[Federal Register Volume 63, Number 18 (Wednesday, January 28, 1998)]
[Rules and Regulations]
[Pages 4360-4364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2082]



[[Page 4359]]

_______________________________________________________________________

Part IV





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 82



Protection of Stratospheric Ozone: Allocation of 1998 Essential Use 
Allowances; Interim Final Rule

Federal Register / Vol. 63, No. 18 / Wednesday, January 28, 1998 / 
Rules and Regulations

[[Page 4360]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-5953-6]
RIN 2060-AG48


Protection of Stratospheric Ozone: Allocation of 1998 Essential 
Use Allowances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

-----------------------------------------------------------------------

SUMMARY: With this action, EPA allocates essential-use allowances for 
the 1998 control period. The United States nominated specific uses of 
ozone-depleting substances (ODS) as essential uses for 1998 under the 
Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol). The Parties to the Protocol subsequently approved 
production and import of ODS for the uses nominated by the United 
States in the quantities specified. In today's action, EPA allocates 
essential use allowances based on the quantities approved by the 
Parties for the nominated uses. Essential use allowances permit a 
person to obtain controlled ozone-depleting substances as an exemption 
to the January 1, 1996 regulatory phaseout of production and import. 
Essential use allowances are allocated to a person for exempted 
production or importation of a specific quantity of a controlled 
substance solely for the designated essential purpose.

DATES: This action is effective January 28, 1998. EPA will consider all 
written comments received by February 27, 1998, to determine if any 
change to this action is necessary.

ADDRESSES: Comments on and materials supporting this interim final rule 
are collected in Air Docket No. A-92-13, U.S. Environmental Protection 
Agency, 401 M Street, SW., Room M-1500, Washington, DC 20460. The 
Docket is located in room M-1500, First Floor, Waterside Mall at the 
address above. The materials may be inspected from 8 am until 4 pm 
Monday through Friday. A reasonable fee may be charged by EPA for 
copying docket materials. Those wishing to notify EPA of their intent 
to submit adverse comments on this action should contact Tom Land, EPA, 
Stratospheric Protection Division, Office of Atmospheric Programs, 
Office of Air and Radiation (6205-J), 401 M Street, SW., Washington, DC 
20460, (Docket # A-92-13), (202)-564-9185.

FOR FURTHER INFORMATION CONTACT: Tom Land, EPA, Stratospheric 
Protection Division, Office of Atmospheric Programs, Office of Air and 
Radiation (6205-J), 401 M Street, SW., Washington, DC 20460, (202)-564-
9185 or The Stratospheric Ozone Hotline at (800)-296-1996.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Allocation of 1998 Essential use Allowances
III. Additional Changes in the Essential use Process to be Published 
in Subsequent Proposed Rulemaking
IV. Summary of Supporting Analysis
    A. Unfunded Mandates Reform Act and Regulatory Flexibility Act
    B. Executive Order 12866
    C. Paperwork Reduction Act
    D. Executive Order 12875
    E. Submission to Congress and the General Accounting Office

I. Background

    The Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol) sets specific deadlines for the phaseout of production and 
importation of ozone depleting substances (ODS). At their Fourth 
Meeting in 1992, the signatories to the Protocol (the Parties) amended 
the Protocol to allow exemptions to the phaseout for uses agreed by the 
Parties to be essential. At the same Meeting, the Parties also adopted 
Decision IV/25, which established both criteria for determining whether 
a specific use should be approved as essential and a process for the 
Parties to use in making such a determination.
    The criteria for an essential use as set forth in Decision IV/25 
are the following:

    ``(1) that a use of a controlled substance should qualify as 
`essential' only if:
    (i) it is necessary for the health, safety or is critical for 
the functioning of society (encompassing cultural and intellectual 
aspects); and
    (ii) there are no available technically and economically 
feasible alternatives or substitutes that are acceptable from the 
standpoint of environment and health;
    (2) that production and consumption, if any, of a controlled 
substance for essential uses should be permitted only if:
    (i) all economically feasible steps have been taken to minimize 
the essential use and any associated emission of the controlled 
substance; and
    (ii) the controlled substance is not available in sufficient 
quantity and quality from existing stocks of banked or recycled 
controlled substances, also bearing in mind the developing 
countries' need for controlled substances.''

    Decision IV/25 also sets out the procedural steps for implementing 
this process. It first calls for individual Parties to nominate 
essential uses. These nominations are then to be evaluated by the 
Protocol's Technology and Economic Assessment Panel (TEAP or the Panel) 
which makes recommendations to representatives of all Protocol Parties. 
The final decision on which nominations to approve is to be taken by a 
meeting of the Parties.
    The initial cycle of implementing this Decision has been completed 
in the context of halons which were phased out of production at the end 
of 1993. This initial timetable separated nominations for halons from 
those for other ozone-depleting substances. EPA issued a Federal 
Register notice requesting nominations for essential uses of halons 
(February 2, 1993; 58 FR 6786). In response, the Agency received over 
ten nominations, but was able to work with applicants to resolve their 
near-term requirements. As a result, the U.S. did not nominate any uses 
for continued halon production in 1994. About a dozen other nations put 
forth nominations which were reviewed by the Technical and Economic 
Assessment Panel. Because the Panel determined that in each case 
alternatives existed or that the existing supply of banked halons was 
adequate to meet near-term needs, it did not recommend approval of any 
of the nominations. In November of 1993, at the Fifth Meeting, the 
Parties unanimously adopted the recommendation of the Panel not to 
approve any essential uses for the production or consumption of halons 
in 1994.
    EPA issued a second notice for essential use nominations for halons 
on October 18, 1993 (58 FR 53722). These nominations covered possible 
production of halons in 1995 for essential uses. In response to this 
inquiry, EPA received no nominations.
    Only one nomination (from France) was received by the TEAP for 
production and consumption of halons for an essential use in 1995. The 
TEAP did not recommend approval of this nomination.
    EPA also issued a Federal Register notice requesting nominations 
for essential use applications which would need to continue beyond the 
1996 phaseout of consumption and production allowances for CFCs, methyl 
chloroform, carbon tetrachloride, and hydrobromofluorocarbons (May 20, 
1993, 58 FR 29410). EPA received 20 applications in response to this 
notice. For several of these applications, EPA determined that the 
criteria contained in Decision IV/25 had not been satisfied. For 
example, two applications sought CFCs for servicing existing air-
conditioning equipment. EPA rejected these applications on the basis 
that if all

[[Page 4361]]

economically feasible steps were taken prior to the 1996 phaseout, then 
adequate supplies of banked and recycled CFCs should be available. 
However, in rejecting these nominations, the United States noted that 
servicing existing air-conditioning and refrigeration equipment remains 
a major challenge to the successful transition from the use of CFCs and 
that a future nomination in this area might be necessary if a 
combination of retrofits, replacements, recycling, recovery at 
disposal, and banking do not adequately address these needs.
    Of the responses to the Federal Register request for essential use 
applications, the United States submitted essential use nominations to 
the Protocol Secretariat for the following uses of CFCs: metered dose 
inhalers and other selected medical applications; a bonding agent for 
the Space Shuttle; aerosol wasp killers; limited use in a specified 
bonding agent and polymer application; and a generic application for 
laboratory uses under specified limitations. (Letter from Pomerance to 
UNEP, September 27, 1993).
    Nominations from the U.S. and other countries for over 200 specific 
uses were submitted to the Montreal Protocol Secretariat and provided 
to the Technical and Economic Assessment Panel for review. In March 
1994, the Panel issued the ``1994 Report of the Technology and Economic 
Assessment Panel.'' The Report includes the Panel's recommendations for 
essential-use production and consumption exemptions. The Panel 
recommended that essential use exemptions be granted for nominations 
of: Methyl chloroform in solvent bonding for the Space Shuttle; CFCs 
used in metered dose inhalers; and specific controlled substances 
needed for laboratory and analytical applications. For each of the 
other nominations submitted, the TEAP determined that one or more of 
the criteria for evaluating an essential use had not been satisfied. 
For example, in the case of several of the U.S. nominations, the report 
states that alternatives are available and therefore the essential use 
exemption is not warranted.
    In every year since 1994, the Parties have reviewed recommendations 
by the Technology and Economic Assessment Panel and made final 
decisions on essential use authorizations. Today's action follows 
decisions taken by the Parties after considering recommendations by the 
TEAP in 1996 and 1997.
    In 1993, the Parties to the Protocol modified the timetable for 
submission of essential use nominations to combine both halons and all 
the other class I controlled substances (except methyl bromide) and to 
reduce the overall length of time between nomination and decision. 
According to Decision V/18, essential use nominations for halon 
consumption and production for 1995 and beyond, and essential use 
nominations for all the other class I controlled substances (except 
methyl bromide) for 1997 and beyond, must be submitted to the 
Secretariat prior to January 1st of the year prior to the year for 
which production and consumption is being sought. The Parties again 
revised the timetable for essential use nominations in Decision VIII/9 
requiring submission by 31 January in the year in which decisions would 
be taken for subsequent years. EPA revised the domestic schedule 
accordingly so a Federal Register notice calling for essential use 
applications for class I controlled substances for future years is 
published prior to the Protocol deadline for submission to the Ozone 
Secretariat.
    Decision V/18 directed the Technology and Economic Assessment Panel 
to develop a ``handbook on essential use nominations'' (Handbook). The 
July 1994 Handbook contained forms and instructions for how to apply 
for an essential-use exemption. Subsequent decisions by the Parties to 
the Protocol created additional criteria for essential use 
authorizations now reflected in the August 1997 Handbook. The Handbook 
may be obtained from the Stratospheric Protection Division, U.S. 
Environmental Protection Agency or the Ozone Secretariat of the 
Montreal Protocol in Nairobi.

II. Allocation of 1998 Essential Use Allowances

    In today's action, EPA is allocating essential use allowances for 
the 1998 control period to the entities listed in Table I for exempted 
production or import of the specific quantity of class I controlled 
substances solely for the specified essential use.

  Table I.--Essential Uses Agreed to by the Parties to the Protocol for 
                    1998 and Essential Use Allowances                   
------------------------------------------------------------------------
                                                 Class I        Quantity
              Company/entity                    controlled      (metric 
                                                substance       tonnes) 
------------------------------------------------------------------------
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic     
                      Obstructive Pulmonary Disease                     
------------------------------------------------------------------------
International Pharmaceutical Aerosol        CFC-11...........     1043.6
 Consortium (IPAC)--Abbott Laboratories,    CFC-12...........     2512.2
 Armstrong Laboratories, Boehringer         CFC-114..........      338.0
 Ingelheim, Glaxo Wellcome, 3M, Rhone                                   
 Poulenc Rorer, Schering-Plough                                         
 Corporation.                                                           
Medisol...................................  CFC-11...........       78.0
                                            CFC-12...........      132.0
                                            CFC-114..........       11.0
Aeropharm.................................  CFC-11...........       83.0
                                            CFC-12...........      166.7
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
                    Shuttle Rockets and Titan Rockets                   
------------------------------------------------------------------------
National Aeronautics and Space              Methyl Chloroform       56.7
 Administration (NASA)/Thiokol Rocket.                                  
United States Air Force/Titan Rocket......  Methyl Chloroform        3.4
------------------------------------------------------------------------
              (iii) Laboratory and Analytical Applications              
------------------------------------------------------------------------
Global Exemption (Restrictions in Appendix  All Class I         No (\1\)
 G Apply).                                   Controlled                 
                                             Substances                 
                                             (except Group              
                                             VI).                       
------------------------------------------------------------------------
\1\ No quantity specified.                                              


[[Page 4362]]

    The International Pharmaceutical Aerosol Consortium (IPAC) 
consolidated requests for an essential use exemption to be nominated to 
the Protocol as an agent of its member companies for administrative 
convenience. By means of a confidential letter to each of the companies 
listed above, EPA will allocate essential-use allowances separately to 
each company in the amount requested by it for the nomination.
    Applications submitted by these companies requested class I 
controlled substances for uses claimed to be essential during the 1998 
control period. The applications provided information in accordance 
with the criteria set forth in Decision VI/25 of the Protocol and the 
procedures outlined in the ``Handbook on Essential Use Nominations.'' 
The applications request exemptions for the production and import of 
specific quantities of specific class I controlled substances after the 
phaseout as set forth in 40 CFR 82.4. The applications were reviewed by 
the U.S. government and nominated to the Protocol Secretariat for 
analysis by the Technical and Economic Assessment Panel (TEAP) and its 
Technical Option Committees (TOCs). The Parties to the Montreal 
Protocol approved the U.S. nominations for essential-use exemptions 
during meetings in 1995 and 1996. In today's action essential-use 
allowances are allocated to United States entities based on nominations 
decided upon by the Parties to the Protocol.
    The 1998 global essential use exemption for analytical and 
laboratory applications published in today's rule imposes strict 
requirements both in Sec. 82.13 and in Appendix G of this subpart. The 
restrictions for the global laboratory and analytical essential use 
exemption listed in Appendix G include requirements regarding purity of 
the class I controlled substances and the size of the containers. In 
addition, there are detailed reporting requirements in Sec. 82.13 for 
persons that take advantage of the global laboratory and analytical 
essential-use exemption for class I controlled substances. The strict 
requirements are established because the Parties to the Protocol, and 
today's rule, do not specify a quantity of essential use allowances 
permitted for analytical and laboratory applications, but establish a 
global essential-use exemption, without a named recipient.
    Any person obtaining class I controlled substances after the 
phaseout under the essential use exemptions published in today's rule 
is subject to all the restrictions and requirements in other sections 
of 40 CFR part 82, subpart A. Holders of essential-use allowances or 
persons obtaining class I controlled substances under the essential-use 
exemptions must comply with the recordkeeping and reporting 
requirements in Sec. 82.13 of this subpart and the restrictions in 
Appendix G of this subpart.
    Section 307(d) of the Clean Air Act Amendments of 1990 (CAA or the 
Act) states that in the case of any rule to which section 307(d) 
applies, notice of proposed rulemaking must be published in the Federal 
Register (CAA 307(d)(3)). The promulgation or revision of regulations 
under title VI of the CAA (relating to stratospheric ozone protection) 
is generally subject to section 307(d). However, section 307(d) does 
not apply to any rule referred to in subparagraphs (A) or (B) of 
section 553(b) of the Administrative Procedure Act (APA), 5 U.S.C. 551 
et seq.
    APA section 553(b) requires that any rule to which it applies be 
issued only after the public has received notice of, and an opportunity 
to comment on, the rule. However, APA section 553(b)(B) exempts from 
those requirements any rule for which the issuing agency for good cause 
finds that providing prior notice-and-comment would be impracticable, 
unnecessary or contrary to the public interest. Thus, any rule for 
which EPA makes such a finding is exempt from the notice-and-comment 
requirements of both APA section 553(b) and CAA section 307(d).
    EPA believes that the circumstances presented here provide good 
cause to take this action without prior notice and comment. EPA finds 
that providing prior notice and comment would be impracticable and 
contrary to the public interest because the ozone-depleting substances 
need to be available to the listed entities in 1998 for the health and 
safety of society as defined in the Protocol essential use criteria. 
The allocation of essential-use allowances for CFCs to the 
manufacturers of metered-dose inhalers will ensure the availability of 
treatment in order to protect the health of U.S. patients with asthma 
and chronic obstructive pulmonary disease. The allocation of essential-
use allowances for methyl chloroform for the manufacture of the 
Thiokol/Space Shuttle Rockets and the Titan Rockets will provide a 
guarantee of safety from explosions that are unacceptable risks to both 
national programs.
    Nonetheless, EPA is providing 30 days for submission of public 
comments following today's action. EPA will consider all written 
comments submitted in the allotted time period to determine if any 
change to this action is necessary.
    Section 553(d) of the APA generally provides that rules may not 
take effect earlier than 30 days after they are published in the 
Federal Register. However, APA section 553(d)(1) excepts from this 
provision any action that grants or recognizes an exemption or relieves 
a restriction. Since today's action grants an exemption from the 
phaseout of production and consumption of most class I ozone-depleting 
substances, EPA is making this action immediately effective to ensure 
the availability of ozone-depleting substances for essential uses 
during the 1998 control period.

III. Additional Changes in the Essential Use Process To Be 
Published in Subsequent Proposed Rulemaking

    EPA will be publishing a Notice of Proposed Rulemaking that 
includes changes to the essential-use provisions published in the 
Federal Register on May 10, 1995. One of the proposals will be a 
simplification of the process for allocating essential-use allowances 
by providing that allowances will be allocated through a Notice 
published in the Federal Register rather than through a Final 
Rulemaking. EPA will propose allocating essential-use allowances 
according to the quantities approved by the Parties to the Protocol for 
which applications were submitted to the U.S. government. EPA will be 
seeking comments on a simplification of the current allocation process.
    EPA will also be proposing changes to the reporting requirements 
for holders of essential-use allowances in the subsequent Notice of 
Proposed Rulemaking. EPA will propose changes to the reporting 
requirements to allow the U.S. to gather information in accordance with 
Decision VIII/9, paragraph 9. Under the reporting format associated 
with Decision VIII/9, paragraph 9, Parties to the Protocol are 
requested to report data regarding essential uses, including 
inventories of CFCs, quantities of CFCs imported and produced for 
essential uses, the amount of CFCs that are actually filled into 
metered-dose inhalers, and stockpiles of CFCs remaining at the end of a 
control period.

IV. Summary of Supporting Analysis

A. Unfunded Mandates Reform Act and Regulatory Flexibility Act

    Since this action is not subject to notice-and-comment rulemaking 
requirements under the APA or any other law, it is also not subject to 
sections 202, 204 or 205 of the

[[Page 4363]]

Unfunded Mandates Reform Act (UMRA). In addition, since this action 
does not impose annual costs of $100 million or more on small 
governments or uniquely affect small governments, the Agency has no 
obligations under section 203 of UMRA. Moreover, since this action is 
not subject to notice-and-comment requirements under the APA or any 
other statute as stated above, it is not subject to section 603 or 604 
of the Regulatory Flexibility Act.

B. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant'' regulatory action as 
one that is likely to result in a rule that may:
    (1) have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined by EPA that this rule is not a ``significant 
regulatory action'' within the meaning of the Executive Order.

C. Paperwork Reduction Act

    This action does not add any information collection requirements or 
increase burden under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. The Office of Management and Budget (OMB) 
previously approved the information collection requirements contained 
in the final rule promulgated on May 10, 1995, and assigned OMB control 
number 2060-0170 (EPA ICR No. 1432.16).
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

D. Executive Order 12875

    Today's action does not impose any unfunded mandate upon any State, 
local, or tribal government; therefore, Executive Order 12875 does not 
apply to this rulemaking.

E. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives, and the Comptroller General of the 
General Accounting Office prior to publication of the rule in today's 
Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Chlorofluorocarbons, Exports, 
Hydrochlorofluorocarbons, Imports, Ozone layer, Reporting and 
recordkeeping requirements.

    Dated: January 16, 1998.
Carol M. Browner,
Administrator.

    40 CFR part 82 is 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.

Subpart A--Production and Consumption Controls

    2. Section 82.4(r)(2) is amended by revising the table to read as 
follows:


Sec. 82.4  Prohibitions.

* * * * *
    (r) * * *
    (2) * * *

  Table I.--Essential Uses Agreed to by the Parties to the Protocol for 
                    1998 and Essential Use Allowances                   
------------------------------------------------------------------------
                                                 Class I        Quantity
              Company/entity                    controlled      (metric 
                                                substance       tonnes) 
------------------------------------------------------------------------
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic     
                     Obstructive Pulmonary Disease                      
------------------------------------------------------------------------
International Pharmaceutical Aerosol        CFC-11...........     1043.6
 Consortium (IPAC) \1\--Abbott              CFC-12...........     2512.2
 Laboratories, Armstrong Laboratories,      CFC-114..........      338.0
 Boehringer Ingelheim, Glaxo Wellcome, 3M,                              
 Rhone Poulenc Rorer, Schering--Plough                                  
 Corporation.                                                           
Medisol...................................  CFC-11...........       78.0
                                            CFC-12...........      132.0
                                            CFC-114..........       11.0
Aeropharm.................................  CFC-11...........       83.0
                                            CFC-12...........      166.7
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
                   Shuttle Rockets and Titan Rockets                    
------------------------------------------------------------------------
National Aeronautics and Space              Methyl Chloroform       56.7
 Administration (NASA)/Thiokol Rocket.                                  
United States Air Force/Titan Rocket......  Methyl Chloroform        3.4
------------------------------------------------------------------------

[[Page 4364]]

                                                                        
              (iii) Laboratory and Analytical Applications              
------------------------------------------------------------------------
Global Exemption (Restrictions in Appendix  All Class I           (\2\) 
 G Apply).                                   Controlled                 
                                             Substances                 
                                             (except Group              
                                             VI).                       
------------------------------------------------------------------------
\1\ IPAC consolidated requests for an essential use exemption to be     
  nominated to the Protocol as an agent of its member companies for     
  administrative convenience. By means of a confidential letter to each 
  of the companies listed above, EPA will allocate essential-use        
  allowances separately to each company in the amount requested by it   
  for the nomination.                                                   
\2\ No quantity specified.                                              

* * * * *
[FR Doc. 98-2082 Filed 1-27-98; 8:45 am]
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