64254 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 82 

[EPA–HQ–OAR–2013–0263; FRL–9917–98– 

OAR] 

RIN 2060–AR04 

Protection of Stratospheric Ozone: 

Adjustments to the Allowance System 

for Controlling HCFC Production, 

Import and Export, 2015–2019 

AGENCY: Environmental Protection 

Agency. 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is adjusting the allowance 

system for the consumption and 

production of hydrochlorofluorocarbons 

(HCFCs). Under the Clean Air Act, EPA 

is required to phase out production and 

import of these chemicals in accordance 

with the Montreal Protocol on 

Substances that Deplete the Ozone 

Layer (Protocol). Under the Protocol, 

total United States HCFC production 

and consumption is capped, and will be 

completely phased out by 2030. Today’s 

action announces the availability of 

annual production and consumption 

allowances for HCFC–22, HCFC–142b, 

HCFC–123, and HCFC–124 for 2015– 

2019. This rule also makes minor 

changes to the reclamation regulations, 

updates the use restrictions to account 

for a recent amendment to the Clean Air 

Act, and finalizes a de minimis 

exemption to the use restrictions for 

certain uses of HCFC–225ca/cb and 

HCFC–124. 

DATES: This final rule is effective on 

January 1, 2015. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–HQ–OAR–2013–0263. All 

documents in the docket are listed on 

the www.regulations.gov Web site. 

Although listed in the index, some 

information is not publicly available, 

e.g., CBI or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy at: EPA 

Docket Center, WJC West Building, 

Room 3334, 1301 Constitution Avenue 

NW., Washington, DC 20004. The Public 

Reading Room is open from 8:30 a.m. to 

4:30 p.m., Monday through Friday, 

excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744, and the telephone 

number for the Air and Radiation 

Docket is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Whiteley by telephone at (202) 

343–9310 or by email at 

whiteley.elizabeth@epa.gov, or by mail 

at United States Environmental 

Protection Agency, Stratospheric 

Protection Division, Stratospheric 

Program Implementation Branch 

(6205J), 1200 Pennsylvania Ave. NW., 

Washington, DC 20460. You may also 

visit the Web site of EPA’s Stratospheric 

Protection Division at www.epa.gov/ 

ozone/strathome.html for further 

information about EPA’s stratospheric 

ozone protection regulations, the 

science of ozone layer depletion, and 

related topics. 

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. The 

following acronyms and abbreviations 

are used in this document. 

ANPRM—Advance Notice of Proposed 

Rulemaking 

CAA—Clean Air Act 

CAAA—Clean Air Act Amendments of 1990 

CFC—Chlorofluorocarbon 

CFR—Code of Federal Regulations 

EPA—Environmental Protection Agency 

FR—Federal Register 

GWP—Global Warming Potential 

HCFC—Hydrochlorofluorocarbon 

HVACR—Heating, Ventilating, Air 

Conditioning and Refrigeration 

Montreal Protocol or Protocol—Montreal 

Protocol on Substances that Deplete the 

Ozone Layer 

MOP—Meeting of the Parties 

MT—Metric Ton 

ODP—Ozone Depletion Potential 

ODS—Ozone-Depleting Substance(s) 

Party—States and regional economic 

integration organizations that have 

consented to be bound by the Montreal 

Protocol on Substances that Deplete the 

Ozone Layer 

RACA—Request for Additional Consumption 

Allowances 

Organization of This Document. The 

following outline is provided to aid in 

locating information in this preamble. 

I. General Information 

A. Does this action apply to me? 

II. Background 

A. How does the Montreal Protocol phase 

out HCFCs? 

B. How do the Clean Air Act and EPA 

regulations phase out HCFCs? 

C. What sections of the Clean Air Act apply 

to this rulemaking? 

III. Summary of This Final Action 

IV. Clean Air Act Requirements That Begin 

in 2015 

A. What are the existing HCFC product 

labeling requirements at 40 CFR Part 82 

subpart E? 

1. Minor Modifications to Existing 

Regulatory Text 

2. Comments on the Existing Labeling 

Requirements and EPA’s Response 

B. What actions is EPA taking regarding the 

use and sales restriction in Clean Air Act 

section 605(a)? 

1. Treatment of Existing Inventory of 

HCFC–225ca and HCFC–225cb for 

Solvent Uses 

2. Treatment of Existing Inventory of 

HCFC–124 for Sterilant Uses 

3. Update to Regulations to Account for 

Recent Changes to Section 605(a) 

C. Which Montreal Protocol requirements 

take effect in 2015 and 2020? 

V. HCFC Baselines for 2015–2019 

VI. HCFC Allowance Allocation Amounts for 

2015–2019 

A. What is the 2015–2019 HCFC–22 

consumption allocation? 

1. Summary of Final HCFC–22 

Consumption Allocation 

2. EPA’s Collection, Consideration and Use 

of Aggregate HCFC–22 Inventory Data 

3. Explanation of the Agency’s Final 

Decision and Response to Comments 

4. Timing of the Final Rule 

B. What is the 2015–2019 HCFC–22 

production allocation? 

C. What is the 2015–2019 HCFC–142b 

consumption and production allocation? 

D. What is the 2015–2019 HCFC–123 

consumption allocation? 

E. What is the 2015–2019 HCFC–124 

consumption and production allocation? 

F. How is EPA addressing the end of the 

HCFC–141b Exemption Program? 

G. Other HCFCs that Are Class II 

Controlled Substances 

VII. Other Adjustments to the HCFC 

Allowance System 

A. What is EPA’s response to comments on 

dry-shipped HCFC–22 condensing units? 

B. How is EPA treating requests for 

additional consumption allowances in 

2020 and beyond? 

C. What is EPA’s response to comments on 

maximizing compliance with HCFC 

regulations? 

VIII. Modifications to Section 608 

Regulations 

A. Overview of Current Reclamation 

Standards 

B. Benefits of Reclamation 

C. What regulatory changes is EPA 

finalizing under CAA section 608? 

1. Consideration of AHRI 700–2012 

Standards 

2. Notification to EPA of Changes to 

Business Management, Location, or 

Contact Information 

3. Reporting and Recordkeeping 

Requirements 

4. Other Section 608 Reclamation Program 

Options 

5. Other Issues Related to Section 608’s 

National Recycling and Emissions 

Reduction Program 

IX. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act (RFA) 

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 


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64255 

1Class I refers to the controlled substances listed 

in appendix A to 40 CFR part 82 subpart A. Class 

II refers to the controlled substances listed in 

appendix B to 40 CFR part 82 subpart A; HCFCs are 

class II substances. 

2The adjustment entered into force and became 

binding for all Parties on May 14, 2008. 

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 

K. Congressional Review Act 

I. General Information 

A. Does this action apply to me? 

This rule may affect the following 

categories: 

—Industrial Gas Manufacturing entities 

(NAICS code 325120), including 

fluorinated hydrocarbon gas 

manufacturers and reclaimers; 

—Other Chemical and Allied Products 

Merchant Wholesalers (NAICS code 

424690), including chemical gases 

and compressed gases merchant 

wholesalers; 

—Air-Conditioning and Warm Air 

Heating Equipment and Commercial 

and Industrial Refrigeration 

Equipment Manufacturing entities 

(NAICS code 333415), including airconditioning equipment and 

commercial and industrial 

refrigeration equipment 

manufacturers; 

—Air-Conditioning Equipment and 

Supplies Merchant Wholesalers 

(NAICS code 423730), including airconditioning (condensing unit, 

compressors) merchant wholesalers; 

—Electrical and Electronic Appliance, 

Television, and Radio Set Merchant 

Wholesalers (NAICS code 423620), 

including air-conditioning (room 

units) merchant wholesalers; 

—Plumbing, Heating, and AirConditioning Contractors (NAICS 

code 238220), including Central airconditioning system and commercial 

refrigeration installation, HVACR 

contractors; 

—Refrigerant reclaimers, manufacturers 

of recovery/recycling equipment, and 

refrigerant recovery/recycling 

equipment testing organizations; 

—Fire Extinguisher Chemical 

Preparations Manufacturing (325998); 

Portable Fire Extinguishers 

Manufacturing (339999); Other 

Aircraft Parts and Auxiliary 

Equipment Manufacturing (336413); 

—Surgical Appliance and Supplies 

Manufacturing (339113); Ophthalmic 

goods manufacturing (339115); 

General Medical and Surgical 

Hospitals (622110); Specialty (Except 

Psychiatric and Substance Abuse) 

Hospitals (622310); 

—Entities Performing Solvent Cleaning, 

(including but not necessarily limited 

to NAICS subsector codes 332 and 

335). 

This list is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding the types of 

entities that could potentially be 

regulated by this action. Other types of 

entities not listed in this table could 

also be affected. To determine whether 

your facility, company, business 

organization, or other entity is regulated 

by this action, you should carefully 

examine these regulations. If you have 

questions regarding the applicability of 

this action to a particular entity, consult 

the person listed in the FOR FURTHER

INFORMATION CONTACT section. 

II. Background 

A. How does the Montreal Protocol 

phase out HCFCs? 

The Montreal Protocol on Substances 

that Deplete the Ozone Layer is the 

international agreement aimed at 

reducing and eventually eliminating the 

production and consumption of ozonedepleting substances (ODS). The United 

States was one of the original signatories 

to the 1987 Montreal Protocol and 

ratified the Protocol in 1988. Congress 

then enacted, and President George 

H.W. Bush signed into law, the Clean 

Air Act Amendments of 1990 (CAAA) to 

ensure that the United States could 

satisfy its obligations under the 

Montreal Protocol. Title VI of the Act 

(codified as 42 U.S.C. Chapter 85, 

Subchapter VI), titled Stratospheric 

Ozone Protection, includes restrictions 

on production, consumption, and use of 

ODS that are subject to acceleration if 

‘‘the Montreal Protocol is modified to 

include a schedule to control or reduce 

production, consumption, or use * * * 

more rapidly than the applicable 

schedule’’ prescribed by the statute (see 

Clean Air Act section 606(a)(3)). Both 

the Montreal Protocol and the Clean Air 

Act (CAA) define consumption as 

production plus imports minus exports 

(see CAA section 601(6)). 

In 1990, as part of the London 

Amendment to the Montreal Protocol, 

the Parties identified HCFCs as 

‘‘transitional substances’’ to serve as 

temporary, lower ozone depletion 

potential (ODP) substitutes for 

chlorofluorocarbons (CFCs) and other 

ODS. EPA similarly viewed HCFCs as 

‘‘important interim substitutes that will 

allow for the earliest possible phaseout 

of CFCs and other class I substances.1’’ 

(58 FR 65026, December 10, 1993). In 

1992, through the Copenhagen 

Amendment to the Montreal Protocol, 

the Parties created a detailed phaseout 

schedule for HCFCs, beginning with a 

cap on consumption for developed 

countries not operating under Article 5 

of the Montreal Protocol (non-Article 5 

Parties), a schedule to which the United 

States adheres. The consumption cap for 

each non-Article 5 Party was set at 3.1 

percent (later tightened to 2.8 percent) 

of a Party’s CFC consumption in 1989, 

plus a Party’s consumption of HCFCs in 

1989 (weighted on an ODP basis). Based 

on this formula, the HCFC consumption 

cap for the United States was set at 

15,240 ODP-weighted metric tons, 

effective January 1, 1996. This cap is the 

United States HCFC consumption 

baseline. 

The 1992 Copenhagen Amendment 

created a schedule with graduated 

reductions and eventual phaseout of 

HCFC consumption (Copenhagen, 23–25 

November, 1992, Decision IV/4). The 

schedule for non-Article 5 Parties 

initially called for tighter consumption 

caps based on a Party’s baseline, as 

follows: An annual consumption cap 

equal to 65 percent of baseline in 2004, 

35 percent of baseline in 2010, 10 

percent of baseline in 2015, and 0.5 

percent of baseline in 2020, with a 

complete HCFC phaseout by 2030. 

The Copenhagen Amendment did not 

cap HCFC production. In 1999, the 

Parties created a cap on production for 

non-Article 5 Parties through an 

amendment to the Montreal Protocol 

agreed to at the Eleventh Meeting of the 

Parties (Beijing, 29 November–3 

December 1999, Decision XI/5). The cap 

on production was set at the average of: 

(a) 1989 HCFC production plus 2.8 

percent of 1989 CFC production, and (b) 

1989 HCFC consumption plus 2.8 

percent of 1989 CFC consumption. 

Based on this formula, the HCFC 

production cap for the United States 

was set at 15,537 ODP-weighted metric 

tons (MT), effective January 1, 2004. 

This cap is the United States HCFC 

production baseline. 

To further protect human health and 

the environment, the Parties to the 

Montreal Protocol adjusted the phaseout 

schedule for HCFCs at the 19th Meeting 

of the Parties in September 2007. As a 

result of the Montreal Adjustment 

(reflected in Decision XIX/6),2 the 

United States and other non-Article 5 

parties were obligated to reduce HCFC 

production and consumption to 25 

percent of baseline by 2010, rather than 

35 percent as previously required. The 

other milestones remain the same. The 


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64256 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

3The process for assigning consumption baseline 

percentages works as follows: First, all the 

company-specific baselines listed in the tables at 40 

CFR 82.19 are added to determine the aggregate 

consumption baseline. Second, EPA determines 

how many consumption allowances to allocate for 

a given year and divides that amount by the 

aggregate baseline. The resulting percentage listed 

in the table at section 82.16 becomes what each 

company is allowed to consume in a given control 

period. For example, a company with 100,000 kg of 

HCFC–22 consumption baseline allowances would 

multiply that number by the percentage allowed in 

a given year (for example, 25 percent) to determine 

its calendar-year consumption allowance is 25,000 

kg. EPA uses the same process to determine 

production baseline percentages. 

adjustment also resulted in a phaseout 

schedule for HCFC production that 

parallels the consumption phaseout 

schedule. All production and 

consumption for non-Article 5 Parties 

must be phased out by 2030. 

Decision XIX/6 also adjusted the 

provisions for Parties operating under 

paragraph 1 of Article 5, considered as 

developing countries under the 

Protocol: (1) To set HCFC production 

and consumption baselines based on the 

average 2009–2010 production and 

consumption, respectively; (2) to freeze 

HCFC production and consumption at 

those baselines in 2013; and (3) to add 

stepwise reductions to 90 percent of 

baseline by 2015, 65 percent by 2020, 

32.5 percent by 2025, and an average of 

2.5 percent for 2030–2039. All 

production and consumption for Article 

5 Parties must be phased out by 2040. 

In addition, Decision XIX/6 adjusted 

Article 2F to allow non-Article 5 Parties 

to produce ‘‘up to 10 percent of baseline 

levels’’ for export to Article 5 countries 

‘‘in order to satisfy basic domestic 

needs’’ until 2020. Paragraph 14 of 

Decision XIX/6 notes that no later than 

2015, the Parties would consider 

‘‘further reduction of production for 

basic domestic needs’’ in 2020 and 

beyond. Paragraph 3 of Decision XIX/6 

contains the accelerated phaseout 

schedule, allowing consumption and 

production up to 0.5 percent of baseline 

from 2020–2030 for servicing needs 

only. Pursuant to paragraph 13 of 

Decision XIX/6, the Parties will review 

in 2015 and 2025, respectively, the need 

for the ‘‘servicing tails’’ for Article 5 and 

non-Article 5 countries. EPA uses the 

term ‘‘servicing tail’’ to refer to an 

amount of HCFCs used to service 

existing equipment, such as certain 

types of air-conditioning and 

refrigeration appliances. 

B. How do the Clean Air Act and EPA 

regulations phase out HCFCs? 

The Clean Air Act schedules for the 

phaseout of HCFC production and 

consumption, and for the restriction of 

HCFC use, appear in section 605. EPA 

has used its authority under section 606 

to accelerate those schedules. EPA 

regulations that apply to production and 

consumption of HCFCs are designed to 

enable the United States to meet the 

phaseout schedule under the Montreal 

Protocol. 

The United States has chosen to 

implement the Montreal Protocol 

phaseout schedule on a chemical-bychemical basis. In 1992, environmental 

and industry groups petitioned EPA to 

implement the required phaseout by 

eliminating the HCFCs with the highest 

ozone depletion potential first. Based on 

data available at that time, EPA believed 

the United States could meet, and 

possibly exceed, the required Montreal 

Protocol reductions through a chemicalby-chemical phaseout that employed a 

‘‘worst-first’’ approach. In 1993, as 

authorized by section 606 of the CAA, 

EPA established a phaseout schedule 

that eliminated HCFC–141b first and 

would greatly restrict HCFC–142b and 

HCFC–22 next, followed by restrictions 

on all other HCFCs and ultimately a 

complete phaseout (58 FR 15014, March 

18, 1993, and 58 FR 65018, December 

10, 1993). 

On January 21, 2003, EPA 

promulgated regulations (68 FR 2820, 

January 21, 2003, ‘‘2003–2009 Rule’’) to 

ensure compliance with the first 

reduction milestone in the HCFC 

phaseout: The requirement that by 

January 1, 2004, the United States 

reduce HCFC consumption to 65 

percent of baseline and freeze HCFC 

production. In the 2003–2009 Rule, EPA 

established chemical-specific 

consumption and production baselines 

for HCFC–141b, HCFC–22, and HCFC– 

142b for the initial regulatory period 

ending December 31, 2009. Section 

601(2) states that EPA may select ‘‘a 

representative calendar year’’ to serve as 

the company baseline for HCFCs. In the 

2003–2009 Rule, EPA concluded that 

because the entities eligible for 

allowances had differing production 

and import histories, no single year was 

representative for all companies. 

Therefore, EPA assigned an individual 

consumption baseline year to each 

company by selecting its highest ODPweighted consumption year from 1994 

through 1997. EPA assigned individual 

production baseline years in the same 

manner. EPA also provided for new 

entrants that began importing after 1997 

but before April 5, 1999, the date the 

advanced notice of proposed 

rulemaking (ANPRM) was published. 

EPA took this action to ensure that 

small businesses that might not have 

been aware of the impending 

rulemaking would be able to continue in 

the HCFC market. 

In the United States, an allowance is 

the unit of measure that controls 

production and consumption of ODS. 

EPA allocates calendar-year allowances 

equal to a percentage of the baseline— 

they are valid from January 1 to 

December 31 of that control period. A 

calendar-year allowance represents the 

privilege granted to a company to 

produce or import one kilogram (not 

ODP-weighted) of the specific 

substance. ‘‘Production allowance’’ and 

‘‘consumption allowance’’ are defined at 

40 CFR 82.3. To produce an HCFC for 

which EPA has issued allowances, an 

allowance holder must expend both 

production and consumption 

allowances. To import an HCFC for 

which EPA has issued allowances, an 

allowance holder must expend only 

consumption allowances. An allowance 

holder exporting HCFCs for which it has 

expended consumption allowances may 

request a refund of those consumption 

allowances by submitting proper 

documentation and receiving approval 

from EPA. 

The 2003–2009 Rule set production 

and consumption baselines for the 

2003–2009 regulatory period, using each 

company’s highest ‘‘production year’’ or 

‘‘consumption year.’’ The 2003–2009 

Rule prohibited production and import 

of those HCFCs that were subject to the 

allowance system without the 

appropriate allowances (40 CFR 

82.15(a),(b)). EPA set the maximum 

production and consumption of each 

HCFC by issuing allowances that are 

valid for a single calendar year, equal to 

a certain percentage of each company’s 

baseline.3 It completely phased out the 

production and import of HCFC–141b 

by granting zero percent of baseline for 

production and consumption in the 

table at 40 CFR 82.16. EPA created a 

petition process to allow applicants to 

request small amounts of HCFC–141b 

beyond the phaseout. For production 

and consumption of HCFC–22 and 

HCFC–142b in 2003 through 2009, EPA 

allocated allowances at 100 percent of 

baseline. The complete phaseout of 

HCFC–141b, the allocations for HCFC– 

22 and HCFC–142b, combined with 

projections for consumption of all other 

HCFCs, remained below the 2004 cap of 

65 percent of the United States baseline. 

Since EPA is implementing the 

phaseout on a chemical-by-chemical 

basis, it allocates and tracks production 

and consumption allowances on a 

kilogram basis for each chemical. Upon 

EPA approval, an allowance holder may 

transfer calendar-year allowances of one 

type of HCFC for calendar-year 

allowances of another type of HCFC, 

with transactions weighted according to 

the ODP of the chemicals involved. 


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64257 

4The Clean Air Act provisions that address 

stratospheric ozone protection are codified at 42 

U.S.C. 7671–7671q. 

Pursuant to section 607 of the CAA, 

EPA applies an offset to each HCFC 

transfer by deducting 0.1 percent from 

the transferor’s allowance balance. The 

offset benefits the ozone layer since it 

‘‘results in greater total reductions in the 

production in each year of * * * class 

II substances than would occur in that 

year in the absence of such 

transactions’’ (see CAA section 607(a)). 

The 2003–2009 Rule announced that 

EPA would allocate allowances for the 

2010–2014 regulatory period in a 

subsequent action and that those 

allowances would be lower than for 

2003–2009, consistent with the next 

stepwise reduction for HCFCs under the 

Montreal Protocol. EPA subsequently 

monitored the market to estimate 

servicing needs and market adjustments 

in the use of HCFCs, including HCFCs 

for which EPA had not established 

baselines in the 2003–2009 Rule. In the 

2010–2014 Rule (74 FR 66412, 

December 15, 2009), EPA issued 

production and import allowances for 

HCFC–22, HCFC–142b, and other 

HCFCs not previously included in the 

allowance system, for the 2010–2014 

control periods. 

In the 2010–2014 Rule, EPA estimated 

the need for HCFC–22 during the 2010– 

2014 regulatory period and the 

percentage of that need for which it was 

appropriate to allocate allowances. EPA 

decided that the percentage of the 

estimated need allocated in the form of 

allowances should not remain constant 

from year to year, but rather should 

decline on an annual basis. For 2010, 

EPA allocated HCFC–22 allowances 

equal to 80 percent of the estimated 

need, concluding that reused, recycled, 

and reclaimed material could meet the 

remaining 20 percent. The percentage of 

estimated need for which there was no 

allocation, and that would therefore 

need to be met through recycling and 

reclamation, rose from 20 percent in 

2010 to 29 percent in 2014. The intent 

of this approach was to foster 

reclamation and to ensure that the 

United States could meet the 2015 

stepdown under the Montreal Protocol. 

However, part of the 2010–2014 Rule 

was vacated in an August 27, 2010, 

decision issued by the United States 

Court of Appeals for the District of 

Columbia Circuit (Court) in Arkema v. 

EPA (618 F.3d 1, D.C. Cir. 2010). Certain 

allowance holders affected by the 2010– 

2014 Rule contended that the rule was 

impermissibly retroactive because in 

setting the baselines for the new 

regulatory period, EPA did not take into 

account certain inter-pollutant baseline 

transfers that petitioners had performed 

during the prior regulatory period. 

Accounting for these transfers in the 

2010–2014 Rule and applying the same 

methodology would have resulted in 

different baselines and calendar-year 

allowances for HCFC–22 and HCFC– 

142b. 

The Court agreed with petitioners that 

‘‘the [2010–2014] Final Rule 

unacceptably alters transactions the 

EPA approved under the 2003 Rule,’’ 

(Arkema v. EPA, 618 F.3d at 3). The 

Court vacated the rule in part, ‘‘insofar 

as it operates retroactively,’’ and 

remanded to EPA ‘‘for prompt 

resolution,’’ (618 F.3d at 10). EPA’s 

petition for rehearing was denied on 

January 21, 2011. EPA addressed the 

Court’s partial vacatur as it related to 

2011 in an August 5, 2011, interim final 

rule, ‘‘Protection of Stratospheric 

Ozone: Adjustments to the Allowance 

System for Controlling HCFC 

Production, Import, and Export,’’ (76 FR 

47451, August 5, 2011, ‘‘2011 Interim 

Final Rule’’). In that rule, EPA 

established new baselines that (1) 

credited the 2008 inter-pollutant trades 

at issue in Arkema v. EPA based on the 

Court’s decision; (2) reflected intercompany, single-pollutant baseline 

transfers that occurred since the 2010– 

2014 Rule was signed; (3) allocated 

HCFC–22 and HCFC–142b allowances 

for 2011; (4) clarified EPA’s policy on 

all future inter-pollutant transfers; and 

(5) updated company names. The 

HCFC–22 and HCFC–142b use 

restrictions and the allocation for other 

controlled HCFCs were not affected by 

the partial vacatur. 

To complete its response to the 

Court’s decision, EPA published a final 

rule with the same name on April 3, 

2013, allocating HCFC–142b and HCFC– 

22 allowances for 2012–2014 (78 FR 

20004, ‘‘2012–2014 Rule’’). That rule 

reduced HCFC–22 allowances in 2012– 

2014 by almost 30 percent relative to the 

2010–2014 Rule in order to incentivize 

proper handling and recovery of HCFC– 

22 and encourage transition to non-ODS 

alternatives. 

On December 24, 2013, EPA 

published a proposed rule that would 

issue allowances for HCFC–22, HCFC– 

142b, HCFC–123, and HCFC–124 for the 

2015–2019 regulatory period (78 FR 

78071, ‘‘2015–2019 Proposed Rule’’). 

Today’s action finalizes the HCFC 

allowance allocations for those years 

based on the options presented in the 

2015–2019 Proposed Rule and 

comments submitted to EPA. For more 

information on the history of the HCFC 

phaseout and applicable rulemakings, 

see: http://www.epa.gov/ozone/title6/ 

phaseout/classtwo.html. 

C. What sections of the Clean Air Act 

apply to this rulemaking? 

Several sections of the CAA 4 apply to 

this rulemaking. Section 602 states that 

EPA shall publish an initial list of class 

II substances, which is to include the 

HCFCs specified in the statute as well 

as their isomers. EPA’s listing of class II 

substances appears at appendix B to 40 

CFR part 82, subpart A. 

Section 605 of the CAA phases out 

production and consumption and 

restricts the use of HCFCs in accordance 

with the schedule set forth in that 

section. As discussed in the 2010–2014 

Rule (74 FR 66416), section 606 

provides EPA authority to set a more 

stringent phaseout schedule based on 

(1) current scientific information that a 

more stringent schedule may be 

necessary to protect human health and 

the environment, (2) the availability of 

substitutes, or (3) to conform to any 

acceleration under the Montreal 

Protocol. EPA previously set a more 

stringent schedule than the section 605 

schedule through a rule published 

December 10, 1993 (58 FR 65018). The 

2010–2014 Rule made a further 

adjustment from the section 605 

schedule based on the acceleration 

under the Montreal Protocol as agreed to 

at the Meeting of the Parties in 

September 2007. The more stringent 

schedule established in that rule was 

unaffected by the decision in Arkema v. 

EPA and is still in effect. 

Section 608 of the CAA, titled 

National Recycling and Emission 

Reduction Program, requires EPA to 

establish standards and requirements for 

the use and disposal of class I and class 

II substances. Those requirements must 

reduce the use and emissions of 

controlled substances to the lowest 

achievable level, as well as maximize 

their recapture and recycling. 

Additionally, section 608(c) prohibits 

any person maintaining, servicing, 

repairing, or disposing of an appliance 

that contains refrigerant from knowingly 

venting, releasing, or disposing of that 

substance to the environment, 

regardless of whether the refrigerant is 

an ODS or a substitute. Substitutes are 

exempted from this prohibition only if 

EPA has determined that venting, 

releasing, or disposing of the substitute 

does not pose a threat to the 

environment. The full list of substitutes 

that are exempt from this prohibition 

can be found at 40 CFR section 

82.154(a). 

Section 611 of the CAA requires EPA 

to establish and implement labeling 


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5Throughout this preamble, the term ‘HCFC– 

225ca/cb’ refers to either the HCFC–225ca or 

HCFC–225cb isomers, as well as blends containing 

both isomers. 

requirements for containers of, and 

products containing or manufactured 

with, class I or class II ODS. While 

containers of class II substances 

(HCFCs) already are subject to labeling 

requirements, products containing or 

manufactured with class II substances 

must be labeled beginning January 1, 

2015. The specific requirements and 

existing regulation implementing those 

requirements are discussed in Section 

IV.A. of this preamble. 

Finally, section 614 of the CAA 

describes the relationship of Title VI to 

the Montreal Protocol. Section 614(b) 

states: ‘‘In the case of conflict between 

any provision of this title and any 

provision of the Montreal Protocol, the 

more stringent provision shall govern.’’ 

Section 614 ensures that EPA 

regulations are in accordance with 

United States obligations under the 

Montreal Protocol. 

III. Summary of This Final Action 

This action amends the existing 

regulations to implement the next major 

milestone in the HCFC phaseout. As a 

party to the Montreal Protocol, the 

United States has agreed to decrease 

HCFC consumption and production 

levels to 10 percent of the U.S. baseline 

by 2015. In this rule, EPA is allocating 

HCFC allowances starting at 

approximately five percent of the U.S. 

consumption baseline in 2015, or half of 

the Montreal Protocol cap. 

EPA is issuing allowances for four 

HCFCs, implementing a narrow de 

minimis exemption for use of existing 

inventory of HCFC–225ca/cb 5 and 

HCFC–124, and is updating regulations 

to account for a recent change to the 

Clean Air Act. In addition, EPA is 

making minor changes to the regulations 

promulgated under section 608 of the 

Act. These final agency actions are 

summarized below: 

—HCFC–22: EPA is finalizing the 

lowest proposed 5-year linear approach 

of HCFC–22 consumption allowances. 

The consumption allocation in 2015 is 

approximately 10,000 MT, decreasing 

by approximately 2,000 MT per year 

until it is phased out in 2020. EPA is 

also providing approximately 28,000 

MT of HCFC–22 production allowances 

each year. Under existing regulations, 

HCFC–22 production and consumption 

are zero in 2020. The agency considered 

market information, comments, 

regulatory and statutory requirements 

and its long-standing policy objectives 

as it weighed the merits of the proposed 

approaches. The final consumption 

allocation meets the 2020 phaseout 

deadline, and should help achieve a 

smooth transition to more 

environmentally-friendly alternatives, 

while also providing regulatory 

certainty to consumers and industry. 

—HCFC–123: EPA is finalizing its 

preferred consumption allocation of 

approximately 2,000 MT per year 

through 2019. EPA is also finalizing its 

proposal to align its regulations with the 

recent amendment to CAA section 

605(a) and allow for continued use of 

HCFC–123 in nonresidential streaming 

fire suppression applications. 

—HCFC–124: EPA is finalizing its 

preferred production and consumption 

allocation of 200 MT per year through 

2019. 

—HCFC–142b: EPA is finalizing its 

preferred production and consumption 

allocation of 35 MT in 2015, decreasing 

by 5 MT per year through 2019. Under 

existing regulations HCFC–142b 

allowances for production and 

consumption are zero in 2020. 

—HCFC–225ca/cb: EPA is allocating 

zero percent of the baseline for 

production and consumption of HCFC– 

225ca or HCFC–225cb effective January 

1, 2015. 

—De minimis use exemption: EPA is 

finalizing its proposed de minimis 

exemption allowing any person with 

HCFC–225ca/cb in inventory prior to 

January 1, 2015, to use that material as 

a solvent. EPA is also finalizing a de 

minimis exemption allowing any person 

with HCFC–124 in inventory prior to 

January 1, 2015, to use that material as 

a sterilant for biological indicators. 

—CAA Section 608 Reclamation 

Requirements: EPA is finalizing its 

proposal (1) to require a reclaimer to 

notify EPA when there is a change in 

business management, location, or 

contact information and (2) to require 

disaggregated information for all 

reclaimed refrigerants as part of annual 

reporting to EPA. The agency is not 

finalizing its proposed incorporation by 

reference of AHRI 700–2012 at this time 

due to the ongoing review of the 

standard by ASHRAE and AHRI. 

IV. Clean Air Act Requirements That 

Begin in 2015 

A. What are the existing HCFC product 

labeling requirements at 40 CFR part 82 

subpart E? 

Section 611 of the CAA requires EPA 

to establish and implement labeling 

requirements for containers of, and 

products containing or manufactured 

with, class I or class II ODS. In 1993, 

EPA published regulations on these 

labeling requirements (58 FR 8136, 

February 11, 1993, Labeling Rule), 

codified at 40 CFR part 82 subpart E. 

Currently, these requirements only 

apply to containers containing class I or 

II ODS and products containing or 

manufactured with class I ODS. 

Products containing or manufactured 

with class II substances will be subject 

to these requirements beginning on 

January 1, 2015. 

In 2015, containers containing, 

products containing, and products 

manufactured with a class I or class II 

substance must bear a product label 

stating: ‘‘Warning: Contains [or 

Manufactured with, if applicable] [insert 

name of class I or II substance], a 

substance which harms public health 

and environment by destroying ozone in 

the upper atmosphere’’ (40 CFR 82.106). 

The wording of the label is specified 

verbatim in CAA section 611. 

EPA defines a ‘‘product containing’’ a 

class II substance as a product 

including, but not limited to, containers, 

vessels, or pieces of equipment, that 

physically holds a controlled substance 

at the point of sale to the ultimate 

consumer which remains within the 

product, (40 CFR 82.104). Two 

examples of a ‘‘product containing’’ a 

class II substance that would require a 

label are (1) portable fire extinguishers 

containing an HCFC and (2) appliances 

that incorporate closed-cell foam blown 

with an HCFC. Foams are plastics (such 

as polyurethane or polystyrene) that are 

manufactured using blowing agents to 

create bubbles or cells in the material’s 

structure. Closed-cell foam physically 

holds blowing agent within the cells. 

While HCFCs are no longer used as 

blowing agents in the United States, 

they are used in other countries from 

which the United States may import 

products. In the case of portable fire 

extinguishers, the fire suppression agent 

is contained in a reservoir within the 

extinguisher and released by the user 

when needed. 

The definition of a product 

‘‘manufactured with’’ a class II 

substance is a product for which the 

manufacturer used a class II substance 

directly in that product’s 

manufacturing, but where the product 

itself does not contain more than trace 

quantities of the ODS at the point of 

introduction into interstate commerce. 

A product ‘‘manufactured with’’ a class 

II substance would include electronics 

cleaned with an HCFC solvent or open 

cell foam blown with an HCFC. Open 

cell foam is different from closed cell 

foam in that it was manufactured with 

a blowing agent, but no longer contains 

the blowing agent because the cells or 

bubbles in open cell foam are open to 

the surrounding environment. Since 


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HCFCs are no longer used as foam 

blowing agents in the United States, and 

the Nonessential Products Ban prohibits 

the sale or distribution of open cell 

plastic foam products made with HCFCs 

(40 CFR 82.70(c)), EPA expects the 

requirement for a ‘‘manufactured with’’ 

label should not be relevant to most 

open cell foam products. 

Final products that incorporate 

another product that was 

‘‘manufactured with’’ a class I or class 

II ODS do not have to bear a label so 

long as the manufacturer of the final 

product is distinct from the 

manufacturer of the product 

‘‘manufactured with’’ the ODS (40 CFR 

82.116). By contrast, final products that 

incorporate ‘‘products containing’’ a 

class I or II ODS will require a warning 

label, even if the final product 

manufacturer purchases the ‘‘product 

containing’’ the ODS from another 

manufacturer or supplier (40 CFR 

82.114). 

1. Minor Modifications to Existing 

Regulatory Text 

The agency proposed and is now 

finalizing three minor edits to 40 CFR 

subpart E to clarify the intent of the 

regulatory language with respect to class 

II substances. EPA received no adverse 

comments regarding these minor 

clarifying revisions. 

The first two clarifications are to 

replace ‘‘class I substance’’ with 

‘‘controlled substance.’’ While the 

emphasis in 1993 was on class I 

substances, EPA is now removing any 

ambiguity with respect to class II 

substances by reconciling inconsistent 

terminology, specifically at 82.110(c) 

and 82.112(d). The text of 40 CFR 

82.110(c) clearly applies to both class I 

and class II products, so EPA is revising 

the title of this paragraph to make it 

consistent with the existing operative 

text. 

Similarly, 82.112(d) includes the 

more general term ‘‘controlled 

substances’’ in the title, but not the 

existing operative text. Through today’s 

action, EPA is replacing ‘‘class I 

substance’’ with ‘‘controlled substance’’ 

to clarify that this narrow exemption to 

the labeling requirements also applies to 

class II products in the same way it 

applied to class I products. 

Third, EPA proposed to correct a 

citation in 82.122(a)(1). The first 

sentence incorrectly refers to 

82.106(b)(2) as the exemption for certain 

methyl chloroform uses; this exemption 

is actually provided for in 82.106(b)(4). 

EPA is revising the text to reference the 

correct paragraph. EPA also notes that 

this exemption ended May 15, 1994. 

2. Comments on the Existing Labeling 

Requirements and EPA’s Response 

EPA created a preliminary list of 

products that might be affected by these 

requirements in 2015. This list, along 

with guidance for manufacturers and 

importers of potentially affected 

products, is titled Summary of HCFC 

Product Labeling Requirements & 

Potentially Affected Products (Labeling 

Memo) and can be found in the docket 

for this rulemaking. EPA sought 

comment on whether this list is accurate 

and complete, and where products 

made with or containing HCFCs are 

manufactured. The agency sought 

comment on which products have 

mainly switched to non-ODS 

alternatives so it can continue to assist 

companies in determining whether the 

labeling requirements are likely to apply 

to their products. The agency also 

sought comment on whether any 

clarification to the regulations at 40 CFR 

subpart E (82.100–82.124) is needed to 

implement the existing labeling 

requirement for products containing or 

manufactured with class II substances. 

EPA received five comments regarding 

the existing labeling requirements 

implementing CAA section 611(c), 

specifically on the effectiveness and 

applicability of such requirements. 

RMS of Georgia commented that the 

labeling requirements will not be an 

effective way to increase awareness and 

ensure compliance because EPA does 

not have an enforcement arm to handle 

complaints. The Alliance does not think 

the labeling requirements are beneficial, 

and encourages EPA to focus its 

enforcement efforts towards compliance 

with regulations promulgated under 

CAA section 608 (40 CFR subpart F). 

The Alliance also commented that it 

believes the list of products included in 

the docket is complete, and it does not 

support additional labeling of products. 

In contrast, Carrier commented that EPA 

should revise the labeling requirements 

to apply to dry-shipped HCFC–123 

chillers and residential air conditioning 

condensing units, not just products 

containing or manufactured with 

HCFCs. American Pacific (AMPAC) 

believes fire extinguishers containing 

HCFC–123 should not be subject to 

labeling because the ODP of HCFC–123 

is very low and it is used as a 

replacement to Halon 1211, which has 

a very high ODP. The commenter also 

noted that the list of products 

potentially subject to this requirement 

does include the HCFC Blend B 

nonresidential fire suppressant that it 

has manufactured since 1994. 

The agency appreciates comments on 

the effectiveness of the labeling 

requirements. EPA takes enforcement of 

its regulations seriously, and notes that 

the comment that the agency ‘‘does not 

have an enforcement arm to handle 

complaints’’ is inaccurate. EPA has also 

made an effort to focus its outreach 

toward the industries most likely to be 

affected by the HCFC product labeling 

requirement. Applicability of this CAA 

requirement is to all class II products, 

which includes all products that contain 

or are manufactured with HCFC–123. 

The labeling requirements for ‘‘products 

containing’’ or ‘‘products manufactured 

with’’ class II substances in CAA section 

611(c) apply January 1, 2015, without 

any action by the Administrator. The 

commenter asking for an exemption for 

HCFC-containing fire extinguishers did 

not explain how EPA could create an 

exemption, given that such products are 

clearly ‘‘products containing’’ class II 

substances. Similarly, the commenter 

requesting an extension of the labeling 

requirements did not explain how or 

under what authority EPA could extend 

those requirements to equipment that 

does not contain an HCFC when 

introduced into interstate commerce. In 

addition, EPA did not propose to take 

any such actions. 

Finally, Honeywell commented on 

labeling requirements for closed cell 

polyurethane insulated refrigerated 

trailers and containers where the foam 

was blown with HCFC–141b. Honeywell 

suggests that EPA require, or at least 

offer guidance stating, that the warning 

label be applied to transactional 

paperwork as well as the actual trailer, 

container, or panels containing the 

HCFC-blown foam. 

To the extent that these HCFC–141b 

trailers or containers are imported into 

the U.S. (and therefore introduced into 

interstate commerce), they would 

require a label. The existing labeling 

requirements allow flexibility in where 

the label may be placed, including on 

the bill of lading, supplemental printed 

material, or promotional printed 

material (see 40 CFR 82.108). However, 

the label must be placed where the 

person purchasing the HCFC-containing 

product (or product manufactured with 

HCFCs) is likely to read and understand 

the warning statement before 

purchasing the product. In the preamble 

to the rule that implemented the 

statutory labeling requirements (58 FR 

8136, February 11, 1993), EPA 

explained that ‘‘the warning statement 

may appear on a display panel other 

than the [principal display panel] as 

long as that label can be readily seen 

and understood by the consumer at the 

time of purchase,’’ (58 FR 8152). EPA 

continues to communicate with and 

offer guidance to companies that must 


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6The fourth exception in this list is a recent 

change to the Clean Air Act, which was included 

in the National Defense Authorization Act for Fiscal 

Year 2012 [112th Congress, H.R. 1540, Title III, 

Section 320, Fire Suppression Agents]. 

7EPA also accelerated the restrictions for HCFC– 

141b in the same rulemaking; however, HCFC–141b 

is not discussed further in this section because it 

is not used for refrigeration purposes. 

determine whether the HCFC labeling 

requirements apply to their products. 

More background on the labeling 

requirements, including a discussion of 

the labeling pass-through requirements, 

can be found in the 1993 Labeling Rule. 

B. What actions is EPA taking regarding 

the use and sales restriction in Clean Air 

Act section 605(a)? 

Starting January 1, 2015, section 

605(a) of the Clean Air Act prohibits the 

use or introduction into interstate 

commerce of any class II substance that 

does not meet one of four exceptions. 

Specifically, use or introduction into 

interstate commerce is allowed only if 

(1) the substance has been used, 

recovered and recycled; (2) it is entirely 

transformed, except for trace quantities, 

in the production of other chemicals; (3) 

it is used as a refrigerant in appliances 

manufactured prior to 2020; or (4) it is 

listed as acceptable for use as a 

nonresidential fire suppression agent in 

accordance with CAA section 612(c).6

Section 612 is the statutory authority for 

EPA’s Significant New Alternatives 

Policy (SNAP) program, under which 

the agency reviews information on the 

human health and environmental 

impacts of substitutes for class I and 

class II substances in certain end-uses 

and lists those substitutes as acceptable, 

acceptable subject to use conditions, 

acceptable subject to narrowed use 

limits, or unacceptable (see 40 CFR 

subpart G). 

In the 2010–2014 Rule (74 FR 66412), 

EPA used its authority under section 

606 to accelerate the section 605(a) 

restrictions on use and introduction into 

interstate commerce for HCFC–22 and 

HCFC–142b 7 to January 1, 2010, five 

years earlier than the date specified in 

section 605(a). Effective January 1, 2010, 

EPA prohibited the use of virgin HCFC– 

22 and HCFC–142b to manufacture or 

service new air-conditioning and 

refrigeration appliances. In a separate 

rule, under the authority provided in 

section 615 of the CAA, EPA also 

prohibited the sale and distribution of 

appliances and appliance components 

pre-charged with either virgin or used, 

recovered, and recycled HCFC–22 and 

HCFC–142b (74 FR 66450). For all other 

HCFCs, including those for which EPA 

has not historically issued allowances, 

the CAA section 605(a) prohibitions and 

exceptions apply as of January 1, 2015. 

All HCFCs other than HCFC–22 and 

HCFC–142b may continue to be used 

and sold as refrigerants, but only for use 

in appliances manufactured before 

2020. 

EPA believes the term ‘‘use’’ is 

ambiguous in the context of section 

605(a) with respect to potential 

categories of use that Congress did not 

directly address. Historically, in the 

context of section 605, EPA has focused 

on use of refrigerants to manufacture 

and service appliances and the section 

605(a)(3) exception for servicing 

existing equipment. In 1993, EPA took 

the section 605(a) use restrictions into 

account in establishing the HCFC 

chemical-by-chemical phaseout. The 

1993 Proposed Rule (58 FR 15014, 

March 18, 1993) discusses the 

acceleration of the use restriction for 

HCFC–22 and HCFC–142b from the 

standpoint of when it would be 

technologically feasible to end the use 

of these two chemicals in new 

refrigeration and air-conditioning 

equipment. In that rulemaking, EPA did 

not explore how to interpret or apply 

the term ‘‘use’’ in other circumstances. 

EPA considered various interpretations 

of that term in developing the 2010– 

2014 Rule but again focused on 

refrigerants. In the 2008 Proposed Rule 

(73 FR 78680, December 23, 2008), EPA 

noted that the three statutory exceptions 

that existed at that time ‘‘inform EPA’s 

understanding of the term ‘use’ ’’ (73 FR 

78698). The preamble to the 2010–2014 

Rule states: ‘‘With regard to HCFCs used 

as refrigerants, EPA interprets the term 

‘use’ to mean initially charging as well 

as maintaining and servicing 

refrigeration equipment’’ (74 FR 66437). 

In regard to non-refrigerant uses, EPA 

addressed two manufacturing uses of 

HCFC–22 (manufacture of sterilant 

blends for medical equipment and 

manufacture of thermostatic expansion 

valves); EPA also concluded that section 

605(a) would ban the primary pre-2010 

use of HCFC–142b (foam-blowing). At 

that time, however, EPA was not yet 

implementing section 605(a) with 

respect to other HCFCs and did not fully 

explore what ‘‘use’’ might mean in the 

context of non-refrigerants. 

In the development of the 2010–2014 

Rule, EPA did consider whether section 

605(a) applies to the operation of 

products containing HCFCs. With regard 

to refrigeration equipment, EPA 

concluded: ‘‘the section 605(a) ‘use’ ban 

does not apply to a consumer’s 

operation of equipment containing 

HCFCs’’ (74 FR 66438). The agency’s 

conclusion was partially based on the 

third exemption to 605(a), for class II 

substances that are used as refrigerants 

in appliances manufactured before a 

specified date. This exemption 

indicated ‘‘that Congress intended to 

permit the continued use of previously 

manufactured appliances.’’ EPA also 

stated that for ‘‘products containing 

HCFCs for non-refrigerant uses. . . . 

EPA interprets the term ‘use’ as relating 

to the manufacture (and where 

applicable, the service) of those 

products, not the utilization of those 

products in the hands of the end user’’ 

(74 FR 66437). 

EPA is not revisiting its interpretation 

of section 605(a) with respect to how it 

interprets ‘‘use’’ for products containing 

HCFCs. For purposes of implementing 

the 2015 use restriction in section 

605(a), ‘‘use’’ of a controlled substance 

includes the manufacture of products 

that contain or are made with HCFCs; 

however, it would not include use of 

existing products containing HCFCs. 

(Products that contain class II controlled 

substances other than HCFC–22, HCFC– 

142b and HCFC–141b may still be 

manufactured before January 1, 2015). 

As EPA explains in the preamble to the 

2010–2014 Rule, EPA interprets section 

605(a) as prohibiting the use of 

substances, not the use of products. The 

statutory language does not directly 

address whether use of a product 

containing controlled substances might 

constitute a prohibited use of the 

substance. However, consistent with its 

earlier statements, EPA does not treat 

the use of a product containing HCFCs 

as use of the HCFC. 

The agency has a long history of 

distinguishing between products and 

substances in its ODS phaseout 

regulations. The definition of controlled 

substances in 40 CFR part 82 subpart A 

excludes any such substance or mixture 

that is in a manufactured product other 

than a container used for the 

transportation or storage of the 

substance or mixture. EPA distinguishes 

between bulk containers of HCFCs and 

products containing HCFCs. The 

subpart A definition of controlled 

substance clarifies that if a substance 

needs to be transferred from a bulk 

container to a piece of equipment or 

another container to realize its intended 

use, it will be treated as a ‘‘substance.’’ 

Examples of bulk containers include 

jugs, drums, and cylinders. 

EPA refers readers to the preamble of 

the 2010–2014 Rule for two other 

clarifications on how EPA interprets the 

term ‘‘use’’ in the context of section 

605(a). First, the agency clarified how 

the Nonessential Products Ban (CAA 

section 610) and the HCFC use 

restriction (CAA section 605(a)) should 

be interpreted together: ‘‘By prohibiting 

use and introduction into interstate 


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8Since the section 605(a) prohibition only limits 

the use of virgin or unused HCFC–225ca/cb solvent, 

used, recovered, and recycled solvent can still be 

used for precision cleaning and manufacturing 

products after January 1, 2015. 

commerce of HCFCs as bulk substances, 

section 605(a) effectively prohibits the 

continued manufacture of any products 

containing HCFCs (which qualifies as a 

type of ‘use’) unless specifically 

exempted in that section.’’ EPA 

explained that while the section 610(a) 

Nonessential Products Ban exempts 

certain products, these exempted 

products may not be manufactured after 

2014 due to the HCFC use restrictions 

in section 605(a). EPA clarified that 

‘‘such products are prohibited from 

continued manufacture, unless 

manufactured with recovered HCFCs’’ 

(74 FR 66439). Second, in the preamble 

to the 2010–2014 Rule the agency 

clarified that ‘‘EPA does not interpret 

‘use’ [in the context of section 605] to 

include destruction, recovery for 

disposal, discharge consistent with all 

other regulatory requirements, or other 

similar actions where the substance is 

part of a disposal chain’’ (74 FR 66439). 

Because the use prohibition will 

apply to a variety of sectors and 

circumstances beginning in 2015, EPA 

believes it may be helpful to define 

‘‘use’’ in the phaseout regulations (40 

CFR part 82 subpart A). There is 

currently a definition of ‘‘use’’ in the 

regulations for the SNAP program (40 

CFR part 82 subpart G), under which 

‘‘use’’ means any use of a substitute for 

a class I or class II substance, including 

but not limited to, use in a 

manufacturing process or product, in 

consumption by the end-user, or in 

intermediate uses, such as formulation 

or packaging for other subsequent uses 

(40 CFR 82.172). EPA proposed a related 

definition for purposes of the section 

605(a) use prohibition. Under this 

proposed definition, use of a class II 

controlled substance, for the purposes of 

section 82.15, would include use in a 

manufacturing process, use in 

manufacturing a product, intermediate 

uses such as formulation or packaging 

for other subsequent uses, and use in 

maintaining, servicing, or repairing an 

appliance or other piece of equipment. 

It would also include use of that 

controlled substance when it is removed 

from a storage or transportation vessel. 

However, the definition of ‘‘use’’ would 

not include use of a manufactured 

product containing a controlled 

substance. The primary difference 

between the proposed definition under 

section 605(a) and the SNAP 

regulations’ definition is that the SNAP 

definition includes use by the consumer 

of a product containing ODS. This 

difference reflects EPA’s interpretation 

of the section 605(a) use restriction as 

set forth in the preamble to the 2010– 

2014 Rule. 

EPA received three comments on its 

proposed definition of ‘‘use.’’ Two 

commenters support adopting a formal 

definition as proposed. One commenter 

opposes EPA’s interpretation, 

particularly as it relates to the proposed 

HCFC–225ca/cb exemption for existing 

inventory. The commenter in opposition 

provides no justification for their 

opposition to EPA’s definition of use, so 

EPA believes this comment is in fact a 

comment in opposition to the de 

minimis exemption for existing 

inventory of HCFC–225ca/cb, which is 

discussed in the following section 

(IV.B.1). In light of the comments 

received, EPA is finalizing its proposed 

definition of ‘‘use’’ at 40 CFR 82.3. 

1. Treatment of Existing Inventory of 

HCFC–225ca and HCFC–225cb for 

Solvent Uses 

Numerous stakeholders have asked 

what they will be able to do with 

inventory of HCFC–225ca, HCFC–225cb, 

and mixtures thereof (abbreviated as 

‘‘HCFC–225ca/cb’’ for the remainder of 

the preamble) that exists as of January 

1, 2015. To EPA’s knowledge, HCFC– 

225ca/cb is used only as a solvent, 

primarily for precision cleaning in the 

aerospace and electronics industries. As 

explained above, the section 605(a) use 

ban does not apply to the use of 

products that contain class II controlled 

substances. However, some substances, 

including HCFC–225ca/cb, may be used 

directly to clean equipment or to 

manufacture a product without first 

being put into a manufactured product 

themselves. For example, a person may 

take HCFC–225ca/cb from a bulk 

container, in a mixture or neat, and 

either add it to a vapor degreaser or 

pour it on a hand wipe to clean a piece 

of equipment. In those circumstances, 

the substance itself—not a product 

containing the substance—is being used. 

This differs from the use of products 

that contain HCFC–225ca/cb, such as 

aerosol cans or pre-soaked wipes. In 

general, EPA proposed to interpret the 

section 605(a) use ban to apply to use 

when the substance is removed from a 

container used for transportation or 

storage. The agency did not receive any 

adverse comment on EPA’s proposed 

interpretation and is therefore finalizing 

this interpretation. 

However, EPA believes the use of 

HCFC–225ca/cb entered into inventory 

prior to January 1, 2015, by persons that 

use these substances as solvents may 

fairly be considered de minimis. Thus, 

for reasons discussed below, the agency 

is finalizing its proposed de minimis 

exemption to the use prohibition in 

section 605(a), which allows any person 

with HCFC–225ca/cb in inventory prior 

to January 1, 2015, to use that material 

as a solvent.8 ‘‘Person’’ is defined in 40 

CFR 82.3 to include corporations and 

Federal agencies, as well as their 

employees and agents. Agents include 

contractors and subcontractors, as well 

as other entities performing a service or 

task on behalf of the corporation or 

Federal agency. One of those tasks could 

be storing and/or using HCFC–225ca/cb 

that was in existing inventory prior to 

January 1, 2015. 

EPA did not propose an exemption to 

the prohibition on introduction into 

interstate commerce, nor did it propose 

to change the existing regulatory 

phaseout date for production and 

import of HCFC–225ca/cb. Effective 

January 1, 2015, a person holding 

HCFC–225ca/cb in inventory may not 

transfer or sell it to another person 

(unless for destruction), nor is EPA 

issuing any allowances to produce or 

import new HCFC–225ca/cb. 

Additionally, neither companies that 

manufacture products for their own use, 

nor companies that manufacture 

products for sale to others are allowed 

to manufacture products containing 

virgin HCFC–225ca/cb, as that is a 

prohibited use of the substance. A 

person may sell any products containing 

HCFC–225ca/cb that had been 

manufactured and entered into initial 

inventory prior to January 1, 2015, since 

at that point they would be ‘‘products’’ 

and not ‘‘class II controlled substances.’’ 

A product is considered to be a part of 

‘‘initial inventory’’ at the point where 

the original product has completed its 

manufacturing process and is ready for 

sale by the product manufacturer. For 

more discussion of EPA’s interpretation 

of the term ‘‘initial inventory,’’ see the 

1993 Nonessential Products Ban. Also, 

for purposes of section 605(a), 

manufacturers may continue to use 

HCFC–225ca/cb to make both products 

‘‘manufactured with’’ and products 

‘‘containing’’ HCFC–225ca/cb as of 

January 1, 2015, so long as the HCFC– 

225ca/cb has been used, recovered and 

recycled. Labeling requirements for 

these products manufactured with 

either virgin or used, recovered, and 

recycled HCFC–225ca/cb will apply 

beginning January 1, 2015 (see Section 

IV.A. of this preamble). Manufacturers 

should also ensure that they are in 

compliance with the Nonessential 

Products Ban and with SNAP 

regulations. 

EPA received seven comments on its 

proposed de minimis exemption to the 


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64262 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

9 In Sierra Club v. EPA, 705 F.3d 458 (D.C. Cir. 

2013), the DC Circuit held that EPA had no de 

minimis authority to create an exemption from the 

preconstruction monitoring requirement in 

§ 165(e)(2) of the CAA. ‘‘Whether we call 

preconstruction monitoring a ‘plain requirement’ or 

a requirement mandated by an ‘extraordinarily 

rigid’ statute, the result is the same: The EPA has 

no de minimis authority to exempt the 

requirement.’’ Id. at 468. 

use restriction in section 605(a) for 

entities that use HCFC–225ca/cb as 

solvents and have HCFC–225ca/cb in 

their inventory prior to January 1, 2015. 

Six commenters supported the 

exemption because it would provide 

valuable flexibility while they evaluate 

and qualify alternatives that can satisfy 

specialized applications. Charles Stark 

Draper Laboratory (CSDL) and AGC 

Chemicals both note that EPA has 

adequate authority in the CAA to issue 

this exemption. Three commenters also 

noted that the exemption would help 

industry avoid costs associated with 

disposing of HCFC–225ca/cb already 

held in inventory. 

One commenter, AGC Chemicals, 

stated that EPA should clarify that 

‘‘owners’’ of HCFC–225ca/cb can use 

their inventory in any of their affiliated 

organizations, allowing transfer among 

facilities in different locations. In the 

preceding text describing the 

exemption, EPA has attempted to clarify 

that the term ‘‘person’’ applies to 

subcontractors and other agents working 

on the person’s behalf. Transferring a 

chemical between different facilities of 

the same person within the United 

States would be allowed by this 

exemption. 

Another commenter supports EPA’s 

proposed de minimis exemption for 

HCFC–225ca/cb inventory prior to 

January 1, 2015, because at that point 

the inventory would be a product and 

not a class II controlled substances. EPA 

would like to clarify that bulk HCFC– 

225ca/cb produced or imported before 

2015 is not a product. As explained in 

this section, bulk HCFC–225ca/cb in 

existing inventory is still a controlled 

class II substance. As such, EPA is 

providing an exemption to the use 

prohibition for class II controlled 

substances and is not reclassifying 

HCFC–225ca/cb as a product merely 

because time has passed. 

One commenter, NRDC, opposes the 

exemption and believes that section 

605(a) is intended to be interpreted 

strictly. According to NRDC, justifying 

the de minimis argument based on the 

limited quantities of this chemical in 

use is inappropriate and unjustified. 

NRDC further asserts that EPA’s 

statutory interpretation has the potential 

to cause harm in future years of the 

phaseout if small amounts of a chemical 

were made available for ‘‘as long as 

needed’’ and that such an exemption 

would be contrary to the goals of Title 

VI of the Clean Air Act and the Montreal 

Protocol. 

As explained in the proposal and in 

this rule, EPA is not allowing for new 

production or new import of virgin 

HCFC–225ca/cb, but only for the 

continued use of a small amount of 

material that was previously produced 

and/or imported using the appropriate 

allowances prior to 2015. The 

production and consumption allocation 

for HCFC–225ca/cb is zero starting in 

2015. EPA sees the de minimis 

exemption as consistent with how EPA 

has treated other ODS, and with the 

goals of Title VI. For example, 

production and consumption of CFCs 

were phased out in 1996, yet amounts 

in inventory continued to be used. 

Additionally, there will still be 

continued use of HCFC–22 after EPA 

phases out production and import of 

HCFC–22 in 2020. In general, the term 

‘‘phaseout’’ applies to the decrease and 

eventual elimination of production and 

import of a virgin substance, not to the 

use of a particular substance. While 

section 605(a) limits the use of virgin 

HCFCs starting in 2015, use of class I 

substances and certain uses of particular 

class II substances will continue 

without undermining the overarching 

goals of CAA Title VI. 

As stated in the proposed rule, EPA 

believes it has implied authority to 

create a de minimis exemption from the 

section 605(a) use restriction. The 

United States Court of Appeals for the 

District of Columbia Circuit has 

recognized that ‘‘[u]nless Congress has 

been extraordinarily rigid, there is likely 

a basis for an implication of de minimis 

authority to provide exemption when 

the burdens of regulation yield a gain of 

trivial or no value.’’ Alabama Power Co. 

v. Costle, 636 F.2d 323, 360–61 (D.C. 

Cir. 1980). In Alabama Power, the Court 

held that ‘‘[c]ategorical exemptions from 

statutory commands may . . . be 

permissible as an exercise of agency 

power, inherent in most statutory 

schemes, to overlook circumstances that 

in context may fairly be considered de 

minimis. It is commonplace, of course, 

that the law does not concern itself with 

trifling matters, and this principle has 

often found application in the 

administrative context. Courts should be 

reluctant to apply the literal terms of a 

statute to mandate pointless 

expenditures of effort.’’ Id. (internal 

citations omitted). 

In an earlier case cited by the court in 

Alabama Power, the court described the 

doctrine as follows: ‘‘The ‘de minimis’ 

doctrine that was developed to prevent 

trivial items from draining the time of 

the courts has room for sound 

application to administration by the 

Government of its regulatory programs 

. . . The ability, which we describe 

here, to exempt de minimis situations 

from a statutory command is not an 

ability to depart from the statute, but 

rather a tool to be used in implementing 

the legislative design.’’ District of 

Columbia v. Orleans, 406 F.2d 957, 959 

(1968). 

In this respect, the Alabama Power 

opinion observed in a footnote that the 

de minimis principle ‘‘is a cousin of the 

doctrine that, notwithstanding the ‘plain 

meaning’ of a statute, a court must look 

beyond the words to the purpose of the 

act where its literal terms lead to 

‘absurd or futile results.’ ’’ Id. at 360 n. 

89 (citations omitted). To apply an 

exclusion based on the de minimis 

doctrine, ‘‘the agency will bear the 

burden of making the required 

showing’’ that a matter is truly de 

minimis which naturally will turn on 

the assessment of particular 

circumstances. Id. The Alabama Power 

opinion concluded that ‘‘most 

regulatory statutes, including the CAA, 

permit such agency showings in 

appropriate cases.’’ Id. 

A notable limitation on the use of the 

de minimis doctrine is that it does not 

authorize the agency to exclude 

something on the basis of a cost-benefit 

analysis. As the court explained, this 

‘‘implied authority is not available for a 

situation where the regulatory function 

does provide benefits, in the sense of 

furthering the regulatory objectives, but 

the agency concludes that the 

acknowledged benefits are exceeded by 

the costs.’’ Id. The court held that any 

‘‘implied authority to make cost-benefit 

decisions must be based not on a 

general doctrine but on a fair reading of 

the specific statute, its aims and 

legislative history.’’ Id. 

Several courts have recognized de 

minimis exceptions (1) so long as they 

are not contrary to the express terms of 

the statute 9 and (2) the agency’s 

interpretation of the exception is a 

permissible reading of the statute. See 

e.g., Ober v. Whitman, 243 F.3d 1190 

(9th Cir. 2001); see also Ohio v. EPA, 

997 F.2d 1520 (D.C. Cir. 1993). 

A de minimis exemption is 

permissible in this situation for several 

reasons. First, section 605(a) is not 

extraordinarily rigid. Second, the use 

prohibition in section 605(a) is 

ambiguous with respect to potential 

categories of use that Congress did not 

directly address. Third, banning the use 

of HCFC solvent inventory held by the 

end-user would not advance the 

statutory purpose of Title VI of the 


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64263 

10Through rulemakings, EPA accelerated the 

statutory deadlines in sections 604 and 605, in 

accordance with the requirements in section 606. 

See 57 FR 3354 and 58 FR 65013. 

11For example, all CFCs have an ODP of 0.6 or 

greater, with most having an ODP of 1.0, whereas 

the HCFC with the highest ODP is HCFC–141b, 

which has an ODP of 0.11. 

12 ‘‘The centerpiece of the stratospheric ozone 

protection program established by this title is the 

phaseout of production and consumption of all 

ozone depleting substances.’’ Clean Air Act 

Amendments—Conference Report (Senate—October 

27, 1990) (136 Cong. Rec. S16946). 

Clean Air Act. These arguments are 

discussed in more detail in the 

following paragraphs. 

The purpose of Title VI of the Clean 

Air Act, as its title suggests, is 

stratospheric ozone protection. Title VI 

can be categorized into three principal 

areas: The phaseout of production and 

import of ozone depleting substances 

(sections 602–607); reduction in 

emissions of these substances via 

various means such as required 

servicing practices, restrictions on sale 

and distribution of products, and 

consumer education (sections 608–611); 

and the transition to alternatives that 

reduce overall risk to human health and 

the environment compared to other 

alternatives (section 612). 

Section 605 specifically addresses the 

phaseout of production and 

consumption of class II controlled 

substances. Section 604 applies to the 

phaseout of production and 

consumption of class I substances. 

There are notable differences between 

the two phaseouts. The phaseout under 

section 604 works much more quickly 

than the phaseout under section 605. In 

addition, the section 604 phaseout 

applies much earlier than the section 

605 phaseout. Section 604 required the 

first reductions in class I substances in 

1992, followed by a series of stepdowns 

culminating in the complete phaseout of 

nearly all class I substances by 2000. For 

class II substances, section 605 freezes 

production and consumption in 2015, 

with the complete phaseout not 

occurring until 2030.10 Two principal 

factors drive the distinction in phaseout 

schedules. First, class I substances have 

much higher ODPs relative to class II 

substances.11 Second, class II 

substances were recognized as and often 

developed expressly to be important 

transitional chemicals, beneficial in 

phasing out class I substances as quickly 

as possible. During the development of 

the 1990 Clean Air Act Amendments, 

Congress heard testimony on the need to 

phase out HCFCs as well as class I 

substances. Senator Chaffee 

acknowledged that ‘‘one difficulty, 

however, is the fact that achieving the 

goal of eliminating the potent long-lived 

CFCs as rapidly as possible is, to some 

extent, dependent on the continued 

availability of HCFCs as intermediate 

substitutes pending development of 

other, safe, non-ozone depleting 

substances or processes.’’ (A Legislative 

History of the Clean Air Act 

Amendments of 1990, volume 1, p. 5210 

(Senate debate)). 

It is clear that Congress’ intent was to 

phase out production and import of 

class I substances ‘‘as rapidly as 

possible,’’ and certainly more rapidly 

than class II substances given the 

difference in the start and duration of 

the two phaseout schedules; however, 

nowhere in section 604 does Congress 

restrict the use of class I substances. 

Instead, Congress phases out the 

production and import for domestic use, 

and allows for certain exemptions to the 

phaseout for specific uses (see, e.g., 

section 604 (f) and (g).) Given the 

comparable titles of sections 604 and 

605 and the overarching goal of phasing 

out both class I and class II ODS,12

Congress likely intended that the ‘‘use’’ 

restriction, which is unique to section 

605, should be interpreted in a manner 

that furthers the phaseout of production 

and import of HCFCs while recognizing 

the role of HCFCs as transitional 

substances. 

Congress’ overall approach to the 

class II phaseout is generally less rigid 

than its approach to the class I 

phaseout, considering the longer 

timeframes and the presence of only one 

intermediate reduction step (see section 

605(b)). Given this context, EPA does 

not view section 605(a) as 

‘‘extraordinarily rigid.’’ In addition, 

section 605(a) provides an explicit 

exception for class II substances that 

have been ‘‘used, recovered, and 

recycled.’’ Thus, Congress clearly did 

not envision that all HCFC use in 

applications not specifically exempted 

would come to a halt by 2015. Indeed, 

end-users of HCFC–225ca/cb could avail 

themselves of this exception by putting 

their entire existing inventory of HCFC– 

225ca/cb into their equipment before 

January 1, 2015. For example, an enduser could use its entire inventory of 

virgin HCFC–225ca/cb in its vapor 

degreaser, recover the HCFC–225ca/cb 

from the degreaser, and then recycle it 

for reuse in 2015 and beyond. In other 

instances, an end-user could take virgin 

HCFC–225ca/cb, apply it to a surface via 

the typical application method such that 

the surface is cleaned as intended, at 

which point any recovered HCFC– 

225ca/cb would be rendered ‘‘used.’’ 

EPA does not wish to encourage this 

approach to meeting section 605(a) 

requirements, which would do nothing 

to advance the statutory purpose of 

stratospheric ozone protection. Rather 

than insist on an inflexible reading of 

the statute that may create ‘‘absurd or 

futile results,’’ EPA believes the better 

option is to allow end-users to continue 

to use virgin HCFC–225ca/cb inventory 

that was manufactured and is in their 

possession prior to 2015. 

EPA views section 605(a) as 

ambiguous with respect to potential 

categories of use that Congress did not 

explicitly address. Section 605(a) 

explicitly addresses refrigerant uses of 

HCFCs but is silent with respect to 

solvents. At the time the 1990 Clean Air 

Act Amendments were written, HCFCs 

were used predominantly as refrigerants 

and much consideration was given to 

this use in the legislative history. HCFC 

solvent uses, on the other hand, were 

not considered by Congress in the 

context of the class II phaseout, because 

they did not exist. At that time, two 

class I substances, CFC–113 and methyl 

chloroform, were used as solvents. Far 

from expecting an early transition, 

Congress allowed production and 

import of methyl chloroform until 2002, 

two years after the phaseout date for 

most class I substances. In addition, in 

section 604(d)(1), Congress specifically 

allowed for limited exemptions to the 

production and import phaseout for 

methyl chloroform for ‘‘use in essential 

applications.’’ It was not until 1995 that 

the SNAP program listed HCFC–225ca/ 

cb as acceptable subject to use 

conditions in electronics cleaning and 

precision cleaning (see 60 FR 31092, 

June 13, 1995). HCFC–225ca/cb was 

listed as acceptable in metals cleaning 

as recently as 2002 (see 67 FR 77927, 

December 20, 2002). In all three of these 

end-uses, HCFC–225ca/cb, which has an 

ODP of 0.025/0.033, is a substitute for 

CFC–113 and methyl chloroform, which 

have ODPs of 0.8 and 0.1, respectively. 

While HCFC–225ca/cb solvents have 

acted since 1995 as transitional 

substances between class I ODS and 

non-ODS substitutes for certain niche 

needs, there is no evidence that 

Congress anticipated in 1990 that any 

HCFCs would be used as solvents. Thus, 

Congress did not have the opportunity 

to consider whether to apply the section 

605(a) use restriction to HCFC–225ca/cb 

solvents. 

EPA does not believe that it would 

advance the goals of Title VI to prohibit 

persons that use HCFC–225ca/cb as a 

solvent to clean their equipment or to 

clean components of products they 

manufacture—resulting in products 

‘‘manufactured with’’ these HCFCs— 

from using their existing inventory of 

HCFC–225ca/cb. As discussed above, 

any person could avoid such a 


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64264 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

13According to www.iso.org, ISO 9001:2008 

‘‘specifies requirements for a quality management 

system where an organization needs to demonstrate 

its ability to consistently provide product that 

meets customer and applicable statutory and 

regulatory requirements, and aims to enhance 

customer satisfaction through the effective 

application of the system, including processes for 

continual improvement of the system and the 

assurance of conformity to customer and applicable 

statutory and regulatory requirements.’’ 

prohibition by rendering all their 

inventory ‘‘used’’ in advance of the 

effective date. From the perspective of 

potential ozone destruction, there is 

little or no difference in this instance 

whether the person uses de minimis 

quantities already on site at the end of 

2014 or after January 1, 2015. 

EPA believes a de minimis exemption 

is appropriate for the reasons provided, 

and also because the quantities involved 

are extremely limited. This is a small 

niche use and EPA is only proposing to 

exempt HCFC–225ca/cb held in 

inventory by persons that use these 

substances as a solvent. Allowances act 

as a ceiling on the quantities that can be 

produced or imported and thus 

comprise pre-2015 inventory. The 

annual allocation of allowances for 

HCFC–225ca/cb from 2010–2014 has 

been only 20.7 ODP-weighted MT per 

year. Recent data showing HCFC–225ca/ 

cb consumption has been substantially 

less than the allocation, further 

decreasing the absolute maximum 

amount that could remain in inventories 

as of 2015, when production and import 

are prohibited. 

EPA also considered its past use of de 

minimis authority under Title VI of the 

Clean Air Act. The agency is modeling 

this exemption to section 605(a) on the 

de minimis exemption to the 

Nonessential Products Ban for class II 

substances (CAA section 610(c) and (d)). 

In the 1993 Nonessential Products Rule, 

EPA exempted products manufactured 

with or containing HCFCs from the ban 

if they were placed in initial inventory 

by December 27, 1993, which was 90 

days after the proposed rule published 

and four days prior to the statutory ban 

on sale and distribution in interstate 

commerce (58 FR 50464, September 27, 

1993 and 58 FR 69638, December 30, 

1993). EPA adopted this narrow 

‘‘grandfather’’ exception for existing 

inventories based on a de minimis 

rationale: ‘‘The crux of EPA’s reasoning 

for providing any exemption for existing 

inventories was that emissions from 

products already in existence were de 

minimis’’ (58 FR 69660). EPA believes 

that emissions from pre-2015 existing 

inventories of HCFC–225ca/cb would 

also be de minimis. 

As discussed, EPA believes it has 

sufficient authority to adopt a de 

minimis exemption to the section 605(a) 

use prohibition for use of HCFC–225ca/ 

cb held in inventory by persons using 

these substances as solvents. EPA has 

also considered policy aspects of an 

exemption. In the 1993 Nonessential 

Products Rule, EPA identified various 

reasons for exempting existing 

inventory. One policy goal was to 

relieve a potentially onerous burden on 

small businesses because, absent a sell 

through provision, existing inventories 

would otherwise have to be liquidated 

(or in the case of the section 605(a) use 

restriction, intentionally used, 

recovered, and recycled prior to the 

effective date of the prohibition). 

Another important consideration is 

that the nature of precision cleaning is 

such that the group of affected entities 

is small, but their needs are very 

specific. Those needs often include 

minimal to zero flammability as well as 

excellent solvency properties. If those 

needs are not met, human safety can be 

jeopardized. Prior to the proposal, EPA 

had heard from several entities that use 

HCFC–225ca/cb as solvents for cleaning 

existing equipment or for cleaning 

surfaces that are part of a newlyproduced product that still have not 

found a suitable alternative to HCFC– 

225ca/cb. In some instances, they need 

more time to test alternatives to ensure 

that the chosen replacement has 

acceptable solvency, flammability, and 

usability characteristics. Also, in some 

areas of the United States, a number of 

Federal, state, and local regulations 

affect the choice of solvents. In 

particular, areas that do not meet the 

national ambient air quality standard for 

ground-level ozone may regulate 

solvents that are volatile organic 

compounds (VOCs) to reduce emissions 

that contribute to the formation of smog. 

HCFC–225ca and HCFC–225cb are 

exempt from the definition of VOC 

under CAA regulations (see 40 CFR 

51.100(s)) addressing the development 

of State Implementation Plans (SIPs) to 

attain and maintain the national 

ambient air quality standards. Only a 

few SNAP-listed alternatives to HCFC– 

225ca/cb are exempt from the definition 

of VOC (e.g., trans-1-chloro-3,3,3- 

trifluoroprop-1-ene). 

After taking into account public 

comments, as well as the legal and 

policy considerations above, EPA is 

finalizing its proposed de minimis 

exemption to the use restriction in CAA 

section 605(a) for entities that use 

HCFC–225ca/cb as solvents and that 

have HCFC–225ca/cb in their inventory 

prior to January 1, 2015. The exemption 

will appear at 40 CFR 82.15(g). The 

exemption does not pertain to 

manufacturers of products containing 

HCFC–225ca/cb, such as technical 

aerosol solvents, or to producers and 

importers of HCFC–225ca/cb. Any 

aerosol solvent product manufactured 

prior to January 1, 2015, could be sold 

and used after that date, since an aerosol 

spray can is a product, not a controlled 

substance. However, manufacture of the 

product or HCFC blends used in those 

products would be considered use of a 

controlled substance, and would be 

prohibited after January 1, 2015, unless 

the HCFC were used, recovered, and 

recycled. 

2. Treatment of Existing Inventory of 

HCFC–124 for Sterilant Uses 

In the proposed rule, EPA also sought 

comment on whether there are other 

small, niche uses of HCFCs that 

Congress may not have contemplated in 

the 1990 CAA Amendments and for 

which a prohibition on continued use of 

existing inventory would yield trivial or 

no benefits in light of the statutory 

purpose. In the proposal, the agency 

stated that it might consider extending 

the proposed exemption to other such 

niche uses in the final rule. 

EPA received one comment from 

Mesa Labs, requesting continued use of 

HCFC–124 already held in inventory as 

a sterilant for the manufacture and 

testing of biological indicators (BIs). BIs 

contain biological spores and are used 

in the pharmaceutical, medical device 

and healthcare markets to monitor 

sterilization cycles. In this case, the 

commenter manufactures BIs for use in 

monitoring ethylene oxide (EtO) 

sterilization cycles. Two sources of EtO 

currently available for use are 100 

percent EtO and a blend called Oxyfume 

2000 (which consists of 8.6 percent EtO 

and 91.4 percent HCFC–124). The 

commenter requests an exemption to the 

section 605(a) HCFC use restriction for 

their HCFC–124 inventory for the 

specific reasons listed below: 

(1) BIs in the commenter’s stability 

program may need to be tested for up to 

two years after the production date of 

the BI (i.e. up until the expiration date). 

This is a regulatory compliance issue 

connected to the FDA and ISO 

9001:2008 standards.13 Since initial 

resistance assessment of these BIs was 

conducted using the Oxyfume 2000 

blend gas, the commenter cannot obtain 

relevant comparison data if subsequent 

testing is performed using 100 percent 

EtO as the source gas. Transitioning to 

a non-HCFC sterilant would affect the 

commenter’s ability to comply with the 

ISO standards as well as FDA 

expectations. 


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64265 

14According to www.iso.org, ISO 11138–2:2006 

‘‘provides specific requirements for test organisms, 

suspensions, inoculated carriers, biological 

indicators and test methods intended for use in 

assessing the performance of sterilizers and 

sterilization processes employing ethylene oxide 

gas as the sterilizing agent, either as pure ethylene 

oxide gas or mixtures of this gas with diluent gases, 

at sterilizing temperatures within the range of 29 °C 

to 65 °C.’’ 

(2) According to the ISO 11138–2 

standard,14 the minimum acceptable 

resistance for a BI used for EtO 

monitoring is 2.5 minutes. This is 

achievable using the Oxyfume blend but 

not achievable using the 100 percent 

EtO source. The ISO 11138–2 standard 

has not yet been changed to reflect this 

difference. Therefore, the commenter 

would not be able to comply with the 

ISO resistance requirements using 100 

percent EtO, which would affect the 

medical industry’s ability to source 

suitable BIs. 

(3) The manufacturer of Oxyfume 

2000 has stopped producing the 

material and will no longer accept 

unused material for destruction. 

(4) The company’s existing supplies 

of Oxyfume 2000 are small (300–400 

pounds) and will last for up to 2 years. 

The commenter also stated that they 

are active on the Association for the 

Advancement of Medical 

Instrumentation (AAMI) BI Working 

Group. Efforts are underway to change 

the ISO 11138–2 standard to reflect 

appropriate resistance values associated 

with the use of 100 percent EtO as the 

sterilants source gas. However, changes 

to the ISO standard will likely take 18– 

24 months. 

Prior to the December 2013 proposal, 

EPA spoke with the domestic 

manufacturer of Oxyfume 2000 and also 

with representatives from the Ethylene 

Oxide Sterilization Association (EOSA). 

Through these conversations, the agency 

confirmed that the medical sterilant 

industry was aware of the upcoming use 

prohibition and that sterilant users were 

in the process of, or had already 

transitioned to, non-ODS sterilants. 

However, EPA appreciates that the 

standards for the minimum acceptable 

resistance for a BI used for EtO 

monitoring are currently being revised 

and that revision may take up to two 

years to complete. Due to strict 

requirements for BI testing, it may not 

be feasible for BI manufacturers to 

transition to a non-ODS sterilant before 

January 1, 2015. Therefore, in 

developing this final rule, EPA 

considered whether to create a de 

minimis exemption for this use similar 

to the exemption being finalized for use 

of HCFC 225ca/cb. EPA believes a de 

minimis exemption for use of HCFC– 

124/EtO sterilant blends in existing 

inventory is permissible for several 

reasons. First, as described above, 

section 605(a) is not extraordinarily 

rigid. Second, as discussed, the use 

prohibition in section 605(a) is 

ambiguous with respect to potential 

categories of use that Congress did not 

directly address. There is no mention of 

sterilant uses of HCFCs in section 

605(a). It is unlikely that Congress 

considered sterilant uses of HCFCs in 

developing the 1990 CAA Amendments. 

Estimates indicate that in 1989, CFC– 

12/EtO was used for over 95 percent of 

all sterilization in hospitals (59 FR 

13044). HCFC–124 containing sterilants 

were listed as acceptable by SNAP in 

the March 1994 rule establishing the 

SNAP program (59 FR 13044), several 

years after the 1990 CAA Amendments. 

Following that action, use of an HCFC– 

124/EtO blend largely replaced 

sterilization with a CFC–12/EtO blend. 

Third, banning the use of HCFC sterilant 

inventory held by the end-user would 

not advance the statutory purpose as 

companies could render the material 

‘‘used’’ prior to the 2015 use 

prohibition, and then be able to utilize 

the ‘‘used’’ material in 2015 and 

beyond. 

Additionally, the quantities of HCFC– 

124 that are being exempted are 

extremely limited. This is a small niche 

use and EPA is only exempting HCFC– 

124 held in inventory prior to January 

1, 2015. Allowances act as a ceiling on 

the quantities that can be produced or 

imported and thus comprise pre-2015 

inventory. The annual allocation of 

allowances for HCFC–124 from 2010– 

2014 has been 66 ODP-weighted MT per 

year. Recent data showing HCFC–124 

consumption has been less than the full 

allocation, further decreasing the 

absolute maximum amount that could 

remain in inventories as of 2015, when 

production and import are prohibited. 

Honeywell, the manufacture of the 

Oxyfume 2000 HCFC–124 sterilant 

blend, stopped producing this product 

as of November 1, 2013. The company 

also encouraged their customers to ship 

back unused material and has a Web site 

dedicated to informing customers about 

the use restriction that takes effect on 

January 1, 2015 (see http://

www.honeywell-sterilants.com/

questions-and-answers/ or the PDF in 

the docket). It is likely that the 

remaining HCFC–124 inventory is very 

small, and is held by end-users with 

niche sterilization needs (e.g. testing the 

efficacy of BIs). 

For the reasons discussed above, EPA 

is including in this final rule a limited 

use exemption for sterilants containing 

HCFC–124. EPA is not creating an 

exemption to the prohibition on 

introduction into interstate commerce. 

Similarly, EPA is not changing the 

existing regulatory phaseout date for 

production and import of HCFC–124 for 

use as a sterilant, nor is EPA issuing any 

allowances to produce or import new 

HCFC–124 for use as a sterilant. 

Effective January 1, 2015, a person 

holding HCFC–124 in inventory may 

not transfer or sell HCFC–124 to another 

person (unless for destruction or for use 

as a refrigerant). EPA is creating a de 

minimis exemption to the use restriction 

in CAA section 605(a) for entities that 

use HCFC–124 as a sterilant for 

manufacture and testing of biological 

indicators and that have HCFC–124 in 

their inventory prior to January 1, 2015. 

The exemption will appear at 40 CFR 

82.15(g). The exemption does not 

pertain to manufacturers of products 

containing HCFC–124 (e.g., aerosol 

spray cans); however, a product 

manufactured prior to January 1, 2015, 

could be sold and used after that date, 

since an aerosol spray can is a product, 

not a controlled substance. 

3. Update to Regulations To Account for 

Recent Changes to Section 605(a) 

In the National Defense Authorization 

Act (NDAA) for fiscal year 2012, 

Congress amended section 605(a) of the 

Clean Air Act to allow for continued use 

and introduction into interstate 

commerce of a class II substance that ‘‘is 

listed as acceptable for use as a fire 

suppression agent for nonresidential 

applications in accordance with section 

612(c).’’ 

Section 612 of the Clean Air Act 

requires EPA to develop a program for 

evaluating alternatives to ozonedepleting substances. EPA refers to this 

program as the Significant New 

Alternatives Policy (SNAP) program. 

Section 612(c) requires EPA to publish 

a list of the substitutes unacceptable for 

specific uses and to publish a 

corresponding list of substitutes 

acceptable for specific uses. The list of 

acceptable substitutes is found at 

www.epa.gov/ozone/snap/lists, and the 

lists of ‘‘unacceptable,’’ ‘‘acceptable 

subject to use conditions,’’ and 

‘‘acceptable subject to narrowed use 

limits’’ substitutes are found in the 

appendices to subpart G of 40 CFR part 

82. 

HCFC–123, HCFC–124, and several 

blends containing an HCFC are 

currently listed as acceptable and 

acceptable subject to narrowed use 

limits as fire suppression agents, where 

the use limit restricts use to only 

nonresidential fire suppression. EPA 

assumes that Congress intended the 

statutory phrase ‘‘listed as acceptable for 

use’’ to include HCFCs listed as 


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15EPA intended to use parallel language for 

production and import of HCFCs for fire 

suppression in § 82.16(d) but inadvertently omitted 

the phrase ‘‘listed as acceptable for use or 

acceptable subject to narrowed use limits’’ from the 

clause regarding imports. EPA is correcting this 

omission in the final rule. 

acceptable and acceptable subject to 

narrowed use limits. In light of the 2012 

statutory revision, EPA proposed to 

update its regulations for use and 

introduction into interstate commerce of 

HCFCs (82.15(g)), as well as the 

regulations governing production and 

import (82.16). Specifically, the agency 

proposed amending 82.15(g)(4) to allow 

for use and introduction into interstate 

commerce of any class II controlled 

substance not governed by the 

acceleration of the use prohibition to 

2010, when used as a fire suppression 

streaming agent listed as acceptable for 

use or acceptable subject to narrowed 

use limits for nonresidential 

applications. EPA believes this addition 

is necessary and appropriate, given 

Congress’ addition to section 605(a). 

Though section 605(a) pertains only 

to use and introduction into interstate 

commerce, EPA believes that allowing 

for continued HCFC production and 

import for nonresidential fire 

suppression uses is in accordance with 

Congressional intent. Section 605 does 

not establish a production phaseout date 

for any specific HCFC. EPA previously 

used its discretion to establish a 

regulatory phaseout date, which the 

agency is modifying in this action. This 

change has minimal effect on the overall 

allocation since the primary HCFC used 

for fire suppression, HCFC–123, has a 

low ODP, and the quantities used for 

fire suppression are small relative to the 

other uses of HCFCs. 

In large part, the regulatory phaseout 

date for HCFCs used in fire suppression 

was driven by the section 605(a) 

limitations on use and introduction into 

interstate commerce of class II 

controlled substances, to which 

Congress has now created an exception. 

Therefore, EPA also proposed to amend 

82.16(d), by allowing for HCFC 

production and import in the 2015– 

2019 regulatory period for use in 

nonresidential streaming fire 

suppression applications. To give 

practical effect to this proposed change, 

EPA proposed allocating consumption 

allowances for HCFC–123 for use as 

both a refrigerant and as a fire 

suppression agent. As discussed in 

section VI.D. of this preamble, EPA is 

finalizing its proposal to allocate the 

maximum allowed amount of HCFC– 

123 consumption allowances under 

section 605(b). This is 100 percent of the 

HCFC–123 baseline, which is still less 

than three percent of the Montreal 

Protocol cap for 2015–2019. 

EPA is allowing production and 

import for fire suppression purposes for 

the 2015–2019 regulatory period only. 

Beginning January 1, 2020, Article 2F of 

the Montreal Protocol limits United 

States production and import of HCFCs 

to use only in servicing and repair of 

existing refrigeration and air 

conditioning equipment. Under section 

614(b), where either the Montreal 

Protocol or Title VI is more stringent, 

the more stringent provision governs. To 

reflect this Montreal Protocol time 

limitation, EPA proposed adding 

language to 82.16(e) indicating the 

purposes for which production and 

import may continue in 2020 and 

beyond. Fire suppression was not 

included on the list. 

The agency received three comments 

regarding its plans to update regulations 

to account for recent changes to section 

605(a), all of which agreed with EPA’s 

rationale and language regarding 

continued use of HCFCs as a fire 

suppression agent. One fire suppressant 

manufacturer, AMPAC, commented that 

the word ‘‘streaming’’ should be deleted 

from the proposed changes to section 

82.15(g)(4) and 82.16(d), on the ground 

that limiting the exemption to streaming 

agents only is inconsistent with 

legislative intent and what is stated in 

section 320 of the 2012 NDAA. 

EPA recognizes that the language 

included in section 320 of the 2012 

NDAA is broader than the regulatory 

language proposed. In particular, the 

2012 NDAA does not provide any 

guidance on whether Congress intended 

to exempt only those applications in 

which HCFCs are currently used. EPA 

proposed language that was limited to 

streaming applications to reflect its 

understanding that current use of 

HCFCs in fire suppression is limited to 

streaming applications. The agency 

sought comment on whether HCFCs 

were used for other nonresidential fire 

suppression applications, such as total 

flooding. EPA did not receive any 

comments that would counter its 

understanding that current use of 

HCFCs in fire suppression is limited to 

streaming applications. Therefore, the 

agency is not including total flooding 

applications and is finalizing its 

changes to 40 CFR 82.15(g)(4), 

82.16(d),15 and 82. 16(e)(2) as proposed. 

C. Which Montreal protocol 

requirements take effect in 2015 and 

2020? 

As discussed in section II.A. of this 

preamble, the United States has agreed 

under the Montreal Protocol to limit 

consumption and production of HCFCs 

by January 1, 2015, to no more than 10 

percent of its Montreal Protocol 

baseline. Starting in 2015, the United 

States cap on consumption will be 1,524 

ODP-weighted MT and the cap on 

production will be 1,553.7 ODPweighted MT. By January 1, 2020, the 

United States is required to limit 

consumption and production of HCFCs 

to 0.5 percent of baseline. As required 

under sections 606(a) and 614(b) of the 

Clean Air Act, EPA phaseout regulations 

reflect the Montreal Protocol schedule 

for phasing out HCFCs, including the 

2015 and 2020 stepdowns. In 

developing and finalizing the HCFC 

allocation schedule for 2015–2019, the 

agency bore in mind that as of January 

1, 2020, the consumption and 

production caps will be approximately 

76 and 77.5 ODP-weighted MT, 

respectively. Also, as of January 1, 2020, 

Article 2F of the Protocol limits United 

States production and consumption of 

HCFCs to servicing needs for 

refrigeration and air conditioning 

equipment. In addition, CAA section 

605(a) limits the use of virgin HCFCs as 

of January 1, 2015, to use as a refrigerant 

in equipment manufactured prior to 

2020, and use as a nonresidential fire 

suppressant. EPA regulations also 

prohibit the production and import of 

virgin HCFC–22 or HCFC–142b for 

refrigeration uses as of January 1, 2020 

(see 40 CFR 82.16(e)). The 2015 and 

2020 milestones in the Montreal 

Protocol and the Clean Air Act provide 

a framework within which EPA 

proposed, and is now finalizing, the 

HCFC allocations for 2015–2019. 

V. HCFC Baselines for 2015–2019 

EPA proposed to keep the postArkema historical baselines in the 

December 2013 proposal (as adjusted to 

reflect subsequent name changes and 

inter-company baseline allowance 

transfers), for the 2015–2019 regulatory 

period. The baselines for production 

and consumption of the seven HCFCs 

for which EPA has allocated allowances 

can be found at 40 CFR 82.17 and 82.19, 

respectively. Through today’s final rule, 

EPA is finalizing those same baselines 

for 2015–2019 for all HCFCs subject to 

the allocation system. More information 

on the HCFC baseline system and the 

Arkema lawsuit is found in section II.B. 

of this preamble. 

EPA received six comments on how it 

would determine baselines for 2015– 

2019 regulatory period, all in support of 

maintaining the existing baseline 

system. National, the Alliance, Combs 

Investment Properties, Arkema, 

Honeywell, and AMPAC all support (or 

in the case of AMPAC, do not object to) 

EPA’s proposal to maintain existing 


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16The Clean Air Act defines appliance as ‘‘any 

device which contains and uses a class I or class 

II substance as a refrigerant and which is used for 

household or commercial purposes, including any 

air conditioner, refrigerator, chiller or freezer.’’ 

17EPA accelerated the 605(a) use restrictions for 

HCFC–22 and HCFC–142b in the 2010–2014 Rule. 

Consequently, HCFC–22, HCFC–142b, and blends 

containing either can only be used as a refrigerant 

in appliances manufactured before January 1, 2010, 

not 2020. Additionally, the Clean Air Act allows 

use and introduction into interstate commerce of 

virgin HCFCs for use in transformation, but since 

this use does not require consumption or 

production allowances, it is not discussed in this 

section. 

18Article 5 allowances allow a company with an 

HCFC baseline to produce that HCFC only for 

export to Article 5 Parties under the Montreal 

Protocol. See 40 CFR 82.18(a). 

19 Global warming potential is a measure of the 

total energy that a gas absorbs over a particular 

period of time (usually 100 years), compared to 

carbon dioxide. 

baselines. Several commenters reference 

the certainty and stability that 

maintaining the current system would 

provide, or the confusion that new 

baselines would cause, and agree with 

EPA that altering baselines would not 

provide environmental benefit. One 

commenter explicitly referenced EPA’s 

statements that revised baselines would 

not affect the overall, aggregate 

allocation since it is the percentage of 

baseline issued—not the aggregate 

baseline itself—that determines the 

allowed amount of production and 

import in a given year. AMPAC states 

that it supports establishment of 

baselines such that only actively 

consuming companies receive baseline 

allowances and it supports reallocating 

any allowances proportionately from 

non-active companies to those that are 

still using allowances. 

Since EPA proposed to maintain the 

current baseline system, and 

commenters were supportive of the 

proposal, the agency is finalizing the 

same baselines it used in the 2012–2014 

Rule. In response to AMPAC’s 

comments, the agency believes that 

reallocating baselines, especially this far 

into the phaseout of HCFCs, would 

cause uncertainty and confusion. As 

discussed above, altering baselines 

would not provide environmental 

benefit. In addition, changing baselines 

for 2015–2019 could interfere with the 

agency’s longstanding goal of an orderly 

transition out of HCFCs. Since baseline 

allowances are tradable, there is 

flexibility within the current system to 

allow companies to grow or shrink their 

activity in the market. The agency’s 

consideration of updated baselines and 

its reasons for not proposing to revise 

baselines are discussed in more detail in 

the proposed rule (78 FR 78083). 

VI. HCFC Allowance Allocation 

Amounts for 2015–2019 

Section 605(a) of the Clean Air Act 

limits the use of newly-produced (i.e. 

virgin) HCFCs beginning January 1, 

2015. Under the statute, the uses of 

virgin HCFCs are limited to use as a 

refrigerant in appliances 16

manufactured prior to 2020 (EPA 

accelerated this manufacturing date to 

2010 for HCFC–22 and HCFC–142b) 17

and as a nonresidential fire suppressant, 

if listed as acceptable under SNAP for 

this end-use. HCFC–22 and HCFC–123 

are both used as refrigerants, and thus 

EPA is issuing allowances for these 

chemicals. EPA is also issuing 

consumption and production 

allowances for HCFC–142b and HCFC– 

124, since both are listed as acceptable 

for certain refrigerant end-uses and 

limited, albeit decreasing, demand for 

refrigerant blends containing these 

HCFCs continues. 

EPA is not issuing allowances for 

HCFC–225ca or HCFC–225cb because 

neither is used as a refrigerant nor as a 

fire suppressant, though the agency is 

finalizing a narrow de minimis 

exemption for the use of existing 

inventory of HCFC–225ca, HCFC–225cb, 

or a mixture of the two isomers (HCFC– 

225ca/cb) in specialty precision 

cleaning needs. EPA is also adopting a 

narrow de minimis exemption for the 

use of inventory of sterilants containing 

HCFC–124. Both of these exemptions 

are discussed at section IV.B. of this 

preamble. 

Use of HCFC–141b was banned 

effective January 1, 2010 (see 

82.15(g)(1),(3)), with limited exceptions. 

In addition, the exemption from the 

class II phaseout that allows for HCFC– 

141b exemption allowances does not 

continue beyond 2014 (see 40 CFR 

82.16(b),(d)). The agency is finalizing its 

proposal to remove 40 CFR 82.16(h), 

which described the petition 

requirements for receiving HCFC–141b 

exemption allowances. EPA did not 

receive any adverse comments on 

removing this regulatory language. 

As stated in the proposal and in 

accordance with 40 CFR 82.18(a)(2) and 

(3), EPA is issuing Article 5 

allowances 18 for 2015–2019 to each 

company with a production baseline for 

any HCFC. The allocation is equal to 10 

percent of the company’s production 

baseline for that HCFC, regardless of 

whether production or consumption 

allowances are issued for that HCFC in 

2015–2019. 

The final HCFC allowance allocations 

discussed in the following sections were 

developed with consideration of many 

factors, including: Production, import, 

and use restrictions in the CAA and 

Montreal Protocol; current HCFC uses 

and trends, including inventory trends 

for HCFC–22; historic allowance use; 

the expected availability of recovered 

and reused material; servicing need 

projections in EPA’s 2013 Servicing Tail 

Report; comments received on the 

proposed rule; the availability of 

alternatives for each HCFC in each enduse; and proposed EPA action through 

the SNAP program regarding higherglobal warming potential 19 (GWP) 

alternatives. In the case of HCFC–22 and 

HCFC–142b, EPA also considered the 

fact that under long-standing 

regulations, production and import of 

these two HCFCs must be phased out by 

January 1, 2020. 

The agency released its HCFC 

servicing need projections (i.e., 

estimates of HCFC use) and other data 

supporting its proposed allocations for 

2015–2019 in the 2013 Servicing Tail 

Report on HCFC market needs with the 

proposed rule in December 2013. The 

agency made several revisions to the 

HCFC–123 fire suppression sections of 

the report and released the revised 

report with the Notice of Data 

Availability published April 7, 2014 (79 

FR 19077). With this final action, the 

agency is releasing the updated 2014 

Servicing Tail Report, which reflects 

data and certain comments received 

during the public comment period. Both 

the 2013 and 2014 versions of the 

Servicing Tail Report are found in the 

docket for this rulemaking. 

A. What is the 2015–2019 HCFC–22 

consumption allocation? 

1. Summary of Final HCFC–22 

Consumption Allocation 

In developing the proposed rule, EPA 

considered three options for 

determining the quantity of HCFC–22 

consumption allowances to allocate. 

Each involved a declining allocation 

from year to year. The overarching goal 

of all of the proposed approaches was to 

meet servicing needs and encourage a 

smooth transition away from HCFC–22, 

while meeting the Clean Air Act and 

Montreal Protocol phaseout 

requirements. Under the linear 

approach (Option 1), which was EPA’s 

preferred approach, the agency 

proposed to decrease the allocation by 

the same amount each year, such that 

there is a linear decrease in allowances 

from 2015 through 2019, ending at zero 

in 2020. 

Within Option 1, EPA’s preferred 

starting point in the proposal was 

approximately 13,700 MT, but the 

agency also proposed to start at 16,700 

MT or 10,000 MT—each with consistent 


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annual decreases in allocation, ending 

at zero in 2020. EPA based the preferred 

starting point of 13,700 MT on a linear 

decrease from the lowest allocation 

previously proposed for 2014 (see 78 FR 

78072). The higher starting point of 

16,700 MT was based on the 2014 

allocation, prior to the addition of 

approximately 3,000 MT of recoupment 

allowances (20,100 MT), and the lower 

proposed starting point of 10,000 MT 

was approximately half of the 2014 prerecoupment allocation. 

For each starting point within this 

linear five-year approach, EPA 

considered information concerning the 

HCFC–22 market in 2012 and 2013, 

particularly (1) changes in inventory, (2) 

the availability of recycled and 

reclaimed HCFC–22, (3) recent sales of 

HCFC–22 alternatives, and (4) 

allowance expenditure in recent years. 

Under Option 2, EPA proposed a 

three-year linear approach, where 

consumption would be zero in 2018 

instead of 2020. The proposed starting 

points in 2015 were 12,300 MT or 

15,000 MT. 

Under Option 3, EPA proposed to 

estimate servicing need as published in 

the 2013 Servicing Tail Report, and then 

make adjustments to account for 

estimated recovery and reuse and for 

inventory, much like it did in the 2010– 

2014 and 2012–2014 Rules. Under the 

estimation approach, the maximum 

starting allocation in 2015 would be 

23,100 MT, but with a wide range of 

possible allocations in each year, 

including 2015. Under the estimation 

approach EPA proposed to ‘‘account for 

up to 10,000 MT of inventory each 

year.’’ Since the estimation approach is 

predicated on modeled servicing need, 

it has a significantly higher starting 

allocation than either of the linear 

approaches (Options 1 and 2). This is 

why EPA specifically proposed to 

account for existing inventory, whereas 

the linear approaches inherently 

account for inventory, given their lower 

starting points relative to past 

allocations and projected need. 

For the reasons discussed in the 

remainder of this section of the 

preamble, EPA is finalizing an HCFC–22 

consumption allocation that starts at 

approximately 10,000 MT in 2015 (7.0% 

of baseline), and decreases by 

approximately 2,000 MT each year, such 

that the allocation in 2020 is zero. This 

is the lowest proposed variant of EPA’s 

preferred five-year linear approach 

(Option 1). EPA is revising the table at 

82.16(a) to reflect the percentage of 

consumption allowance baseline issued 

in each year from 2015–2019. 

2. EPA’s Collection, Consideration and 

Use of Aggregate HCFC–22 Inventory 

Data 

On August 8, 2013, EPA sent requests 

to nine companies asking for each 

company’s year-end inventory of HCFC– 

22 from 2008–2012. Under section 

114(a) of the Clean Air Act, EPA has the 

authority to ask any person who is 

subject to any requirement of the Act to 

establish and maintain such records, 

make such reports, and provide such 

other information as the Administrator 

may reasonably require. These nine 

companies included HCFC–22 

producers, importers, distributors, and 

reclaimers; some are large allowance 

holders and others are not. The group 

has a significant role in the HCFC–22 

market, and because they are different 

types of entities, data from these 

companies provide information on how 

much HCFC–22 might be in the supply 

chain. In collecting inventory data, EPA 

did not intend to determine exactly how 

much inventory or ‘‘stockpiled gas’’ 

exists, but to understand the general 

scale of inventory and trends in the 

growth or decrease in inventory as 

HCFC–22 allowance allocations 

changed. 

2008 through 2012 aggregate 

inventory data from these nine entities 

was fully available to EPA before the 

proposed rule was signed and EPA 

considered these data in development of 

the proposed rule. Aggregate data was 

subsequently placed in the docket as 

explained below. Aggregate inventory as 

of December 31, 2011, was 

approximately 62,000 MT. At the end of 

2012, inventory had decreased by 17.5 

percent (approximately 10,000 MT) to 

just over 51,000 MT. 

Prior to signature of the proposal, on 

November 23, 2013, NRDC filed a FOIA 

request for the aggregate inventory data; 

however, the agency did not 

immediately release the data with the 

proposed rule or in response to the 

FOIA request because two responding 

companies had claimed the aggregate 

data as confidential business 

information (CBI). Per EPA’s regulations 

at 40 CFR Part 2 Subpart B, when the 

agency desires to determine whether 

business information in its possession is 

entitled to confidential treatment, or 

when the agency learns that it is 

responsible for responding to a FOIA 

request for the information, it must first 

determine which businesses, if any, 

have asserted claims of business 

confidentiality and generally must 

provide the affected businesses an 

opportunity to comment. The agency 

subsequently issues a final 

administrative determination of whether 

the business information is entitled to 

confidential treatment. If the agency 

determines that the information is not 

entitled to confidential treatment, it 

provides notice to the affected 

businesses, stating that the agency will 

make the information available to the 

public on the tenth business day after 

the business’ receipt of the written 

notice unless the business commences 

an action in federal court for judicial 

review of the determination and to 

obtain a preliminary injunction against 

disclosure. 

The agency followed these procedures 

with respect to the inventory data and 

on February 18, 2014, EPA issued a final 

determination that the aggregate 

inventory data are not entitled to 

confidential treatment. After notifying 

the two companies of its intent to 

release the aggregate data and waiting 

the required 10 business days before 

releasing the data, EPA made the 2008– 

2012 inventory data public on its Web 

site and responded to the FOIA 

submitted by NRDC. EPA sent a second 

letter under the authority of section 114 

of the Clean Air Act to the same nine 

entities on February 27, 2014, 

requesting each company’s HCFC–22 

inventory as of December 31, 2013. No 

company claimed the aggregate 

inventory data for 2013 as CBI. 

Aggregate inventory at the end of 2013 

was approximately 54,000 MT, an 

increase of 5.4 percent over 2012 

inventory. 

EPA posted the 2008–2012 aggregate 

inventory data on the agency’s Web site 

at http://www.epa.gov/ozone/title6/

phaseout/classtwo.html and notified 

stakeholders via email on March 10, 

2014. EPA posted the 2013 aggregate 

inventory data on the agency’s Web site 

and notified stakeholders via email on 

March 27, 2014. In addition, the agency 

formally announced the availability of 

these data on April 7, 2014, in a Notice 

of Data Availability (NODA). The 

aggregate HCFC–22 inventory data 

(2008–2013 HCFC–22 Aggregate 

Inventory Data) and the April 7 NODA 

can be found in the docket at 

www.regulations.gov/

#!docketDetail;D=EPA-HQ-OAR-2013- 

0263. 

In addition to the section 114 

requests, the agency also held more than 

60 meetings with stakeholders and in 

almost every meeting inventory was 

discussed in a general sense to gauge 

how large industry-wide inventory 

might be. While not definitive, most of 

these stakeholder conversations 

confirmed our view that inventory 

identified through the 114 process 

represents a significant share of total 

inventory in the United States. 


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3. Explanation of the Agency’s Final 

Decision and Response to Comments 

In this section, EPA explains the 

rationale and process for reaching a 

final decision on the HCFC–22 

consumption allocation. The agency’s 

overarching goal is to meet the 2020 

phaseout deadline for HCFC–22 

production and import in a manner that 

achieves a smooth transition to more 

environmentally-friendly alternatives. 

Further, EPA has sought to accomplish 

this transition in a way that provides 

regulatory certainty to consumers and 

industry without prematurely stranding 

equipment (i.e., equipment owners 

should not feel forced out of HCFC–22 

if their equipment is still within its 

expected lifetime). EPA’s focus in this 

rule is stratospheric ozone protection, 

and the focus on this section is the 

HCFC production and consumption 

phaseout under section 605(b)–(c) of the 

CAA, taking into account the HCFC use 

restrictions in section 605(a). EPA has 

also been mindful, however, of actions 

the agency is proposing under section 

612, and has noted, where applicable, 

the climate implications of various 

options for implementing the HCFC–22 

phaseout. 

The reasoning for determining the 

final HCFC–22 allocation, as discussed 

more in this section, can be summarized 

as follows: 

(i) The first question the agency 

considered was whether to issue 

allowances, as proposed, or to move 

forward with some commenters’ 

suggestion of issuing zero allowances 

starting in 2015. As discussed in this 

section, EPA did not propose to issue 

zero allowances for several reasons, and 

those reasons were reaffirmed by several 

other commenters. 

(ii) After determining that 

consumption allowances would be 

issued, EPA considered the question of 

methodology: A linear approach, with 

consistent annual decreases (Options 1 

and 2 from the proposal) or the 

estimation approach (Option 3), which 

is an approach used in past HCFC 

allocation rulemakings. The agency 

concluded that a five-year linear 

approach is most appropriate for the last 

five years of the HCFC–22 phaseout. A 

five-year approach conforms to longstanding market expectations and 

provides much needed market certainty. 

(iii) The final consideration was what 

level to use as the starting point in 2015. 

A starting point of 10,000 MT in 2015 

addresses the concerns about oversupply of HCFC–22 and the large 

existing inventories, while encouraging 

transition, reclamation and proper 

refrigerant management. 

The agency carefully considered 

market information, comments, 

regulatory and statutory requirements, 

and its long-standing policy objectives 

as it weighed the merits of the proposed 

approaches and came to a final decision 

on the amount to allocate for 2015– 

2019. In the remainder of this section, 

EPA summarizes and responds to a 

majority of the comments. The full 

Response to Comments, which 

summarizes and responds to each 

comment received on the proposed rule, 

is available in the public docket at 

www.regulations.gov/

#!docketDetail;D=EPA-HQ-OAR-2013- 

0263. 

i. EPA’s Decision To Issue Allowances 

for 2015–2019 

Sixteen commenters support a lower 

allocation than any of the proposed 

options, with most of them advocating 

for an allocation of zero in 2015. EPA 

did not propose a zero allocation option 

for 2015–2019, but commenters assert 

that dramatically reducing or 

eliminating the allocation would: (1) 

Provide decisive action needed to 

correct the oversupply of HCFC–22; (2) 

encourage development of new lowGWP alternatives and use of non-ODS 

alternatives; (3) encourage responsible 

reclamation practices and revive the 

reclamation industry; and (4) encourage 

improved leak reduction and product 

stewardship. Commenters also state that 

between the large amount of HCFC–22 

currently in inventory, decreased 

demand, better leak control, use of 

reclaimed HCFC–22, and availability of 

alternative refrigerants, consumers can 

be assured of sufficient capacity to 

service their existing systems without 

EPA granting a significant amount of 

new HCFC–22 allowances. Among 

others, these commenters include 

NRDC, EIA, Hudson Technologies, and 

other reclamation companies that 

commented individually and also as 

part of the New Era Group, Inc. 

coalition. 

Two commenters, NRDC and EIA, 

state that the lower allocations they 

advocate for (zero allowances of HCFC– 

22, or if not zero, then Option 2 with a 

modified three-year phasedown) are 

logical outgrowths of the proposal and 

as such, satisfy the legal requirements to 

offer opportunity for comment. 

EPA is not finalizing commenters’ 

suggestion of issuing zero allowances in 

this rule for several reasons. First, recent 

market data support the issuance of 

allowances. Data from 2012 and 2013 

show that there is still considerable 

servicing need for HCFC–22. Data 

collected through EPA’s section 114 

process show that inventory drawdown 

in 2012 was over 10,000 MT. Given that 

consumption was 25,600 MT, and 

reclamation was over 4,000 MT, it is 

clear that in 2012 there was still 

significant servicing demand for HCFC– 

22. In 2013, consumption was 29,146 

MT, and inventory build from the nine 

companies was only 2,800 MT, or about 

a 5 percent increase in their aggregate 

inventory levels. (The increase in 

inventory from these nine companies is 

about equal to the number of 

recoupment allowances that were issued 

in addition to the final consumption 

allocation.) Reclamation was also more 

than 3,500 MT. Based on these data, the 

agency concludes that there is still 

significant servicing need for HCFC–22. 

Continued servicing need for existing 

equipment is not unexpected, 

problematic or otherwise contrary to the 

goals of the phaseout. Allowing 

consumers to continue operating 

equipment using the refrigerant for 

which it was designed is instrumental to 

the agency’s goal of a smooth transition 

while safeguarding the viability of the 

reclamation industry. 

Second, while there would be a 

benefit to the stratospheric ozone layer 

from not allocating allowances for 

2015–2019, the total level of HCFC 

consumption allowances allocated over 

the five year period covered by this rule 

is already 75 percent below the 

maximum level of consumption 

permitted by the Montreal Protocol and 

EPA’s regulations implementing 

sections 605 and 606 of the Clean Air 

Act. In addition, by finalizing the option 

starting at 10,000 MT rather than the 

option starting at 13,700 MT, EPA is 

taking an additional step towards 

stratospheric ozone protection by 

preventing the consumption of more 

than 11,000 MT of HCFC–22 over the 

five year period. EPA disagrees with 

commenters about the climate benefits 

of a zero allocation approach. Some of 

these commenters state that the future 

emissions resulting from a large 

allocation of HCFC–22 would have 

significant climate impacts and be 

contrary to the President’s Climate 

Action Plan. Hudson states that 

eliminating or further reducing HCFC– 

22 allowances beyond EPA’s preferred 

approach in the proposal would be ‘‘one 

of the most significant actions the 

Administration could take in the shortterm to address global climate change.’’ 

Two commenters believe EPA’s 

preferred approach may benefit the 

consumer, but is at odds with the 

agency’s greenhouse gas reduction 

goals. In total, twelve commenters state 

that EPA’s preferred approach will 

result in significant and unnecessary 


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20 e.g., R–407C, R–421A, R–422D, R–438A, and 

numerous other non-ODS alternatives. 

21EPA finds the use of the term ‘‘drop-in 

replacement’’ as misleading when advertising 

refrigerants that substitute for an ODS refrigerant, 

such as HCFC–22, since the term confuses and 

obscures several important regulatory and technical 

points. At minimum, a new type of lubricant will 

often be needed, certain parts such as elastomer 

gaskets will need to be replaced, and/or settings 

such as on TXVs will need adjustment. EPA also 

encourages technicians to repair leaks before recharging with refrigerant. 

emissions of HCFC–22 to the 

atmosphere, and recommend adopting a 

faster phaseout schedule to minimize 

environmental impact. 

On the other hand, Arkema and the 

Department of Defense (DoD) do not 

believe that eliminating HCFC–22 

allowances before 2020 would have 

environmental benefits, especially since 

the agency is reducing consumption at 

a faster rate than the Montreal Protocol 

requires. They believe that an overly 

quick phaseout schedule may accelerate 

equipment replacement, and DoD points 

out that the commercial availability of 

equipment using low-GWP alternatives 

is limited for some uses. DoD states that 

accelerating transition to equipment 

using high-GWP alternative refrigerants 

may not benefit the environment. One 

commenter is concerned about 

emissions from the venting of HCFC–22, 

but also states that the movement to 

switch out of HCFC–22 is creating a 

problem related to the high GWPs of the 

HCFC–22 substitutes. FMI is concerned 

about accelerated or poorly planned 

retrofits in the retail food sector from a 

shrinking HCFC–22 supply, which 

could lead to an increase in energy use. 

EPA notes that commenters claiming 

that a zero allocation would reduce 

HCFC–22 emissions and accordingly 

have climate benefits, do not account for 

the emissions of the refrigerant that 

would replace HCFC–22. Calculating 

potential HCFC emissions avoided, 

without considering emissions from 

replacement refrigerants, does not give a 

true picture of climate impacts. In 

addition, while new systems like R– 

410A residential unitary airconditioners often have smaller charge 

sizes and lower leak rates than the 

HCFC–22 equipment they replace, this 

is not the case for retrofits of existing 

unitary equipment. 

A zero allocation would likely 

accelerate retrofits, particularly in 

residential unitary air-conditioning. The 

agency heard from numerous 

stakeholders that retrofits and system 

replacements increased when the price 

of HCFC–22 went up in 2012 and early 

2013. Data collected from alternatives 

producers show a dramatic increase in 

sales of HCFC–22 retrofit refrigerants 20

since 2011. EPA has also heard that 

during the last several years, service 

technicians have become more aware of 

and comfortable using non-ODS retrofit 

refrigerants. As the phaseout progresses, 

the percentage of HCFC–22 demand met 

by retrofit refrigerants is expected to 

continue to rise. 

EPA believes retrofits are an 

important option for many consumers as 

HCFC–22 is phased out; however, the 

agency does not want to prematurely 

drive consumers away from the 

refrigerant their system was designed to 

run with. EPA is concerned that a zero 

allocation could unnecessarily push 

equipment owners to retrofits, 

potentially discouraging continued 

operation of HCFC–22 equipment with 

reclaimed refrigerant. In addition, 

HCFC–22 systems generally run most 

efficiently on HCFC–22, and to the 

extent stakeholders wish to evaluate the 

climate impacts of various options, 

energy efficiency is also an important 

climate consideration. Retrofitting an 

existing system can also decrease 

capacity, meaning a system must run 

longer and use more electricity in order 

to generate the same cooling output. A 

decreased capacity may also result in 

the inability of equipment to meet the 

sensible (temperature) and latent 

(humidity) cooling needs required 

throughout the season. 

Additionally, stakeholders should be 

aware that most retrofit refrigerants 

(often inaccurately called ‘‘drop-ins’’ 21) 

have higher GWPs than HCFC–22’s 

GWP of 1810, particularly in residential 

unitary air-conditioning—the 

predominant use of HCFC–22. While 

not a retrofit, R–410A is the most 

common non-ozone depleting substitute 

for use in residential air conditioning, 

with a GWP of approximately 2090. In 

retail food refrigeration, which is the 

second largest HCFC–22 end-use, some 

of the alternatives are high GWP 

refrigerants. For example, the most 

common refrigerants used for 

refrigeration equipment in 

supermarkets, R–404A, R–507A and R– 

407A, have GWPs of approximately 

3920, 3990 and 2110, respectively. 

Certain high-GWP alternatives in the 

retail food sector may be subject to 

additional constraints in the future 

since the agency is proposing to change 

their acceptability status under its 

SNAP regulations. If the HCFC 

allocation level were set at zero, that 

could encourage a near-term transition 

into high GWP gases that the agency has 

proposed to remove from the list of 

acceptable ODS substitutes (e.g., R– 

404A and R–507A). Such a result would 

mean that a zero allocation would fail 

to achieve the climate benefits 

envisioned by the commenters. 

Several commenters supporting a zero 

allocation assert that an over-supply of 

HCFC–22 discourages the transition to 

alternatives. Two commenters make 

statements on the rate of transition to 

HCFC alternatives. One commenter, 

ICOR International, notes that recent 

history shows that when the HCFC–22 

allocation is low and the price of HCFC– 

22 is high, recovery rates go up and the 

transition to alternatives rapidly 

accelerates. Hudson Technologies states 

that programs like EPA’s GreenChill 

Advanced Refrigeration Partnership 

have resulted in a more rapid transition 

away from HCFC–22 in the supermarket 

sector and the proliferation of HFC 

alternatives now represent 25 percent of 

the market. But Hudson Technologies 

also notes that HCFC–22 systems 

operate more efficiently with HCFC–22 

than HFC-based alternatives and states 

that the use of reclaimed HCFC–22 is 

the best solution for HCFC–22 system 

owners. Several commenters assert that 

the 2012–2014 Rule hurt the alternative 

refrigerant industry, whose sales 

decreased significantly. USA 

Refrigerants believes that the 2012–2014 

Rule was working well to encourage a 

transition to alternatives and that SNAPapproved refrigerants are providing 

cost-effective alternatives to Americans. 

Three commenters note that there are 

several HCFC–22 alternatives available 

across a range of applications that are 

reducing dependence on HCFC–22. 

The agency supports encouraging new 

alternatives that offer improved 

environmental profiles to HCFC–22. 

However, as noted above, many of the 

existing alternatives in sectors that rely 

on HCFC–22 (e.g., residential AC and 

retail food refrigeration) have GWPs 

comparable to or higher than HCFC–22. 

In later parts of this section, EPA 

addresses existing HCFC–22 inventories 

and the importance of encouraging 

transition, reclamation and improved 

refrigerant management practices. 

Three commenters explicitly oppose a 

zero allocation approach, which they 

believe would cause unanticipated 

market disruptions. In meetings after the 

issuance of the proposed rule and in 

their comments, Heating, Airconditioning and Refrigeration 

Distributors, International (HARDI) 

expressed concerns that a zero 

allocation approach would leave 

insufficient time for distributors to plan 

their business, especially considering 

the long-standing expectation of an 

allocation through the end of 2019. 

Additionally, there are concerns that 

going to zero so quickly would leave 


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22With limited exceptions through the end of 

2011. 

some distributors without access to 

HCFC–22 for the customers who operate 

and service HCFC–22 equipment. 

Another commenter, Arkema, questions 

the reclamation industry’s ability to be 

the sole source of refrigerant needed to 

service consumer demand. Arkema also 

notes that the five-year timeline is 

especially important as EPA and the 

international community shift to 

regulation of HFCs; there should be no 

precipitous incentive to make inefficient 

switches to alternatives that may be 

phased out later. EPA believes its 

decision to issue allowances for 2015– 

2019 addresses these commenters’ 

concerns. The third commenter, ACCA, 

does not support a zero allocation 

because they believe it would cause 

tremendous volatility and uncertainty in 

the market, which would likely lead to 

upward price fluctuations. 

In the proposal, EPA recognized that 

some stakeholders had encouraged the 

agency to cease allocating allowances 

for HCFC–22 in 2015. The proposal 

noted that a zero allocation could have 

unintended consequences, given the 

longstanding expectation that the 

agency would issue allowances through 

2019, and could adversely affect the 

business and transition planning for 

much of industry, particularly owners 

and operators of HCFC–22 equipment. 

In their comments and in subsequent 

meetings with EPA, many commenters 

point out that going to zero in 2015 is 

not supported by a majority of market 

participants, both small and large 

businesses, including but not limited to: 

Producers, importers, distributors, 

contractors, and the end-user 

community. Given the long-standing 

expectation that allowances for 

production and import of HCFC–22 

would be available through 2019, EPA 

agrees with comments that issuing zero 

allowances for 2015 could cause chaotic 

and unanticipated market disruptions, 

particularly because a zero option was 

not proposed. 

The agency continues to believe that 

a zero allocation is contrary to the goal 

of an orderly transition, and would lead 

to a high degree of market uncertainty. 

Given the diverse, and in some cases 

competing, legitimate needs, objectives 

and interests of the HCFC–22 

stakeholder community, EPA can best 

meet its goal of a smooth transition and 

a 2020 production phaseout by sending 

a clear market signal for 2015–2019. 

Based on the rationale laid out in the 

proposed rule and in today’s final rule, 

EPA is issuing consumption allowances 

for HCFC–22 in 2015 and beyond. 

ii. EPA’s Decision To Use a Five-Year 

Linear Approach for 2015–2019 

Having decided to issue allowances 

for HCFC–22 during the 2015–2019 

regulatory period, the agency’s next 

decision was which methodology to use 

in setting the allocation. Based on the 

considerations below, EPA is finalizing 

allowances using a five-year linear 

approach. 

As a methodology, a linear approach 

has many clear benefits, not least of 

which is that it is simple and easy to 

communicate to affected parties. This 

aspect is important for service 

technicians, since they are often the 

ones directly interacting with home and 

business owners. It is often their job to 

explain what the HCFC phaseout means 

and how it works. Providing technicians 

with an easier-to-explain common sense 

approach should improve consumers’ 

understanding of the phaseout and the 

options available to them. EPA 

developed several fact sheets that 

discuss the HCFC phaseout and the 

choices available to consumers to 

provide technicians and equipment 

owners with additional information. 

These fact sheets can be found at: 

www.epa.gov/ozone/title6/phaseout/

classtwo.html. 

EPA recognizes that as a chemical 

reaches its production phaseout, 

modeling HCFC–22 servicing needs 

with precision becomes increasingly 

difficult. While EPA’s Vintaging Model 

is updated frequently to reflect changes 

in the marketplace, it is not designed to 

model how the specific allocation 

amounts in recent years affects servicing 

need in future years, nor is it designed 

to model certain other events that may 

affect supply, e.g., the effects of a hot or 

cold summer, or the general state of the 

economy. The difficulty of predicting 

certain real-time market factors is one 

reason that the agency has not relied 

heavily on modeled servicing need in 

the final HCFC–22 allocation for 2015– 

2019, and why EPA has always relied 

on modeling as one tool among many 

considered in deciding the final 

allocation. 

One commenter favors the estimation 

approach (Option 3) in order to stabilize 

the market. Other commenters oppose 

the estimation approach because in their 

view it would reduce incentives for 

recovery, does not account 

appropriately for stockpiles, and 

allocates more HCFC–22 than is needed. 

Another commenter, Johnstone Supply, 

supports a five-year phaseout similar to 

Option 3 but with approximately twothirds of the allocation cut. 

Six commenters specifically address 

technical aspects or parameters in EPA’s 

2013 Servicing Tail Report. Several of 

these commenters question the report’s 

accuracy and say EPA’s projected 

servicing need for HCFC–22 does not 

adequately account for: Sales of 

alternative and retrofit refrigerants, 

declining leak rates (especially for 

GreenChill partners), servicing needs, 

existing HCFC–22 stockpiles, the 

capabilities of the reclamation industry, 

recycling, and future economic and 

weather conditions. One commenter, 

EOS Climate, incorrectly asserts that 

EPA assumes growth rates in all 

categories of HCFC–22 equipment 

despite the fact that virgin HCFC–22 can 

only be used for pre-2010 equipment 

and that imports of dry-shipped 

condensing units are decreasing. 

Another commenter, North Lakes 

Distributing, Inc., believes EPA ‘‘has 

displayed a pervasive unwillingness to 

scrap the old inaccurate bottom up 

analysis,’’ such as that used in the 

Servicing Tail Report. The commenter 

believes that if top down manufacturing 

supply information is not collected, 

estimates of usage in individual market 

sectors are not useful. EPA reiterates 

that the five-year linear approach uses a 

common sense approach, focused on a 

2015 starting allocation that will 

encourage transition and a gradual 

phase out production and consumption 

of HCFC–22 by 2020. Also, since the 

2015 allocation is less than one-quarter 

of modeled servicing need as presented 

in the 2013 Servicing Tail Report, EPA 

believes that it has adequately 

addressed these commenters’ concerns 

for the purposes of the 2015–2019 

allocation. The agency responds to 

specific comments more fully in the 

Response to Comments document. 

Since the market for virgin HCFC–22 

is solely for servicing air-conditioning 

and refrigeration equipment that was 

installed prior to 2010,22 EPA believes 

that annually decreasing the allocation 

by the same amount over five years is 

appropriate. Such an allocation 

schedule should drive the necessary 

changes in the service market to prepare 

for the 2020 phaseout, without 

unnecessarily forcing transition or 

retrofits out of HCFC–22 equipment that 

is still within its expected lifetime. A 

five-year linear approach sends a clear 

market signal about the allowed 

production and import of HCFC–22 in 

each year leading up to the 2020 

phaseout date. It also allows industry 

time to digest, comment on and 

participate in the public regulatory 

process related to actions EPA is 

proposing to take under SNAP to further 


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the goals of the President’s Climate 

Action Plan. Actions under SNAP may 

bear on end-users’ decisions about 

continuing to operate equipment with 

HCFC–22, or retrofitting or replacing the 

equipment. EPA is concerned that a 

three-year linear reduction to zero could 

increase the likelihood that end-users 

would rush to transition from HCFC–22 

without adequately considering their 

longer-term options. A five-year 

approach provides more time for the 

introduction of alternatives that reduce 

overall risk, before the complete 

phaseout of HCFC–22 production and 

virgin import. A five-year approach with 

consistent annual decreases strikes an 

important balance: Recognizing that the 

phaseout of virgin production and 

import is only five years away, without 

forcing end-users to retrofit or replace 

their equipment designed for HCFC–22. 

Continued operation of HCFC–22 

equipment also helps ensure that 

HCFC–22 is valuable; HCFC–22 is less 

likely to be vented and more likely to 

be reclaimed and reused if it has 

economic value. 

EPA received numerous comments in 

support of the five-year linear approach. 

Commenters stated that the five-year 

linear approach will ‘‘provide steady 

incentives’’ to reclaim material and 

move to alternatives, while also giving 

consumers and equipment 

manufacturers ‘‘sufficient time’’ to 

prepare for the transition. Competition, 

market stability and ensured access to 

HCFC–22 were also cited as reasons to 

use a five-year linear schedule for 

issuing HCFC–22 allowances from 2015 

through 2019. EPA generally agrees with 

these comments. 

EOS Climate prefers the three-year 

drawdown, claiming that it partially 

accounts for existing stockpiles and 

provides significant environmental 

benefits compared to EPA’s lead 

proposal at no additional cost. NRDC, 

Combs Investment Properties, Hudson 

Technologies, and EIA support a 

modified 3-year approach if EPA does 

decide to issue allowances. One 

commenter, DuPont, opposes a threeyear schedule because ending the 

allocation in 2018 would result in a 

chaotic market. EPA sees the three-year 

schedule as having some of the same 

drawbacks as the zero allocation 

approach, given the longstanding 

expectation that the agency would issue 

allowances through 2019. Not allocating 

allowances in 2018–2019 could 

adversely affect the business planning 

and transition plans for much of 

industry, particularly owners and 

operators of HCFC–22 equipment. EPA 

addresses the role of inventory in the 

next section and the environmental 

benefits of EPA’s chosen approach in 

the previous section. 

EPA has explained here the merits of 

the linear approach, which are 

supported by many commenters. Based 

on the available data, current market 

perceptions and the 2020 phaseout 

deadline, the agency believes a five-year 

linear drawdown best addresses the 

concerns and suggestions of a majority 

of the commenters. In the following 

paragraphs, EPA explains why it is 

finalizing a starting point lower than its 

preferred starting point of 13,600 MT. 

iii. EPA’s Decision To Use a Five-Year 

Linear Approach, Starting at 10,000 MT 

in 2015 

Twelve commenters support Option 

1, with the lower starting point of 

10,000 MT in 2015. Several of these 

commenters are industry associations 

representing anywhere from 50 to 

several hundred small and large 

businesses. Commenters favor this 

option because it is one of the lowest 

allowance options proposed, it would 

provide the fewest allowances in 2015 

and 2016, and because the linear 

approach provides market stability 

through its consistent annual decreases 

in allocation. The commenters generally 

advocate for a lower allocation than 

EPA’s proposed starting point of 13,700 

MT in order to send a strong early 

market signal of tightening supply, 

compensate for larger-than-estimated 

HCFC–22 inventories, and stimulate 

reclamation. Five commenters support 

Option 1 starting at 13,700 MT. Those 

in support of EPA’s preferred starting 

point of 13,700 MT believe that it offers 

the smoothest transition, while faster 

reductions may result in refrigerant 

shortages and high prices. The Food 

Marketing Institute supports a linear 

approach, but suggests a higher starting 

point than 13,700 MT. Options 2 and 3 

each received support as the preferred 

option from one commenter. 

The agency is finalizing a 2015 

allocation of 10,000 MT, with a decrease 

of approximately 2,000 MT each year 

thereafter. In deciding on the amount of 

the 2015 allocation, EPA gave further 

consideration to the market factors 

discussed in the proposal. Many of 

these market factors are discussed 

earlier in this section as support for 

EPA’s decision to issue allowances in 

2015–2019. EPA’s decision to finalize a 

starting point of 10,000 MT was 

primarily based on three considerations: 

The availability of larger-thananticipated inventory, the importance of 

a viable reclamation industry and the 

market-signaling effects of a sufficiently 

low 2015 and 2016 allocation. 

In the 2012–2014 Rule, the agency 

estimated industry-wide inventory to be 

between 22,700 MT and 45,500 MT. As 

explained in section VI.A.2, in the fall 

of 2013, the agency asked nine entities 

in the HCFC–22 market about their yearend inventory. Aggregate inventory data 

from these nine entities were fully 

available to EPA while developing the 

proposed rule. With the knowledge that 

aggregate inventory held by these nine 

major entities at the end of 2012 was 

51,100 MT, which is higher than the 

upper end of EPA’s estimate used in the 

2012–2014 rulemaking, EPA proposed 

13,700 MT as its preferred starting point 

for 2015. At the request of industry, EPA 

also collected 2013 year-end inventory 

data from these same nine companies. 

At the end of 2013, inventory had grown 

by 2,800 MT, an increase of 5.6% from 

2012. The proposed 2015 starting points 

for the linear draw-down approaches are 

much lower than under the estimation 

approach, in part because of the 

inventory data EPA was able to collect 

and consider while developing the 

proposal. 

EPA is aware that these nine entities 

do not hold all inventory industry-wide. 

EPA was not seeking precise inventory 

numbers. The agency did not consider 

inventory as a result of a statutory 

mandate to do so. Rather, EPA believed 

it was reasonable to allow the 

approximate scale of inventory and 

inventory trends to inform its general 

understanding of the market. Given the 

data collected in the fall of 2013, and 

the numerous conversations with many 

companies throughout the supply chain, 

EPA believes that the data from these 

nine companies are representative of the 

trends and scale of inventory across the 

entire market, and that the aggregate 

held by these nine companies accounts 

for a large proportion of total inventory. 

The data collected show that aggregate 

inventory is large enough to justify a 

starting allocation of 10,000 MT instead 

of 13,700 MT. While additional 

inventory data from more entities might 

further support a 10,000 MT starting 

point, these data would not eliminate 

the considerations that led EPA to 

finalize a non-zero allocation for 2015– 

2019. 

In addition to comments on the 

proposal that discuss existing HCFC–22 

inventory as it relates to the proposed 

allocation options, EPA received 15 

comments on its April 4, 2014, Notice 

of Data Availability, announcing the 

2008–2013 aggregate HCFC–22 

inventory data collected from nine 

companies. Six comments reiterated 

that HCFC–22 aggregate inventory is 

higher than expected or previously 

estimated by EPA. Six commenters 


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believe that the nine companies that 

EPA collected data from do not 

represent the entire market, while one 

commenter believes that nine entities 

likely hold a majority of HCFC–22 

inventory. One commenter specifically 

names other potential sources of HCFC– 

22 inventory, while two comment that 

EPA needs to consider other sources of 

inventory beyond the nine surveyed 

companies like grocery stores and 

apartment buildings. Several comments 

explicitly state that the inventory data 

proves that no additional allowances are 

needed, while another commenter 

believes that the aggregate data supports 

issuing allowances in all five years. Two 

commenters add together recent 

allowance use, reported reclamation 

amounts and the change in aggregate 

inventory to show an estimate of actual 

market demand for HCFC–22, though 

the commenters believe that their 

servicing need calculations support a 

zero allocation in 2015 and beyond. 

Three commenters believe EPA needs 

additional inventory data to proceed 

with its rulemaking, but also believe 

that EPA should issue zero allowances. 

The agency’s goal is to phase out the 

production of HCFC–22 by 2020, 

consistent with Title VI of the CAA and 

the long-standing regulatory phaseout 

date, not to remove all HCFC–22 from 

inventory by 2020. The statute does not 

specify the factors EPA is to consider in 

setting an allocation level, other than 

the applicable phaseout step. Existing 

inventory can be beneficial during a 

time of transition, allowing equipment 

owners more flexibility in planning and 

implementing their transition. The 

availability of HCFC–22 inventory after 

2020 along with continued reclamation 

is important for allowing equipment 

owners to continue using their 

equipment after the production 

phaseout. However, EPA also recognizes 

that current inventory grew in 2013 and 

is higher than some in industry 

expected, which is one of several 

reasons why EPA is finalizing a 2015 

allocation of 10,000 MT instead of 

13,700 MT. Now that the inventory data 

is public, awareness as to the scale of 

existing inventory should help moderate 

potential price spikes and allow 

equipment owners to plan a thoughtful 

transition to alternatives. 

Several commenters appear to be 

confused about how EPA considered 

inventory information in development 

of this rulemaking, as compared to the 

2012–2014 Rule that issued allowances 

for 2012–2014. In the proposal covering 

2012 through 2014, EPA considered the 

servicing need estimates from the 

Vintaging Model and made reductions 

to that number to derive a possible 

allocation that approximates the need 

for virgin HCFC–22, just as in the 2010– 

2014 Rule. For 2012 through 2014, EPA 

proposed to decrease annual allocations 

by 6,000 MT each year to account for 

existing inventory. In the fall of 2012, 

the agency estimated that inventory was 

between 22,700 MT and 45,400 MT, 

based on preliminary market research 

and industry feedback. The agency 

finalized the annual 6,000 MT reduction 

in the 2012–2014 Rule, thus lowering 

the aggregate allocation for 2012–2014 

compared to the 2010–2014 Rule. EPA’s 

intent was not to immediately deplete 

all inventory, as inventory can help 

provide for a smoother transition out of 

HCFC–22, but to draw out some of the 

inventory prior to 2015. In the 2015– 

2019 proposal, EPA specifically 

proposed to account for up to 10,000 

MT of inventory under the estimation 

approach, which, unlike the linear 

approaches, is most similar to the 

allocation methodology EPA used in the 

2010–2014 Rule and the 2012–2014 

Rule. 

In response to comments stating that 

EPA must consider prevailing market 

conditions and inventory held by 

entities from which it did not collect 

data, EPA explains above its different 

understanding of the role of inventory 

data in this rulemaking. The agency did 

not intend to allocate allowances at a 

level that would result in inventory 

being drawn down to zero immediately 

or even by 2020. The agency believes 

that the additional expenditure of effort, 

particularly the information collection 

burden imposed on industry, is not 

required to establish a reasonable and 

predictable allocation level for the final 

five years of the HCFC–22 phaseout. 

EPA appreciates that many 

commenters believe additional HCFC– 

22 production and import is unneeded 

based on their position in the market. 

EPA’s allocation considers the 

perspectives of both the end-users that 

need HCFC–22 to operate their 

equipment and the companies 

recovering and reclaiming HCFC–22, 

because both play an integral role in 

meeting EPA’s policy objective of a 

smooth transition from HCFC–22. In 

particular, the capability of recovery 

and reclamation companies is an 

important consideration as reclamation 

decreases the need for new production, 

thereby allowing EPA to allocate fewer 

HCFC–22 allowances. 

In response to comments about 

potential inventory held by grocery 

stores, apartment buildings, and other 

large end-users, EPA points out that 

inventory held by a building or 

supermarket in preparation for a 

possible leak is different from inventory 

in the supply chain. Inventory held by 

these large end-users is refrigerant that 

they intend to use, not sell. Therefore, 

this type of inventory is more like 

refrigerant already charged into a system 

than inventory in the supply chain (i.e. 

channel inventory) that will eventually 

be sold to an end-user. Equipment 

owners have this refrigerant on-hand in 

order to keep operating their system, 

whereas inventory in the supply chain 

is waiting for someone to purchase it. 

Although existing stocks of HCFC–22 

are important for meeting continued 

servicing need, EPA recognizes that too 

much existing inventory could be 

contrary to the agency’s goal of a smooth 

transition to alternatives. Proper 

refrigerant management and a viable 

reclamation industry are also critical to 

a smooth transition, which is why EPA 

believes that a sufficiently low 

allocation is needed in order to 

encourage the use of some existing 

stocks and also to encourage—but not 

immediately force—transition. The final 

2015 allocation of 10,000 MT is less 

than one-quarter of the modeled 2015 

servicing need. By allocating well below 

the projected need for HCFC–22 each 

year, EPA is accounting for retrofitted 

equipment, recovery and reuse of 

refrigerant, use of reclaimed refrigerant, 

and existing inventory of virgin HCFC– 

22, in addition to realizing the benefits 

of a linear drawdown already discussed. 

Twenty-seven commenters addressed 

market issues related to the supply or 

price of HCFC–22; most of these 

commenters believe the 2012–2014 Rule 

led to an oversupply in the market, with 

adverse effects on the reclamation and 

alternative-refrigerant industries. 

Several commenters assert that the 

2012–2014 Rule led to a 50–60 percent 

decline in the price of HCFC–22 relative 

to the peak price reached in 2013, a 

decline in volume of returned used 

HCFC–22, a decline in reclamation and 

recycling, and an increase in volume of 

HCFC–22 being leaked or vented. One 

commenter, USA Refrigerants, states 

that their organization and other EPA 

certified reclaimers were negatively 

affected by the change in the price of 

HCFC–22 and the inability to provide 

high buyback prices for used refrigerant, 

which they said dropped to as low as 

$1.00 per pound. Another commenter, 

EIA, notes that the price of virgin 

HCFC–22 in 2011 was $4.50/pound but 

claims that the price needs to exceed 

$8/pound for reclaimed HCFC–22 to be 

competitive. One distribution company 

reports already seeing 50 percent less 

reclaimed material available to sell in 

2014. On the other hand, Polar 

Technologies states that its internal 

analysis on the market dynamics of 


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HCFC–22 found no correlation between 

price and reclaim volume. The 

commenter asserts that as prices 

increase, hoarding occurs and 

reclamation decreases. As HCFC–22 

prices jumped and supplies seemingly 

were shrinking, contractors were 

speculating and buying up cylinders to 

store material to hedge against the 

pending shortage. 

Three commenters make statements 

on investments by the reclamation and 

alternative refrigerants industry. A-Gas 

RemTec notes that they invested in 

additional capacity for reclaimed 

refrigerants but have since halted this 

development as a result of the 2012– 

2014 Rule. A-Gas RemTec notes that 

other entities may also question 

committing to increased capacity in an 

unpredictable market, which could lead 

to a refrigerant shortage in future years. 

Another commenter, Hudson 

Technologies, asserts that the 

reclamation industry invested millions 

of dollars in infrastructure, but since the 

supply gap never materialized, 

reclamation has not grown. USA 

Refrigerants notes that companies that 

invested in alternative refrigerants saw 

prices for HCFC–22 plummet as a result 

of the 2012–2014 Rule, undercutting the 

sale of alternatives. 

Six commenters are concerned about 

venting of HCFC–22, which they believe 

is perpetuated by an oversupply of 

HCFC–22 and the corresponding low 

value of the gas. Specifically, these 

commenters believe that a lower (or in 

some cases, zero) allocation would 

incentivize the use of reclaimed gas and 

better refrigerant management. 

The agency believes the best way to 

encourage reclamation, as well as 

development and use of expanded 

reclaimer capacity, is to send a clear 

market signal: A substantial decrease in 

allocation in 2015 with a continued, but 

decreasing, allocation over all five years. 

Such a signal should encourage 

recovery and reclamation, while also 

giving equipment owners confidence 

that they can have access to refrigerant 

for their installed HCFC–22 equipment 

through 2020 and beyond. The linear 

drawdown starting at 10,000 MT should 

encourage more recycling and 

reclamation, without creating such 

dramatic market changes as to 

incentivize hoarding of used refrigerant. 

This approach has the lowest allocation 

in 2015 and 2016 of all options 

discussed in the proposed rule, which 

should encourage better refrigerant 

management practices, while a small, 

decreasing allocation in later years 

should allow for a smooth transition to 

zero in 2020. Compared to a 2014 

allocation of 23,100 MT, a 2015 

allocation of 10,000 MT should 

encourage proper refrigerant 

management and more reclamation; it 

should also encourage planning for a 

transition to alternative refrigerants 

without unnecessarily forcing 

equipment owners to immediately 

abandon their use of HCFC–22. 

The agency views its final allocation 

as sending appropriate signals to the 

market by decreasing the HCFC–22 

allowance allocation by almost sixty 

percent between 2014 and 2015. 

Further, by providing a predictable but 

declining number of allowances through 

2019, the agency believes this final rule 

will give HCFC–22 equipment owners 

the information they need to choose 

between maintaining their HCFC–22 

systems, retrofitting their existing 

systems, and purchasing new systems 

that rely on alternative refrigerants. EPA 

intends to strike a balance with the final 

allocation: A significant decrease from 

the 2014 allocation promotes 

alternatives, reclamation, and transition, 

while a non-zero allocation avoids 

stranding HCFC–22 equipment or 

forcing premature retrofits. 

4. Timing of the Final Rule 

Eighteen commenters urge EPA to 

finalize today’s action as quickly as 

possible. They cite several reasons for 

expeditious action specific to the 

HCFC–22 allocation: To allow industry 

to properly plan and prepare for 

complying with the rule; to provide 

certainty and stability for business 

planning; and to minimize market 

disruption and foster a smoother 

transition during these final stages of 

the HCFC–22 phaseout. One of these 

commenters states that EPA is not acting 

quickly enough. AHRI specifically calls 

out the need for timely action as it 

relates to the HVAC market, a major use 

for HCFC–22, which will transition to 

new minimum energy efficiency 

standards on January 1, 2015. AHRI 

states that uncertainty in the HCFC–22 

allocation adds complexity to this 

transition and that lack of knowledge 

regarding the HCFC–22 allocation could 

be detrimental to manufactures and 

small business owners. 

On the other hand, RMS, New Era 

Group Inc., and ICOR International 

comment that EPA needs to update its 

models or obtain more accurate data 

prior to finalizing this rule. New Era 

Group Inc. suggests that the proposed 

rule be withdrawn and the NODA 

republished along with immediate steps 

to mitigate the serious damage to small 

companies, human health, and the 

environment. EPA does not see a need 

to re-propose or to publish another 

NODA. As discussed earlier in this 

notice, EPA does not believe it needs to 

gather additional data or to propose 

additional options. The agency believes 

the information it has at its disposal 

currently is sufficient to justify the 

significantly lower allocation of HCFC– 

22 as compared to the preferred option 

in the proposal, especially since 

finalizing a rule this year will support 

EPA’s goal of a smooth transition to 

alternatives. 

EPA appreciates the many comments 

stressing the value of a timely 

rulemaking in providing regulatory 

certainty to the market. The agency 

agrees that it can best realize its goal of 

a smooth transition to alternatives via a 

timely 2015–2019 rule, especially in the 

case of HCFC–22. In addition to a timely 

rule, the agency and many commenters 

believe a linear drawdown will also 

provide certainty and help stabilize the 

market by setting a straightforward, 

predictable schedule for the final years 

of the HCFC–22 phaseout. 

B. What is the 2015–2019 HCFC–22 

production allocation? 

Since the start of the HCFC allocation 

program in 2003, the agency has 

determined the HCFC–22 production 

allocation in one of two ways. Under 

either method, EPA first determines the 

aggregate consumption allocation, 

divides by the aggregate baseline, and 

assigns the percentage of the 

consumption baseline accordingly. EPA 

describes this process in more detail in 

section II.B. 

In the 2003–2009 Rule, and again in 

the 2010–2014 Rule, EPA allocated the 

same percentage of baseline allowances 

for production as it did for 

consumption. A company with a 

production baseline at 40 CFR 82.17 

would simply multiply its baseline by 

the percentage listed at 82.16 to 

determine its calendar-year production 

allocation. However, in the 2012–2014 

Rule covering 2012–2014, EPA provided 

a larger percentage of baseline and more 

HCFC–22 production allowances than it 

did for consumption. EPA amended 

section 82.16 to include two tables, one 

listing the baseline percentage for 

consumption and the other listing the 

percentage for production. As discussed 

in the 2012–2014 Rule, the reason for 

this change was to allow United States 

manufacturers to produce at the same 

level as under the 2010–2014 Rule (see 

78 FR 20020). 

For the 2015–2019 regulatory period, 

EPA proposed two options for the 

HCFC–22 production allocation: (1) 

Issue production allowances at the 

highest allowable level under the 

Montreal Protocol, or (2) provide 

approximately the same number of 


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23 Data submitted to the Greenhouse Gas 

Reporting Program on byproducts of the HCFC–22 

production process indicate that only three of the 

four companies holding production allowances 

actually produced HCFC–22 in 2010, 2011 and 

2012. While the non-producing allowance holder 

can transfer its allowances to another producer, the 

fact that they do not produce in the U.S. makes it 

unlikely that all calendar-year production 

allowances will be used. 

24 GWP of HFC–23 presented in the 

Intergovernmental Panel on Climate Change (IPCC) 

Fourth Assessment Report: Climate Change 2007 

(AR4) 

production allowances as consumption 

allowances. 

EPA noted that the first approach was 

its preferred option. EPA believes that 

allocating more production allowances 

than consumption allowances cannot 

lead to an increase in United States 

consumption and would not result in a 

global increase in production or 

consumption of HCFC–22; all countries’ 

consumption are capped under the 

Montreal Protocol and presumably 

global production would be driven by 

market conditions. Allocating additional 

production allowances may have 

environmental benefits, to the extent 

that U.S. production displaces 

production in foreign plants that lack 

HFC–23 byproduct controls and 

destruction technologies. For more 

discussion on EPA’s rationale for this 

approach, see the preambles for the 

2012–2014 Final Rule (78 FR 20020) 

and the 2015–2019 Proposed Rule (78 

FR 78089). 

EPA received eight comments on how 

it will determine the HCFC–22 

production allocation for 2015–2019. 

Comments from EIA, a private citizen, 

and Hudson Technologies stated that 

the industry or marketplace does not 

need any additional HCFC–22, and that 

EPA should not issue production 

allowances. Additionally, EIA believes 

that issuing production allowances is 

contrary to helping developing 

countries transition to low-GWP and 

zero-ODP technologies through the 

Multilateral Fund of the Montreal 

Protocol (which is the financial 

mechanism to help those Parties meet 

their Montreal Protocol obligations). 

Airgas is also against EPA’s preferred 

option on the grounds that more 

production allowances for export will 

lead to further oversupply globally. 

Airgas believes that consumption and 

production allocations should be the 

same and should be set at zero or 

minimal levels. A private citizen 

supports cutting the production 

allocation to encourage a shift in U.S. 

production of ODS alternatives for 

export, instead of HCFC–22. The 

commenter acknowledges the 

importance of considering HFC–23 

byproduct emissions, but thinks it is 

less important since HCFCs will be 

phased out globally. 

DuPont and Honeywell commented in 

favor of EPA’s proposal to allocate the 

maximum HCFC–22 production allowed 

under the Protocol after accounting for 

other HCFC production allocations. The 

commenters believe that more 

production for export could allow 

production from U.S. facilities to 

displace production from facilities 

abroad that may not control HFC–23 

emissions, thus providing 

environmental benefits and reductions 

in GHG emissions. The commenters 

reference EPA’s prior statements that 

allowing for additional U.S. production 

for export could not result in a domestic 

or global increase in consumption since 

HCFC producers are already limited by 

consumption allowance limits 

established under the Montreal 

Protocol. A third commenter supported 

a production allocation that is higher 

than allowed under the Montreal 

Protocol, starting at 25 percent of U.S. 

HCFC production baseline in 2015 

(whereas the Montreal Protocol cap is 

10 percent of baseline for all HCFCs). 

In response to the five adverse 

comments on EPA’s preferred option, 

the agency points out that allocating 

more production allowances than 

consumption allowances does not 

provide United States producers the 

opportunity to exceed their 

consumption allocation. Production of 

one kilogram of an HCFC still requires 

both a production allowance and a 

consumption allowance (82.15(a)(1), 

(2)). Allocating more production 

allowances than consumption 

allowances would provide United States 

producers the opportunity to continue 

production for export subject to existing 

regulatory constraints. A company must 

submit documentation to verify the 

export of an HCFC for which 

consumption allowances were 

expended in order to request a 

reimbursement of spent consumption 

allowances. The agency reviews the 

documentation and issues a notice to 

either deny or grant the request. 

Therefore, a company would not be able 

to produce more HCFC–22 unless it had 

exported an equal amount of material 

and been granted a refund of spent 

consumption allowances. To the extent 

that commenters support a lower 

production allocation to address 

concerns about U.S. consumption, EPA 

responds to those comments in Section 

VI.A. of this preamble. 

In response to concerns about an 

increase in global consumption, EPA 

explained in the 2015–2019 Proposed 

Rule that allowing United States 

production allocation to be higher than 

the consumption allocation could not 

result in increased global consumption. 

Providing more production than 

consumption allowances could allow 

companies to continue exporting to nonArticle 5 countries, which have the 

same overall Montreal Protocol 

phaseout schedule as the United States 

but may not use the United States’ 

chemical-by-chemical approach to 

phasing out HCFCs. Also, consumption 

of HCFCs in Article 5 countries was 

capped starting in 2013, which further 

limits global HCFC–22 demand (see 

Montreal Protocol Art. 5, para. 8 ter.). 

Finally, at least one company holding 

production allowances does not 

produce HCFC–22 in the United States; 

therefore, it is unlikely that every 

production allowance issued will be 

used.23 EPA is concerned that the 

alternative approach—issuing 

production allowances at the same level 

as consumption, instead of at the 

maximum level allowed under the 

cap—reduces flexibility for industry 

without a benefit to the environment. 

EPA disagrees with EIA’s comment 

that issuing production allowances is 

contrary to helping developing 

countries transition to low-GWP and 

zero-ODP technologies through the 

Multilateral Fund of the Montreal 

Protocol. The U.S. is committed to 

helping Article 5 Parties transition to 

non-ODP and low-GWP alternatives via 

the Multilateral Fund. Since HCFC 

consumption in Article 5 Parties was 

only capped starting in 2013, and 

because those Parties still have servicing 

needs for HCFC–22 in existing 

equipment, EPA does not see HCFC–22 

exports during 2015 through 2019 as 

contrary to the goals of encouraging a 

transition to alternatives. Given that 

Article 5 countries are not required to 

completely phase out HCFCs until 2040, 

it is expected that demand for HCFC–22 

will continue while low-GWP 

alternatives are developed and deployed 

to replace existing HCFC technologies. 

As mentioned previously, EPA also 

believes that allocating more production 

allowances than consumption 

allowances could have environmental 

benefits if United States production 

displaces production at facilities that do 

not control byproduct emissions of 

HFC–23, which has a global warming 

potential of 14,800.24 Comments on the 

2015–2019 proposal cited the growth of 

HFC–23 emissions globally and 

indicated that facilities in Article 5 

countries do not control HFC–23 

emissions to the same degree as 

companies operating in the United 

States. EPA has historically worked 

with industry through its HFC–23 


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25See Preliminary 2011 and 2012 Sales and 

Distribution Data from the California Air Resources 

Board’s Refrigerant Management Program in the 

docket. 

Emission Reduction Partnership to 

encourage companies to reduce HFC–23 

byproduct emissions from the 

manufacture of HCFC–22. For further 

discussion see the 2015–2019 Proposed 

Rule at 78 FR 20021. 

Based on the consideration of the 

comments, and for reasons discussed 

here, EPA is issuing the maximum 

number of HCFC–22 production 

allowances allowed under the Montreal 

Protocol cap, after accounting for 

production allocations of all other 

HCFCs provided under this rule. 

Starting in 2015, the United States 

production cap under the Montreal 

Protocol is 1,553.7 ODP-weighted MT. 

The final production allocations for 

HCFC–124 and HCFC–142b are 4.4 and 

2.3 ODP–MT, respectively (see VI.E and 

VI.C, respectively), leaving the 

remainder of the cap available for 

HCFC–22 production. For 2015–2019, 

EPA is issuing 21.7% percent of HCFC– 

22 production baseline, which is 

approximately 28,000 MT of HCFC–22, 

as shown in the regulatory text at 

82.16(a). 

To put the 2015 cap in historical 

perspective, EPA issued 41,200 MT of 

HCFC–22 production allowances in 

2013, 36,000 MT in 2014, and is only 

issuing 28,000 MT of HCFC–22 

production allowances for each year 

from 2015–2019. 

C. What is the 2015–2019 HCFC–142b 

consumption and production 

allocation? 

The 2010–2014 Rule allocated 100 

MT of HCFC–142b consumption 

allowances annually. When EPA reestablished HCFC–22 and HCFC–142b 

baselines in the 2011 Interim Final Rule 

and 2012–2014 Rule, the HCFC–142b 

consumption allocation remained at 100 

MT. Because the HCFC–142b 

production baseline was significantly 

higher than the consumption baseline, 

and the same percentage of baseline was 

used for both consumption and 

production, the production allocation 

became 463 MT per year in 2011–2014. 

As discussed in the proposed rule, 

several HCFC manufacturers anticipate 

continued, albeit decreasing, sales of 

refrigerant blends containing HCFC– 

142b in 2015 and later. HCFC–142b is 

predominantly used in refrigerant 

blends that have historically served as 

replacements for CFC–12 and R–500 in 

medium- and large-sized refrigeration 

equipment. Some of these blends 

containing HCFC–142b, particularly R– 

409A, are in use today, but in small 

quantities. Because the volumes are very 

small, EPA does not model servicing 

need for equipment using these HCFC– 

142b blends. Refrigerant sales data 

collected by the California Air 

Resources Board,25 along with industry 

feedback, confirm that there is some R– 

409A equipment still in use. For this 

reason, EPA proposed to allocate 35 MT 

of consumption allowances in 2015 

with a decrease of 5 MT each year 

through 2019. 

As stated in the proposed rule, a 

consumption allocation of 35 MT in 

2015 is an appropriate balance between 

the 2010–2014 allocation of 100 MT, the 

actual consumption of HCFC–142b in 

recent years, and the reasonable 

assumption that R–409A is used mainly 

in retrofitted equipment designed for 

CFCs that is nearing expected 

retirement. With an annual decrease of 

5 MT, the HCFC–142b allocation would 

be 15 MT in 2019 before going to zero 

in 2020. A decreasing allocation sends 

a stronger market signal that production 

and import of HCFC–142b are ending, as 

compared to a constant allocation in all 

five years. Such a signal will help 

encourage equipment owners to 

transition to equipment that uses nonODS refrigerants, while also providing 

them with an opportunity and time to 

select alternatives that are more energy 

efficient. EPA is finalizing its proposed 

consumption allocations of 35 MT in 

2015, 30 MT in 2016, 25 MT in 2017, 

20 MT in 2018, and 15 MT in 2019. 

HCFC–142b consumption and 

production in 2020 will be zero based 

on EPA’s chemical-by-chemical 

phaseout rule (58 FR 65018). 

For production, EPA proposed issuing 

HCFC–142b production allowances at 

the same level as consumption, not the 

same percentage of baseline. Unlike 

HCFC–22 production, historic exports of 

HCFC–142b do not indicate a need for 

additional production allowances to 

meet export demands. EPA stated that it 

would consider issuing up to 100 MT of 

production allowances, even if the final 

consumption allocation is lower, if there 

is documented need for United Statesproduced HCFC–142b in other nonArticle 5 countries; however, the agency 

has not received any such 

documentation. In this rule, EPA is 

finalizing its preferred allocation of 35 

MT of HCFC–142b production 

allowances, decreasing by 5 MT per year 

through 2019. 

EPA received five comments related 

to how it will determine the HCFC–142b 

allocation. Three comments support 

EPA’s proposal to allocate 35 MT of 

HCFC–142b consumption allowances in 

2015 with a decrease of 5 MT each year. 

Three commenters support EPA’s 

proposal to issue production allowances 

at the same level as consumption, 

asserting that a lower percentage would 

discourage U.S. production and harm 

the U.S. economy. One commenter, 

Arkema, requests that EPA make the 

percentage allocations for HCFC–142b 

production allowances the same as the 

proposed percentage for consumption 

allowances, which would result in a 

higher absolute number of production 

allowances. As proposed, the rule 

would provide 35 MT of total 

production allowances, but for some 

companies, their production allowances 

would be much lower than their 

consumption allowances. Arkema 

argues that an individual company 

receiving fewer production allowances 

than consumption allowances would 

discourage U.S. production of HCFC– 

142b, resulting in both environmental 

and economic consequences. Another 

commenter, CIP, stated during the 

January 2014 public hearing on the 

proposed rule that they support issuing 

HCFC–142b allowances only through 

2017 (instead of 2019) to enhance good 

handling, emissions control, and 

enforcement. 

While one commenter recommends 

going to a three-year approach that stops 

providing consumption allowances for 

HCFC–142b in 2018, EPA did not 

propose that option and believes it may 

be too rapid for many of the same 

reasons EPA is not finalizing the 3-year 

approach for HCFC–22. A three-year 

approach would be contrary to long 

standing market expectations and EPA’s 

goal of allowing equipment owners to 

realize the intended life of their 

equipment and plan a smooth, 

thoughtful transition to alternatives. 

For production allowances, EPA does 

not agree that the percent allocations for 

consumption and production should be 

the same. The production baseline for 

HCFC–142b is substantially larger than 

the consumption baseline because of the 

baseline transfers made in 2008 and 

2009. While one company transferred an 

equal number of its HCFC–142b 

baseline consumption and production 

allowances, a second company did not. 

As a result, the number of aggregate 

baseline consumption allowances is 

about 1/5th the number of aggregate 

baseline production allowances. Using 

the same percentage of baseline for 

HCFC–142b production as for 

consumption would result in more 

production allowances than 

consumption allowances. As discussed 

above, historic exports of HCFC–142b 

do not indicate a need for additional 

production allowances to meet export 

demands. For more history on these 


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26Use of HCFC–123 that was imported prior to 

2020, or that is used, recovered and recycled, is still 

allowed for use in fire suppression beyond January 

1, 2020. 

trades, see previous HCFC allocation 

proposed and final rules available at 76 

FR 47451, 77 FR 237, and 78 FR 20004. 

To address the commenter’s concern 

that an individual company might not 

have the desired number of production 

allowances, EPA notes that it is 

allocating more HCFC–22 production 

allowances than consumption 

allowances. HCFC–22 production 

allowances can easily be transferred into 

HCFC–142b production allowances on a 

calendar-year basis. Alternatively, 

HCFC–142b allowance holders can seek 

to transfer allowances from another 

HCFC–142b production allowance 

holder to their company. Finally, EPA 

has allocated up to 10 percent of 

baseline in Article 5 production 

allowances that can be used to export 

domestically-produced HCFC–142b. 

Because of these flexibilities, EPA does 

not see a need to allocate additional 

HCFC–142b production allowances and 

is finalizing its proposed HCFC–142b 

production allocation of 35 MT in 2015, 

decreasing by 5 MT per year through 

2019. 

D. What is the 2015–2019 HCFC–123 

consumption allocation? 

HCFC–123 is currently used as a 

refrigerant and as a fire suppression 

agent, which are the two uses of nonfeedstock virgin HCFCs permitted by 

section 605(a) of the CAA as of January 

1, 2015. The agency proposed to issue 

consumption allowances to allow 

import for these two uses. For the 2010– 

2014 regulatory period, EPA issued 

approximately 2,500 MT of HCFC–123 

consumption allowances each year, 

which is 125% of the HCFC–123 

consumption baseline. EPA has never 

established a production baseline for 

HCFC–123, and the agency has no 

record of domestic production of HCFC– 

123 for refrigeration or fire suppression 

uses during the baseline years (2005– 

2007). 

As stated in the proposal, section 

605(b) of the Clean Air Act restricts 

production of any class II substance to 

100% of baseline levels or less 

beginning on January 1, 2015. Section 

605(c) requires that consumption of 

class II substances be phased out on the 

same schedule as production. The 

agency’s reading of 605(b) and 605(c) 

together is that as of January 1, 2015, 

EPA may allocate no more than 100 

percent of baseline for production or 

consumption of each class II substance. 

This milestone is part of the phaseout 

schedule contained in the CAA. EPA 

has accelerated the section 605 phaseout 

schedule for some HCFCs under the 

authority of section 606. Nevertheless, 

the 2015 milestone in section 605(b) is 

still relevant because it applies to each 

class II substance individually. This is 

in contrast to the basket approach 

contained in the Montreal Protocol. 

Under section 614(b), where there is a 

conflict between Title VI of the CAA 

and the Montreal Protocol, ‘‘the more 

stringent provision shall govern.’’ With 

respect to individual substances, section 

605 is more stringent. Thus, for the 2015 

control period and beyond, EPA may 

not allocate more than 100 percent of 

baseline for any class II substance. 

Under the current phaseout 

regulations, beginning in 2015, 

production and import of HCFC–123 is 

limited to servicing of existing 

refrigeration and air conditioning 

equipment only. In this rule, EPA is 

finalizing revisions to section 82.16(d) 

to allow production and import of 

HCFC–123 for non-residential, 

streaming fire suppression applications 

to complement section 605(a)(4) of the 

CAA (see section IV.B.3.) This 

exemption will end on December 31, 

2019, because beginning in 2020, Article 

2F of the Montreal Protocol restricts 

production and import of HCFCs to 

servicing of existing refrigeration and air 

conditioning equipment.26 While virgin 

HCFCs can continue to be used in fire 

suppression applications, EPA does not 

intend to issue consumption allowances 

for fire suppression after 2019 because 

of this Montreal Protocol requirement. 

In addition, beginning January 1, 2020, 

section 605(a) of the CAA prohibits the 

use of virgin class II substances in the 

installation and/or manufacture of air 

conditioning and refrigeration systems. 

Any HCFC–123 consumption 

allowances issued after 2019 would 

only allow import of HCFC–123 for use 

as a refrigerant for servicing systems 

manufactured prior to January 1, 2020. 

EPA’s understanding is that much of 

the HCFC–123 refrigerant use today is to 

service and manufacture low pressure 

chillers. Given the expectation that 

these chillers can last for more than 20 

years, EPA sought comment on whether 

it should provide a static amount of 

HCFC–123 allowances through 2019 at 

the maximum amount allowed by the 

CAA (100 percent of baseline), or 

whether it should begin to gradually 

reduce HCFC–123 allowances now to 

foster transition. EPA stated that it 

preferred to issue 100 percent of the 

HCFC–123 baseline. This approach 

would be consistent with the way EPA 

allocated HCFC–22 and HCFC–142b 

allowances prior to the 2010 prohibition 

on manufacturing new HCFC–22 and 

HCFC–142b appliances. 

In considering allocation options, 

EPA looked at the projected need for 

virgin HCFC–123 for refrigeration and 

nonresidential fire suppression uses. 

EPA’s modeled need for each of these 

uses is presented in the 2013 Servicing 

Tail Report. In the proposed rule, EPA 

sought comment on the remaining 

refrigerant and fire suppression uses of 

HCFC–123, how much is needed, and 

why non-ODS alternatives could not 

meet this need. Based on data provided 

during the comment period, EPA 

provides an updated projection of 

HCFC–123 need in the 2014 Servicing 

Tail Report. 

EPA received nine comments 

regarding its proposed options for 

issuing HCFC–123 consumption 

allowances. Four commenters support 

EPA’s preferred option to allocate 100 

percent of the HCFC–123 consumption 

baseline. Two of these commenters 

assert that there is no commercially 

available alternative to replace HCFC– 

123 in low-pressure centrifugal chillers, 

and one commenter noted that its 

HCFC–123 alternative development 

strategy is based on the existing date of 

transition (2020) and requires 

significant chiller redesigns. One 

commenter believes that 100 percent 

allocation is necessary to support new 

chillers and those to be serviced in the 

future, and that allowing continued 

HCFC–123 allowances may prevent 

global warming because competitors’ 

products typically use HFC–134a 

(which has a higher GWP than HCFC– 

123). One other commenter states that 

there is no need to decrease the 

allowances over time to ensure a smooth 

transition as the EPA will have the 

opportunity to issue allowances post 

2019 to allow for servicing of existing 

equipment. 

In an attachment to its comments, 

AMPAC makes the case for continued 

HCFC–123 production in 2020 and 

beyond, requesting that EPA consider an 

updated ODP of 0.0098 for the purposes 

of ‘‘analysis of environmental impact.’’ 

This same commenter urged EPA to 

consider increasing the HCFC–123 

allocation to 120 percent of baseline to 

provide flexibility in the market and 

benefits to users and the environment. 

The commenter states that their 

projected need for HCFC–123 

allowances for nonresidential fire 

suppression is more than what is 

proposed in EPA’s preferred allocation 

and the increased allocation they are 

recommending still falls well under the 

Montreal Protocol cap. Specifically, 

AMPAC believes that within section 

605(b) and 605(c), there could be EPA 


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27See Appendix B to 40 CFR Part 82 Subpart A. 

discretion, subject to meeting the HCFC 

cap, to increase the consumption 

allowance allocations for HCFC–123 in 

2015–2019 beyond the values found in 

the baseline years (2005–2007). The 

commenter finds that exercising this 

discretion is appropriate given that the 

highest contemplated level of planned 

allocation of HCFC–22 allowances in 

the Proposed Rule still results in the 

U.S. being well below the Montreal 

Protocol cap. AMPAC also requests that 

EPA increase HCFC–123 allowances for 

2015–2019 by 100 MT to account for 

higher than initially cited use for fire 

suppression. 

Five other commenters state that 

EPA’s preferred HCFC–123 allocation is 

too high. Three of these commenters 

believe that EPA’s justification for its 

preferred allocation is deficient because 

commercially-viable alternatives exist 

for HCFC–123 in centrifugal chillers, 

such as Solstice-1233zd(E) (trans-1- 

chloro-3,3,3-trifluoroprop-1-ene) and 

HFC–134a. One commenter also noted 

that they have a chiller using HFC–134a 

that surpasses industry standards for 

energy efficiency. This commenter also 

believes that EPA has made no effort to 

encourage the development and use of 

alternatives for HCFC–123. Another 

commenter believes that EPA has given 

preferential treatment to an ODS that 

favors one manufacturer in the air 

conditioning business. Two other 

commenters support an allocation of 

less than 100 percent of the 

consumption baseline to account for 

recovery and recycling. 

The isomer of HCFC–123 that is 

primarily used in fire suppression has 

an ODP of 0.02 under long-standing 

CAA regulations 27 and a GWP of 77. 

While EPA is aware of studies showing 

a lower ODP for HCFC–123, the specific 

ODP used for HCFC–123 does not affect 

the section 605(b) and (c) requirement to 

limit the production and consumption 

of each class II substance to at most 100 

percent of baseline starting in 2015. The 

baseline is not ODP-weighted, so a 

change in the ODP would not change 

the amount that EPA could allocate. 

Additionally, the Montreal Protocol 

uses an ODP of 0.02, so EPA will 

continue to use that value. HCFC–123 

has a lower GWP than some of the 

refrigerant alternatives available (e.g. 

HFC–134a with a GWP of 1,430). 

However, compared to a recently SNAPlisted alternative, Solstice-1233zd(E), 

HCFC–123 has both a higher ODP (0.02 

vs. 0.00024–0.00034) and a higher GWP 

(77 vs. 4.7–7). Of note, Solstice1233zd(E) equipment is still being 

commercialized, but should be available 

in the future. 

EPA is not attempting to favor any 

type of equipment or any specific 

company with this allocation as some 

commenters have suggested. EPA does 

not have control over the number of 

manufacturers that use a particular 

chemical in their equipment. The 

agency is merely attempting to meet 

needs for HCFC–123 that are consistent 

with market projections, while also 

encouraging transition and the 

development of non-ODP and low-GWP 

alternatives. 

Several commenters indicated that 

allocating 100 percent of baseline is 

counter to how the agency has handled 

other HCFCs. In response, EPA notes 

that handling HCFC–22 and HCFC–142b 

differently from HCFCs with lower 

ODPs has been a long-standing agency 

policy. While EPA could have 

accelerated the phaseout schedule for 

HCFC–123 as it did for HCFC–22 and 

HCFC–142b, it did not. In the 1993 

proposed rule, EPA stated that ‘‘no 

change to the statutorily specified 

timetable would be imposed on HCFC– 

123 [. . .] because of [its] substantially 

shorter lifetime[] and lower ODP[],’’ (58 

FR 15027). EPA continues to believe 

this logic is appropriate for the HCFC– 

123 allocation during the 2015–2019 

time period. The agency is finalizing a 

consumption allocation of 2,000 MT, 

which is 100 percent of baseline, for the 

years 2015–2019. 

Additionally, allocating 100 percent 

of baseline is consistent with how EPA 

handled the allocations of HCFC–22 and 

HCFC–142b prior to 2010. As of January 

1, 2010, it became illegal to use virgin 

HCFC–22 or HCFC–142b in the 

manufacture of a new appliance. In 

2003–2009, EPA allocated 100% of the 

HCFC–22 and HCFC–142b baselines 

right up until the prohibition on use in 

manufacturing took effect. In this final 

rule, EPA is taking similar action with 

HCFC–123 by allocating 100 percent of 

baseline up until the January 1, 2020, 

ban on using virgin HCFC–123 in the 

manufacture of appliances takes effect. 

There is one important difference 

between how EPA is allocating 

allowances for HCFC–123 compared to 

HCFC–22 and HCFC–142b. In 2003– 

2009, EPA allocated more HCFC–22 and 

HCFC–142b consumption than 

estimated market need. In this rule, EPA 

is allocating fewer HCFC–123 

consumption allowances than the 

amount of estimated market need. 

Allocating below EPA’s estimate for 

market need, combined with the 2020 

ban on the manufacture of new HCFC– 

123 appliances, should provide 

incentive to recover and recycle used 

refrigerants, as well as to transition to 

alternative non-ODS refrigerants, all 

while meeting anticipated market need. 

E. What is the 2015–2019 HCFC–124 

consumption and production 

allocation? 

The primary use of HCFC–124 

beginning January 1, 2015, will be in 

refrigerant blends. Though HCFC–124 

has sterilant and fire suppression 

applications that are listed as acceptable 

under the SNAP program, EPA is 

adopting only a narrow de minimis 

exemption to the CAA section 605(a) 

use prohibition for the use of virgin 

HCFCs as sterilants, and there are no 

remaining commercial applications of 

HCFC–124 fire suppression products. 

Several refrigerant blends with HCFC– 

124 are listed as acceptable by the SNAP 

program: R–401A, R–401B, R–409A, R– 

414A, R–414B, R–416A and others. 

Given EPA projected some continued 

use of certain refrigerant blends 

containing HCFC–124, the agency 

proposed to issue HCFC–124 allowances 

in 2015–2019. As mentioned in the 

proposal, the Servicing Tail Report 

likely does not capture all current uses 

of HCFC–124 refrigeration equipment. 

EPA proposed to allocate both 

consumption and production at the 

level of 200 MT. However, the agency 

requested comments on a lower 

allocation of as few as 4 MT of HCFC– 

124 consumption and production 

allowances, consistent with the 

Servicing Tail Report projections. While 

not the preferred allocation, EPA said it 

would consider a lower allocation if 

commenters could provide evidence 

that the allocation should be that low. 

Similarly, EPA requested data from 

commenters in support of allocating up 

to 400 MT of HCFC–124 consumption 

and production allowances. The agency 

also sought comment on the transition 

or retrofit plans of equipment owners, 

and for how long they expect to need 

virgin HCFC–124. 

The agency received five comments 

about the HCFC–124 allocation. Two 

companies support EPA’s proposal to 

allocate 200 MT of production and 

consumption allowances; one of these 

commenters believes that 200 MT of 

consumption and production 

allowances would allow for continued 

use of refrigerants containing HCFC–124 

while limiting the growth of this market 

as the industry transitions to non-ODS 

refrigerants. One commenter believes 

the agency failed to account for exports 

in their allocation, and thus allowances 

should be either 400 MT for production 

and 200 MT for consumption or 400 MT 

for both production and consumption, if 

the agency prefers to allocate the same 


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28Population data from http://www.census.gov/

popest/data/state/totals/2013/index.html. 

quantity of production and 

consumption allowances. 

Two commenters do not support the 

proposed allocation. EIA asserts that 

EPA’s proposal is not based on real 

demand. EIA states that if the major use 

for HCFC–124 is as a sterilant blend that 

will be banned under the CAA in 2015, 

and the estimated need from the 

Vintaging Model is so low, without 

taking into account recovery and reuse 

of any of the refrigerant nor potential 

stockpiles, there is no reason to allocate 

any more production or consumption. 

NRDC commented that HCFC–124 

allowances should not be set higher 

than 4 MT per year—i.e., the level 

estimated by the Vintaging Model—to 

foster markets in recycling and safer 

alternatives. 

Commenters opposed to EPA’s 

preferred allocation of 200 MT cite the 

Servicing Tail Report and the 

prohibition on the use of HCFC–124 as 

a sterilant, combined with the need to 

encourage recovery and reclamation, as 

justification for a lower allocation. As 

EPA stated in the proposal, niche 

refrigerant blends with low servicing 

need, like R–409A, are not typically 

modeled. R–409A is predominantly 

used as a replacement for CFC–12 and 

R–500 in medium- and large-sized 

refrigeration equipment. Included in the 

docket with the proposed rule is 

Preliminary 2011 and 2012 Sales and 

Distribution Data from the California 

Air Resources Board’s Refrigerant 

Management Program. This document 

shows that in California alone, the 

amount of HCFC–124 included in 

blends sold in 2012 totaled more than 

40 MT—well above the amount 

modeled in the Servicing Tail Report. If 

use were proportional to population, a 

California value of 40 MT would imply 

approximately 330 MT of HCFC–124 for 

the entire U.S. in 2012.28 This level 

would then be expected to decrease by 

2015; a linear decrease from 2012 to 

zero in 2020 would bring this amount to 

206 MT in 2015. Based on these data 

and comments from stakeholders, 

allocating an amount lower than 200 

MT for consumption throughout the 

entire U.S. may not meet the servicing 

need for equipment containing HCFC– 

124 refrigerant blends. EPA notes that 

200 MT is a greater than 90 percent 

reduction from the 2014 consumption 

and production allocation levels for 

HCFC–124. For reference, the 2014 

consumption and production 

allocations are roughly 3,000 MT and 

5,000 MT, respectively. 

One commenter also requests that 

EPA increase production allowances to 

allow for export of HCFC–124. After 

reviewing recent export data to both 

Article 5 and non-Article 5 countries, 

EPA concludes the preferred allocation 

of 200 MT of production, combined 

with Article 5 allowances, should 

provide an adequate amount of 

flexibility. Article 5 allowances for 

HCFC–124 will be approximately 400 

MT in 2015–2019, ten percent of the 

aggregate HCFC–124 production 

baseline. If additional production 

allowances are needed to allow for 

export, companies can transfer HCFC– 

22 production allowances into HCFC– 

124 production allowances or Article 5 

allowances for HCFC–22 into Article 5 

allowances for HCFC–124. As discussed 

in Section VI.B of the preamble, EPA is 

allocating a greater number of HCFC–22 

production allowances than HCFC–22 

consumption allowances. 

Based on industry feedback and 

public comments on the needs and uses 

of HCFC–124, and the use of HCFC–124 

consumption allowances in recent 

years, EPA is finalizing its proposal to 

allocate 200 MT of HCFC–124 

consumption and production 

allowances each year between 2015 and 

2019. EPA’s goal is to ensure that 

servicing needs can be met, while also 

encouraging recovery and reuse or 

transition to non-ODS refrigerant 

blends. An allocation of 200 MT 

supports this goal. 

F. How is EPA addressing the end of the 

HCFC–141b exemption program? 

The HCFC–141b exemption program 

has been in place since the start of the 

HCFC allowance program in 2003. In 

the preamble to the 2010–2014 Rule, 

EPA stated that the petition process for 

HCFC–141b exemption allowances at 40 

CFR 82.16(h) would end in 2015, since 

HCFC–141b is not used as a refrigerant 

and thus does not meet the criteria 

established by section 605(a) for 

continued use. HCFC–141b similarly is 

not used as a fire suppression agent and 

therefore would not be covered by the 

recent modification to CAA section 

605(a). EPA proposed to remove the 

HCFC–141b petition process from 40 

CFR 82.16(h) effective January 1, 2015. 

EPA received only one comment on 

HCFC–141b. The commenter supports 

EPA’s proposal to remove the petition 

process from the regulations, thereby 

eliminating unnecessary use of HCFC– 

141b and facilitating a smooth transition 

to alternatives. The agency is finalizing 

its proposal to remove the petition 

process for HCFC–141b exemption 

allowances at section 82.16(h) from the 

regulations and is terminating the 

HCFC–141b exemption allowance 

program, effective January 1, 2015. 

G. Other HCFCs That Are Class II 

Controlled Substances 

EPA has not established baselines or 

issued allowances for the production or 

import of HCFCs that are not included 

in the tables at 40 CFR 82.16(a). The 

prohibitions in 40 CFR 82.15(a) and (b) 

on production and import without 

allowances do not apply to such HCFCs. 

However, the phaseout schedule in 40 

CFR 82.16 applies to all class II 

substances, whether or not they are 

governed by the allowance system. 

Similarly, all class II substances are 

subject to the restrictions on 

introduction into interstate commerce 

and use contained in 40 CFR 82.15(g). 

HCFCs that EPA has listed as class II 

controlled substances are identified in 

appendix B to subpart A. 

Beginning January 1, 2015, the use of 

all class II substances is banned, unless 

specifically exempted (see section IV.B. 

of this preamble for more details). EPA 

sought comment on whether any of the 

HCFCs not governed by the allowance 

system qualify for the nonresidential 

fire suppression and/or refrigeration 

servicing exemptions and what quantity 

the market would need going forward 

for these purposes. Should the need for 

any of these chemicals grow, EPA 

would consider establishing baselines 

and allocating calendar-year allowances 

via a separate rulemaking. EPA received 

no comments on the production, import, 

or use of HCFCs not governed by the 

allocation system. 

Also, as proposed, EPA is amending 

the list of class II controlled substances 

in appendix B of subpart A to better 

match the lists in Clean Air Act section 

602 and the Montreal Protocol (Group I, 

Annex C). Both the Protocol and CAA 

section 602 include all isomers of listed 

substances, but 40 CFR part 82, subpart 

A, appendix B has not included all 

isomers, only those that are specifically 

named (e.g., HCFC–141b is listed as 

such, but there are other isomers of 

HCFC–141b, namely HCFC–141 and 

HCFC–141a, that are not included in 

appendix B). 

CAA section 602 states that EPA 

‘‘shall publish’’ a list of class II 

substances that shall include the 

specified HCFCs and ‘‘shall also include 

the isomers’’ of those substances. EPA’s 

intent was to list all isomers in 

appendix B, as indicated by the footnote 

explaining that when a range of ODPs is 

listed for a chemical, the range applies 

to an isomeric group. EPA proposed a 

change to correct this omission and did 

not receive any adverse comment. 

Therefore, EPA is reconciling the 


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statutory and Montreal Protocol lists 

with the list in the regulations by 

adding a footnote to 40 CFR part 82 

subpart A appendix B stating that the 

appendix includes all isomers of a listed 

chemical, even if the isomer itself is not 

listed on its own. 

VII. Other Adjustments to the HCFC 

Allocation System 

A. What is EPA’s response to comments 

on dry-shipped HCFC–22 condensing 

units? 

Condensing units are a type of 

component in split system air 

conditioners. Under current regulations, 

the sale or distribution of a condensing 

unit pre-charged with HCFC–22 is 

prohibited (40 CFR 82 subpart I); 

however, a dry-shipped unit may be 

sold and used to repair an existing 

system that uses HCFC–22 as the 

refrigerant. In February 2011, the Carrier 

Corporation sent a letter to EPA asking 

the agency to ban this particular type of 

repair. In the proposed rule providing 

2012–2014 HCFC–22 allocations (77 FR 

237, January 4, 2013), EPA took 

comment on whether repairs using dryshipped condensing units affect the 

phaseout of HCFC–22. The agency 

received numerous comments, and 

responded to them in the 2012–2014 

Rule. While many comments discussed 

dry-shipped condensing units, very few 

provided EPA any additional data or 

information to indicate that repairs 

using condensing units affect the HCFC 

phaseout. In the proposed rule to 

today’s action the agency again sought 

quantifiable information on the number 

of dry-shipped condensing units being 

shipped, whether they are being used as 

a repair in lieu of a compressor or motor 

replacement, and whether and to what 

extent condensing unit replacements 

extend the life of an existing system. 

Most comments focused on the merits of 

banning or not banning the 

manufacture, sale, or installation of dryshipped condensing units. That action 

is beyond the scope of this rulemaking. 

While EPA did not propose a ban on 

dry-shipped condensing units in the 

2015–2019 proposal, the agency is 

summarizing and responding to 

comments on dry-shipped units in the 

Response to Comments found in the 

docket. 

EPA’s purpose in requesting comment 

on this topic was to gain additional 

data. Since the agency did not receive 

quantifiable data, particularly on the 

number of dry-shipped HCFC–22 

condensing units shipped in the past 

several years, EPA intends to exercise 

its authority under CAA section 114 to 

collect additional information in order 

to confirm shipment trends between 

January 1, 2008, and January 1, 2015. 

After reviewing this data, EPA intends 

to consider whether additional 

regulatory action is appropriate to meet 

the goals of CAA Title VI. 

B. How is EPA treating requests for 

additional consumption allowances in 

2020 and beyond? 

The regulations at 82.20(a) allow a 

person to obtain consumption 

allowances equivalent to the quantity of 

class II controlled substances that the 

person exported during the control 

period, provided that the substances 

were originally produced or imported 

with consumption allowances. The 

exporter must submit certain 

information to EPA which the agency 

reviews before either granting or 

denying the request for additional 

consumption allowances. Historically, a 

person could submit this request 

(known as a Request for Additional 

Consumption Allowances, or RACA) 

upon export of any HCFC for which 

consumption allowances were originally 

expended, regardless of what control 

period the production or import took 

place. 

EPA proposed to modify the RACA 

regulations in light of the approaching 

phaseout deadlines for certain HCFCs. 

For example, consider 1,000 kg of 

HCFC–22 that is produced in 2019 using 

consumption and production 

allowances. Under the previous 

regulations, in 2020 or later, that 

material could be exported and that 

exporter would have been eligible to 

request 1,000 additional HCFC–22 

consumption allowances. However, 

there will not be any consumption 

allowances for HCFC–22 in 2020 or 

subsequent years. Therefore, the agency 

proposed to clarify the RACA 

regulations. 

Specifically, EPA proposed to add the 

requirement that both the export and the 

request for additional consumption 

allowances must occur in a year in 

which consumption allowances were 

issued. Such clarifying language about 

RACA eligibility already exists for class 

I controlled substances. EPA did not 

receive any adverse comments on this 

clarification and is finalizing the 

proposed text at 82.20(a). 

The agency did receive one comment 

from the Alliance for Responsible 

Atmospheric Policy supporting EPA’s 

proposal to not issue any additional 

consumption allowances after 

consumption of a particular chemical 

has been entirely phased out. The 

Alliance also stated that it supports 

requiring the export of HCFCs and the 

request for additional consumption 

allowances to occur in the same year as 

the consumption allowances were 

expended. EPA is clarifying here that 

use of consumption allowances to 

produce or import HCFCs may still 

occur in one year, with export and the 

RACA occurring in a subsequent year, 

so long as export and the RACA occur 

in a year prior to the complete phaseout 

of that particular HCFC. 

C. What is EPA’s response to comments 

on maximizing compliance with HCFC 

regulations? 

In the proposed rule, EPA requested 

comments and suggestions for ensuring 

compliance with HCFC regulations. The 

2015 stepdown and the approaching 

phaseout of HCFC–22 may affect prices, 

which could increase the incentive for 

illegal activity, particularly illegal 

imports of HCFCs or HCFC blends. On 

the other hand, the agency believes that 

reduced allocations and market changes 

increasing the value of the material will 

encourage proper recovery and decrease 

motivation to vent HCFCs, especially 

HCFC–22. EPA sought comment on how 

it could alter existing regulations to 

encourage compliance with the HCFC 

phaseout requirements and section 608 

refrigerant regulations. In addition, the 

agency was interested in ways it could 

increase awareness and ensure 

compliance with the section 605(a) use 

restrictions and the section 611 labeling 

requirements that will begin in 2015. 

EPA received nine comments 

providing suggestions on how the 

agency can maximize compliance with 

HCFC regulations. Several commenters 

suggested increased educational efforts 

on regulatory requirements and the 

consequences of non-compliance for 

distributors, contractors, and 

homeowners. Other commenters 

asserted that the best way to maximize 

compliance is to bolster the reclamation 

industry. 

Two commenters noted the 

importance of addressing illegal trade, 

especially as the availability of HCFC– 

22 declines. One commenter suggested 

increasing the efficiency of the current 

import and export documentation 

practices by either requiring electronic 

transfer/acceptance of documents prior 

to shipments arriving at the port/border 

or by creating a license system for HCFC 

imports similar to what already exists in 

some countries. 

Other suggestions for maximizing 

compliance with HCFC regulations 

include: Implementing additional 

recordkeeping requirements for 

contractors, similar to those of system 

owners; reducing leak rate requirements 

from the current 35% per year and 

reducing the size of the systems subject 


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to recordkeeping and leak rate 

requirements to below 50 lbs.; returning 

to the excise tax that was used for CFCs 

during its phaseout; establishing a 

system for regulating the venting of 

appliances and residential units during 

maintenance and installation; and 

enforcing a fixed price support that can 

provide incentives to contractors for 

recovery and provide stability and 

sufficient volume to support the 

reclamation industry. 

EPA appreciates stakeholders’ 

thoughts on ways to maximize 

compliance with the HCFC regulations. 

With respect to educational materials, 

EPA has several guidance documents 

and FAQs on HCFC–22 on its Web site 

at: http://www.epa.gov/ozone/title6/

phaseout/classtwo.html, as well as 

guidance on labeling requirements, 

found in the docket and at: http://

www.epa.gov/ozone/title6/labeling. In 

addition, EPA has a list of previous 

enforcement actions on its Web site at: 

http://www.epa.gov/ozone/enforce. The 

agency also encourages stakeholders to 

share any of this information with their 

clients, members, or fellow industry 

stakeholders. 

The agency also is committed to 

preventing illegal trade of HCFCs, and 

works closely with colleagues at 

Customs and Border Protection (CBP), 

as well as Homeland Security 

Investigation (HSI). In addition, EPA is 

participating in the greater International 

Trade Data System (ITDS) initiative to 

leverage the benefits of a single-window 

Automated Commercial Environment 

(ACE). The transition to broker import 

filings in ACE is expected to play an 

important role in EPA’s ability to 

proactively examine data associated 

with imports of HCFCs. For more 

information see http://www.itds.gov/xp/ 

itds/toolbox/background/

background.xml and CBP’s Federal 

Register Notice from December 2013 on 

the ODS ITDS pilot (78 FR 75931). 

Under this pilot, ‘‘pre-approved 

importers’’ will be automatically 

checked and their imports released. 

This helps ensures compliance with 

import regulations, while expediting the 

import process. EPA notes the greater 

ITDS efforts should address some of the 

issues raised by the commenter 

suggesting EPA restructure the import 

and export documentation 

requirements. 

The agency is appreciative of the 

other recommendations submitted by 

commenters and will consider whether 

it is appropriate for the agency to take 

additional regulatory action. 

VIII. Modifications to Section 608 

Regulations 

The portion of the stratospheric ozone 

regulations titled Recycling and 

Emissions Reduction (40 CFR part 82 

subpart F) contains requirements 

promulgated under CAA section 608. 

The requirements under section 608 are 

intended to reduce emissions of class I 

and class II refrigerants and their 

substitutes to the lowest achievable 

level by, among other things, designing 

standards for the use of refrigerants 

during the service, maintenance, repair, 

and disposal of appliances. (See 40 CFR 

82.150). 

To support this goal, EPA is finalizing 

several updates to its reclamation 

requirements. Specifically, EPA is 

finalizing its proposal (1) to require a 

reclaimer to notify EPA when there is a 

change in business management, 

location, or contact information and (2) 

to require disaggregated information for 

all reclaimed refrigerants as part of the 

annual reporting. EPA is not finalizing 

its proposed incorporation by reference 

of AHRI 700–2012 at this time due to 

the ongoing review of the standard by a 

joint ASHRAE and AHRI research 

group. 

A. Overview of Current Reclamation 

Standards 

Recovered refrigerant often contains 

contaminants, including air, water, 

particulates, acids, chlorides, high 

boiling residues, and other impurities. 

Reclamation is the re-processing and 

upgrading of a recovered controlled 

substance through such mechanisms as 

filtering, drying, distillation, and 

chemical treatment in order to restore 

the substance to a specified standard of 

performance. EPA’s definition of 

reclaim at 40 CFR 82.152 refers to 

specifications in appendix A to 40 CFR 

part 82, subpart F that are based on ARI 

Standard 700–1995, Specification for 

Fluorocarbons and Other Refrigerants. 

A used refrigerant may not be sold, 

distributed or offered for sale or 

distribution, unless certain 

requirements have been met; one such 

set of requirements provides in part that 

the used refrigerant must be reclaimed 

to the purity level specified by the 

regulations and its purity must be 

verified (see 40 CFR 82.154(g)(1)). 

Additionally, reclamation companies 

must meet certain EPA certification 

requirements to become a reclaimer and 

must satisfy recordkeeping and 

reporting requirements, including 

reporting annually on the amount of 

ODS refrigerant that they reclaim (see 40 

CFR 82.164 and 82.166(g–h)). 

B. Benefits of Reclamation 

Proper recovery, recycling or 

reclamation, and reuse of HCFC–22 and 

other ODS refrigerants is an essential 

component of stratospheric ozone 

protection. Refrigerant reuse is 

preferable to venting or destruction. 

Recovery and reuse reduces emissions 

of HCFCs to the atmosphere. Reuse also 

reduces the amount of virgin material 

that needs to be produced. Section 

608(c) of the CAA contains certain 

prohibitions on knowingly venting or 

releasing HCFCs during maintenance, 

service, repair, or disposal of an 

appliance and EPA regulations require 

that HCFCs be recovered during service 

or disposal of appliances (see 40 CFR 

82.154 and 82.156). 

Recovery and reuse is becoming 

increasingly important as the United 

States continues its progress in the 

phaseout of ODS. As discussed earlier 

in this preamble, EPA is reducing the 

number of HCFC–22 consumption 

allowances provided in 2015 by almost 

60 percent relative to 2014. Reclamation 

will continue to be a key component of 

a smooth transition from HCFC–22 to 

non-ODS alternatives. 

C. What regulatory changes is EPA 

finalizing under CAA section 608? 

1. Consideration of AHRI 700–2012 

Standards 

In the proposed rule, EPA sought 

comment on revising the reclamation 

standards in appendix A of 40 CFR 

subpart F to incorporate by reference the 

current version of the ARI (now AHRI) 

Standard 700–2012, including addenda 

added in August 2008 and August 2012 

(AHRI 700C–2008: Appendix C to AHRI 

Standard 700-Analytical Procedures for 

AHRI Standard 700–06 and AHRI 700D– 

2012: Appendix D Gas Chromatograms 

for AHRI Standard 700–2012- 

Informative, all three of which are 

included in the docket). While EPA 

would prefer to update the standards to 

use the most current industry best 

practices, the agency is not finalizing its 

proposal to incorporate the AHRI 700– 

2012 standard at this time because of 

concerns about the 40 ppm limit for 

unsaturated contaminants (unsaturates). 

EPA received ten comments related to 

the adoption of AHRI Standard 700– 

2012. Six comments oppose the 

adoption of AHRI Standard 700–2012 at 

this time, stating that the specification 

of 40 ppm limit for unsaturates will 

cause undue hardship to the 

reclamation industry since most 

reclaimers do not have the capability to 

detect contamination at this level. One 

comment opposing the change is signed 

by ten companies. Commenters also 


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note that studies and testing are ongoing 

and EPA should wait until they are 

complete before adopting the new 

standard to ensure the unsaturates limit 

is appropriate for HVACR equipment 

performance. One commenter believes 

that any new standard will need to be 

phased in over a five-year period to give 

companies ample time to adapt. 

Another commenter recommends that 

reclaimed refrigerant collected and 

processed in the U.S. that is not mixed 

or blended with new refrigerants be 

exempt from the unsaturates 

specification in the AHRI Standard 700– 

2012. The commenter notes that a 

significant quantity of reclaimed 

refrigerant that would have passed the 

previous AHRI standard would fail this 

new standard. 

Five commenters support the 

adoption of AHRI Standard 700–2012, 

stating that it reflects the most up to 

date testing procedures which have 

already been recognized and adopted by 

the industry since 2006. Two 

commenters strongly recommend that 

EPA institute a process by which it will 

adopt future versions of the AHRI 

standard in a timely manner. Since an 

AHRI and ASHRAE joint research 

project has not yet concluded its 

assessment of the appropriateness of the 

40 ppm limit for unsaturates, EPA is not 

finalizing its proposed revision to 

appendix A and the definition of 

‘‘reclaim’’ at this time. Once the 

research project, Effect of Unsaturated 

Fluorocarbon Contaminates on the 

Reliability and Performance of HVACR 

Equipment, is completed, EPA will 

reassess how to proceed. 

2. Notification to EPA of Changes to 

Business Management, Location, or 

Contact Information 

Reclaimer certification does not 

transfer when there is a change in 

ownership. Section 40 CFR 82.164(f) 

requires the new owner of the 

reclamation company to certify with 

EPA within thirty days of the change of 

ownership; however, there are no 

provisions that a reclamation company 

must notify EPA of changes in business 

management, location, or contact 

information for the refrigerant manager 

who communicates with EPA. EPA 

believes that notification of changes in 

business information would improve 

accountability and benefit reclaimers in 

the long run. Without accurate 

information, EPA may not be able to 

communicate with a reclaimer in a 

timely manner. Additionally, as a 

benefit to the public, the agency wants 

to ensure that its Web site listing 

certified reclaimers and their contact 

information is accurate. All of the 

comments received on the proposed 

change were supportive, EPA is 

finalizing its proposal to require 

notification from the reclaimer when 

there is a change in business 

management, location, or contact 

information. The change will appear at 

40 CFR 82.164(f). 

3. Reporting and Recordkeeping 

Requirements 

Currently, 40 CFR 82.166(h) requires 

that reclaimers, on an annual basis, 

report how much material was received 

for reclamation, the mass of refrigerant 

reclaimed, and the mass of waste 

product generated as a result of 

reclamation activities. However, the 

regulations do not clearly state that 

reported information must be broken 

down by refrigerant type. Some 

reclaimers do submit information 

broken down by refrigerant, and EPA 

typically asks for refrigerant-specific 

information when it is not provided. 

EPA uses this information as part of its 

review of refrigerant supply to help 

ensure the continued smooth transition 

out of ODS refrigerants. The agency 

believes it is essential for EPA and the 

public to have accurate information 

concerning the amounts of specific 

types of refrigerants that are available 

from reclaimers for reuse. 

All comments received on the 

proposal were supportive of EPA’s 

proposed change. EPA is finalizing its 

proposal to require disaggregated 

information for all reclaimed 

refrigerants as part of the annual 

reporting. The revision will appear at 40 

CFR 82.166(h). The agency believes that 

this proposed change will clarify what 

information it needs from reclaimers up 

front, and will alleviate the need for 

additional back-and-forth between EPA 

and reclamation companies that in the 

past were not submitting refrigerantspecific data, thereby potentially 

reducing burden associated with 

reporting for those companies. 

4. Other Section 608 Reclamation 

Program Options 

EPA also sought comment on whether 

the agency should initiate a rulemaking 

that would require (1) reporting of 

inventory information from reclaimers 

and on the possibility of future 

reporting and recordkeeping changes 

that would help minimize emissions 

and facilitate a smooth transition away 

from ODS, (2) a more robust reclaimer 

certification application, and (3) 

expanded end product testing. EPA 

appreciates the diverse comments that 

were received and will consider those 

comments as it determines whether to 

take additional action in future. 

5. Other Issues Related to Section 608’s 

National Recycling and Emissions 

Reduction Program 

EPA also received a comment in 

support of a petition that EPA recently 

received from the Alliance dated 

January 31, 2014, requesting that the 

agency initiate rulemaking to extend the 

section 608 refrigerant management 

regulations to hydrofluorocarbons 

(HFCs) and other substitutes for class I 

and class II ODS. The Alliance cites 

section 608(c)(2) of the CAA as 

authority. While action on this petition 

is beyond the scope of this rulemaking, 

EPA is actively considering the merits 

and environmental benefits of this 

petition under a separate process. A 

copy of the petition is included in the 

docket for this rulemaking as a 

reference. 

IX. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

Under Executive Order 12866 (58 FR 

51735, October 4, 1993), this action is a 

‘‘significant regulatory action’’ since it 

raises ‘‘novel legal or policy issues.’’ 

Accordingly, EPA submitted this action 

to the Office of Management and Budget 

(OMB) for review under Executive 

Orders 12866 and 13563 (76 FR 3821, 

January 21, 2011) and any changes made 

in response to OMB recommendations 

have been documented in the docket for 

this action. 

EPA did not conduct a specific 

analysis of the benefits and costs 

associated with this particular action 

because many previous analyses 

provide a wealth of information on the 

costs and benefits of the United States 

ODS phaseout, and specifically the 

HCFC phaseout: 

• The 1993 Addendum to the 1992 

Phaseout Regulatory Impact Analysis: 

Accelerating the Phaseout of CFCs, 

Halons, Methyl Chloroform, Carbon 

Tetrachloride, and HCFCs. 

• The 1999 Report Costs and Benefits 

of the HCFC Allowance Allocation 

System. 

• The 2000 Memorandum Cost/

Benefit Comparison of the HCFC 

Allowance Allocation System. 

• The 2005 Memorandum 

Recommended Scenarios for HCFC 

Phaseout Costs Estimation. 

• The 2006 ICR Reporting and 

Recordkeeping Requirements of the 

HCFC Allowance System. 

• The 2007 Memorandum 

Preliminary Estimates of the 


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Incremental Cost of the HCFC Phaseout 

in Article 5 Countries. 

• The 2007 Memorandum Revised 

Ozone and Climate Benefits Associated 

with the 2010 HCFC Production and 

Consumption Stepwise Reductions and 

a Ban on HCFC Pre-charged Imports. 

A memorandum summarizing these 

analyses is available in the docket. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. The 

Office of Management and Budget 

(OMB) has previously approved the 

information collection requirements 

contained in the existing regulations at 

40 CFR part 82, subpart A under the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. and has 

assigned OMB control number 2060– 

0498. 

While this rule modifies the 

recordkeeping and reporting 

regulations, it does not increase the 

information collection burden. The 

changes are as follows: (1) Requiring 

reclaimers to provide updated contact 

information and (2) requiring reclaimers 

to provide the amount of each 

refrigerant reclaimed in their annual 

reporting. These changes reflect 

customary business practices and 

therefore do not affect information 

collection burden. In both of these 

cases, EPA is modifying the regulations 

so they align with current practices. 

EPA has posted to the docket and 

submitted to OMB completed an 

Information Collection Request (ICR) 

Change Worksheet, documenting the 

changes and their non-effect on the 

collection burden. The OMB control 

numbers for EPA’s regulations in 40 

CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act (RFA) 

The Regulatory Flexibility Act (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, a small 

entity is defined as: (1) A small business 

as defined by the Small Business 

Administration’s (SBA) regulations at 13 

CFR 121.201; (2) a small governmental 

jurisdiction that is a government of a 

city, county, town, school district or 

special district with a population of less 

than 50,000; and (3) a small 

organization that is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. This action will 

potentially affect the following 

categories: 

—Industrial Gas Manufacturing entities 

(NAICS code 325120), including 

fluorinated hydrocarbon gas 

manufacturers and reclaimers; 

—Other Chemical and Allied Products 

Merchant Wholesalers (NAICS code 

424690), including chemical gases 

and compressed gases merchant 

wholesalers; 

—Air-Conditioning and Warm Air 

Heating Equipment and Commercial 

and Industrial Refrigeration 

Equipment Manufacturing entities 

(NAICS code 333415), including airconditioning equipment and 

commercial and industrial 

refrigeration equipment 

manufacturers; 

—Air-Conditioning Equipment and 

Supplies Merchant Wholesalers 

(NAICS code 423730), including airconditioning (condensing unit, 

compressors) merchant wholesalers; 

—Electrical and Electronic Appliance, 

Television, and Radio Set Merchant 

Wholesalers (NAICS code 423620), 

including air-conditioning (room 

units) merchant wholesalers; 

—Plumbing, Heating, and AirConditioning Contractors (NAICS 

code 238220), including Central airconditioning system and commercial 

refrigeration installation, HVACR 

contractors; 

—Refrigerant reclaimers, manufacturers 

of recovery/recycling equipment, and 

refrigerant recovery/recycling 

equipment testing organizations; 

—Fire Extinguisher Chemical 

Preparations Manufacturing (325998); 

Portable Fire Extinguishers 

Manufacturing (339999); Other 

Aircraft Parts and Auxiliary 

Equipment Manufacturing (336413); 

—Surgical Appliance and Supplies 

Manufacturing (339113); Ophthalmic 

goods manufacturing (339115); 

General Medical and Surgical 

Hospitals (622110); Specialty (Except 

Psychiatric and Substance Abuse) 

Hospitals (622310); 

—Entities Performing Solvent Cleaning, 

(including but not necessarily limited 

to NAICS subsector codes 332 and 

335). 

After considering the economic 

impacts of today’s final rule on small 

entities, I certify 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 rule 

on small entities.’’ 5 U.S.C. 603 and 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 regulatory 

burden, or otherwise has a positive 

economic effect on all of the small 

entities subject to the rule. 

Without allowances for the 2015– 

2019 regulatory period, existing 

regulations would prohibit the 

production and import of HCFCs. Since 

the direct result of this final action is to 

allocate HCFC allowances for 

production and import, thereby 

relieving a prohibition, the direct effects 

of this final decision are not a potential 

burden to small business. EPA’s HCFC 

Phaseout Benefits and Costs Memo, 

included in the docket for this 

rulemaking, provides a summary of 

previous small business analyses. 

Though EPA certified in the proposal 

that this rulemaking would not have a 

significant impact on a substantial 

number of small entities, EPA 

completed an economic screening 

analysis prior to development of this 

final rule, titled, ‘‘Economic Impact 

Screening Analysis for Proposed 

Adjustments to the Allowance System 

for Controlling HCFC Production, 

Import and Export’’ (Screening 

Analysis). EPA’s Screening Analysis, 

which is available in the docket, shows 

that the HCFC allocation for 2015–2019 

is expected to have a net economic 

benefit to the small businesses that are 

directly impacted by this rulemaking. 

Therefore, EPA continues to believe that 

this rulemaking does not have a 

significant impact on a substantial 

number of small entities. 

Although this final rule will not have 

a significant economic impact on a 

substantial number of small entities, 

EPA nonetheless has tried to reduce the 

impact of this rule on small entities. The 

agency is also aware that there is 

substantial interest in this rule among 

small entities, particularly recovery and 

reclamation companies and HVACR 

distributors and wholesalers. In light of 

this interest, on January 31, 2014, one 

week after the January 23 public 

hearing, EPA participated in a Small 

Business Administration Environmental 

Roundtable on the proposed HCFC–22 

allocation options and discussed the 

proposal with small business attendees. 


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The presentation from that roundtable is 

available in the docket. As explained 

during the roundtable, if a small entity 

will have obligations imposed on them 

directly by the rule then the potential 

impact on those small entities should be 

included in the RFA screening analysis. 

The direct effect of this rulemaking is to 

issue allowances that allow for 

continued production and import of a 

salable commodity. Allowances for 

production and import of four HCFCs in 

2015–2019 are being issued to baseline 

allowance holders, including both large 

and small businesses. 

The January 31 roundtable had 

approximately 20 participants, 

representing both small and large 

businesses. The small businesses in 

attendance did not have a uniform 

position on the size of the HCFC–22 

allocation. Some spoke in support of a 

zero allocation; other small businesses 

or organizations representing small 

businesses spoke out against a zero 

allocation, stating the importance of 

market certainty and a continued 

HCFC–22 allocation for their business 

planning needs. 

EPA received two written comments 

on the RFA. One commenter stated that 

RFA and SBREFA issues have not been 

met because the agency’s statement that 

this action does not have a significant 

economic impact on a substantial 

number of small entities applies to 

allowance holders. The commenter 

writes, ‘‘this rule alters or changes other 

elements of 40 CFR Title VI, Section 608 

and 609.’’ EPA assumes the commenter 

meant 40 CFR part 82, and is then 

referring to Clean Air Act Title VI, 

specifically sections 608 and 609. EPA 

is not taking any action under CAA 

section 609 in this rulemaking. EPA is 

finalizing two minor changes to 

recordkeeping and reporting provisions 

in 40 CFR part 82 subpart F under the 

authority of CAA section 608; however, 

these changes do not increase burden 

and may in fact lessen burden on small 

reclamation businesses by ensuring that 

businesses that have already reported do 

not have to spend additional time 

responding to follow-up requests from 

EPA. These changes also ensure that 

EPA can reach businesses in a timely 

manner with any necessary information. 

The other commenter claims that EPA 

has not given due diligence to its 

obligations under the RFA to ensure that 

the rule does not inflict undue financial 

burden on small businesses. As 

explained above, the direct result of this 

final action is to allocate HCFC 

allowances for production and import, 

thereby relieving a prohibition; thus, the 

direct effects of this final decision are 

not a potential burden to small business. 

EPA explains the considerations and 

rationale for its final HCFC–22 

consumption allocation in section VI.A. 

of this preamble. 

I have therefore concluded that 

today’s final rule will relieve regulatory 

burden for directly affected 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. 

UMRA does not apply to rules that are 

necessary for the national security or the 

ratification or implementation of 

international treaty obligations. This 

rule implements the2015 milestone for 

the phase-out of HCFCs under the 

Montreal Protocol. Therefore, this action 

is not subject to 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. This 

action apportions production and 

consumption allowances and 

establishes baselines for private entities, 

not small governments. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It does 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 action is 

expected to primarily affect producers, 

importers, and exporters of HCFCs. 

Thus, Executive Order 13132 does not 

apply to this action. 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and State and local governments, EPA 

specifically solicited, but did not 

receive, comment from State and local 

officials on this issue. 

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 action does not significantly 

or uniquely affect the communities of 

Indian tribal governments. It does not 

impose any enforceable duties on 

communities of Indian tribal 

governments. Thus, Executive Order 

13175 does not apply to this action. 

Although Executive Order 13175 does 

not apply to this action, EPA 

participated in a National Tribal Air 

Association conference call hosted by 

EPA regarding EPA air policy. EPA 

provided a summary of the proposed 

rule, the importance of protecting and 

restoring the stratospheric ozone layer, 

and how the 2015–2019 rule would 

further the goals of the HCFC phaseout. 

EPA provided contact information and 

offered to answer any specific questions 

following the call or at any point in the 

future. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

This action is not subject to EO 13045 

(62 F.R. 19885, April 23, 1997) because 

it is not economically significant as 

defined in EO 12866. The agency 

nonetheless has reason to believe that 

the environmental health or safety risk 

addressed by this action may have a 

disproportionate effect on children. 

Depletion of stratospheric ozone results 

in greater transmission of the sun’s 

ultraviolet (UV) radiation to the earth’s 

surface. The following studies describe 

the effects of excessive exposure to UV 

radiation on children: (1) Westerdahl J, 

Olsson H, Ingvar C. ‘‘At what age do 

sunburn episodes play a crucial role for 

the development of malignant 

melanoma,’’ Eur J Cancer 1994: 30A: 

1647–54; (2) Elwood JM Japson J. 

‘‘Melanoma and sun exposure: an 

overview of published studies,’’ Int J 

Cancer 1997; 73:198–203; (3) Armstrong 

BK, ‘‘Melanoma: childhood or lifelong 

sun exposure,’’ In: Grobb JJ, Stern RS 

Mackie RM, Weinstock WA, eds. 

‘‘Epidemiology, causes and prevention 

of skin diseases,’’ 1st ed. London, 

England: Blackwell Science, 1997: 63–6; 

(4) Whiteman D., Green A. ‘‘Melanoma 

and Sunburn,’’ Cancer Causes Control, 

1994: 5:564–72; (5) Heenan, PJ. ‘‘Does 

intermittent sun exposure cause basal 

cell carcinoma? A case control study in 

Western Australia,’’ Int J Cancer 1995; 

60: 489–94; (6) Gallagher, RP, Hill, GB, 

Bajdik, CD, et al. ‘‘Sunlight exposure, 

pigmentary factors, and risk of 

nonmelanocytic skin cancer I, Basal cell 

carcinoma,’’ Arch Dermatol 1995; 131: 

157–63; (7) Armstrong, DK. ‘‘How sun 

exposure causes skin cancer: an 

epidemiological perspective,’’ 

Prevention of Skin Cancer. 2004. 89– 

116. 

This action implements the 

commitment of the United States to 

reduce the production and import of 

HCFCs under the Montreal Protocol. 

While on an ODP-weighted basis, this is 


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29 ‘‘Endangerment and Cause or Contribute 

Findings for Greenhouse Gases Under Section 

202(a) of the Clean Air Act,’’ 74 FR 66,496 (Dec. 15, 

2009) (‘‘Endangerment Finding’’). 

not as large a step as previous actions, 

such as the 1996 class I phaseout, it is 

one of the most significant remaining 

actions the United States can take to 

complete the overall phaseout of ODS 

and further decrease impacts on 

children’s health from stratospheric 

ozone depletion. The final HCFC 

consumption allocation for 2015 is more 

than 95 percent below the United States 

HCFC baseline, decreasing further 

through 2019. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ as defined in Executive 

Order 13211 (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. The rule 

issues allowances for the production 

and consumption of HCFCs. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law 

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. 

The proposed rule involved technical 

standards because EPA proposed to 

incorporate by reference AHRI Standard 

700–2012 Specification for 

Fluorocarbons and Other Refrigerants 

and its appendices. The proposed 

standard is an updated version of the 

standard contained in the current 

regulations. The agency is not finalizing 

its proposal to update the standard, 

therefore, this final rule does not 

involve any technical 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 action 

will not have disproportionately high 

and adverse human health or 

environmental effects on minority or 

low-income populations. The 2015 

phaseout step increases the level of 

environmental protection 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. 

This action implements the 

commitment of the United States to 

reduce the production and import of 

HCFCs under the Montreal Protocol. 

While on an ODP-weighted basis, this is 

not as large a step as previous actions, 

such as the 1996 class I phaseout, it is 

one of the most significant remaining 

actions the United States can take to 

complete the overall phaseout of ODS 

and further lessen the adverse human 

health effects for the entire population. 

The final HCFC consumption allocation 

for 2015 is more than 95 below the 

United States HCFC consumption 

baseline, outperforming the 

requirements set by the Montreal 

Protocol and Title VI of the Clean Air 

Act. 

The agency did receive two comments 

pertaining to this executive order. The 

National Association for the 

Advancement of Colored People 

(NAACP) states that climate change has 

a disproportionate impact on 

communities of color in the United 

States and around the world. NAACP 

supports efforts to eliminate chemicals 

that have dangerous or damaging effects 

on our communities, and points to both 

the ozone depleting potential and global 

warming potential of HCFCs. NAACP 

asks to be included during the drafting 

of the 2015–2019 final rule. The other 

commenter, New Era Group, Inc., 

believes that EPA blocks organizations 

such as the NAACP from engaging on 

this issue and states that climate change 

is a significant issue for minorities and 

people of color. 

As part of the 2009 Endangerment 

Finding under CAA section 202(a)(1),29

the Administrator considered climate 

change risks to minority or low-income 

populations, finding that certain parts of 

the population may be especially 

vulnerable based on their 

circumstances. These include the poor, 

the elderly, the very young, those 

already in poor health, the disabled, 

those living alone, and/or indigenous 

populations dependent on one or a few 

resources. The Administrator placed 

weight on the fact that certain groups, 

including children, the elderly, and the 

poor, are most vulnerable to climaterelated health effects. 

Since HCFCs are ozone depleting 

substances and also greenhouse gases 

that can contribute to climate change, 

the agency takes seriously its mandate 

to phase out production and import of 

these substances. In fact, this 

rulemaking far outperforms domestic 

and international caps on U.S. HCFC 

production. In addition, both 

stratospheric ozone depletion and 

climate change are global issues. That is, 

the impact of HCFC emissions on 

stratospheric ozone or atmospheric 

greenhouse concentrations is 

independent of where the HCFCs were 

used or eventually emitted. The agency 

discusses the environmental 

implications of the chosen HCFC–22 

allocation levels in section VI.A. of this 

preamble. The agency appreciates 

NAACP’s comment, and invited 

representatives from NAACP to meet 

with EPA while developing this final 

rule. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit 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 United 

States prior to publication of the rule in 

the Federal Register. A Major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). This rule 

will be effective January 1, 2015. 

List of Subjects in 40 CFR Part 82 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Chemicals, 

Exports, Hydrochlorofluorocarbons, 

Imports. 


asabaliauskas on DSK5VPTVN1PROD with RULES
64286 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

Dated: October 16, 2014. 

Gina McCarthy, 

Administrator. 

For the reasons stated in the 

preamble, 40 CFR part 82 is 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. Amend § 82.3 by adding the 

definition of ‘‘Use of a class II controlled 

substance’’ in alphabetical order to read 

as follows: 

§ 82.3 Definitions for class I and class II 

controlled substances. 

* * * * * 

Use of a class II controlled substance, 

for the purposes of § 82.15 of this 

subpart, includes but is not limited to, 

use in a manufacturing process, use in 

manufacturing a product, intermediate 

uses such as formulation or packaging 

for other subsequent uses, and use in 

maintaining, servicing, or repairing an 

appliance or other piece of equipment. 

Use of a class II controlled substance 

also includes use of that controlled 

substance when it is removed from a 

container used for the transportation or 

storage of the substance but does not 

include use of a manufactured product 

containing a controlled substance. 

■ 3. Amend § 82.15 by redesignating 

paragraph (g)(4) as (g)(4)(i) and revising 

it, and adding paragraphs (g)(4)(ii) and 

(iii) to read as follows: 

§ 82.15 Prohibitions for class II controlled 

substances. 

* * * * * 

(g) * * * 

(4)(i) Effective January 1, 2015, no 

person may introduce into interstate 

commerce or use any class II controlled 

substance not governed by paragraphs 

(g)(1) through (3) of this section (unless 

used, recovered and recycled) for any 

purpose other than for use in a process 

resulting in its transformation or its 

destruction; for use as a refrigerant in 

equipment manufactured before January 

1, 2020; for use as a fire suppression 

streaming agent listed as acceptable for 

use or acceptable subject to narrowed 

use limits for nonresidential 

applications in accordance with the 

regulations at subpart G of this part; for 

export to Article 5 Parties under 

§ 82.18(a); as a transhipment or heel; for 

exemptions permitted under paragraph 

(f) of this section; or for exemptions 

permitted under paragraph (g)(4)(ii) or 

(iii) of this section. 

(ii) Effective January 1, 2015, use of 

HCFC–225ca or HCFC–225cb as a 

solvent (excluding use in manufacturing 

a product containing HCFC–225ca or 

HCFC–225cb) is not subject to the use 

prohibition in paragraph (g)(4)(i) of this 

section if the person using the HCFC– 

225ca or HCFC–225cb placed the 

controlled substance into inventory 

before January 1, 2015. This paragraph 

does not create an exemption to the 

prohibition on introduction into 

interstate commerce in paragraph 

(g)(4)(i) of this section. 

(iii) Effective January 1, 2015, use of 

HCFC–124 as a sterilant for the 

manufacture and testing of biological 

indicators is not subject to the use 

prohibition in paragraph (g)(4)(i) of this 

section if the person using the HCFC– 

124 placed the controlled substance into 

inventory before January 1, 2015. This 

paragraph does not create an exemption 

to the prohibition on introduction into 

interstate commerce in paragraph 

(g)(4)(i) of this section. 

* * * * * 

■ 4. Amend § 82.16 by revising 

paragraphs (a)(1), (d), and (e) and 

removing and reserving paragraph (h). 

The revisions read as follows: 

§ 82.16 Phaseout schedule of class II 

controlled substances. 

(a) Calendar-year Allowances. (1) In 

each control period as indicated in the 

following tables, each person is granted 

the specified percentage of baseline 

production allowances and baseline 

consumption allowances for the 

specified class II controlled substances 

apportioned under §§ 82.17 and § 82.19: 

CALENDAR-YEAR HCFC PRODUCTION ALLOWANCES

Control period Percent of 

HCFC–141b 

Percent 

of 

HCFC–22 

Percent 

of 

HCFC–142b 

Percent of 

HCFC–123 

Percent 

of 

HCFC–124 

Percent of 

HCFC– 

225ca 

Percent of 

HCFC– 

225cb 

2003 ................................................... 0 100 100 .................... ...................... .................... ....................

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

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

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

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

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

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

2010 ................................................... 0 41 .9 0 .47 0 125 125 125 

2011 ................................................... 0 32 .0 4 .9 0 125 125 125 

2012 ................................................... 0 17 .7 4 .9 0 125 125 125 

2013 ................................................... 0 30 .1 4 .9 0 125 125 125 

2014 ................................................... 0 26 .1 4 .9 0 125 125 125 

2015 ................................................... 0 21 .7 0 .37 0 5 .0 0 0 

2016 ................................................... 0 21 .7 0 .32 0 5 .0 0 0 

2017 ................................................... 0 21 .7 0 .26 0 5 .0 0 0 

2018 ................................................... 0 21 .7 0 .21 0 5 .0 0 0 

2019 ................................................... 0 21 .7 0 .16 0 5 .0 0 0 

CALENDAR-YEAR HCFC CONSUMPTION ALLOWANCES

Control period Percent of 

HCFC–141b 

Percent 

of 

HCFC–22 

Percent 

of 

HCFC–142b 

Percent of 

HCFC–123 

Percent 

of 

HCFC–124 

Percent of 

HCFC– 

225ca 

Percent of 

HCFC– 

225cb 

2003 ................................................... 0 100 100 .................... ...................... .................... ....................

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


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64287 

CALENDAR-YEAR HCFC CONSUMPTION ALLOWANCES—Continued 

Control period Percent of 

HCFC–141b 

Percent 

of 

HCFC–22 

Percent 

of 

HCFC–142b 

Percent of 

HCFC–123 

Percent 

of 

HCFC–124 

Percent of 

HCFC– 

225ca 

Percent of 

HCFC– 

225cb 

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

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

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

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

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

2010 ................................................... 0 41 .9 0 .47 125 125 125 125 

2011 ................................................... 0 32 .0 4 .9 125 125 125 125 

2012 ................................................... 0 17 .7 4 .9 125 125 125 125 

2013 ................................................... 0 18 .0 4 .9 125 125 125 125 

2014 ................................................... 0 14 .2 4 .9 125 125 125 125 

2015 ................................................... 0 7 .0 1 .7 100 8 .3 0 0 

2016 ................................................... 0 5 .6 1 .5 100 8 .3 0 0 

2017 ................................................... 0 4 .2 1 .2 100 8 .3 0 0 

2018 ................................................... 0 2 .8 1 .0 100 8 .3 0 0 

2019 ................................................... 0 1 .4 0 .7 100 8 .3 0 0 

* * * * * 

(d) Effective January 1, 2015, no 

person may produce class II controlled 

substances not previously controlled for 

any purpose other than for use in a 

process resulting in their transformation 

or their destruction, for use as a 

refrigerant in equipment manufactured 

before January 1, 2020, for use as a fire 

suppression streaming agent listed as 

acceptable for use or acceptable subject 

to narrowed use limits for 

nonresidential applications in 

accordance with the regulations at 

subpart G of this part, for export under 

§ 82.18(a) using unexpended Article 5 

allowances, for export under § 82.18(b) 

using unexpended export production 

allowances, or for exemptions permitted 

in § 82.15(f). Effective January 1, 2015, 

no person may import class II controlled 

substances not subject to the 

requirements of paragraph (b) or (c) of 

this section (other than transhipments, 

heels, or used class II controlled 

substances) for any purpose other than 

for use in a process resulting in their 

transformation or their destruction, for 

exemptions permitted in § 82.15(f), for 

use as a refrigerant in equipment 

manufactured prior to January 1, 2020, 

or for use as a fire suppression 

streaming agent listed as acceptable for 

use or acceptable subject to narrowed 

use limits for nonresidential 

applications in accordance with the 

regulations at subpart G of this part. 

(e)(1) Effective January 1, 2020, no 

person may produce HCFC–22 or 

HCFC–142b for any purpose other than 

for use in a process resulting in their 

transformation or their destruction, for 

export under § 82.18(a) using 

unexpended Article 5 allowances, or for 

export under § 82.18(b) using 

unexpended export production 

allowances, or for exemptions permitted 

in § 82.15(f). 

Effective January 1, 2020, no person 

may import HCFC–22 or HCFC–142b for 

any purpose other than for use in a 

process resulting in their transformation 

or their destruction, or for exemptions 

permitted in § 82.15(f). 

(2) Effective January 1, 2020, no 

person may produce HCFC–123 for any 

purpose other than for use in a process 

resulting in its transformation or its 

destruction, for use as a refrigerant in 

equipment manufactured before January 

1, 2020, for export under § 82.18(a) 

using unexpended Article 5 allowances, 

or for export under § 82.18(b) using 

unexpended export production 

allowances, or for exemptions permitted 

in § 82.15(f). Effective January 1, 2020, 

no person may import HCFC–123 for 

any purpose other than for use in a 

process resulting in its transformation or 

its destruction, for use as a refrigerant in 

equipment manufactured before January 

1, 2020, or for exemptions permitted in 

§ 82.15(f). 

* * * * * 

■ 5. Revise § 82.17 to read as follows: 

§ 82.17 Apportionment of baseline 

production allowances for class II 

controlled substances. 

The following persons are 

apportioned baseline production 

allowances for HCFC–22, HCFC–141b, 

HCFC–142b, HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb as set 

forth in the following table: 

Person Controlled substance Allowances 

(kg) 

AGC Chemicals Americas ...................................................................................... HCFC–225ca ......................................... 266,608 

HCFC–225cb ......................................... 373,952 

Arkema .................................................................................................................... HCFC–22 ............................................... 46,692,336 

HCFC–141b ........................................... 24,647,925 

HCFC–142b ........................................... 484,369 

DuPont .................................................................................................................... HCFC–22 ............................................... 42,638,049 

HCFC–124 ............................................. 2,269,210 

Honeywell ................................................................................................................ HCFC–22 ............................................... 37,378,252 

HCFC–141b ........................................... 28,705,200 

HCFC–142b ........................................... 2,417,534 

HCFC–124 ............................................. 1,759,681 

MDA Manufacturing ................................................................................................ HCFC–22 ............................................... 2,383,835 

Solvay Specialty Polymers USA, LLC .................................................................... HCFC–142b ........................................... 6,541,764 


asabaliauskas on DSK5VPTVN1PROD with RULES
64288 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

■ 6. Revise § 82.19 to read as follows: § 82.19 Apportionment of baseline 

consumption allowances for class II 

controlled substances. 

The following persons are 

apportioned baseline consumption 

allowances for HCFC–22, HCFC–142b, 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb as set forth in the 

following table: 

Person Controlled substance Allowances 

(kg) 

ABCO Refrigeration Supply .............................................................. HCFC–22 ..................................................................... 279,366 

AGC Chemicals Americas ................................................................. HCFC–225ca ............................................................... 285,328 

HCFC–225cb ............................................................... 286,832 

Altair Partners .................................................................................... HCFC–22 ..................................................................... 302,011 

Arkema .............................................................................................. HCFC–22 ..................................................................... 48,637,642 

HCFC–141b ................................................................. 25,405,570 

HCFC–142b ................................................................. 483,827 

HCFC–124 ................................................................... 3,719 

Carrier ................................................................................................ HCFC–22 ..................................................................... 54,088 

Continental Industrial Group ............................................................. HCFC–141b ................................................................. 20,315 

Coolgas, Inc. ..................................................................................... HCFC–141b ................................................................. 16,097,869 

Combs Investment Property .............................................................. HCFC–22 ..................................................................... 1,040,458 

HCFC–123 ................................................................... 19,980 

HCFC–124 ................................................................... 3,742 

Discount Refrigerants ........................................................................ HCFC–141b ................................................................. 994 

DuPont ............................................................................................... HCFC–22 ..................................................................... 38,814,862 

HCFC–141b ................................................................. 9,049 

HCFC–142b ................................................................. 52,797 

HCFC–123 ................................................................... 1,877,042 

HCFC–124 ................................................................... 743,312 

H.G. Refrigeration Supply ................................................................. HCFC–22 ..................................................................... 40,068 

Honeywell .......................................................................................... HCFC–22 ..................................................................... 35,392,492 

HCFC–141b ................................................................. 20,749,489 

HCFC–142b ................................................................. 1,315,819 

HCFC–124 ................................................................... 1,284,265 

ICC Chemical Corp. .......................................................................... HCFC–141b ................................................................. 81,225 

ICOR .................................................................................................. HCFC–124 ................................................................... 81,220 

Mexichem Fluor Inc. .......................................................................... HCFC–22 ..................................................................... 2,546,305 

Kivlan & Company ............................................................................. HCFC–22 ..................................................................... 2,081,018 

MDA Manufacturing ........................................................................... HCFC–22 ..................................................................... 2,541,545 

Mondy Global .................................................................................... HCFC–22 ..................................................................... 281,824 

National Refrigerants ......................................................................... HCFC–22 ..................................................................... 5,528,316 

HCFC–123 ................................................................... 72,600 

HCFC–124 ................................................................... 50,380 

Perfect Technology Center, LP ......................................................... HCFC–123 ................................................................... 9,100 

Refricenter of Miami .......................................................................... HCFC–22 ..................................................................... 381,293 

Refricentro ......................................................................................... HCFC–22 ..................................................................... 45,979 

R-Lines .............................................................................................. HCFC–22 ..................................................................... 63,172 

Saez Distributors ............................................................................... HCFC–22 ..................................................................... 37,936 

Solvay Fluorides, LLC ....................................................................... HCFC–22 ..................................................................... 3,781,691 

HCFC–141b ................................................................. 3,940,115 

Solvay Specialty Polymers USA, LLC .............................................. HCFC–142b ................................................................. 194,536 

Tulstar Products ................................................................................ HCFC–141b ................................................................. 89,913 

HCFC–123 ................................................................... 34,800 

HCFC–124 ................................................................... 229,582 

USA Refrigerants .............................................................................. HCFC–22 ..................................................................... 14,865 

■ 7. Amend § 82.20 by revising 

paragraph (a) introductory text to read 

as follows: 

§ 82.20 Availability of consumption 

allowances in addition to baseline 

consumption allowances for class II 

controlled substances. 

(a) A person may obtain at any time 

during the control period, in accordance 

with the provisions of this section, 

consumption allowances equivalent to 

the quantity of class II controlled 

substances that the person exported 

from the United States and its territories 

to a foreign state in accordance with this 

section, when that quantity of class II 

controlled substance was produced in 

the U.S. or imported into the United 

States with expended consumption 

allowances. Both the export of the class 

II controlled substance and the request 

for additional consumption allowances 

must occur during a calendar year in 

which consumption allowances were 

issued for that class II controlled 

substance. 

* * * * * 

■ 8. Revise appendix B to subpart A to 

read as follows: 


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Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 64289 

Appendix B to Subpart A of Part 82— 

Class II Controlled Substances a b

Controlled substance ODP 

1. HCFC-21 (CHFCl2) Dichlorofluoromethane .................................................................................................................................... 0.04 

2. HCFC-22 (CHF2Cl) Monochlorodifluoromethane ........................................................................................................................... 0.055 

3. HCFC-31 (CH2FCl) Monochlorofluoromethane .............................................................................................................................. 0.02 

4. HCFC-121 (C2HFCl4) Tetrachlorofluoroethane .............................................................................................................................. 0.01–0.04 

5. HCFC-122 (C2HF2Cl3) Trichlorodifluoroethane ............................................................................................................................. 0.02–0.08 

6. HCFC-123 (C2HF3Cl2) Dichlorotrifluoroethane .............................................................................................................................. 0.02 

7. HCFC-124 (C2HF4Cl) Monochlorotetrafluoroethane ...................................................................................................................... 0.022 

8. HCFC-131 (C2H2FCl3) Trichlorofluoroethane ................................................................................................................................ 0.007–0.05 

9. HCFC-132 (C2H2F2Cl2) Dichlorodifluoroethane ............................................................................................................................ 0.008–0.05 

10. HCFC-133 (C2H2F3Cl) Monochlorotrifluoroethane ...................................................................................................................... 0.02–0.06 

11. HCFC-141 (C2H3FCl2) Dichlorofluoroethane ............................................................................................................................... 0.005–0.07 

12. HCFC-141b (CH3CFCl2) Dichlorofluoroethane ............................................................................................................................ 0.11 

13. HCFC-142 (C2H3F2Cl) Chlorodifluoroethane ............................................................................................................................... 0.008–0.07 

14. HCFC-142b (CH3CF2Cl) Monochlorodifluoroethane .................................................................................................................... 0.065 

15. HCFC-151 (C2H4FCl) Chlorofluoroethane ................................................................................................................................... 0.003–0.005 

16. HCFC-221 (C3HFCl6) Hexachlorofluoropropane .......................................................................................................................... 0.015–0.07 

17. HCFC-222 (C3HF2Cl5) Pentachlorodifluoropropane .................................................................................................................... 0.01–0.09 

18. HCFC-223 (C3HF3Cl4) Tetrachlorotrifluoropropane ..................................................................................................................... 0.01–0.08 

19. HCFC-224 (C3HF4Cl3) Trichlorotetrafluoropropane ..................................................................................................................... 0.01–0.09 

20. HCFC-225 (C3HF5Cl2) Dichloropentafluoropropane .................................................................................................................... 0.02–0.07 

21. HCFC-225ca (CF3CF2CHCl2) Dichloropentafluoropropane ........................................................................................................ 0.025 

22. HCFC-225cb (CF2ClCF2CHClF) Dichloropentafluoropropane ..................................................................................................... 0.033 

23. HCFC-226 (C3HF6Cl) Monochlorohexafluoropropane ................................................................................................................. 0.02–0.1 

24. HCFC-231 (C3H2FCl5) Pentachlorofluoropropane ....................................................................................................................... 0.05–0.09 

25. HCFC-232 (C3H2F2Cl4) Tetrachlorodifluoropropane ................................................................................................................... 0.008–0.1 

26. HCFC-233 (C3H2F3Cl3) Trichlorotrifluoropropane ....................................................................................................................... 0.007–0.23 

27. HCFC-234 (C3H2F4Cl2) Dichlorotetrafluoropropane ................................................................................................................... 0.01–0.28 

28. HCFC-235 (C3H2F5Cl) Monochloropentafluoropropane .............................................................................................................. 0.03–0.52 

29. HCFC-241 (C3H3FCl4) Tetrachlorofluoropropane ........................................................................................................................ 0.004–0.09 

30. HCFC-242 (C3H3F2Cl3) Trichlorodifluoropropane ....................................................................................................................... 0.005–0.13 

31. HCFC-243 (C3H3F3Cl2) Dichlorotrifluoropropane ........................................................................................................................ 0.007–0.12 

32. HCFC-244 (C3H3F4Cl) Monochlorotetrafluoropropane ................................................................................................................ 0.009–0.14 

33. HCFC-251 (C3H4FCl3) Monochlorotetrafluoropropane ................................................................................................................ 0.001–0.01 

34. HCFC-252 (C3H4F2Cl2) Dichlorodifluoropropane ........................................................................................................................ 0.005–0.04 

35. HCFC-253 (C3H4F3Cl) Monochlorotrifluoropropane .................................................................................................................... 0.003–0.03 

36. HCFC-261 (C3H5FCl2) Dichlorofluoropropane ............................................................................................................................. 0.002–0.02 

37. HCFC-262 (C3H5F2Cl) Monochlorodifluoropropane .................................................................................................................... 0.002–0.02 

38. HCFC-271 (C3H6FCl) Monochlorofluoropropane ......................................................................................................................... 0.001–0.03 

aAccording to Annex C of the Montreal Protocol, ‘‘Where a range of ODPs is indicated, the highest value in that range shall be used for the 

purposes of the Protocol. The ODPs listed as single value have been determined from calculations based on laboratory measurements. Those 

listed as a range are based on estimates and are less certain. The range pertains to an isomeric group. The upper value is the estimate of the 

ODP of the isomer with the highest ODP, and the lower value is the estimate of the ODP of the isomer with the lowest ODP. bThis table includes all isomers of the substances above, regardless of whether the isomer is explicitly listed on its own. 

Subpart E—The Labeling of Products 

Using Ozone-Depleting Substances 

■ 9. Amend § 82.110 by revising the 

paragraph (c) heading to read as follows: 

§ 82.110 Form of label bearing warning 

statement. 

* * * * * 

(c) Combined statement for multiple 

controlled substances * * * 

* * * * * 

■ 10. In § 82.112, amend paragraph (d) 

by revising the first sentence to read as 

follows: 

§ 82.112 Removal of label bearing warning 

statement. 

* * * * * 

(d) * * * Manufacturers, distributors, 

wholesalers, and retailers that purchase 

spare parts manufactured with a class I 

or class II substance from another 

manufacturer or supplier, and sell such 

spare parts for the sole purpose of 

repair, are not required to pass through 

an applicable warning label if such 

products are removed from the original 

packaging provided by the manufacturer 

from whom the products are purchased. 

* * * 

* * * * * 

■ 11. Amend § 82.122 by revising 

paragraph (a)(1) to read as follows: 

§ 82.122 Certification, recordkeeping, and 

notice requirements. 

(a) * * * 

(1) Persons claiming the exemption 

provided in § 82.106(b)(4) must submit 

a written certification to the following 

address: Labeling Program Manager, 

Stratospheric Protection Division, Office 

of Atmospheric Programs, 6205–T, 1200 

Pennsylvania Ave. NW., Washington DC 

20460. 

* * * * * 


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64290 Federal Register / Vol. 79, No. 208 / Tuesday, October 28, 2014 / Rules and Regulations 

Subpart F—Recycling and Emissions 

Reductions 

■ 12. Amend § 82.164 by revising 

paragraph (f) to read as follows: 

§ 82.164 Reclaimer certification. 

* * * * * 

(f) Certificates are not transferrable. In 

the event of a change in ownership of 

an entity which reclaims refrigerant, the 

new owner of the entity shall certify 

within 30 days of the change of 

ownership pursuant to this section. In 

the event of a change in business 

management, location, or contact 

information, the owner of the entity 

shall notify EPA within 30 days of the 

change. 

* * * * * 

■ 13. Amend § 82.166 by revising 

paragraph (h) to read as follows: 

§ 82.166 Reporting and recordkeeping 

requirements. 

* * * * * 

(h) Reclaimers must maintain records 

of the quantity of material (the 

combined mass of refrigerant and 

contaminants) sent to them for 

reclamation, the mass of each refrigerant 

reclaimed, and the mass of waste 

products. Reclaimers must report this 

information to the Administrator 

annually within 30 days of the end of 

the calendar year. 

* * * * * 

[FR Doc. 2014–25374 Filed 10–27–14; 8:45 am] 

BILLING CODE 6560–50–P 


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