 3,062,674 – 1,523,676 – 1,192,000). EPA therefore proposes to allocate 346,998 kg as critical stock allowances for 2011. 2. Approach for Determining New Production and Import Amounts For the 2011 control period, EPA is proposing to apply the existing framework established in the Framework Rule. Under this approach, the amount of new production equals the total amount authorized by the Parties to the Montreal Protocol in Decision XXI/11, minus the CSA amount detailed above, minus any additional reductions for carryover and uptake of

### alternatives. Applying this established approach, EPA is proposing to exempt limited amounts of new production and import of methyl bromide for critical uses in 2011 in the amount of 1,635,335 kg (6.4% of baseline). EPA is taking comment on this approach. Carryover Material As discussed in the Framework Rule, EPA does not permit the building of stocks of methyl bromide produced or imported after January 1, 2005, under the critical use exemption. Quantities of methyl bromide produced, imported, exported, or sold to end-users under the critical use exemption in a control period must be reported to EPA the following year. EPA uses these reports to calculate the amount of methyl bromide produced or imported under the critical use exemption, but not exported or sold to end-users in that year. EPA deducts an amount equivalent to this “carryover” from the total level of allowable new production and import in the year following the year of the data report. Carryover material (which is produced using critical use allowances) is not included in EPA’s definition of existingstocks (ES) (which applies to pre-phaseout material) because this would lead to a doublecounting of carryover amounts, and a double reduction of critical use allowances (CUAs). Companies reported that 2,273,600 kg of critical use methyl bromide were acquired through production or import in 2009. The information reported to EPA is that 2,200,733 kg of critical use methyl bromide were exported or sold to end-users in 2009. EPA calculates that the carryover amount at the end of 2009 was therefore 72,867 kg, which is the difference between the reported amount of critical use methyl bromide acquired in 2009 and the reported amount of exports or sales of that material to end users in 2009 (2,273,600 - 2,200,733 = 72,867). Using the existing framework, EPA is proposing to apply the carryover deduction of 72,867 kg to the new production amount as it has in all prior CUE rules. EPA’s calculation of the amount of carryover at the end of 2009 is consistent with the method used in previous CUE rules, and with

### the method agreed to by the Parties in Decision XVI/6 for calculating column L of the U.S. Accounting Framework. The 2009 U.S. Accounting Framework is available in the public docket for this rulemaking. As in past years, EPA will take into account additional reports received within a reasonable time in calculating the carryover amount for the final 2011 rule. Uptake of Alternatives EPA considers new data regarding alternatives that were not available at the time the U.S. Government submitted its CUN to the Parties, and adjusts the allocation for new production accordingly. Two alternatives not considered in the 2011 CUN have the potential to be used in 2011 but EPA cannot estimate any amount of uptake with certainty because their registrations remain incomplete. In July 2010, EPA registered Dimethyl Disulfide (DMDS) to control nematodes, weeds, and pathogens in tomatoes, peppers, eggplants, curcurbits, strawberries, ornamentals and forest nursery seedlings, and onions. While this federal registration is final, individual states must also register DMDS for that fumigant to be used in that state. No states have currently registered DMDS though EPA anticipates that states will likely do so. At this point EPA cannot estimate a rate of uptake because such calculations require knowing the states in which the alternative will be used. EPA anticipates uptake to be minimal in the first year as growers experiment on a limited number of acres. Similarly, until California finalizes its proposed registration of Iodomethane, EPA will not know the use rates, emission mitigation requirements, buffer distances, and other factors necessary in estimating the uptake. While EPA is not proposing a specific amount of reduction to account for the uptake of these alternatives, EPA will consider new data received during the comment period. If the registration status of either of these alternatives changes, EPA is proposing to estimate and account for that uptake in the final rule.

### EPA is not proposing to take any other reductions for alternatives because the 2011 CUN properly applied transition rates for alternatives in all other sectors. The TEAP report of September 2009 included reductions in its recommendations for critical use categories based on the transition rates in the 2011 CUN. The TEAP’s recommendations were then considered in the Parties’ 2011 authorization amounts, as listed in Decision XXI/11. Therefore, transition rates, which account for the uptake of alternatives have already been applied for authorized 2011 critical use amounts. EPA continues to gather information about methyl bromide alternatives through the CUE application process, and by other means. EPA also continues to support research and adoption of methyl bromide alternatives, and to request information about the economic and technical feasibility of all existing and potential alternatives. 3. Summary of Calculations The calculations described above for determining the level of new production and critical stock allowances are summarized in the table below:

Step 1: Calculate supply chain factor Kilograms U.S. authorization for 2011 in Decision XXI/11 2,055,200

- Reduction for uptake of alternatives 0 = One year's CUE need 2,055,200 x Percentage of year's production to recover from production failure 58% = Supply Chain Factor 1,1 92,000 Step 2: Calculate available stocks Existing pre

-phaseout inventory on January 1, 2010 3,062,674

- Drawdown of inventory for critical uses 719,676

- Drawdown of inventory for non- critical uses 804,000

- Supply Chain Factor (Step 1) 1, 192,000 = Available stocks = Critical Stock Allowance 346,998 Step 3: Calculate carry over Reported as produced/imported in 2008 2,273,600

- Reported as sold in 2008 2,200,733 = Carry over 72,867 Step 4: Calculate new productionTotal U.S. authorization for 2010 (Decisions XXI/11) 2,055,200

- Critical Stock Allowance (Step 2) 346 ,998

- Carryover (Step 3) 72,867

- Uptake of alternatives 0 = New production = Critical Use Allowance 1,635,335

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### How Will EPA Implement the CUE Program in the Future? The recent Federal Register notice requesting applications for the 2013 control period (75 FR 41177) noted that EPA believes it is appropriate at this time to consider a year in which the Agency will stop requesting applications for critical use exemptions. The notice clarified that EPA would provide additional information and invite comment on possible end dates in this proposed rulemaking. In today’s notice, EPA is proposing that 2013 be the final year of the CUE program in the U.S. EPA has several reasons for proposing to establish a date certain for ending the CUE program at this time. The U.S. government and private entities have invested substantial time and resources in developing alternatives, and as a result many sectors have already successfully completed their transition. Overall, the nominated amount has decreased 88% since 2005, reflecting the successful transition of many sectors and uses. Since the U.S. has historically been the largest user of methyl bromide worldwide, and given the scope and complexity of U.S. agriculture as it relates to affected niche crops including tree fruits and nuts, solanaceous crops, and specialty crops, this is a considerable achievement and a notable success. Further, the international context for the CUE program is changing. Other developed countries are ending their own CUE programs, and the phaseout date for developing countries is 2015. Many developing countries, with assistance from the Montreal Protocol’s Multilateral Fund, have already ended their reliance on methyl bromide. These developments

### will complicate USG efforts to successfully negotiate further amounts of exempted methyl bromide from the Parties in the future. A clear end date to the U.S. CUE program acknowledges this changed context, saves significant work and effort on applications for future CUEs on the part of the small number of remaining methyl bromide users, and facilitates their transition to ozone-safe alternatives by providing certainty. Finally, the three remaining years until 2013 provide an appropriate transition time. The developed country phaseout occurred in 2005. The U.S., along with other developed countries requesting critical use methyl bromide since that date, have benefited from an additional five years – in the case of successful requests – to cushion the transition to alternatives. Given the years that have already elapsed since the phaseout and the even longer period since the methyl bromide phaseout was first announced, EPA believes that establishing 2013 as the last year of the CUE program is reasonable. The critical use exemption from the phaseout of methyl bromide is authorized in the United States through section 604(d)(6) of the CAA. This section is clear that exempting the production and import of methyl bromide for critical uses is discretionary. As EPA noted in the Framework Rule, as well as previous CUE rulemakings, section 604(d)(6) of the CAA does not require EPA to exempt any amount of production and consumption from the phaseout, but instead specifies that the Agency “may” create an exemption for critical uses. (See, e.g. 69 FR 76985 and 74 FR 19866). This discretion granted to the Administrator to authorize the production of methyl bromide for critical uses contrasts with the mandatory language used in the same section of the CAA which requires that if certain conditions are met the Administrator “shall” authorize production for medical devices (604(d)(2)), and for sanitation and food

### protection (referred to under the Montreal Protocol as quarantine and pre-shipment purposes) (604(d)(5)). EPA’s discretion to exempt production and import for critical uses is constrained by only two criteria. First, EPA must provide notice and the opportunity for public comment and consult with other federal government entities having regulatory authority related to methyl bromide. While these procedures do not apply on their face to a decision to terminate the CUE program, EPA is nonetheless following these procedures in order to give all interested entities notice of its intended new policy and an opportunity to comment. Second, any exemption that EPA creates must be “consistent with the Montreal Protocol.” Article 2H of the Montreal Protocol states that for developed country Parties, each Party’s calculated level of methyl bromide consumption in 2005 and each subsequent year must be zero, “save to the extent that the Parties decide to permit the level of production and consumption that is necessary to satisfy uses agreed by them to be critical uses.” Thus, absent such a decision by the Parties, a domestic critical use exemption would not be “consistent with the Montreal Protocol” as required by the CAA. Neither the Montreal Protocol nor any agreement reached under the Protocol, however, purports to require the U.S. to establish or continue a critical use exemption domestically. This second criterion thus does not limit EPA’s ability to cease granting exemptions under section 604(d)(6). While the availability of suitable alternatives is a factor the Administrator may consider under section 604(d)(6), nothing in that section requires that EPA continue to grant exemptions until all methyl bromide users have transitioned to alternatives. EPA recognizes, however, that as a policy matter it has been granting CUEs in its yearly rulemakings based on the unavailability of alternatives. For example, in the Framework Rule, EPA stated that “[i]n the instance of

### critical uses where suitable alternatives are not yet available for all uses, EPA believes it would be inconsistent with the history and the goals of the ozone protection program to not allow for a safety valve in accordance with the provisions of both international and domestic law.” (69 FR 76985). Similarly, in the first few years of the CUE program, EPA received a comment requesting that the Agency not exempt any methyl bromide for critical uses. EPA’s response was that “the lack of suitable alternatives . . . warrants the continuation of the exemption process begun in 2005.” (71 FR 75389). EPA is aware of these past statements and believes they were appropriate given the context at the time they were made. Nonetheless, EPA is proposing to change its policy to take into account the transition time already provided, the substantial progress in adopting ozone-safe alternatives in many sectors, the international context, and the benefits of certainty and advance notice to the few remaining sectors that continue to use methyl bromide. EPA is proposing an end date for the CUE program without being able to guarantee that all sectors will have technically or economically feasible alternatives as of December 31, 2013. EPA is not required to determine that an alternative is or will be in place for every use prior to establishing an end date for the CUE program. Thus, while the decision to end the CUE program is committed to EPA’s discretion, EPA has chosen to state its reasons and invite public comment prior to making this decision final. The U.S. Government has made significant efforts to smooth the transition away from methyl bromide. First, beginning with the Framework Rule in 2004, EPA has established yearly CUEs using its authority under section 604(d)(6). In each year, the U.S. Government (EPA, USDA, State Department) has successfully negotiated with the Parties to the Protocol for the continued use of methyl bromide for critical uses. In total over the past 5 years, the Parties have granted the U.S. approximately 89% of its nominated amount. Second, since methyl bromide

### was listed as an ozone-depleting substance in 1992, the U.S. Government has promoted research on new and existing pesticide active ingredients to determine their potential as methyl bromide alternatives. Between 1995 and 2010, the U.S. Department of Agriculture through the Agricultural Research Service (ARS), Cooperative State Research Education and Extension Service (CSREES), and the Inter-regional Project 4 (IR-4) programs has spent over $300 million in research and outreach related to alternatives for crops that used methyl bromide. USDA through its Agricultural Research Service continues to devote $22 million annually to the task of scientifically qualifying effective new treatments. EPA has made the registration of alternatives to methyl bromide a high registration priority. EPA initiated an expedited registration process for products identified by industry as potential methyl bromide alternatives. Since 1997, the United States has registered several alternatives for “niche” uses of methyl bromide. These registrations include: phosphine to control insects in stored products (2000), Halosulfuron to control weeds in melons (2001), Indian Meal Moth Granulosis Virus to control insects in stored products (2001), 1,3-Dichloropropene to be applied via drip applications (2001), Halosulfuron to control weeds in selected fruiting vegetables (2002), s-Metolachlor to control weeds in tomatoes (2003), Trifloxysulfuron-methyl to control weeds in tomatoes (2003), Fosthiazate to control nematodes in tomatoes (2004), Sulfuryl Fluoride to control insects in stored grains, dried fruit, nuts, grain mills, and food processing facilities (2004/2005), Iodomethane to control nematodes, weeds, and pathogens in tomatoes, peppers, and strawberries (2007), and Dimethyl Disulfide to control nematodes, weeds, and pathogens in tomatoes, peppers, eggplants, curcurbits, strawberries, ornamentals and forest nursery seedlings, and onions (2010).

### EPA has also sought to create a level playing field with respect to the human health and environmental impacts of various fumigants. Some fumigants, such as methyl bromide, 1,3- dichloropropene, metam-sodium, and chloropicrin, were registered over 30 years ago, at a time when the risk analysis and exposure methodology differed from the current review methodology. As stated in the 2005 National Management Strategy for Methyl Bromide, EPA has initiated a comprehensive review of all pre-plant fumigants to ensure that there was no unintentional regulatory partiality toward these fumigants simply because they were registered a number of years ago. This review has since been completed, resulting in changes to labeling for all fumigants. The value of these efforts and the commitment of U.S growers are evident in the dramatic reduction in U.S. consumption of methyl bromide. In 1991, the baseline year, the U.S. used 25,500 metric tons on all uses. In 2005, the first year of the CUE program, EPA nominated 9,921 metric tons of methyl bromide for critical uses. For the 2012 control period, the USG has nominated less than 1,200 metric tons, an 88% decrease from 2005. While this rule proposes to list 14 sectors as critical in 2011, EPA anticipates that the majority of these sectors will adopt suitable alternatives by 2013, even absent the announcement of an end to the CUE program, given the recent proposed registration of iodomethane in California and the federal registration of DMDS. The international context in which CUE requests from developed country Parties are authorized is another important consideration for the U.S. CUE program’s future. There has never been a guarantee that the Parties will authorize the production and import of methyl bromide for critical uses in the U.S. in any year. For example, MBTOC has chosen in the past to “not recommend” uses such as dates in California and strawberry nurseries in the Southeast,

### though the USG, with help from grower groups providing substantiating data, has convinced MBTOC to change position and recommend them. The USG also cannot guarantee that the Parties will continue to authorize the production of methyl bromide, even for sectors that some users believe lack technically or economically feasible alternatives. For example, the USG developed a nomination for tobacco trays for use in 2007 based on its analysis that there were no technical or economically feasible alternatives. EPA ultimately withdrew that nomination because discussions with MBTOC indicated that the Parties were unlikely to authorize it as a critical use. The Montreal Protocol operates under the assumption that while safety valves like the critical use exemption may cushion transition to ozone-safe alternatives, these are temporary bridges rather than indefinite extensions of the 2005 phaseout. While there is no end date to the critical use exemption in the Montreal Protocol, the Preamble to the Protocol states that the Parties are: “Determined to protect the ozone layer by taking precautionary measures to control equitably total global emissions of substances that deplete it, with the ultimate objective of their elimination.” (emphasis added). Decision XV/54 and Decision Ex.I/3 state that CUEs “are intended to be limited, temporary derogations from the phase-out of methyl bromide.” This language, while non-binding, demonstrates the intent of the Parties that the exemption would not be available forever. MBTOC has interpreted this Decision in the MBTOC handbook (available in the docket) to mean that exemptions “are to apply only until there are technically and economically feasible alternatives” which MBTOC itself would evaluate in making its recommendation to the Parties. In the TEAP’s 2010 Progress Report, MBTOC indicated their opinion that such alternatives exist. The report states “now that technically effective alternatives have been identified for most applications, regulations on the use of these alternatives and

### comparative information on the economic feasibility/infeasibility of their use compared to MB are critical to the outcomes of present and future CUNs.” In analyzing the 2012 CUN, MBTOC has asked the USG when the U.S. will end its CUE program. While EPA has not yet established an end date for the CUE program, EPA also views the program as temporary in nature. While MBTOC and the Parties have always scrutinized nominations from requesting developed country Parties including the U.S., this scrutiny will likely intensify as 2015 approaches. Most developed countries that sought CUEs have since stopped, whether because they have transitioned to alternatives or for other reasons. In 2006, twenty developed countries submitted critical use nominations. The number has dropped dramatically since then. As of March 2010, the European Union has banned all uses of methyl bromide, including critical and QPS uses. Israel has announced that 2011 will be their last year of using critical use methyl bromide. Japan has also announced that 2012 will be their last year of using methyl bromide for soil uses (the largest amount of use for Japan and many other countries). The context for U.S. nominations will thus change in 2013; of all the Parties in the developed world, only the United States, Australia, Canada, and Japan will continue to nominate amounts for critical uses. The U.S. nomination will likely be almost the entire amount nominated for that year. By comparison, the 2012 nomination for Canada, Australia, and Japan (post-harvest only) accounted for less than 3% of the total amount nominated for 2012. Being the only developed country seeking any significant amount of critical use methyl bromide in 2013 will subject the U.S. and its nominations to intense international scrutiny. The overall Montreal Protocol dynamic for methyl bromide is also changing as developing countries approach their 2015 phaseout date. Since 2005, developing countries have been subject to a cap on their consumption of methyl bromide at 80% of their baseline amounts.

### In 2015, developing countries must complete their phaseout of methyl bromide (except for potential CUEs). 1

### In 2008, seven years before their ultimate phaseout date, only 34 of the 86 developing countries that had used methyl bromide continued to do so. Of those 34 developing countries, only 12 countries reported consumption between 100 and 500 metric tons and only 2 used more than 500 metric tons. In total, developing countries by 2008 had reduced methyl bromide consumption for soil and post-harvest uses by 66% relative to their baselines. These data can be found in the 2010 TEAP Progress Report, available in the docket. In proposing an end date for the CUE program, EPA also recognizes the value of certainty and the need for advance planning. One aspect of EPA’s policy that has remained constant is the Agency’s belief that abruptly ending all critical use allocations would be harmful to U.S. growers. Therefore, EPA is proposing an end date three years into the future. For the same reason, EPA does not believe that it is in the best interest of U.S. growers to prolong the CUE program. Rather than inviting the small remaining group of U.S. critical use growers to devote additional effort to meeting the significant technical and research burden associated with future CUE applications, EPA believes it is more conducive to a smooth transition to provide certainty to users now, so they can do the necessary planning and shift resources instead to the task of implementing ozone-safe alternatives or non-fumigant options. If EPA did not establish a specific end date, users would have to wait for the first indication that the Parties were unlikely to authorize the amount nominated by the U.S.: generally, this would be a determination by MBTOC to “not recommend” an amount to the Parties. If MBTOC were to “not recommend” a U.S. nomination for 2014, it would not do so until the summer of 2012, and the ultimate outcome of the recommendation would not be certain until the Meeting of the Parties late that fall. This

1 The CUE process, which has allowed for a gradual shift to alternatives in developed countries, has thus far only applied to developed countries. Whether a CUE process will be initiated to meet critical needs of the few developing countries still using methyl bromide in 2015 is not yet known.

### would give growers who prepared applications, and for which the USG submitted a nomination, only a year to complete their transition. By acting now, EPA can provide growers certainty at the conclusion of this rulemaking that methyl bromide will not be allocated in 2014. EPA believes that this proposal would provide a reasonable amount of transition time, especially given the time that has already elapsed since the phaseout date. The CUE program has thus far given growers six additional years (2005-2010) beyond the phaseout date to develop and market alternatives and implement practices that reduce the need for fumigants in general. Under this proposal, growers would have three additional years (2011-2013) to complete that transition. Ultimately, the number of sectors likely to be affected by this proposal would be small, as most growers would have transitioned to alternatives by the end of 2013 even in the absence of this proposal. EPA is deeply aware of the special challenge of affected agricultural sectors and crops in transitioning out of methyl bromide. Still, many other stakeholders have successfully transitioned out of other ozone depleting substances under the Clean Air Act despite technical and economic challenges. Growers have known that methyl bromide would be phased out since 1993 (58 FR 65018). EPA’s proposal to end the CUE program in 2013 means that chemical producers, government, and methyl bromide users have had 20 years to investigate, develop, and test alternatives. This timeline is similar to the ozone protection program’s timeline for chlorofluorocarbons (CFCs), which were widely used in numerous sectors including metered dose inhalers for the treatment of asthma. The 1990 Clean Air Act Amendments required the phaseout of CFCs (initially in 2000, later accelerated to 1996). The final year of CFC production under the essential use exemption in the U.S. is likely to be 2010 while 2013 is the final year in which CFC metered dose inhalers may be sold in the U.S. The USG has not submitted

### nominations to produce or import CFCs for 2011 or 2012 and no companies have applied for 2013, though they do have another year to submit a supplemental application. EPA thus believes that the proposed timeline for ending the U.S. critical use program is consistent with the history of the ozone protection program. Finally, regardless of the specific timeline established, treating the critical use program as temporary would be consistent with the goals of Title VI of the CAA. Section 604(d)(6) does not specifically address whether any critical-use exemptions EPA chooses to create should continue indefinitely or should terminate after some reasonable period. However, establishing an end date furthers the goals of the stratospheric protection program as expressed in the legislative history of the 1990 Clean Air Act Amendments. Specifically, the Statement of Senate Managers on the Conference Report says: “The centerpiece of the stratospheric ozone protection program established by this title is the phase-out of production and consumption of all ODSs.” Senate Debate Oct. 27, 1990, reprinted in Legislative History of the Clean Air Act Amendments of 1990, 103d Cong., 1 st 

### Sess, Vol I, p. 925. Similarly, a “Statement of Understanding” submitted during the House Debate on the Conference Report indicates that “[c]ontrolling and ultimately eliminating the production of ozone-depleting substances is one of the key features of this new title.” House Debate Oct. 27, 1990, reprinted in Legislative History of the Clean Air Act Amendments of 1990, 103d Cong., 1 st 

### Sess., Vol I, p. 1422. For the reasons explained above, EPA is proposing to adopt a new policy under which the CUE program will end on a specified date whether or not technically and economically feasible alternatives are in place for all uses as of that date. Specifically, EPA is proposing to end the CUE program on December 31, 2013. EPA is seeking comment on alternatives such as making 2014 rather than 2013 the last year for the critical use program or not specifying any end date for

### the program at this time. EPA stated in the recent Federal Register Notice requesting methyl bromide CUE applications for 2013 that EPA “will likely request applications for 2014” (75 FR 41177). However, upon further consideration, EPA proposes not to seek applications for 2014. Although ending the program in 2014 would theoretically provide growers one additional year to transition, EPA does not want growers to assume that significant amounts of methyl bromide production would be authorized for 2014. Waiting an additional year increases the risk that the Parties will deny the CUN altogether, leaving growers scrambling for alternatives at short notice. Critical use authorizations by the Parties have declined consistently throughout the CUE program and, if the trend continues, could approach zero in 2014. Even if any amounts are authorized, the small quantities involved would not be worth the difficulties the few remaining users would face if authorization were abruptly denied. Thus, EPA does not believe that establishing 2014 rather than 2013 as an end date would confer a significant benefit to growers. In general, an end date of 2013 should provide sufficient notice and time to transition. EPA does not favor the option of not specifying a date at this time because that would fail to provide users any advance notice of the maximum amount of time remaining to complete their transition. EPA does not believe that ignoring the international context discussed above would benefit growers in seeking amounts past 2013 or 2014. Finally, given the United States’ consistent leadership in protecting the ozone layer, EPA prefers that the U.S. end its CUE program prior to the methyl bromide phaseout date of 2015 set for developing countries. EPA therefore proposes to amend 40 CFR 82.8(c) to establish December 31, 2013, as the end date for the CUE program by adding the following italicized text: “Effective January 1, 2005, through December 31, 2013 , critical use allowances are apportioned as set forth in paragraph (c)(1) of this section for the exempted production

### and import of class I, Group VI controlled substances specifically for those approved critical uses listed in appendix L to this subpart for the applicable control period. Critical use allowances for the control period specified in paragraph (c)(1) of this section expire at the end of that control period. Every kilogram of production and import in excess of the total number and type of unexpended critical use allowances held for a particular type of use constitutes a separate violation of this subpart. Effective January 1, 2005, through December 31, 2013 , critical stock allowances are issued as set forth in paragraph (c)(2) of this section for the sale of class I, Group VI controlled substances from inventory produced or imported before the January 1, 2005 phaseout date specifically for those approved critical uses listed in appendix L to this subpart for the applicable control period. Critical stock allowances for the control period specified in paragraph (c)(2) of this section expire at the end of that control period.” EPA is proposing to add language stating that allowances expire at the end of the specified control period to clarify that the values listed in the table apply only to the control period listed, not each remaining control period through 2013. EPA invites comment on this proposal to stop issuing critical use exemptions after 2013.
VII.