Document ID: EPA-HQ-OAR-2007-0163-0071
Agency: epa
Document Type: Rule
Title: Protection of Stratospheric Ozone: Ban on the Sale or Distribution of Pre-Charged Appliances
Posted Date: 2009-12-15T05:00Z

[Federal Register: December 15, 2009 (Volume 74, Number 239)]
[Rules and Regulations]               
[Page 66449-66467]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de09-18]                         

[[Page 66449]]

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Part III

Environmental Protection Agency

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40 CFR Part 82

Protection of Stratospheric Ozone: Ban on the Sale or Distribution of 
Pre-Charged Appliances; Final Rule

[[Page 66450]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2007-0163; FRL-9091-9]
RIN 2060-AN58

 
Protection of Stratospheric Ozone: Ban on the Sale or 
Distribution of Pre-Charged Appliances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This final rule bans the sale or distribution of air-
conditioning and refrigeration appliances containing HCFC-22, HCFC-
142b, or blends containing one or both of these substances, beginning 
January 1, 2010. In addition, EPA is banning the sale or distribution 
of air-conditioning and refrigeration appliance components that are 
pre-charged with HCFC-22, HCFC-142b, or blends containing one or both 
of these controlled substances as the refrigerant. These prohibitions 
apply only to appliances and components manufactured on or after 
January 1, 2010.

DATES: This final rule is effective on January 1, 2010.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. HQ-OAR-2007-0163. All documents in the docket are listed on the 
http://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 form. Publicly available docket 
materials are available either electronically through http://
www.regulations.gov or in hard copy at the Air and Radiation Docket; 
EPA West; Room 3334; 1301 Constitution Avenue NW., Washington, DC 
20460. 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 OAR Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Julius Banks, EPA, Stratospheric 
Protection Division, Office of Atmospheric Programs, Office of Air and 
Radiation (6205J), 1200 Pennsylvania Avenue, NW., Washington, DC 20460, 
(202) 343-9870, banks.julius@epa.gov.

SUPPLEMENTARY INFORMATION: Under the Montreal Protocol on Substances 
that Deplete the Ozone Layer (Protocol), as amended, the U.S. and other 
industrialized countries that are Parties to the Protocol have agreed 
to limit production and consumption of hydrochlorofluorocarbons (HCFCs) 
and to phase out consumption in a step-wise fashion over time, 
culminating in a complete phaseout in 2030. Title VI of the Clean Air 
Act Amendments of 1990 (CAAA) authorizes EPA to promulgate regulations 
to manage the consumption and production of HCFCs until the total 
phaseout in 2030. EPA promulgated final regulations establishing an 
allowance tracking system for HCFCs on January 21, 2003 (68 FR 2820). 
These regulations were amended on June 17, 2004 (69 FR 34024) and July 
20, 2006 (71 FR 41163). This action establishes a ban on sale or 
distribution in interstate commerce of air-conditioning and 
refrigeration appliances, as well as appliance components that are pre-
charged with HCFC-22, HCFC-142b, or blends containing one or both of 
these controlled substances. It does not, however, affect the sale or 
distribution of appliances or components manufactured before January 1, 
2010.
    Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. 
Chapter 5, generally provides that rules may not take effect earlier 
than 30 days after they are published in the Federal Register. EPA is 
issuing this final rule under section 307(d)(1) of the Clean Air Act, 
which states: ``The provisions of section 553 through 557 * * * of 
Title 5 shall not, except as expressly provided in this section, apply 
to actions to which this subsection applies.'' Thus, section 553(d) of 
the APA does not apply to this rule. EPA is nevertheless acting 
consistently with the policies underlying APA section 553(d) in making 
this rule effective on January 1, 2010. APA section 553(d) provides an 
exception for any action for which the agency provides good cause found 
and published within the rule. EPA finds that there is good cause to 
make this rule effective January 1, 2010. This final rule accompanies a 
second rule, ``Protection of Stratospheric Ozone: Adjustments to the 
Allowance System for Controlling HCFC Production, Import, and Export'' 
(EPA Docket: EPA-HQ-OAR-2008-0496) which contains interrelated 
requirements. The effective date of the other rule is January 1, 2010. 
Having two different effective dates for the two rules would create a 
discontinuity and potentially generate confusion among the regulated 
community. The interrelated nature of the two rules is discussed in 
Section II of the preamble.

Table of Contents

I. General Information
    A. Does This Action Apply to Me?
    B. Background
II. Final Action
    A. Establishing 40 CFR Part 82, Subpart I
    B. Authority To Prohibit Sale or Distribution, or Offer for Sale 
or Distribution, of Specific Types of Appliances
    C. Criteria and Conditions Established Under Sec.  615 of CAAA
    D. Defining Air-Conditioning and Refrigeration Appliances and 
Pre-Charged Appliance Components
    i. Appliance
    ii. Pre-Charged Appliance Component
    iii. ``Manufactured'' and Date of ``Manufacture''
    E. Ban on Sale or Distribution or Offer for Sale or Distribution 
in Interstate Commerce
    i. Existing Inventories of Pre-Charged Appliances and Components 
Manufactured Prior to January 1, 2010
    ii. Use of Recovered and Reclaimed HCFC-22 and HCFC-142b
    iii. Sale and Distribution of Appliances and Components Without 
Refrigerant
    iv. Imports and Exports of Pre-Charged Appliances and Components
    v. Transhipments of Pre-Charged Appliances and Components
    vi. Existing Contracts or Plans for Pre-Charged Appliances and 
Components
    F. Costs Analysis and Small Business Economic Impacts
    i. What Are the Impacts On Stratospheric Ozone Avoided through 
This Final Action?
    ii. What Factors Will Influence the Costs of Pre-Charged 
Appliances Charged With Substitutes?
    iii. Impacts on the General Public
    iv. Implications for Other Markets
    v. In the Absence of This Action, Are There Impacts Associated 
With Unequal Treatment of Stakeholders?
III. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and 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 & Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. The National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. The Congressional Review Act

[[Page 66451]]

I. General Information

A. Does This Action Apply to Me?

    This final rule will affect the following categories:

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                  Category                     NAICS code       SIC code        Examples of regulated entities
----------------------------------------------------------------------------------------------------------------
Contractors and Servicing..................          238220      1711, 7623  Plumbing, Heating, and Air-
                                                                              Conditioning Contractors.
Manufacturers of air conditioners and                333415            3585  Air-Conditioning Equipment and
 refrigerators.                                                               Commercial and Industrial
                                                                              Refrigeration Equipment
                                                                              Manufacturing.
Air-Conditioning Equipment and Supplies              423730            5075  Air-conditioning (condensing unit,
 Merchant Wholesalers.                                                        compressors) merchant wholesalers.
Electrical and Electronic Appliance,                 423620            5064  Air-conditioning (room units)
 Television, and Radio Set Merchant                                           merchant wholesalers.
 Wholesalers.
Importers of air conditioners and                    333415            3585  Air-Conditioning Equipment and
 refrigerators.                                                               Commercial and Industrial
                                                                              Refrigeration Equipment
                                                                              Manufacturing.
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This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
potentially could 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.

B. Background

    In 1973 chemists Frank Sherwood Rowland and Mario Molina at the 
University of California-Irvine began studying the impacts of 
chlorofluorocarbons (CFCs) in the earth's atmosphere. They discovered 
that CFC molecules were stable enough to migrate to the stratosphere 
and that the chorine atoms contained in these molecules could cause the 
breakdown of large amounts of ozone in the stratosphere. The Toxic 
Substances Control Act (TSCA), passed in 1976, included regulatory 
authority over CFCs. EPA's first regulatory response to the concerns 
for stratospheric ozone protection resulted in a ban on CFC aerosol 
propellants (43 FR 11301; March 17, 1978 and 43 FR 11318; March 17, 
1978).
    EPA followed this initial regulatory approach with an Advance 
Notice of Proposed Rulemaking (ANPRM) which discussed a freeze on the 
production of certain CFCs and a system of marketable permits to 
allocate CFC consumption among industries (45 FR 66726; October 7, 
1980). EPA did not act immediately on the 1980 ANPRM and was 
subsequently sued by the Natural Resources Defense Council (NRDC v. 
Thomas, No. 84-3587 (D.D.C.)) for failure to regulate CFCs further. EPA 
and NRDC settled the case and agreed that EPA would propose further 
regulatory controls on CFCs, or state the reasons for deciding not to 
issue a proposal, by December 1, 1987, and would take final action by 
August 1, 1988.
    On January 10, 1986 (51 FR 1257), EPA published its Stratospheric 
Ozone Protection Plan. That plan described the analytic basis for 
supporting negotiations for an international agreement to control CFCs 
and for reassessing the need for additional domestic regulations of 
CFCs and other ozone-depleting substances (ODS). The United States 
participated in negotiations organized by the United Nations 
Environment Programme (UNEP) to develop an international agreement to 
protect stratospheric ozone. These negotiations, preceded by the 1985 
signing of the Vienna Convention, resulted in the signing of the 
Montreal Protocol in 1987. The United States ratified the Montreal 
Protocol on April 21, 1988. In 1988, EPA promulgated regulations 
implementing the requirements of the Montreal Protocol through a system 
of tradable allowances under section 157(b) of the Clean Air Act as 
amended in 1977. This section was subsequently modified by the 1990 
Amendments and became CAA Sec.  615. The Senate Report on the 1990 
Amendments, Senate Rep. No. 101-228: ``Authority of the Administrator'' 
notes that this section ``is intended * * * to preserve the authority 
and responsibility of the Administrator as set forth in section 157 of 
the existing Clean Air Act,'' although the Conference report to the 
1990 CAAA is silent on this matter.
    Since the CAAA were passed in 1990, EPA has promulgated regulations 
based on various provisions of Title VI. For example, EPA has 
promulgated a production and consumption phaseout schedule that 
included a revised trading regime for class I ODS, a production and 
consumption phaseout schedule and trading regime for class II ODS, 
servicing requirements for air-conditioning and refrigeration 
appliances, bans on nonessential products containing or manufactured 
with ODS, and labeling requirements.
    Concern for ozone layer protection remains paramount for the global 
community. In an effort to further protect human health and the 
environment, the Parties to the Montreal Protocol adjusted the Montreal 
Protocol's phaseout schedule for HCFCs in September 2007. The Parties 
agreed that industrialized countries, including the United States, 
would reduce production and consumption of HCFCs to 75 percent below 
the established baseline in 2010, to 90 percent below the established 
baseline in 2015, and to 99.5 percent in 2020--allowing for only 0.5 
percent production and consumption between 2020-2030 to be used solely 
for servicing existing appliances culminating in the terminal phaseout 
in 2030. In addition, the Parties adjusted the schedule for non-
industrialized countries by agreeing to set production and consumption 
baselines based on the average values for 2009-2010 production and 
consumption, respectively; to freeze production and consumption in 
2013; and to add stepwise reductions as follows: 10 percent below 
baselines in 2015, 35 percent below in 2020, 67.5 percent below in 2025 
and allowing for a servicing tail to average no more than 2.5 percent 
between 2030-2040 to be used solely for servicing existing appliances, 
culminating in the terminal phaseout in 2040.
    The requirements already established at 40 CFR 82.16(c) make it 
unlawful to produce or import HCFC-22 or HCFC-142b on or after January 
1, 2010, for use

[[Page 66452]]

in refrigeration or air-conditioning appliances manufactured on or 
after that date. The practical result of this provision is that 
effective January 1, 2010, domestic manufacturers of air-conditioning 
and refrigeration appliances will not be able to charge newly 
manufactured appliances with newly produced or imported HCFC-22 or 
HCFC-142b, and thus will not be introducing new appliances containing 
these substances into interstate commerce.

II. Final Action

    EPA is establishing regulations that ban the sale or distribution 
or offer for sale or distribution in interstate commerce of all air-
conditioning and refrigeration appliances containing HCFC-22, HCFC-
142b, or blends containing one or both of these controlled 
substances\1\, beginning January 1, 2010. The prohibition includes 
fully assembled appliances that are sold pre-charged with HCFC-22 or 
HCFC-142b (such as window air-conditioning units), as well as 
appliances that are field assembled with HCFC-22 or HCFC-142b (such as 
residential split systems and supermarket refrigeration equipment). 
This prohibition extends to imported appliances as well as U.S. 
manufactured appliances that are destined for export. EPA is also 
banning the sale or distribution in interstate commerce of appliance 
components that are pre-charged with HCFC-22 or HCFC-142b beginning 
January 1, 2010. The prohibitions do not apply to pre-charged 
appliances or pre-charged appliance components that are manufactured 
prior to January 1, 2010. Pre-charged appliances and components that 
have been manufactured prior to January 1, 2010 may be sold and 
distributed in interstate commerce.
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    \1\ Throughout this action, where EPA refers to HCFC-22 or HCFC-
142b, it also refers to blends containing one or both of those 
HCFCs.
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    Refrigeration and air-conditioning end-uses typically use a 
refrigerant in a vapor compression cycle to cool and/or dehumidify a 
substance or space, like a refrigerator cabinet, room, office building, 
or warehouse. HCFC-22 is a popular refrigerant that is commonly used in 
a variety of refrigeration and air-conditioning equipment including 
industrial and residential applications, most of which are field 
installed and charged on-site. HCFC-22 can be used in a large range of 
equipment including:

Residential Uses

     Window air-conditioning units.
     Dehumidifiers.
     Central air conditioners.
     Air-to-air heat pumps.
     Ground-source heat pumps.
     Ductless air conditioners.
     Chest or upright freezers.

Commercial and Industrial Uses

     Packaged air conditioners and heat pumps.
     Chillers.
     Retail food refrigeration.
     Cold storage warehouses.
     Industrial process refrigeration.
     Refrigerated transport.
     Public transport (e.g., buses, trains, subway air-
conditioning).
    HCFC-22 is often used as a component in refrigerant blends that 
contain several chemical compounds. HCFC-22 refrigerant blends are used 
in various industrial, commercial, and residential end uses including: 
Retail food refrigeration, cold storage warehouses, industrial process 
refrigeration (IPR), and transport refrigeration appliances. As a 
refrigerant, HCFC-142b is rarely used by itself; it is generally a 
component of a refrigerant blend. For example, R-401A (Suva[supreg] 
MP39), R-406A (Autofrost GHG-X3), R-414B (Hot Shot[supreg]), Freeze-
12TM are all refrigerant blends containing HCFC-22 and/or 
HCFC-142b.
    Readers interested in substitutes for ODS refrigerants should 
review the Significant New Alternatives Policy (SNAP) program which 
evaluates and determines whether a substitute for an ODS in a specific 
end-use may be used safely in comparison to other available 
substitutes. Section 612 authorizes EPA to identify and publish lists 
of acceptable and unacceptable substitutes for class I or class II 
ozone-depleting substances. EPA has determined that a large number of 
alternatives are acceptable because they provide limited risk to human 
health and the environment. The purpose of SNAP is to allow a safe, 
smooth transition away from ODS by identifying as acceptable 
substitutes for those substances or processes that offer lower overall 
risks to human health and the environment than the ODS they replace, 
and by prohibiting substitutes that provide significantly greater risk 
than other substitutes that are available. Additional information 
concerning substitutes specifically for air-conditioning and 
refrigeration applications can be found at: http://www.epa.gov/ozone/
snap/refrigerants/index.html.
    This final rule does not restrict or prohibit the sale of 
appliances containing HCFC-22 or HCFC-142b as blowing agents in closed 
cell insulation foam. However, EPA has promulgated SNAP Rule 13: The 
use of HCFC-22 and HCFC-142b in foams/listing of ozone depleting 
substitutes in foam blowing (72 FR 14432), finding HCFC-22 and HCFC-
142b as unacceptable substitutes for HCFC-141b in the manufacture of 
commercial refrigeration, sandwich panels, slabstock, and other ``pour 
foam'' applications.
    This final rule does not affect the servicing of air-conditioning 
or refrigeration appliances manufactured prior to January 1, 2010. 
Servicing is regulated under other authorities, notably 40 CFR part 82 
subpart F (i.e., section 608 regulations). Service and repair of 
existing equipment using HCFC-22 or HCFC-142b is not affected by this 
final rule. EPA believes it is necessary to continue to permit the 
servicing of air-conditioning and refrigeration appliances manufactured 
prior to January 1, 2010, to ensure a smooth transition to non-ODS 
alternatives.
    This final rule prohibits the sale or distribution, and the offer 
for sale or distribution, in interstate commerce of air-conditioning 
and refrigeration appliances and their components containing HCFC-22 or 
HCFC-142b beginning January 1, 2010. The ban applies to appliances and 
components manufactured on or after January 1, 2010, but not to 
appliances or components manufactured before that date. This final 
rule, combined with the accompanying final rule titled ``Protection of 
Stratospheric Ozone: Adjustments to the Allowance System for 
Controlling HCFC Production, Import, and Export'' (EPA Docket: EPA-HQ-
OAR-2008-0496) published elsewhere in this issue of the Federal 
Register, which we refer to below as the ``allocation rulemaking,'' 
will have the following effects on the sale, distribution, and 
installation of air-conditioning and refrigeration products charged 
with HCFC-22 or HCFC-142b.
     Sale and distribution of appliances pre-charged with HCFC-
22 or HCFC-142b is allowed for self-contained, factory-charged 
appliances such as pre-charged window units, packaged terminal air 
conditioners (PTACs), and some commercial refrigeration units, if 
manufactured before January 1, 2010. The pre-charged appliance rule 
does not prohibit sale and distribution of pre-2010 inventory (i.e., 
stockpiled inventories).
     Sale and distribution of appliances pre-charged with HCFC-
22 or HCFC-142b is not allowed for self-contained, factory-charged 
appliances such as pre-charged window units, packaged terminal air 
conditioners (PTACs), and some commercial refrigeration units, if

[[Page 66453]]

manufactured on or after January 1, 2010. This prohibition, which is 
contained in the pre-charged appliance rule, applies regardless of when 
the refrigerant was produced and whether it is virgin or reclaimed.\2\ 
Under the allocation rule, neither stockpiled HCFC-22 produced prior to 
January 1, 2010, nor new HCFC-22 produced after that date can be used 
to manufacture new appliances on or after January 1, 2010.
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    \2\ At 40 CFR 82.152, EPA has defined reclaim refrigerant to 
mean to reprocess refrigerant to all of the specifications in 
appendix A to 40 CFR part 82, subpart F (based on ARI Standard 700-
1995, Specification for Fluorocarbons and Other Refrigerants) that 
are applicable to that refrigerant and to verify that the 
refrigerant meets these specifications using the analytical 
methodology prescribed in section 5 of appendix A of 40 CFR part 82, 
subpart F.
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     Sale and distribution of appliance components pre-charged 
with HCFC-22 or HCFC-142b is allowed if the components (e.g., 
condensing units, line sets, and coils that are charged with 
refrigerant) were manufactured before January 1, 2010. The pre-charged 
appliance rule does not prohibit sale and distribution of pre-2010 
inventory (i.e., stockpiled inventories).
     Pre-charged appliance components manufactured before 
January 1, 2010 may be used to service appliances manufactured before 
January 1, 2010, but may not be assembled to create new appliances 
unless there is no use of virgin HCFC-22 or HCFC-142b, in the 
components or otherwise. The allocation rule prohibits use of virgin 
HCFC-22 and HCFC-142b in manufacturing new appliances.
     There is no exemption from the pre-charged appliance rule 
for the sale or distribution of pre-charged appliances and pre-charged 
components that are charged with reclaimed HCFC-22 or HCFC-142b 
refrigerant. In other words, the provisions banning sale and 
distribution apply equally regardless of whether the appliances or 
components contain virgin or reclaimed refrigerant.
     Under the allocation rule, virgin HCFC-22 and HCFC-142b 
may only be used to service existing appliances. Virgin HCFC-22 and 
HCFC-142b may not be used to manufacture new pre-charged appliances or 
appliance components. Virgin HCFC-22 and HCFC-142b also may not be used 
to charge new appliances assembled onsite on or after January 1, 2010, 
though new appliances (not pre-charged) may be charged with reclaimed 
refrigerant.
     EPA is providing an exception to the allocation rule that 
allows virgin HCFC-22 to be used in the onsite ``manufacture'' of 
appliances for a particular project between January 1, 2010, and 
December 31, 2011, if the components have been specified for use at 
that project under a building permit or contract dated before January 
1, 2010.
     Under the allocation rule, HCFC-22 produced prior to 
January 1, 2010, may be used until January 1, 2015, for the manufacture 
of thermostatic expansion valves (TXVs).
     The sale and distribution of used appliances is not 
affected by either rule.

A. Establishing 40 CFR Part 82, Subpart I

    Today's final rule prohibits the sale or distribution and the offer 
for sale or distribution of pre-charged appliances and appliance 
components in interstate commerce in a new subpart I to 40 CFR part 82. 
The new subpart is titled Ban on Refrigeration and Air-Conditioning 
Appliances Containing HCFCs. A new subpart is warranted since existing 
subparts dealing with the phaseout of production and consumption of 
controlled substances generally apply to bulk substances and not 
finished goods.
    As discussed in the NPRM, EPA considered amending subpart C, since 
that subpart includes a ban on the sale and distribution of certain 
products manufactured with or containing HCFCs, as well as air-
conditioning and refrigeration appliances containing CFCs as the 
refrigerant, but those provisions were promulgated under CAA section 
610. Given that EPA is using different authority for these provisions 
and is structuring them somewhat differently, EPA finds that for ease 
of reference, these new provisions should be housed in a new and easily 
identifiable subpart in the CFR.

B. Authority To Prohibit Sale or Distribution, or Offer for Sale or 
Distribution, of Specific Types of Appliances

    EPA proposed to establish regulations under authority of section 
615 of the Act, to take effect January 1, 2010, that would ban the sale 
or distribution or offer for sale or distribution in interstate 
commerce of all air-conditioning and refrigeration appliances and 
components containing HCFC-22 or HCFC-142b containing one or both of 
these controlled substances. EPA also proposed to ban effective January 
1, 2010, the sale or distribution or offer for sale or distribution in 
interstate commerce of all air-conditioning and refrigeration 
appliances suitable for use solely with newly-produced HCFC-22 or HCFC-
142b.
    Section 301(a) authorizes EPA to promulgate regulations as are 
necessary to carry out its functions under the Clean Air Act, such as 
issuing prohibitions and standards. Further, section 615 of the CAA 
states that:

    If, in the Administrator's judgment, any substance, practice, 
process, or activity may reasonably be anticipated to affect the 
stratosphere, especially ozone in the stratosphere, and such effect 
may reasonably be anticipated to endanger public health or welfare, 
the Administrator shall promptly promulgate regulations respecting 
the control of such substance, practice, process, or activity, and 
shall submit notice of the proposal and promulgation of such 
regulation to the Congress.

    For the reasons discussed below, EPA has determined that the 
practice of selling and distributing pre-charged air-conditioning and 
refrigeration appliances and components containing HCFC-22 or HCFC-142b 
may reasonably be anticipated to affect ozone in the stratosphere, and 
such effect may reasonably be anticipated to endanger public health.

C. Criteria and Conditions Established Under Sec.  615 of CAAA

    Under Sec.  615, if in the Administrator's judgment, any substance, 
practice, process, or activity may reasonably be anticipated to affect 
the stratosphere, especially ozone in the stratosphere, and such effect 
may reasonably be anticipated to endanger public health or welfare, 
then the Administrator must promptly promulgate regulations respecting 
the control of such substance, practice, process, or activity.
    EPA proposed to conclude that, beginning January 1, 2010, the 
practice of selling and distributing pre-charged air-conditioning and 
refrigeration appliances and pre-charged appliance components 
containing HCFC-22 or HCFC-142b, as well as air-conditioning and 
refrigeration appliances suitable for use solely with newly produced 
HCFC-22 or HCFC-142b may reasonably be anticipated to affect ozone in 
the stratosphere, and such effect may reasonably be anticipated to 
endanger public health. EPA sought comment on this proposed conclusion. 
EPA explained that the impacts on stratospheric ozone resulting from 
continuing these activities can be delineated into impacts from the 
continued production of HCFC-22 or HCFC-142b for use as a refrigerant 
in air-conditioning and refrigeration appliances that cannot be 
initially charged in the U.S. but could be charged abroad and 
subsequently imported into the U.S. if EPA did not take action; and 
impacts from improperly servicing equipment and/or venting controlled 
substances. These impacts are discussed in this notice.

[[Page 66454]]

    Three commenters stated that EPA must ensure that its findings 
regarding public health are well supported, documented in the record, 
and clearly meet the statutory criteria for an endangerment finding, 
under section 615. These commenters did not find EPA's finding to be 
well supported and instead said it was based on general assumptions, 
incomplete analyses, and extrapolations of calculations made by one 
consultant in one brief analysis. Other commenters found that the 
Agency's approach is an appropriate exercise of section 615 authority 
as it would fill a regulatory gap and is well-tailored to the section 
615 endangerment finding.
    After considering the comments, EPA is finalizing its proposed 
conclusion that the practice of selling and distributing air-
conditioning and refrigeration appliances containing HCFC-22 or HCFC-
142b may reasonably be anticipated to affect ozone in the stratosphere, 
and that such effect may reasonably be anticipated to endanger public 
health. Specific concerns raised by commenters regarding the ``Draft 
Memorandum on Costs Associated with Refrigerant Substitution from R-22 
to R-410A in Pre-Charged Equipment Imports'' and the basis for 
estimates used in that document are discussed in the response to 
comments document available in the docket.
    In reaching our conclusion, we considered both of the criteria 
contained in section 615. The first criterion is whether the substance, 
practice, process, or activity in question may reasonably be 
anticipated to affect the stratosphere. As summarized in the background 
section of this preamble, the effects of ODS on stratospheric ozone are 
well known. Further information on the science of ozone depletion is 
available in the docket. The specific ODS addressed in this action, 
HCFC-22 and HCFC-142b, are class II substances listed under section 
602(b) of the Clean Air Act. Pursuant to section 602(b), class II 
substances are those substances that are ``known or may reasonably be 
anticipated to cause or contribute to harmful effects on the 
stratospheric ozone layer.'' As discussed below under the heading 
``Costs Analysis and Small Business Economic Impacts,'' EPA has 
prepared an estimate of the reduction in HCFC emissions attributable to 
a ban on pre-charged appliances. EPA estimates that the projected 
emissions of HCFC-22 between January 1, 2010 and December 31, 2019, in 
the absence of a ban on pre-charged appliances (based in part on charge 
sizes and estimated leak rates of pre-charged appliances), is 
approximately 4,070 ODP weighted tons. For purposes of approximate 
comparison, an assumed average of 407 ODP tons per year of averted 
emissions during this time period is approximately 11 percent of the 
3,810 ODP ton U.S. compliance cap for consumption of all HCFCs each 
year during 2010-2014, and 27 percent of the cap during 2015-2019. 
Additionally, the avoided emissions of 4,070 ODP weighted tons is 
approximately 9 percent of all HCFC emissions projected for the United 
States for this same time period. These estimated reductions assume 
that HCFCs to be used for the US market will not be diverted to other 
markets in the world.
    EPA believes that a reduction in the amount of the installed base 
of HCFC appliances reduces potential emissions and lessens the need for 
HCFCs for servicing. While some of the HCFCs used in appliances can be 
reclaimed and reused, a certain amount of the HCFCs becomes 
contaminated and is not available for future use. Thus restricting the 
installed base of HCFC appliances will have the effect of reducing the 
overall amount of HCFC consumption and emissions in the US. This 
approach is consistent with the previous actions taken to restrict 
applications of ozone-depleting substances where suitable substitutes 
exist. This action also helps further the goals of the Montreal 
Protocol, in particular the Parties' recent emphasis on reducing 
emissions of HCFCs, as evidenced by the Parties' agreement in September 
2007 to pursue a more aggressive HCFC production and consumption 
phaseout. The result of the rulemaking will be fewer appliances pre-
charged with HCFCs that could be emitted either during the useful 
lifetimes of the appliances via leaks or improper servicing, or by the 
improper disposal of the appliances resulting in the release of 
refrigerant in the U.S.
    The second criterion in section 615 is whether ``such effect'' may 
reasonably be anticipated to endanger public health or welfare. The 
phrase ``such effect,'' as used in section 615, could be read in the 
context of this action to refer to (1) stratospheric ozone depletion 
generally; (2) stratospheric ozone depletion associated with HCFCs; or 
(3) stratospheric ozone depletion attributable to the specific practice 
of importing HCFC pre-charged appliances. As indicated above, EPA 
proposed to conclude that the stratospheric ozone depletion 
attributable to the specific practice of importing HCFC pre-charged 
appliances ``may reasonably be anticipated to endanger'' public health 
and thus is sufficient in itself. As further discussed below, EPA is 
finalizing this conclusion in this action. Therefore, it is not 
necessary to arrive at additional or definitive interpretations for 
purposes of this action. However, the following discussion briefly 
addresses the public health consequences of stratospheric ozone 
depletion generally as well as the stratospheric ozone depletion 
attributable to the specific practice of importing HCFC pre-charged 
appliances.
    The links between stratospheric ozone depletion and skin cancer are 
well established. Other public health concerns include cataracts and 
immune suppression. Since the appearance of an ozone hole over the 
Antarctic in the 1980s, Americans have become aware of the health 
threats posed by ozone depletion, which decreases the atmosphere's 
ability to protect the earth's surface from the sun's ultraviolet (UV) 
rays. The 2006 documents Scientific Assessment of Ozone Depletion, 
prepared by the Scientific Assessment Panel to the Montreal Protocol, 
and Environmental Effects of Ozone Depletion and its Interactions with 
Climate Change, prepared by the Environmental Effects Assessment Panel 
(see http://ozone.unep.org/Assessment_Panels), provide comprehensive 
information regarding the links between emissions of ODS, ozone layer 
depletion, UV radiation, and human health effects.
    Skin cancer is the most common form of cancer in the U.S., with 
more than 1,000,000 new cases diagnosed annually (National Cancer 
Institute, ``Common Cancer Types,'' at http://www.cancer.gov/
cancertopics/commoncancers). Melanoma, the most serious form of skin 
cancer, is also one of the fastest growing types of cancer in the U.S.; 
melanoma cases in this country have more than doubled in the past two 
decades, and the rise is expected to continue (Ries, L., Eisner, M.P., 
Kosary, C.L., et al, eds. SEER Cancer Statistics Review, 1973-1999. Vol 
2003. Bethesda (MD): National Cancer Institute; 2002.) In 2007, 
invasive melanoma was expected to strike more than 59,000 Americans and 
kill more than 8,000 (National Cancer Institute, ``Melanomas,'' at 
http://www.cancer.gov/cancertopics/types/melanoma).
    Nonmelanoma skin cancers are less deadly than melanomas. 
Nevertheless, left untreated, they can spread, causing disfigurement 
and more serious health problems, and even death. There are two primary 
types of nonmelanoma skin cancers. Basal cell carcinomas are the most 
common type of skin cancer tumors. They usually appear as small,

[[Page 66455]]

fleshy bumps or nodules on the head and neck, but can occur on other 
skin areas. Basal cell carcinoma grows slowly, and rarely spreads to 
other parts of the body. It can, however, penetrate to the bone and 
cause considerable damage. Squamous cell carcinomas are tumors that may 
appear as nodules or as red, scaly patches. This cancer can develop 
into large masses, and unlike basal cell carcinoma, it can spread to 
other parts of the body.
    EPA's analysis estimates that approximately 1,700 total cases of 
cancer (nonmelanoma and cutaneous malignant melanoma) and approximately 
9 premature mortalities in the United States would be avoided by 
banning the sale and distribution of pre-charged appliances beginning 
in 2010. More information regarding this projection is available in a 
memorandum prepared by ICF Consulting for EPA (``Avoidance of Skin 
Cancer Incidences and Mortalities Associated with a 2010 Ban on 
Products Pre-Charged with R-22'') \3\ and placed in the docket for this 
rulemaking. EPA does not routinely provide projections of this nature 
in developing rules under Title VI of the CAA.
---------------------------------------------------------------------------

    \3\ HCFC-22 is also referred to as R-22, particularly where it 
is used in refrigeration and air-conditioning applications.
---------------------------------------------------------------------------

    Other UV-related skin disorders include actinic keratoses and 
premature aging of the skin. Actinic keratoses are skin growths that 
occur on body areas exposed to the sun. The face, hands, forearms, and 
the ``V'' of the neck are especially susceptible to this type of 
lesion. Although premalignant, actinic keratoses are a risk factor for 
squamous cell carcinoma. Chronic exposure to UV radiation also causes 
premature aging, which over time can make the skin become thick, 
wrinkled, and leathery.
    Cataracts are a form of eye damage in which a loss of transparency 
in the lens of the eye clouds vision. If left untreated, cataracts can 
lead to blindness. Research has shown that UV radiation increases the 
likelihood of certain cataracts. Although curable with modern eye 
surgery, cataracts diminish the eyesight of millions of Americans. 
Other kinds of eye damage include pterygium (i.e., tissue growth that 
can block vision), skin cancer around the eyes, and degeneration of the 
macula (i.e., the part of the retina where visual perception is most 
acute).
    Based on the discussion above of the two criteria contained in 
section 615, EPA concludes that beginning January 1, 2010, the practice 
of selling and distributing pre-charged air-conditioning and 
refrigeration appliances and pre-charged appliance components 
containing HCFC-22 or HCFC-142b, as well as air-conditioning and 
refrigeration appliances suitable for use solely with newly produced 
HCFC-22 or HCFC-142b may reasonably be anticipated to affect ozone in 
the stratosphere, and such effect may reasonably be anticipated to 
endanger public health.

D. Defining Air-Conditioning and Refrigeration Appliances and Pre-
Charged Appliance Components

    In the NPRM, EPA proposed that any air-conditioning or 
refrigeration appliances containing HCFC-22 or HCFC-142b would be 
subject to the proposed ban on the sale and distribution in interstate 
commerce if manufactured on or after January 1, 2010. EPA proposed that 
the ban include pre-charged components for appliances, such as line-
sets and pre-charged compressors, because such pre-charged components 
present the same concerns as pre-charged appliances.
i. Appliance
    Section 601 of the CAA defines the term ``Appliance'' to mean ``* * 
* 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.'' For 
purposes of Subpart I, EPA proposed to use the definition of 
``appliance'' in EPA's refrigerant recycling and emissions reduction 
regulations at 40 CFR part 82, subpart F, which is identical to the 
statutory definition.
    EPA requested comment on using the definition of appliance that 
appears in subpart F to determine what would be subject to the proposed 
ban. In response to the Agency's request, commenters noted that they do 
not believe that every air-conditioning and refrigeration system--
regardless of size, use, application, complexity (such as an industrial 
process refrigeration system)--should be subject to the proposed rule 
in the same manner. Specifically, these commenters suggested that the 
scope of the appliances covered by the rule be revised to clearly 
exclude residential, commercial, and industrial process refrigeration 
systems that are not pre-charged when they leave the factory, but are 
designed to use HCFC-22 or HCFC-142b. The commenters requested that EPA 
clarify that ``any device which contains and uses a refrigerant'' would 
not include systems that can use refrigerants, but are not pre-charged.
    EPA agrees with comments stating that appliance be defined 
consistently with the previously promulgated definition of appliance at 
subpart F. EPA is noting, and later discusses in detail, that equipment 
(including residential, commercial, and industrial process 
refrigeration) that is not pre-charged with HCFC-22 or HCFC-142b is not 
covered under this rulemaking. EPA believes that consistency in these 
definitions benefits the regulated community. Failure to provide a 
consistent regulatory definition would likely lead to uncertainly in 
the refrigeration and air-conditioning supply and service sectors, 
countering the Agency's efforts to phase out use of HCFC-22 and HCFC-
142b in new installations.
    In order to provide regulatory clarity, this final rule applies the 
same definition of appliance that is found at CAA section 601 and 
promulgated at 40 CFR part 82, subpart F. The definition of appliance 
means any device which contains and uses a refrigerant and which is 
used for household or commercial purposes, including any air 
conditioner, refrigerator, chiller, or freezer.
    For further clarification, EPA considers the following equipment as 
appliances, some of which are typically pre-charged with HCFC-22 or 
HCFC-142b:
     Air-to-air heat pumps;
     Chest or upright freezers;
     Ductless air conditioners;
     Dehumidifiers;
     Ground-source heat pumps;
     Packaged air conditioners and heat pumps;
     Unitary air conditioners; and
     Window air-conditioning units.
    This listing is not intended to be exhaustive, but includes 
appliances that may be manufactured and shipped pre-charged with 
refrigerant.
ii. Pre-Charged Appliance Component
    In the NPRM, EPA proposed to define pre-charged appliance component 
as any portion of a pre-charged appliance including but not limited to 
condensers and line sets that are charged with refrigerant prior to 
sale or distribution or offer for sale or distribution in interstate 
commerce.
    EPA has not previously promulgated a definition of pre-charged 
appliance component. However, in an earlier rulemaking addressing the 
sales of pre-charged appliance components, the Agency stated that pre-
charged components are parts of but ``are clearly not 
appliances''(November 9, 1994; 59 FR 55912). Commenters noted that EPA 
provides similar language on its

[[Page 66456]]

refrigerant sales restriction factsheet, stating that EPA considers a 
``part'' to be ``any component or set of components that makes up less 
than an appliance. For example, this includes line sets, evaporators, 
or condensers that are not sold as part of a set from which one can 
construct a complete split system or other appliance. EPA considers a 
part to be ``pre-charged'' if it contains a CFC or HCFC that will 
become part of the operating charge of an appliance'' (http://
www.epa.gov/ozone/title6/608/sales/sales.html).
    In proposing to define pre-charged appliance component, EPA 
requested comment regarding the universe of components that are 
typically manufactured and/or shipped pre-charged with HCFC-22 or HCFC-
142b. EPA received comment from major appliance and component 
manufacturers identifying equipment that is typically pre-charged with 
refrigerant, specifically HCFC-22. These manufacturers stated that 
components such as evaporator coils, condenser coils, compressors or 
line sets are often shipped pre-charged with HCFC-22. EPA received one 
request to add ``condensing units'' to the listed examples of pre-
charged appliance components. The remaining comments concerning the 
universe of pre-charged appliance components concerned the sale of 
inventoried components and did not address the actual definition of 
pre-charged appliance component.
    EPA has consistently stated its interpretation that components that 
make up an appliance such as condensers, evaporators, compressors, and 
line sets in themselves do not constitute appliances. EPA considers 
components (such as compressors, condensers, and evaporators) to be 
portions of the refrigerant circuitry without which the appliance would 
not be able to function in its intended purpose. When sold charged with 
refrigerants, these components present all the same concerns as the 
pre-charged appliances. However, a major appliance component, such as a 
condensing unit, is not an appliance. A condensing unit is not an air 
conditioner, refrigerator, chiller, or freezer that provides a cooling 
effect, but it is certainly a component of such equipment. In addition, 
it is conceivable that major components would have different dates of 
manufacture, making the equation of date of appliance manufacture with 
the date of component manufacture difficult if not impossible. By 
comparison, it is relatively simple to determine the date of 
manufacture for pre-charged appliances where the refrigerant circuitry 
is typically intact and charged, and the appliance is ready to serve 
its intended purpose at the point of manufacture (e.g., a window air 
conditioner).
    For further clarification, the following are components that in 
themselves do not satisfy the definition of appliance, but are 
typically pre-charged with HCFC-22 or HCFC-142b:
     Line sets;
     Condensing units;
     Compressors; and
     Coils.
    This listing is not intended to be exhaustive, but includes 
components that may be manufactured and shipped pre-charged with 
refrigerant.
    EPA is changing the proposed definition of pre-charged appliance 
component to add compressors, condensing units, and coils to the list 
of examples of appliance components that may be pre-charged with 
refrigerant as a part of the manufacturing process prior to the 
component's sale or distribution or offer for sale or distribution in 
interstate commerce. EPA is also changing the proposed definition to 
make clear that the definition is not limited to pre-charged appliance 
components found solely in pre-charged appliances. EPA intends the 
definition to include any appliance component that may be pre-charged 
prior to sale or distribution. Therefore, EPA is defining pre-charged 
appliance component to mean any portion of an appliance including but 
not limited to condensers, compressors, line sets, and coils, that is 
charged with refrigerant prior to sale or distribution or offer for 
sale or distribution in interstate commerce.
iii. ``Manufactured'' and ``Date of Manufacture''
    EPA did not propose a definition of ``manufactured'' in the NPRM. 
However, the term manufactured as it relates to the sale or 
distribution of pre-charged appliances and appliance components was 
discussed in detail in the preamble to the NPRM adjusting the allowance 
system for HCFC production, import, and export (73 FR 78680), which was 
published on the same day (December 23, 2008) as the NPRM for this 
final pre-charged appliance rule. That discussion of the term included 
four criteria for when an appliance would be considered 
``manufactured.'' Due to the volume of comments concerning manufacture 
and date of manufacture, EPA believes that further explanation of EPA's 
use of the term ``manufactured'' in the context of this action is 
warranted.
    The vast majority of comments received in response to the NPRM 
related to the sale of inventoried appliances and components that were 
manufactured prior to January 1, 2010, but would likely remain in 
inventories after 2010. EPA received comment that its understanding of 
the term ``manufactured'' is not consistent with previous conventions 
defining a product as ``manufactured'' when it leaves the 
manufacturer's final assembly process, is packed for shipment, and 
placed into initial inventory. Several commenters noted that they 
preferred a definition of manufactured under which, the date of 
manufacture is a finite date controlled by the manufacturer and is not 
dependent on the dealer network or purchase by the ultimate consumer.
    EPA received numerous comments from manufacturers and distributors 
of pre-charged appliances and components stating that the Agency should 
interpret ``date of manufacture'' for an appliance to conform to the 
date of manufacture of components, such as the date of condenser 
manufacture. These commenters recommended that EPA define the date of 
manufacture in terms of the date of manufacture displayed on name-plate 
marking, but no sooner than the date on which the assembly and end-of-
line testing of the equipment item in question are substantially 
completed or the equipment is shipped from the factory or put into the 
original equipment manufacturer's (OEM's) inventory, whichever occurs 
first.
    EPA believes that the concern expressed in many of the comments 
arises from a commingling of the definitions of the terms ``appliance'' 
and ``pre-charged appliance component.'' There are several reasons why 
EPA does not equate the date of component manufacture to the date of 
appliance manufacture. As previously stated, components in themselves 
do not satisfy the previously promulgated definition of appliance, 
which is identical to the statutory definition. Components likely have 
distinct individual manufacture dates and may be field installed months 
or even years after their manufacture. EPA's reliance on the date of a 
particular component's manufacture, as a means of determining when an 
appliance was manufactured, would lead to a patchwork approach that 
could create confusion. In addition, because components may have 
differing manufacture dates, such an approach would require the Agency 
to provide makeshift determinations as to which major component's 
manufacture date would determine the date of appliance manufacture.
    EPA is promulgating a definition in today's final rule stating that 
an appliance is ``manufactured'' on the date that the appliance meets 
four

[[Page 66457]]

criteria: (1) The appliance's refrigerant circuit is complete, (2) the 
appliance can function, (3) the appliance is charged with refrigerant, 
and (4) the appliance is ready for use for its intended purpose. Small 
appliances, such as refrigerators and window air-conditioners, thus are 
``manufactured'' while the appliance is at a manufacturing facility. 
For instance, a small appliance (such as a residential refrigerator) 
that has been pre-charged with refrigerant by the OEM has gone through 
the entire production line so that all mechanical and electrical 
procedures are complete, and is a ``stand-alone'' piece of equipment 
(i.e., it only needs to be plugged into an electrical outlet and turned 
on to function properly). For such appliances, EPA intends to treat the 
date identified on the appliance by the OEM as the date of manufacture.
    Under the definition of ``manufactured'' in today's final rule, 
appliances that are field charged or have the refrigerant circuit 
completed onsite (for example, residential split systems), regardless 
of whether additional refrigerant is added on-site or not, would not be 
``manufactured'' until installation of all of the components and other 
parts is completed and the appliance is charged with refrigerant. EPA 
will not consider such an appliance to be ``manufactured'' unless all 
four criteria of the definition are met. For such appliances, the date 
of manufacture may be determined by invoices, contracts, or service 
records indicating the date that the appliance manufacture was 
completed.
    For pre-charged components of appliances, EPA considers the 
component to be ``manufactured'' on the date that the OEM has 
physically completed assembly of the component, the component is 
charged with refrigerant, and the component is ready for initial 
distribution or sale. EPA intends to treat the date identified on the 
pre-charged component by the OEM or provided in documentation by the 
OEM as the date of component manufacture. While EPA did not propose a 
definition of ``manufactured'' for appliance components, EPA believes 
including such a definition in the final rule is appropriate in light 
of the extensive comments requesting clarification on the date of 
manufacture of both components and complete appliances. This definition 
reflects the understanding expressed by commenters as it pertains to 
when components are manufactured.
    Due to the volume of comments received concerning the date of 
manufacture, including the request that the Agency promulgate a 
definition of ``manufactured,'' EPA is adding a definition of 
``manufactured,'' with respect to appliances and appliance components, 
at Sec.  82.302. Manufactured, for an appliance, means the date on 
which the appliance's refrigerant circuit is complete, the appliance 
can function, the appliance holds a refrigerant charge, and the 
appliance is ready for use for its intended purposes; for a pre-charged 
appliance component, ``manufactured'' means the date that the original 
equipment manufacturer has physically completed assembly of the 
component, the component is charged with refrigerant, and the component 
is ready for initial sale or distribution.

E. Ban on Sale or Distribution or Offer for Sale or Distribution in 
Interstate Commerce

    In the NPRM, EPA proposed to ban the sale and distribution, or the 
offer for sale or distribution in interstate commerce, of any appliance 
or appliance component that is pre-charged with HCFC-22 or HCFC-142b 
and is manufactured on or after January 1, 2010. In the NPRM, EPA put 
forth the Agency's interpretation, consistent with previous actions 
under CAA Sec.  610, that the term ``interstate commerce'' applies to 
the product's entire distribution chain up to and including the point 
of sale to the ultimate consumer (73 FR 78713).
    EPA has previously banned the sale or distribution, and offer for 
sale or distribution in interstate commerce, of certain products 
containing or manufactured with class II substances, including most 
pressurized dispensers and plastic foam products (58 FR 69637). EPA has 
also previously banned the sale or distribution, and offer for sale or 
distribution in interstate commerce, of air-conditioning and 
refrigeration appliances containing class I substances (66 FR 57512). 
EPA's interpretation of interstate commerce for purposes of these bans 
does not cover the sale, distribution, or offer of sale or distribution 
of an appliance or an appliance component if the appliance or component 
is completely manufactured, distributed, and sold without ever crossing 
State lines. To lie outside the interpretation of interstate commerce, 
the appliance or component must be manufactured, distributed, and sold 
exclusively within a particular State, and all of the raw materials, 
components, equipment, and labor that went into the manufacturing, 
distributing, selling, or offering for sale or distribution of such a 
product originated within that State as well.
i. Existing Inventories of Pre-Charged Appliances and Components 
Manufactured Prior to January 1, 2010
    In the NPRM, EPA proposed that effective January 1, 2010, no person 
may sell or distribute, or offer to sell or distribute, in interstate 
commerce any pre-charged appliance or appliance component manufactured 
on or after January 1, 2010 containing HCFC-22, HCFC-142b, or a blend 
containing one or both of these controlled substances (73 FR 78713). It 
remains EPA's intent to ban the sale or distribution in interstate 
commerce of new pre-charged appliances and pre-charged components 
containing HCFC-22 or HCFC-142b that would be used to configure new 
appliances in the field, while still allowing the use of inventoried 
components that were manufactured prior to January 1, 2010 to service 
appliances that were manufactured prior to January 1, 2010.
    EPA received numerous comments in response to the proposal 
concerning the ``date of manufacture'' of an appliance as it applies to 
the sale of inventoried pre-charged appliances and components. 
Overwhelmingly, the commenters focused on the concern of stranding 
stockpiled inventory that was manufactured prior to January 1, 2010, 
but not yet sold or distributed. Commenters referenced the need to sell 
pre-charged appliances and components manufactured prior to January 1, 
2010, in order to service existing appliances across multiple 
refrigeration and air-conditioning sectors, and requested that EPA 
define a consistent policy for the date of manufacture that would apply 
to the refrigerant, the components, and the appliances.
    Some commenters believed that the proposed ban included existing 
pre-charged appliances and components that were manufactured prior to 
but remain in inventory as of January 1, 2010, and thus expressed 
concern about creating a great deal of stranded inventory, resulting in 
potentially large economic losses for manufacturers. The commenters 
requested that the final rule clearly state that industry is permitted 
to use existing inventories of pre-charged appliance components that 
were manufactured or imported prior to January 1, 2010 to service 
existing appliances. Other commenters suggested a sell-through for pre-
2010 pre-charged appliances and appliance components during the 2010 
calendar year.
    EPA also received comment from the Small Business Administration 
(SBA) requesting that EPA interpret ``manufactured'' as ``the date in 
which

[[Page 66458]]

the appliance is placed in initial inventory, where the original 
product has completed all of its manufacturing processes and is ready 
for sale by the manufacturer,'' a definition which the SBA finds 
consistent with both industry practice and the EPA final rule 
Reconsideration of the 610 Nonessential Products Ban (66 FR 57511; 
November 15, 2001). In the final rule, EPA permitted the sale and 
distribution of air-conditioning and refrigeration appliances 
containing class I controlled substances that were placed into initial 
inventory by January 14, 2002. SBA stated that the 2001 rule gives an 
interpretation of initial inventory that is compatible with common 
industry usage as the date ``that the original product has completed 
all its processes and is ready for sale by the manufacturer.''
    EPA recognizes that air-conditioning and refrigeration appliances 
containing HCFC-22 or HCFC-142b could be manufactured prior to January 
1, 2010, but may not have reached the ultimate consumer by January 1, 
2010. EPA contemplated mechanisms for either a ``sell-through'' or a 
``grandfathering'' of appliances that were previously manufactured and 
placed into an initial inventory--similar to the approaches in 40 CFR 
part 82 subpart C, under the Nonessential Products Ban for class I and 
class II controlled substances. However, we note that the proposed ban 
would not have prohibited the sale or distribution of any appliance or 
appliance component manufactured before January 1, 2010. Thus, in 
effect, the proposed ban already contained a ``sell-through'' 
provision.
    EPA does not intend to strand stocks of components or make existing 
appliances obsolete by not allowing them to be serviced with 
replacement components. EPA noted in the NPRM that it did not intend to 
regulate the servicing of appliances that were manufactured prior to 
January 1, 2010 (73 FR 78712). EPA noted that servicing is regulated 
under other authorities, notably 40 CFR part 82, subpart F. EPA is 
allowing the continued use of recovered and reclaimed HCFC-22 to 
service existing equipment, as well as allowing the limited production 
and import of virgin HCFC-22 and HCFC-142b to service existing 
appliances, as promulgated in the accompanying final rule titled 
``Protection of Stratospheric Ozone: Adjustments to the Allowance 
System for Controlling HCFC Production, Import, and Export'' (EPA 
Docket: EPA-HQ-OAR-2008-0496). EPA believes it is necessary to continue 
to permit the servicing of air-conditioning and refrigeration 
appliances manufactured prior to January 1, 2010, to ensure a smooth 
transition to alternatives.
    EPA recognizes that existing stockpiles of replacement components 
could be used to service existing appliances, and that such service 
would be likely to occur after the January 1, 2010 phaseout date. EPA 
intends to allow the continued servicing of these appliances in order 
to allow for a smooth transition away from HCFC-22 and HCFC-142b. This 
intent is consistent with the companion final rule allocating 
allowances for the production and consumption of HCFC-22 and HCFC-142b 
after January 1, 2010, in order to service the existing stock of 
appliances in residential, commercial, and industrial refrigeration and 
air-conditioning end-uses. EPA is clarifying that pre-charged appliance 
components, such as condensing units, line sets, evaporators, and 
compressors that were manufactured before January 1, 2010, may be sold 
for purposes of servicing appliances manufactured before that date. 
Manufacturers, distributors, and wholesalers maintaining stockpiles of 
pre-2010 components that are pre-charged with virgin HCFC-22 or HCFC-
142b can continue to sell such components in order to service existing 
appliances in the year 2010 and beyond.
    Consistent with the proposal, this final rule does not apply the 
prohibition against the sale and distribution in interstate commerce 
that does not apply to pre-charged components that were manufactured 
prior to January 1, 2010. The finalized prohibition at Sec.  82.304 
reads: ``Effective January 1, 2010, no person may sell or distribute, 
or offer to sell or distribute, in interstate commerce any product 
identified in Sec.  82.306.'' This prohibition is limited to products 
listed in Sec.  82.306, i.e., any air-conditioning or refrigeration 
pre-charged appliance manufactured on or after January 1, 2010 
containing HCFC-22 or HCFC-142b and any pre-charged appliance component 
for air-conditioning or refrigeration appliances manufactured on or 
after January 1, 2010 containing HCFC-22 or HCFC-142b. Hence, 
manufacturers and distributors are allowed to sell or distribute pre-
charged HCFC-22 or HCFC-142b appliances and components that are in 
inventory as of January 1, 2010. There is no time limit for the sale or 
distribution of such pre-charged appliances or components.
ii. Use of Recovered and Reclaimed HCFC-22 and HCFC-142b
    In the NPRM EPA proposed that effective January 1, 2010, no person 
may sell or distribute, or offer to sell or distribute, in interstate 
commerce any newly-manufactured pre-charged appliance or appliance 
component pre-charged with HCFC-22 or HCFC-142, unless the HCFCs were 
previously reclaimed. EPA defines ``reclaim'' at 40 CFR 82.152 as ``to 
reprocess refrigerant to all of the specifications in appendix A to 40 
CFR part 82, subpart F (based on ARI Standard 700-1995, Specification 
for Fluorocarbons and Other Refrigerants) that are applicable to that 
refrigerant and to verify that the refrigerant meets these 
specifications using the analytical methodology prescribed in section 5 
of appendix A of 40 CFR part 82, subpart F.'' EPA limits reclamation to 
entities that have sought and have received EPA certification as 
refrigerant reclaimers, and restricts the sale of used refrigerant to a 
new owner unless it has first been reclaimed by an EPA-certified 
refrigerant reclaimer.
    EPA also proposed to apply the ban on sale and distribution of pre-
charged appliances to appliances manufactured after January 1, 2010 
that are not pre-charged but are ``suitable only for use'' with newly 
produced HCFC-22 or HCFC-142b, or blends thereof. When referring to 
appliances that are suitable for use solely with newly produced HCFC-22 
or HCFC-142b, EPA meant appliances that, according to the manufacturer, 
would not be suitable for use with recycled or reclaimed refrigerants. 
Such a situation could potentially arise if, for example, 
manufacturer's directions stated specifically that warranties are void 
if the appliance is charged with reclaimed refrigerant. As a means of 
addressing such sales, EPA had proposed a prohibition at Sec.  
82.302(b) against the sale and distribution in interstate commerce of 
any air-conditioning or refrigeration appliance manufactured on or 
after January 1, 2010, that is suitable only for use with newly 
produced HCFC-22, HCFC-142b, or a blend containing one or both of these 
controlled substances. While the proposal addressed suitability as it 
pertains to pre-charged appliances, EPA intended to include components 
in the discussion as well.
    EPA did not receive comments specifically addressing the proposal 
to apply the ban on sale and distribution of pre-charged appliances to 
appliances manufactured after January 1, 2010 that are not pre-charged 
but are ``suitable only for use'' with newly produced HCFC-22 or HCFC-
142b, or blends thereof. However, EPA has reevaluated the concept of 
``suitability'' pertaining to the future use of components needed to 
service existing appliances

[[Page 66459]]

manufactured prior to 2010. Appliances and components that were not 
specified as being suitable for use only with newly produced HCFC-22 or 
HCFC-142b could still be charged with newly produced substances, even 
though such use was not promoted by the manufacturer. Thus, the 
proposed ban on appliances suitable only for use with newly-produced or 
virgin HCFC-22 or HCFC-142b would not have the effect of ending use of 
newly-produced or virgin quantities of these HCFCs in new appliances.
    As previously stated, EPA does not intend to ban the sale and 
distribution of components needed to service existing appliances. EPA 
believes that a ban on pre-charged appliances and components based on 
statements by the manufacturer that the warranty would apply only if 
used with newly-produced or virgin HCFCs could be misinterpreted as a 
ban on use of components needed to service existing appliances. Use of 
newly-produced HCFCs in existing appliances is not prohibited. In 
addition, the accompanying HCFC allocation rulemaking ``Protection of 
Stratospheric Ozone: Adjustments to the Allowance System for 
Controlling HCFC Production, Import, and Export'' (EPA Docket: EPA-HQ-
OAR-2008-0496), specifically prohibits the use of virgin HCFC-22 or 
HCFC-142b in appliances manufactured on or after January 1, 2010. EPA 
believes that this prohibition provides adequate coverage against the 
use of virgin HCFC-22 or HCFC-142b. Therefore, EPA is not finalizing 
the proposed supplemental ban against sale and distribution of 
appliances and components that are not pre-charged, but suitable only 
for use with newly produced or virgin HCFC-22 or HCFC-142b at Sec.  
82.302(b).
    EPA requested and received several comments concerning the use of 
reclaimed refrigerant in new pre-charged appliances and pre-charged 
appliance components. Commenters requested that the Agency explicitly 
address its intent to allow or disallow the use of recovered and 
reclaimed HCFC-22 and HCFC-142b in order to meet the future service 
demand. Numerous commenters specifically requested that the final rule 
clearly state that un-charged components may continue to be 
manufactured after January 1, 2010, and field charged with reclaimed 
refrigerant. One commenter felt that such a regulatory measure would 
promote and encourage the use of reclaimed refrigerants, especially 
considering EPA's intent to have reclaimed HCFC-22 reach 20% of the 
total allocation to fill the shortfall in 2015. In particular, one 
commenter stated that any ban on reclaimed HCFC-22 use for new or old 
products would be perceived as a negative message in the marketplace.
    EPA also received numerous comments opposing any exemption allowing 
the use of recovered and reclaimed refrigerant in newly manufactured 
pre-charged appliances and compliance components. Seven commenters 
believed that it would be impossible for EPA to enforce such a 
provision, because it would be unable to determine whether a system is 
charged with virgin or recovered and reclaimed refrigerant (since both 
refrigerants meet the same purity standard, ARI 700); therefore, the 
ban should be extended to newly manufactured equipment using recycled 
and reclaimed, as well as virgin HCFC-22 or HCFC-142b. Commenters 
expressed concern that the continued proliferation of new HCFC-22 
systems after 2010 that will be allowed to use reclaimed refrigerant 
would only exacerbate shortages for HCFC-22 service quantities by 
perpetuating the introduction of new HCFC-22 systems into the 
marketplace, delaying the U.S. transition to alternatives to ozone-
depleting substances.
    EPA's intent in proposing to exclude appliances and components 
charged with reclaimed refrigerant from the prohibition on sale and 
distribution was to focus the prohibition on the virgin HCFCs whose use 
in new appliances is banned under section 605(a). The intent of the 
proposal was to make certain that any virgin HCFC-22 or HCFC-142b 
contained in pre-charged components is only used in the service of 
appliances manufactured prior to January 1, 2010. EPA agrees with 
commenters that noted the difficulty in determining whether refrigerant 
that is undergoing a production phaseout in the U.S. (e.g., HCFC-22) is 
virgin refrigerant or is used refrigerant that has been reclaimed. This 
is especially true for appliances and components that are produced and 
pre-charged abroad and imported into the United States. It would not be 
possible for EPA to determine whether such imported pre-charged 
appliances and components were manufactured with reclaimed refrigerant. 
Because many countries that export pre-charged appliances and 
components will not be obligated to freeze HCFC consumption until 2013, 
consistent with their Montreal Protocol commitments, pre-charged 
appliances imported from those countries could easily contain virgin 
HCFCs.
    In the accompanying HCFC allocation rulemaking ``Protection of 
Stratospheric Ozone: Adjustments to the Allowance System for 
Controlling HCFC Production, Import, and Export'' (EPA Docket: EPA-HQ-
OAR-2008-0496), EPA has achieved the 2010 step-down in production and 
consumption in large part by considering the HCFC servicing demand for 
2010-2014. In that related rulemaking, EPA has projected the HCFC 
appliance servicing demand for 2010-2014 and assumed that the total 
demand will be met in part through virgin HCFCs and in part through use 
of reclaimed and recycled HCFCs. As noted in the comments, adding new 
HCFC appliances to the installed base would cause the servicing demand 
to grow, potentially resulting in increases in the amounts of HCFC 
needed to service existing appliances, and likely hinder the growth of 
alternative refrigerants that do not directly contribute to the 
depletion of the ozone layer.
    EPA supports the use of components to service appliances that were 
manufactured before January 1, 2010, but we recognize the difficulty in 
determining whether pre-charged appliances and components, especially 
those being imported into the United States, have been charged with 
virgin or reclaimed HCFC-22 or HCFC-142b. EPA is not banning the sale 
and distribution of un-charged or previously manufactured components 
needed to service existing appliances manufactured prior to January 1, 
2010. However, due to the complexities discussed above, EPA does not 
believe that components pre-charged with reclaimed refrigerant should 
be exempted from the prohibition on sale or distribution in interstate 
commerce of pre-charged appliances and components manufactured in 2010 
and beyond. This finding does not prohibit manufacturers from producing 
replacement components needed to service existing appliances, as long 
as the components are not pre-charged with HCFC-22or HCFC-142b, 
regardless if the HCFC is reclaimed or virgin. As noted by commenters 
representing manufacturers of appliances and components, such 
components can be sold or distributed in interstate commerce without 
being pre-charged. Such replacement components can be installed into 
existing appliances and charged on-site with reclaimed or virgin HCFC-
22 or HCFC-142b.
    After considering comments and in light of the related rulemaking 
``Protection of Stratospheric Ozone: Adjustments to the Allowance 
System for Controlling HCFC Production, Import, and Export'' (EPA 
Docket: EPA-HQ-OAR-2008-0496), EPA has decided to extend the January 1, 
2010

[[Page 66460]]

prohibition to appliances that are pre-charged with reclaimed 
refrigerant. The final rule thus does not include the proposed text at 
Sec.  82.306(d), which stated that the prohibition would not apply 
where the refrigerant was ``used, recovered and reclaimed.'' Therefore, 
EPA is prohibiting, at Sec.  82.304, the sale or distribution, and the 
offer for sale or distribution in interstate commerce of all appliances 
and components that are pre-charged with HCFC-22 or HCFC-142b, 
regardless of whether the refrigerant is virgin or reclaimed.
iii. Sale and Distribution of Appliances and Components Without 
Refrigerant
    Several comments asked EPA to state explicitly that the prohibition 
does not extend to appliance components that are needed to service 
existing appliances and are shipped ``dry'' or with a holding charge of 
an inert gas. EPA received comments from major U.S. appliance 
manufacturers stating that there is no technical reason why the types 
of appliances and components that are currently charged with 
refrigerant prior to being sold or distributed in interstate commerce 
could not be shipped ``dry'' or with a holding charge of the inert gas 
nitrogen. According to comments received by the Agency, the lone 
exception is that certain TXVs must be shipped with an HCFC in order to 
meet its intended purpose. Commenters stated that a ban on the 
manufacture or sale of un-charged components would undermine the intent 
behind the United States ratifying the Copenhagen Amendment to the 
Montreal Protocol in 1992. Commenters stated that the sale and 
distribution of replacement components should be allowed in order to 
service existing appliances, and asked EPA to clarify whether un-
charged components (such as condensing units) can be installed in 
commercial refrigeration systems and charged with virgin HCFC-22 in the 
field as a replacement for an existing unit.
    Commenters requested an exemption for the manufacture of TXVs 
containing a ``de minimis'' charge amount of HCFC after January 1, 
2010. Allowing an exemption for TXVs would ensure an adequate inventory 
of component parts to service equipment manufactured prior to January 
1, 2010. EPA does not believe that it is necessary to consider 
establishing a de minimis exemption because there are reasons why TXVs 
are not subject to the ban. EPA has previously stated that the Agency 
does not consider TXVs to be pre-charged appliance parts.\4\ EPA 
considers a part to be ``pre-charged'' if it contains a class I or 
class II substance that will become part of the operating charge of an 
appliance. Parts that contain CFCs or HCFCs that will not become part 
of the operating charge, such as TXVs with bulbs containing CFCs or 
HCFCs, are not considered ``pre-charged'' with refrigerant. In this 
rule, EPA is finalizing a definition of ``pre-charged appliance 
component'' that includes the phrase ``charged with refrigerant.'' As 
defined in section 605(a) and Sec.  82.302, refrigerant means ``any 
substance consisting in part or whole of a class I or class II ozone-
depleting substance that is used for heat transfer purposes and 
provides a cooling effect.'' This definition is based on the statutory 
definition in section 605(a). Because the HCFC used in the bulb is not 
involved in the heat transfer cycle of the appliance, it is not a 
refrigerant, and thus the TXV is not a pre-charged appliance component. 
As such, the sale and distribution in interstate commerce of TXVs is 
not governed by this rulemaking.
---------------------------------------------------------------------------

    \4\ EPA has previously stated that TXVs are not considered pre-
charged. (http://www.epa.gov/ozone/title6/608/sales/saleshtml.)
---------------------------------------------------------------------------

    However, section 605(a) of the Act explicitly prohibits the 
introduction into interstate commerce or use of any class II substance 
unless such substance: (1) Has been used, recovered, and recycled; (2) 
is used and entirely consumed (except for trace quantities) in the 
production of other chemicals; or (3) is used as a refrigerant in 
appliances manufactured prior to January 1, 2020. EPA discusses the 
applicability of section 605(a) to TXVs in the accompanying HCFC 
allocation rulemaking ``Protection of Stratospheric Ozone: Adjustments 
to the Allowance System for Controlling HCFC Production, Import, and 
Export'' (EPA Docket: EPA-HQ-OAR-2008-0496). EPA does not intend to 
strand existing appliances that may be in need of replacement 
components that have historically been shipped pre-charged with 
refrigerant. EPA has considered the comments sent in response to the 
NPRM stating that pre-charged components, which do not include TXVs, 
can be sold with a holding charge of an inert gas and field charged 
during appliance configuration. Taking all comments under consideration 
along with the Agency's desire to allow the servicing of existing 
appliances that have not reached their intended end-of-life, EPA is 
clarifying that the ban on sale and distribution into interstate 
commerce of pre-charged components applies only to components that are 
pre-charged with HCFC-22 or HCFC-142b. The ban applies regardless of 
whether the HCFCs are virgin or reclaimed. Therefore, component 
manufacturers, distributors, and sellers are prohibited from selling or 
distributing components (such as but not limited to condensers and line 
sets) that were manufactured on or after January 1, 2010 and pre-
charged with either virgin or reclaimed HCFC-22 or HCFC-142b.
    This prohibition does not apply to appliance components 
manufactured on or after January 1, 2010 that are sold, distributed, or 
otherwise introduced into interstate commerce uncharged or with a 
holding charge of an inert gas, such as nitrogen. Such uncharged 
components could be used as replacement components for pre-2010 
appliances in need of service and charged with either virgin or 
reclaimed HCFC-22 or HCFC-142b.
iv. Imports and Exports of Pre-Charged Appliances and Components
    Commenters stated that the proposal would allow foreign 
manufacturers to export pre-charged products to the U.S., and that EPA 
should evenly and fairly impose the prohibition on both domestic and 
foreign manufacturers. Commenters also stated that allowing the import 
of pre-charged components could encourage the stockpiling of foreign-
made pre-charged components that could be introduced into U.S. 
interstate commerce well after domestic manufacturers cease their 
production of these components prior to January 1, 2010.
    EPA received numerous comments requesting that it allow the 
continued export of un-charged and pre-charged HCFC-22 equipment to 
Article 5 countries \5\ after January 1, 2010. Commenters stated that 
it is unrealistic to assume that [the HCFC-22] market share in Article 
5 countries would be replaced by non-HCFC products, and that developing 
countries' demand for HCFC refrigerant carries with it an implicit 
recognition of these countries' need for equipment which uses HCFC 
refrigerants. Further, if these countries need to import HCFCs at least 
until 2020, then commenters maintain it is reasonable to assume the 
need for HCFC-using equipment will persist until 2020 as well.
---------------------------------------------------------------------------

    \5\ Article 5 (A5) countries--the Montreal Protocol's 
identifying term for developing countries, as listed in Annex 4 to 
Appendix C to 40 CFR 82, subpart A.
---------------------------------------------------------------------------

    Commenters also stated that they believe that EPA's interpretation 
of interstate commerce to include exports

[[Page 66461]]

will disadvantage U.S. manufacturers that are globally competing 
against foreign manufacturers selling in Article 5 countries, resulting 
in possible loss of domestic jobs, the closing of small businesses, and 
probably the net export status of the industry. Commenters suggested 
that the final rule provide relief by specifying that the Agency would 
allow the export of appliances intended for use in A5 countries if such 
appliances are exported without a refrigerant charge.
    EPA is not attempting to regulate foreign commerce through this 
action. EPA is solely regulating U.S. interstate commerce, which 
includes both the domestic sale and distribution of any appliance 
imported into the United States, and the domestic sale or distribution 
of any appliance intended for ultimate export from the United States. 
The prohibition on sale and distribution applies to imported products 
and products destined for export to the same extent that it applies to 
products manufactured and distributed solely within the United States. 
EPA previously discussed this interpretation of interstate commerce in 
the regulations implementing the ban on nonessential products 
containing or manufactured with a class II substance (58 FR 69638). The 
sale or distribution, or offer for sale or distribution, of imported 
products or products destined for export within the scope of this final 
rule would be subject to the same restrictions as the sale or 
distribution, or offer of sale or distribution, of products within the 
scope of that nonessential products ban.
    EPA is not restricting the export of appliances that are shipped 
without refrigerant or with a holding charge of nitrogen. Thus, U.S. 
manufacturers are not precluded from responding to the demand for HCFC 
appliances in Article 5 countries. Similarly, this ban does not affect 
the import of bulk quantities of used HCFC-22 or HCFC-142b under the 
EPA petitioning process established under 40 CFR 82.24(c). Importers of 
bulk shipments of used HCFC-22 or HCFC-142b greater than five pounds 
must still seek and obtain approval from EPA to import on a per-
shipment basis.
    This rule concerns only the sale or distribution, and offer for 
sale or distribution, of pre-charged appliances and appliance 
components manufactured in 2010 and beyond. This action is not intended 
to govern the sale or distribution, or offer for sale or distribution, 
of any previously owned or used appliances that were manufactured prior 
to January 1, 2010.
v. Transhipments of Pre-Charged Appliances and Components
    EPA received comments stating that the Agency had not addressed 
``transhipments,'' meaning the movement of products through the U.S. on 
their way to another country. These commenters requested that the final 
rule clearly state that transhipments of equipment pre-charged with 
HCFC-22 be allowed on or after January 1, 2010. Transhipments are not 
destined for use by United States entities, but are held temporarily 
while awaiting shipment to their ultimate destination. As is done with 
bulk shipments of controlled class I substances (such as CFC 
refrigerants), some distributors of pre-charged products will accept 
transhipments of products that are brought into the United States and 
temporarily stored in bonded warehouses while they await shipment out 
of the country.
    While this action does apply to imported products, it does not 
regulate the act of import as such. Sale and distribution in interstate 
commerce, rather than import or export, are the prohibited acts. In 
addition, transhipment is a defined term, and EPA is stating the 
regulatory history of the term for purposes of clarity.
    EPA has previously defined ``transhipment'' of controlled 
substances (at Sec.  82.3) and made the distinction between a 
transhipment and an import that is subsequently re-exported. The term 
``transhipment'' is defined as ``the continuous shipment of a 
controlled substance, from a foreign State of origin through the United 
States or its territories, to a second foreign state of final 
destination, as long as the shipment does not enter into United States 
jurisdiction. A transhipment, as it moves through the United States or 
its territories, cannot be re-packaged, sorted or otherwise changed in 
condition.'' The first discussion of the term ``transhipment'' in the 
context of the ODS phaseout program appeared in the proposed rulemaking 
published in the Federal Register on March 18, 1993 (58 FR 15014, 
15044). The December 10, 1993 final rule defined ``transhipment as the 
continuous shipment of a controlled substance from a foreign state of 
origin through the United States or its territories to a second foreign 
state of final destination.'' (58 FR 65018, 65064). The clarifying 
phrase ``as long as the shipment does not enter into United States 
jurisdiction'' was added on May 10, 1995 (60 FR 24970, 24983). EPA 
promulgated a definition of transhipment that does not permit a 
shipment to be re-packaged. The current definition distinguishes 
between a transhipment and a shipment that is imported, re-packaged and 
then exported, by stating that a transhipment ``cannot be re-packaged, 
sorted or otherwise changed in condition'' as it moves through the 
United States or its territories.
    The Agency generally exempts transhipments from its ODS regulatory 
prohibitions at 40 CFR Subpart A. For example, EPA does not apply its 
ODS import prohibitions to bulk controlled substances, such as CFC-12, 
that are stored in government bonded warehouses and otherwise meet the 
definition of a transhipment. For purposes of this final rule, EPA will 
not consider transhipment of pre-charged appliances or components as 
sale or distribution in interstate commerce, as defined at Sec.  82.3. 
However, appliances and components that have not originated from a 
foreign state but are being stored in the United States for ultimate 
export are not considered transhipments, and are covered by this rule 
if sold or distributed in interstate commerce prior to export.
vi. Existing Contracts or Plans for Pre-Charged Appliances and 
Components
    EPA received comment requesting that it provide flexibility for 
persons who may be unable to comply with the ban for reasons outside of 
their control. Some commenters interpreted the proposal as banning all 
sale and distribution of pre-charged appliances and components, even 
those manufactured prior to January 1, 2010. (As discussed elsewhere in 
this notice, the proposed and final prohibitions on sale and 
distribution do not apply to appliances and components manufactured 
prior to January 1, 2010.) Commenters suggested that in order to 
minimize the adverse economic effects of the pre-charged ban that EPA 
make exemptions in cases where binding contracts are in place for the 
purchase of equipment that was manufactured prior to January 1, 2010, 
but that cannot be delivered until after January 1, 2010. Commenters 
also requested that EPA exempt appliances and components intended for 
construction projects that have received building code approval of 
plans that include equipment subject to the pre-charged ban, but will 
not be completed until after January 1, 2010. Commenters requested an 
expansion of Sec.  82.306(a) exempting new installation projects using 
HCFC-22 or HCFC-142b appliances that have completed the bidding process 
or have received building code approval prior to January 1, 2010.
    These comments relate primarily to the section 605(a) prohibition 
on use of

[[Page 66462]]

virgin HCFCs in the manufacture of new appliances. In the accompanying 
final rule titled ``Protection of Stratospheric Ozone: Adjustments to 
the Allowance System for Controlling HCFC Production, Import, and 
Export'' (EPA Docket: EPA-HQ-OAR-2008-0496), EPA is granting 
flexibility in limited instances where construction has begun but for 
various reasons beyond their control (e.g.,, budget shortfalls, weather 
delays, labor strikes) would not be able to complete projects prior to 
January 1, 2010.
    EPA recognizes that contractual arrangements exist for construction 
projects that involve air-conditioning systems for which 
``manufacture'' (including completion of the refrigerant loop) will not 
occur until after December 31, 2009. The accompanying allocation rule 
establishes a grandfathering provision which allows HCFC-22 appliances 
to be ``manufactured'' onsite during calendar year 2010, if the 
components are manufactured prior to January 1, 2010, and are specified 
in a building permit or contract dated before January 1, 2010, for use 
on a particular project. Given the flexibility offered by the 
allocation rulemaking, EPA does not find it necessary to adopt a 
grandfathering provision into Sec.  82.306(a) of this final rule.

F. Costs Analysis and Small Business Economic Impacts

(i) What Are the Impacts on Stratospheric Ozone Avoided Through This 
Final Action?
    The global HCFC phaseout is already underway, and restrictions on 
production, import, and sale and distribution of specific types of HCFC 
products are already in place in the United States and in international 
markets. The United States banned the sale and distribution of 
aerosols, pressurized dispensers, and foam products containing HCFCs in 
1994, and the European Union has banned HCFCs for refrigerant use in 
new equipment since 2001 (Regulation EC No. 2037/2000 of the European 
Parliament). Many manufacturers of pre-charged appliances already 
service the European market and other markets with non-HCFC pre-charged 
appliances and components. EPA believes this should ease the 
implementation of a ban on sale and distribution in interstate 
commerce. Given that retooling and other design changes have either 
already occurred to meet the European and other markets, or will occur 
as a result of the global phaseout of HCFCs, EPA believes costs 
associated directly with this rulemaking are limited. As with any 
analysis, EPA's relies on a reasonable understanding of current factors 
affecting costs. Should any of these factors change, costs may change 
as well. For example, introduction of additional alternatives appears 
to be accelerating based on new submissions to EPA's Significant New 
Alternatives Policy (SNAP) program. Availability of additional 
alternatives in the air-conditioning and refrigeration sectors may 
reduce costs. Alternatively, new factors that restrict availability of 
alternatives may raise costs. Based on current conditions, EPA believes 
that our assessment of costs is reasonable.
    EPA estimates that that on average, between 2006 and 2008, 
approximately 9.5 million pre-charged appliances, including heat pumps, 
window air conditioners, and dehumidifiers, were imported into the 
United States and sold throughout the country. This figure includes 
units pre-charged with refrigerants other than HCFC-22 or HCFC-142b. 
EPA estimates that 8.4 million pre-charged appliances were pre-charged 
with HCFC-22. EPA believes this is a mature and stable market and EPA 
projects that in the absence of a restriction on sale and distribution, 
as many as 11 million pre-charged HCFC appliances could have been 
imported and made available for sale or distribution in the U.S., on an 
annual basis, during 2010-2019 using reasonable assumptions concerning 
market growth. Separate domestic restrictions on the production and 
import of HCFC-22 and HCFC-142b would essentially preclude the domestic 
manufacture and initial charging of these appliances with virgin HCFC-
22 or HCFC-142b as of January 1, 2010.
    In estimating the environmental impacts associated with continuing 
to allow the sale and distribution of HCFC-22 and HCFC-142b pre-charged 
appliances in interstate commerce, EPA considered factors such as the 
number of different appliances likely to be available, the average 
charge sizes for the appliances, and the leak rates associated with the 
appliances that are likely to be serviced during their useful lifetime. 
The projected additional emission of HCFC-22 between January 1, 2010, 
and December 31, 2019, in the absence of a ban on pre-charged 
appliances, based on charge sizes and leak rates is approximately 4,070 
ODP-weighted metric tons from these pre-charged appliances. By 
comparison, in accordance with the Montreal Protocol adjustments from 
September 2007, in 2010 the cap for consumption for the total basket of 
HCFCs in the United States will be 3,810 ODP tons annually for the 
years 2010-2014 and 1,524 ODP tons for the years 2015-2020. This 
consumption is for the total basket of HCFCs, with HCFC-22 and HCFC-
142b restricted to servicing the existing base of air-conditioning and 
refrigeration appliances--in particular the units that are charged 
onsite, including but not limited to, chillers and residential unitary 
units.
    The maximum level of consumption of HCFCs will also include use of 
other HCFCs to service and charge both existing and newly manufactured 
appliances, and in other applications such as niche solvent or fire 
suppression uses prior to 2015. EPA received comments on the projected 
number of pre-charged HCFC appliances that could be available after 
January 1, 2010, and the associated amount of ODS that would be 
necessary to both charge and service these appliances during their 
useful lifetimes. A few commenters stated that EPA had not identified 
or discussed the impacts of the rule on distributors and contractors, 
or small businesses and consumers. Additionally, they indicated that 
EPA failed to analyze consumer behaviors that may be impacted by costs, 
and also did not conduct a regulatory flexibility analysis. EPA 
received specific comments from representatives of recreational boat 
manufacturers stating that the NPRM will have negative financial 
impacts on thousands of small boat builders, marine product 
distributors, boat dealers, and repair facilities that may have A/C and 
refrigeration units in inventory before January 1, 2010.
    EPA has addressed the concern of small businesses that stocked 
(pre-2010) inventory would be stranded under their interpretation of 
the proposed provisions. EPA is allowing the sale and distribution of 
pre-charged components (such as condensing units, line sets, evaporator 
coils, and compressors) and fully-assembled pre-charged appliances 
(such as freezers and window air conditioners) that are manufactured 
prior to January 1, 2010 and may be held in inventory as of January 1, 
2010. Stockpiled pre-charged appliance component parts, such as 
condensing units, line sets, evaporator coils, and compressors that are 
manufactured before January 1, 2010, may be used to service existing 
appliances. However, due to the use prohibitions in the companion rule, 
such pre-charged components cannot be configured to ``manufacture'' a 
new appliance, such as a new residential split system, if the 
``manufacture'' involves any use of virgin HCFC-22 or HCFC-142b as a 
refrigerant. Such use would include the addition of virgin HCFC-22 or 
HCFC-

[[Page 66463]]

142b to complete the initial charge of the appliance and the use of 
virgin HCFC-22 or HCFC-142b in the components that are being assembled 
to create the appliance.
    EPA believes that distributors of pre-charged appliance components 
will continue to have access to HCFC-22 and HCFC-142b components that 
are needed to service appliances that were manufactured prior to 
January 1, 2010. EPA is allowing the sale of existing inventories of 
pre-charged components as well as the manufacture or import of 
replacement components if they are not charged with HCFC-22 or HCFC-
142b. In addition, this rulemaking does not impact the manufacture, 
import, or distribution of appliances or components using SNAP-approved 
alternative refrigerants, such as R-410A.
    EPA has also considered the role that future hydrofluorocarbon 
(HFC) controls may have on the impacts of today's rulemaking. Depending 
on how any future HFC controls may affect availability and price of 
HCFC alternatives, the estimated effects of this rule may be over-
stated or under-stated. EPA believes that any future domestic controls 
on the production and consumption of HFCs, if any, would provide for 
adequate time for a smooth transition to new alternatives. Therefore, 
EPA has decided to take action based on current Clean Air Act authority 
addressing HCFCs.
(ii) What Factors Will Influence the Costs of Pre-Charged Appliances 
Charged With Substitutes?
    Costs to transition to another refrigerant for equipment currently 
pre-charged with HCFC-22 can be broken down to refrigerant costs and 
costs associated with manufacturing different equipment components. EPA 
has considered the transitional costs of moving away from pre-charged 
HCFC-22 appliances and components.
    The primary alternative for pre-charged appliances using HCFC-22 or 
HCFC-142b is hydrofluorocarbon (HFC) blend R-410A. R-410A air-
conditioning systems have been commercially available since 1995. As 
such, the fixed costs, such as the engineering redesign of certain 
components of equipment or the costs associated with converting 
facility manufacturing lines in those countries producing this 
equipment are not a major consideration. EPA feels that this is a 
reasonable assumption given that non-ODS alternatives already possess 
some of the current global and U.S. market share and therefore these 
costs have already been incurred to some extent; furthermore, 
facilities abroad (e.g., China, Mexico) are obligated regardless of 
U.S. regulations to transition their equipment manufacturing facilities 
to accommodate substitute refrigerants for their own domestic demand. 
This transition will occur sooner than previously planned given the 
decision made by the Parties to the Montreal Protocol in September 2007 
to adjust the phasedown of HCFC production and import for both Article 
2 (developed) and Article 5 (developing) countries.
    EPA believes that the price of the refrigerant is a comparatively 
small fraction of the total price of the air-conditioning and 
refrigeration appliances affected by this rule, ranging from 1 to 3 
percent of total cost. EPA also believes that only a limited number of 
appliance components will be replaced to accommodate an alternative 
refrigerant. The decision by the Parties to the Montreal Protocol to 
adjust the phaseout schedules for HCFCs was based partly on reliable 
information concerning commercially available substitute refrigerants 
that has been provided to the Parties by the technical assessment 
panels the Parties sponsor. For some applications, manufacturers have a 
suite of non-ODS alternatives from which to choose and can therefore 
consider a range of price and operational factors.
    After U.S. production and import of bulk HCFC-22 for use in new 
equipment is banned on January 1 2010, the supply of virgin HCFC-22 in 
the United States will decrease and the demand for reclaimed HCFC-22 
and alternatives is expected to increase. Recent industry information 
indicates these market shifts have been underway for some time, as 
evident by the introduction of HFC alternatives (e.g., R-410A.), and 
the recent increases in the amounts of HCFC-22 being reclaimed. The 
accompanying HCFC allocation rule will also have the effect of 
restricting the supply of virgin HCFC-22 based on the projected 
servicing demand in 2010-2014, taking into account the amount of that 
demand that can be met through recycling and reclamation.
    International markets for refrigerants may similarly follow U.S. 
market trends given the decision made by the Parties to the Montreal 
Protocol in September 2007 to adjust the phasedown of HCFC production 
and import for both Article 2 and Article 5 countries. With this 
change, developing countries (including China, a predominant exporter 
of HCFC-22 pre-charged appliances to the United States) are now subject 
to a freeze on HCFC consumption in 2013 based on the average of 2009 
and 2010 consumption levels with subsequent step downs in HCFC 
consumption from 2015 to 2040. As such, it can be reasonably expected 
that similar shifts in refrigerant pricing and overall transitions are 
likely to occur in developing countries with an increase in the price 
of HCFC-22 and a drop in the price of some ODS alternatives. For 
example, some foreign companies that produce pre-charged HCFC-22 
appliances for the U.S. market have further incentives to begin making 
the long-term capital investments toward the transition to non-ODS 
alternatives sooner than they would otherwise have done, seeing the 
advantage of investing in alternatives early. This market strategy 
would likely have some impact on the economics of refrigerant pricing 
because the demand created for ODS alternatives by the U.S. market may 
lead to economies of scale in the countries producing the pre-charged 
equipment for export to the United States.
(iii) Impacts on the General Public
    EPA considered whether the transition to alternative refrigerants 
in pre-charged appliances would involve differential costs. Considering 
that these appliances are not retrofitted, this would be an upstream 
cost occurring at the point of manufacture, not after consumer 
purchase. EPA's evaluation, included in the docket for this rulemaking, 
examined potential consumer impacts from differences in refrigerant 
cost and differences in costs associated with changes to certain 
appliance components to accommodate an alternative refrigerant. 
Generally, the R-410A appliances are more energy-efficient than their 
HCFC-22 counterparts, which would result in reduction of energy usage 
by consumers and thus would result in a net savings. EPA assessed 
existing industry data and applied assumptions regarding future 
manufacturing and marketing trends. Several critical limitations 
associated with projecting differential refrigerant and component 
prices preclude the Agency from determining an incremental cost 
estimate with certainty.
    Refrigerant prices vary widely based on factors such as volumes 
purchased and negotiation of purchasing contracts; further, projecting 
prices into the future is complicated by variability in individual 
manufacturers' business decisions regarding when to make the long-term 
capital investments to alternative refrigerants. The more aggressive 
phasedown of HCFC-22 production and import resulting from the 
adjustment decision taken at the 19th Meeting of the Parties is likely 
to lead to an increase in the price of

[[Page 66464]]

HCFC-22 and a drop in the price of R-410A. Prices of HCFC-22 will 
likely increase as the stepwise reductions in production and 
consumption continue. As the global phaseout of HCFCs continues, other 
international markets may become more restrictive, further influencing 
the global pricing.
    Equipment charged with alternative refrigerants such as R-410A 
requires slightly different components--such as thicker-walled copper 
tubing--that may cost slightly more than the components used in older 
HCFC-22 appliances. EPA is not aware of any industry data now available 
that project the likely future differences in component costs between 
equipment designed for HCFC-22 and equipment designed for alternatives 
including R-410A, whether from manufacturers in developed countries or 
developing countries. EPA estimates that for appliances manufactured in 
the United States, incremental costs associated with component 
modifications could range from zero to 10 percent of the cost of the 
appliances--an estimated per-unit difference of $5 for smaller units 
and $45 for larger units. The cost differential for manufacturers in 
developing countries could be less or more, and the degree to which any 
such differential would be passed along to U.S. consumers is unknown. 
Given the caveats above, EPA estimates that the price differential 
could range from $40 to $50 (with a mid-range of $42.50) for each of 
the larger units (e.g., unitary air conditioners) that would be 
imported annually during the period 2010-2019, and that the 
differential for the smaller units (e.g., room air-conditioners) would 
range from $2 to $5 (with a mid-range of $3.50).
    In the updated analysis included in the docket for this rulemaking, 
EPA states that on average 8.4 million appliances pre-charged with 
HCFC-22 were imported into the United States annually from 2006 to 
2008. Applying assumptions identified in the docket concerning market 
growth, EPA estimates that the market for imported pre-charged 
appliances will grow to an annual average rate of 11 million appliances 
per year during the period 2010-2019. Thus, during the period 2010-
2019, EPA projects that an average of 11 million appliances per year 
would be imported pre-charged with a non-ozone-depleting alternative 
refrigerant such as R-134a, R-407C, or R-410A. EPA's analysis shows 
that the engineering modifications to pre-charged components of 
appliances using R-134a or R-407C are likely to have negligible cost. 
EPA has, however, calculated the incremental cost associated with the 
more significant modifications necessary for pre-charged appliances 
using R-410A. EPA estimates that these appliances will constitute 
approximately 64 percent of the pre-charged imports during this time, 
or approximately 7.1 million of the 11 million pre-charged units 
imported with alternative refrigerants on an annual basis during 2010-
2019. The annual aggregate of such impacts would range from $40 to $50 
million, with a mid-range estimate of $45 million.
    In the NPRM, EPA requested comment regarding the assumptions on 
market, growth, and factors concerning costs, as cited in a draft 
memorandum Costs Associated with Refrigerant Substitution from R-22 to 
R-410A in Pre-charged Equipment, prepared by ICF Consulting for EPA. 
EPA received comments requesting a more detailed assessment of the 
State and future of the used, recovered, and reclaimed market, and 
factor those findings and costs into its overall estimates of the 
impacts of the rule on prices and the industry. EPA notes that 
assumptions on the future use of HCFCs needed in the service sector are 
addressed in the accompanying final rule titled ``Protection of 
Stratospheric Ozone: Adjustments to the Allowance System for 
Controlling HCFC Production, Import, and Export'' (EPA Docket: EPA-HQ-
OAR-2008-0496).
    One commenter estimated that the increased cost of this rule 
related to just imported room air-conditioners, portable air-
conditioners, and dehumidifiers is several million dollars per 
manufacturer, including upfront costs such as redesigning of products 
and retooling of factories, as well as ongoing costs of higher cost 
components and refrigerant. The components of an R-410A unit can cost 
more than an equivalent R-22 unit. One commenter states that EPA should 
provide a more detailed assessment of availability and costs of 
alternative refrigerants and factor those findings and costs into its 
overall estimates on the impacts of the rule.
    EPA recognizes that in addition to future changes in refrigerant 
pricing structures, changes in costs may also result from changes in 
equipment design. In most cases, appliances charged with common ODS 
alternatives will require different components than equipment charged 
with HCFC-22, such as thicker walled copper tubing, newly developed 
compressors, and other components capable of withstanding high 
pressures, all of which may cost slightly more than the components used 
in older HCFC-22. Industry expert opinion suggests that for appliances 
manufactured in the United States, the added cost to manufacturers that 
is likely to be reflected in the cost to consumers resulting from the 
component modifications currently may be anywhere from zero to ten 
percent of the cost of the appliances, an estimated difference of $2 to 
$5 for smaller units and $40 to $45 for larger units. EPA also notes 
that this rule only regulates U.S. interstate commerce and does not 
consider the costs of retooling foreign manufacturing plants. As 
previously stated assumptions on the future use of HCFCs needed in the 
service sector are addressed in the accompanying HCFC allocation final 
rule. Discussion of the impacts on foreign markets is discussed below.
(iv) Implications for Other Markets
    EPA believes that there is an additional impact associated with not 
banning the sale and distribution in interstate commerce of these 
appliances as of January 1, 2010. EPA believes that prolonging U.S. 
demand for imported pre-charged appliances would discourage global 
efforts to transition to non-ODS technologies in manufactured air-
conditioning and refrigeration appliances. Given the commitments of the 
United States and its trading partners to ultimately phase out HCFCs, 
investment in alternative refrigerant product lines is occurring and 
will continue to occur globally. Production capacity requires a long-
term capital investment and the choice of refrigerant dictates some of 
that investment in the form of factory tooling, design, and a network 
of suppliers for components.
    Without the ban contained in this rulemaking, investment decisions 
influenced by demand could foster continued investment in HCFC-based 
manufacturing rather than investment in alternatives and would run 
counter to the United States' domestic approach to promote smooth 
transitions rather than a rush to transition at the end of the global 
phaseout. EPA has initiated the phaseout of HCFCs. However, the 
phaseout regulations do not address the sale and distribution of 
products that are pre-charged with HCFCs undergoing a phaseout. Without 
today's final rule, domestic and foreign manufacturers as well as their 
distributors would face differing requirements. Foreign manufactured 
pre-charged products and appliances could continue to enter U.S. 
commerce charged with virgin HCFC-22 and HCFC-142b, thus increasing the 
service need for HCFC appliances in the United States and potentially 
resulting in shortages of virgin HCFC-22 and HCFC-142b given the 
restrictions on production and consumption of these

[[Page 66465]]

substances in the United States. EPA believes that this final rule 
supports the phaseout of HCFC-22 and HCFC-142b by banning all sale and 
distribution of HCFC-22 and HCFC-142b pre-charged appliances and 
components.
(v) In the Absence of This Action, Are There Impacts Associated With 
Unequal Treatment of Stakeholders?
    The requirements established at 40 CFR 82.16(c) make it unlawful, 
effective January 1, 2010, to produce or import HCFC-22 or HCFC-142b 
for use in refrigeration or air-conditioning appliances manufactured on 
or after that date. The result of this provision is that, effective 
January 1, 2010, domestic air-conditioning and refrigeration appliance 
manufacturers will no longer have newly manufactured or imported HCFC-
22 or HCFC-142b available to charge their newly manufactured 
appliances. EPA believes that this final action provides more equitable 
treatment of domestically manufactured and imported appliances by 
holding the equipment to the same requirements for sale and 
distribution in interstate commerce. EPA also believes that if it had 
not promulgated this final rule, domestic manufacturers would be faced 
with differing treatment with regard to sale and distribution in 
interstate commerce for similar appliances based on the location of the 
manufacturing facility (i.e., domestic manufacturing facilities as 
compared to manufacturing facilities located abroad).

III. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because the Office 
of Management and Budget (OMB) believes that it may raise novel legal 
or policy issues. Accordingly, EPA submitted this action to OMB for 
review under EO 12866 and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
Rather, this rule bans the sale or distribution of air-conditioning and 
refrigeration appliances containing HCFC-22 or HCFC-142b containing one 
or both of these substances, beginning January 1, 2010. However, OMB 
has previously approved the information collection requirements 
contained in the existing regulations at 40 CFR part 82 under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2060-0498. 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 today's 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.
    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. The small 
entities directly regulated by this final rule include contractors and 
service companies such as plumbing, heating, and air-conditioning 
contractors; manufacturers of air conditioners and refrigerators, as 
well as distributors, merchants, and wholesalers of such equipment. 
This final rule will affect the following categories:

----------------------------------------------------------------------------------------------------------------
                   Category                      NAICS code    SIC code       Examples of regulated entities
----------------------------------------------------------------------------------------------------------------
Contractors and Servicing.....................       238220   1711, 7623  Plumbing, Heating, and Air-
                                                                           Conditioning Contractors.
Manufacturers of air conditioners and                333415         3585  Air-Conditioning Equipment and
 refrigerators.                                                            Commercial and Industrial
                                                                           Refrigeration Equipment
                                                                           Manufacturing.
Air-Conditioning Equipment and Supplies              423730         5075  Air-conditioning (condensing unit,
 Merchant Wholesalers.                                                     compressors) merchant wholesalers.
Electrical and Electronic Appliance,                 423620         5064  Air-conditioning (room units) merchant
 Television, and Radio Set Merchant                                        wholesalers.
 Wholesalers.
Importers of air conditioners and                    333415         3585  Air-Conditioning Equipment and
 refrigerators.                                                            Commercial and Industrial
                                                                           Refrigeration Equipment
                                                                           Manufacturing.
----------------------------------------------------------------------------------------------------------------

    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. Small 
entities may continue to sell and distribute pre-charged appliances and 
appliance components that were manufactured prior to January 1, 2010. 
Therefore, small entities will not be burdened with the loss of 
stranded inventories. Such inventories may be sold indefinitely for the 
service of existing appliances.
    New appliances entering the market after January 1, 2010 will rely 
on alternatives that have been found acceptable under EPA's SNAP 
Program. Therefore small entities impacted by today's ruling (e.g., 
service contractors and wholesalers) will continue to have access to 
and be able to sell and distribute appliances and components that are 
pre-charged with alternatives to HCFC-22 and HCFC-142b. Similarly, this 
rulemaking does not ban the manufacture of components that are intended 
for the service of existing HCFC-22 or HCFC-142b appliances (i.e., 
appliances manufactured prior to January 1, 2010). Such components can 
continue to be sold and distributed in interstate commerce as long as 
they are not pre-charged with HCFC-22 or HCFC-142b.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
The requirements already established at Sec.  82.16(c) make it unlawful 
to produce or import HCFC-22 or HCFC-142b on or

[[Page 66466]]

after January 1, 2010, for use in refrigeration or air-conditioning 
appliances manufactured on or after that date. The practical result is 
that domestic manufacturers of air-conditioning and refrigeration 
appliances will not be able to charge newly manufactured appliances 
with virgin or imported HCFC-22 or HCFC-142b, and thus will not be 
introducing appliances containing these newly produced substances into 
interstate commerce. Thus, this rule is not subject to the requirements 
of sections 202 or 205 of UMRA.
    This rule 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. As stated above, 
this rule affects manufacturers of air-conditioning and refrigeration 
appliances, not small governments.

E. Executive Order 13132: Federalism

    Executive Order 13132, titled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications.'' 
``Policies that have Federalism implications'' is defined in the 
Executive Order to include regulations that 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.''
    This rule does not have Federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. Today's rule is expected to 
primarily affect producers, importers, and exporters of air-
conditioning and refrigeration appliances. Thus, the requirements of 
section 6 of the Executive Order do not apply.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule 
affects manufacturers of air-conditioning and refrigeration appliances, 
not tribal governments. Thus, Executive Order 13175 does not apply to 
this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to EO 13045 (62 FR 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 on 
children of excessive exposure to UV radiation: (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) Whieman 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 supports the Agency's efforts to reduce the potential 
continued use of class II controlled substances and the emissions of 
such substances. It supplements the United States' commitment to reduce 
the total basket of HCFCs produced and imported to a level that is 75 
percent below the respective baselines. This rule will reduce the 
number of appliances charged with HCFC-22 and HCFC-142b that, in the 
absence of this rulemaking, would continue to be sold and distributed 
in interstate commerce. Uncontrolled sale and distribution of such 
appliances and components would increase the service demand for HCFC-22 
and HCFC-142b needed for the future service of such appliances. This 
action is one of the most significant remaining actions that the United 
States can take to complete the overall phaseout of ODS and further 
decrease impacts on children's health from stratospheric ozone 
depletion.

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 regulation solely impacts the sale 
or distribution, or offer for sale or distribution of pre-charged 
appliances.

I. The National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards. This 
action does not involve technical standards. Therefore, EPA did not 
consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations

[[Page 66467]]

without having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. By restricting the sale and distribution of 
appliances charged with HCFC-22 and HCFC-142b, emissions of these 
ozone-depleting substances will be avoided lessening the adverse human 
health effects for the entire population.

K. The 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 is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective January 1, 2010.

List of Subjects in 40 CFR Part 82

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

    Dated: December 7, 2009.
Lisa P. Jackson,
Administrator.

0
40 CFR part 82 is amended to read as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

0
1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671(q)

0
2. A new subpart I is added to read as follows:

Subpart I--Ban on Refrigeration and Air-Conditioning Appliances 
Containing HCFCs
Sec.
82.300 Purpose.
82.302 Definitions.
82.304 Prohibitions.
82.306 Prohibited products.

Subpart I--Ban on Refrigeration and Air-Conditioning Appliances 
Containing HCFCs

Sec.  82.300  Purpose.

    The purpose of this subpart is to protect stratospheric ozone by 
restricting the sale and distribution of HCFC containing appliances 
under authority of section 615 of the Clean Air Act as amended in 1990.

Sec.  82.302  Definitions.

    As used in this subpart, the term:
    Appliance means any device which contains and uses a refrigerant 
and which is used for household or commercial purposes, including any 
air conditioner, refrigerator, chiller, or freezer.
    Class I substance means any controlled substance designated as 
class I in 40 CFR part 82, appendix A to subpart A.
    Class II substance means any controlled substance designated as 
class II in 40 CFR part 82, appendix B to subpart A.
    Consumer, when used to describe a person taking action with regard 
to a product, means the ultimate purchaser, recipient or user of a 
product.
    Distributor, when used to describe a person taking action with 
regard to a product, means:
    (1) The seller of a product to a consumer or another distributor; 
or
    (2) A person who sells or distributes that product in interstate 
commerce, including sale or distribution preceding export from, or 
following import to, the United States.
    Hydrochlorofluorocarbon means any substance listed as class II in 
40 CFR part 82, appendix B to subpart A.
    Manufactured, for an appliance, means the date on which the 
appliance's refrigerant circuit is complete, the appliance can 
function, the appliance holds a refrigerant charge, and the appliance 
is ready for use for its intended purposes; for a pre-charged appliance 
component, ``manufactured'' means the date that the original equipment 
manufacturer has physically completed assembly of the component, the 
component is charged with refrigerant, and the component is ready for 
initial sale or distribution.
    Person means any individual or legal entity, including an 
individual, corporation, partnership, association, State, municipality, 
political subdivision of a State, Indian tribe; any agency, department, 
or instrumentality of the United States; and any officer, agent, or 
employee thereof.
    Pre-charged appliance means any appliance charged with refrigerant 
prior to sale or distribution, or offer for sale or distribution in 
interstate commerce.
    Pre-charged appliance component means any portion of an appliance 
including but not limited to condensers, compressors, line sets, and 
coils that is charged with refrigerant prior to sale or distribution or 
offer for sale or distribution in interstate commerce.
    Product means an item or category of items manufactured from raw or 
recycled materials which is used to perform a function or task.
    Refrigerant means, for purposes of this subpart, any substance 
consisting in part or whole of a class I or class II ozone-depleting 
substance that is used for heat transfer purposes and provides a 
cooling effect.

Sec.  82.304  Prohibitions.

    Effective January 1, 2010, no person may sell or distribute, or 
offer to sell or distribute, in interstate commerce any product 
identified in Sec.  82.306.

Sec.  82.306  Prohibited products.

    Effective January 1, 2010, the following products are subject to 
the prohibitions specified under Sec.  82.304--
    (a) Any pre-charged appliance manufactured on or after January 1, 
2010 containing HCFC-22, HCFC-142b or a blend containing one or both of 
these controlled substances.
    (b) Any pre-charged appliance component for air-conditioning or 
refrigeration appliances manufactured on or after January 1, 2010 
containing HCFC-22, HCFC-142b, or a blend containing one or both of 
these controlled substances.

[FR Doc. E9-29560 Filed 12-14-09; 8:45 am]

BILLING CODE 6560-50-P