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**MEMORANDUM :**  **Overview of**  **the Final**  **R ule**  **Regarding HCFC Allo** **wances f** **or 2012** **, 2013 and**  **2014** On January 4, 2012, EPA proposed and requested comment on a num ber of options for issuing HCFC 22 and HCFC- 142b allowances for 2012 - 2014 ( 77 FR 237 ). Since this rulemaking only addresses HCFC22 and HCFC- 142b, b aseline and calendar-year allocations for all other HCFCs are the same as in the 2009 Final Rule (74 FR 66412) . Via this final rule, titled “Adjustments to the Allowance System for Controlling HCFC Producti on, Import, and Export,” EPA has decide d to : (1) Continue to u se the same HCFC- 22 and HCFC- 142b baselines established in the 2011 Interim Final Rule (76 FR 47451) (2) Provide the same number of HCFC- 142b consumption and production allowances as the age ncy did in the 2011 Interim Final Rule (3) Provide fewer HCFC- 22 consumption allowances relative to the 2009 Final Rul e (4) Provide the same percentage of baseline for HCFC- 22 production allowances relative to the 2009 Final Rule in 2013 - 2014 (5) Provide recoupment a llowances to address the U.S. Court of Appeals for the D.C. Circuit’s decision in Arkema v. EPA (6) C larify EPA’s positi on on inter- pollutant transfers in the regulations A summary of each decision is provided below. Full discussion , including a summary of comments received and EPA’s response to those comments , can be found in the Final Rule preamble, and the accompanying Response to Comments document (see docket EPA- HQ- OAR - 2011 - 0354 ). **1) Baselines**  **are the same**  **as set in the 2011 IFR** a. 2008 inter- pollutant trade s made by Arkema and Solvay are reflected in the finalized baselines, consistent with the decision in Arkema v. EPA b. Single - pollutant, inter- company trades that occurred after the 2009 Final Rule ar e reflected c. All other baselines are the same as in the 2009 Final Rule **2) Annual**  **HCFC -**  **142b Allocation**  2012 2013 2014 MT ODP MT MT ODP MT MT ODP MT Consumption 100 7 100 7 100 7 Production 463 30 463 30 463 30 % of Baseline Allocated 4.9% 4.9% 4.9% NB: The numbers listed here are rounded and do not include recoupment allowances.Page 2 of 2

**3) Annual HCFC** **- 22 Consumption**  **Allo cation**  To account for changes in the marketplace, EPA is finaliz ing HCFC- 22 consumption allocations for 2012 - 2014 that are almost 3 0 percent lower than the amounts provided in the 2009 Final Rule. 2012 2013 2014 MT ODP MT MT ODP MT MT ODP MT Consumption 25 , 1 00 1, 400 25,500 1,400 20,200 1,100 % of Baseline Allocated 17 . 7 % 18.0% 14.2% NB: The numbers listed here are rounded and do not include recoupment allowances . **4) Annual HCFC** **- 22 Production Allocation**  EPA is using the same percentage of baseline as used in the 2009 Final Rule for 2013 and 2014. Since the baseline amount is higher, the number of HCFC- 22 production allowances provided is higher relative to the 2009 Final Rule in 2013 - 2014 . For 2012, t he agency is issuing production allowances commensurate with the amount of production authorized in the January 20, 2012, No Action Assurance. 2012 2013 2014 MT ODP MT MT ODP MT MT ODP MT Production 22 , 8 00 1 , 3 00 38, 900 2,1 00 33, 700 1, 900 % of Baseline Allocated 17.7 % 30.1% 26.1% NB: The numbers listed here are rounded and do not include recoupment allowances . **5) Addressing 2010 Allowances**  To address the Court’s decision in Arkema, the agency is providing “recoupment” allowances to the following entities: **Company Chemical**  **Consumption Allowances (**  **MT )**  **Production**

**Allowances ( MT** **)** Arkema HCFC - 22 4,7 50 4,61 2 DuPont HCFC - 142b 2 0 Honeywell HCFC - 142b 58 107 Solvay Fluorides HCFC - 22 1,158 0 Solvay Solexis HCFC - 142b 0 29 0 NB: The numbers listed here are rounded . The agency is providing these allowances “in addition to the pie” over the course of two years, issuing half to each company in 2013 and the other half in 2014 . **6) Inter** **- pollutant transfers**  As proposed, EPA is clarifying that future inter- pollutant transfers of baseline allowances are not allowed.