Document ID: EPA-HQ-OAR-2021-0669-0002
Agency: epa
Document Type: Notice
Title: Phasedown of Hydrofluorocarbons: 2022 Set-Aside Pool Allowance Allocations for Production and Consumption of Regulated Substances under the American Innovation and Manufacturing Act
Posted Date: 2022-04-05T04:00Z

[Federal Register Volume 87, Number 65 (Tuesday, April 5, 2022)]
[Notices]
[Pages 19683-19687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07152]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2021-0669; FRL-9116-02-OAR]

Phasedown of Hydrofluorocarbons: Notice of 2022 Set-Aside Pool 
Allowance Allocations for Production and Consumption of Regulated 
Substances Under the American Innovation and Manufacturing Act of 2020

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) is providing notice 
that on March 31, 2022, the Agency issued hydrofluorocarbon allowances 
to applicants that met the applicable

[[Page 19684]]

criteria from the set-aside pool established in EPA's 2021 final rule 
titled Phasedown of Hydrofluorocarbons: Establishing the Allowance 
Allocation and Trading Program under the American Innovation and 
Manufacturing Act. In accordance with this final rule, the Agency 
redistributed allowances remaining in the set-aside pool to entities 
that received general pool production and consumption allowances on 
October 1, 2021. Both the set-aside allocation and the general pool 
reallocation were announced on the Agency's website on March 31, 2022, 
and entities were notified either by letter or electronic mail of the 
allocation decisions. The Agency also provided notice to certain 
companies on March 31, 2022, that the Agency intends to retire an 
identified set of those companies' allowances in accordance with the 
administrative consequences provisions established in the final rule.

FOR FURTHER INFORMATION CONTACT: Andy Chang, U.S. Environmental 
Protection Agency, Stratospheric Protection Division, telephone number: 
202-564-6658; email address: [email protected]. You may also visit 
EPA's website at https://www.epa.gov/climate-hfcs-reduction for further 
information.

SUPPLEMENTARY INFORMATION: In EPA's rulemaking titled Phasedown of 
Hydrofluorocarbons: Establishing the Allowance Allocation and Trading 
Program under the American Innovation and Manufacturing Act (86 FR 
55116, Oct. 5, 2021), EPA established a set-aside pool of allowances 
and codified at 40 CFR 84.15 criteria related to eligibility for the 
set-aside pool allowances, and how EPA would determine the level of 
allowances to allocate to each eligible entity. On March 31, 2022, EPA 
issued allowance allocations consistent with this section and posted 
the updated list of allowance holders on its website at https://www.epa.gov/climate-hfcs-reduction. The set-aside pool was established 
for three general categories of applicants: Application-specific end 
users (40 CFR 84.15(b)(1)), entities that imported regulated substances 
\1\ in 2020 that were not required to report under 40 CFR part 98 
(i.e., the Greenhouse Gas Reporting Program (GHGRP)) and were not 
issued allowances as of October 1, 2021 (40 CFR 84.15(c)(1)), and new 
market entrants (40 CFR 84.15(c)(2)).
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    \1\ Regulated substance means a hydrofluorocarbon listed in the 
table contained in subsection (c)(1) of the AIM Act and a substance 
included as a regulated substance by the Administrator under the 
authority granted in subsection (c)(3). The list of regulated 
substances is available at Appendix A to 40 CFR part 84.
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    Under 40 CFR 84.15, application-specific allowances from the set-
aside pool are subject to the same conditions for such allowances in 40 
CFR 84.13. These allowances are drawn from both the production and 
consumption set-aside allowance pools, and EPA is issuing application-
specific allowances from the set-aside pool to applicants that qualify 
as end users in the applications established by the American Innovation 
and Manufacturing (AIM) Act. The following applications were eligible 
for application-specific allowances under the set-aside pool: 
Propellants in metered dose inhalers (MDI), defense sprays, structural 
composite preformed polyurethane foam for marine use and trailer use, 
etching of semiconductor material or wafers and the cleaning of 
chemical vapor deposition chambers within the semiconductor 
manufacturing sector, and onboard aerospace fire suppression.
    Consistent with the provisions in 40 CFR 84.15, EPA has allocated 
set-aside pool application-specific allowances to the entities listed 
in Table 1.

  Table 1--Set-Aside Application-Specific Allowances for Calendar Year
                                  2022
------------------------------------------------------------------------
                                                          Number of
                                                    application-specific
          Applicant                Application        allowances issued
                                                           (MTEVe)
------------------------------------------------------------------------
Armstrong Pharmaceuticals...  Metered Dose                     111,059.3
                               Inhalers.
AstraZeneca Pharmaceuticals.  Metered Dose                       2,122.7
                               Inhalers.
Aurobindo Pharma USA........  Metered Dose                      71,177.4
                               Inhalers.
Invagen Pharmaceuticals.....  Metered Dose                      28,121.3
                               Inhalers.
Odin Pharmaceuticals........  Metered Dose                       9,473.8
                               Inhalers.
Wabash National Corporation.  Structural Composite              36,686.6
                               Foam.
IBM Corporation.............  Semiconductors......               1,440.0
NXP Semiconductor...........  Semiconductors......               5,040.8
The Research Foundation for   Semiconductors......               1,245.4
 The State University of New
 York OBO SUNY Polytechnic
 Institute.
SkyWater Technology.........  Semiconductors......              15,689.3
Skyworks Solutions..........  Semiconductors......               6,978.5
Proteng Distribution........  Onboard aerospace                 12,075.0
                               fire suppression.
                                                   ---------------------
    Total...................  ....................             301,110.1
------------------------------------------------------------------------

    EPA received three applications by the deadline of December 6, 
2021, for allowances under the second set-aside category. Under the 
provisions at 40 CFR 84.15(c)(1), in order to be eligible for this 
category an applicant had to:
    (1) Import regulated substances in 2020;
    (2) not be required to report under 40 CFR part 98 (i.e., the 
GHGRP); and
    (3) not receive allowances from EPA on October 1, 2021.
    All three applicants, MEK Chemical Corporation, Siemens Industry, 
and Wegochem International, were denied allowances because they are 
ineligible under 40 CFR 84.15(c)(1). The entities were required to 
report to the GHGRP under 40 CFR part 98.
    Under the third set-aside category, for new market entrants, 45 
entities submitted applications by the deadline of December 6, 2021. 
EPA is denying applications from seven entities, CAILLECH LLC, 
ChemPenn, LLC, ComStar International Inc., ISOSTU LLC, J&J AC Supply 
Inc, Kim Stilwell, and Peter Williams DBA New Era Group, because they 
are ineligible under 40 CFR 84.15(c)(2). The applicants were ineligible 
for at least one of the following reasons:

[[Page 19685]]

    (1) Did not submit complete applications,
    (2) were not newly importing regulated substances, or
    (3) shared corporate or common ownership, corporate affiliation in 
the past five years, or familial relations with entities receiving 
allowances on October 1, 2021.
    Consistent with the provisions in 40 CFR 84.15, EPA has allocated 
allowances for new market entrants to the entities listed in Table 2.

 Table 2--Set-Aside New Market Entrant Allowances for Calendar Year 2022
------------------------------------------------------------------------
                                                          Number of
                                                         consumption
                  Applicant name                      allowances issued
                                                           (MTEVe)
------------------------------------------------------------------------
Ability Refrigerants..............................             200,000.0
A.C.S. Reclamation & Recovery (Absolute Chiller                200,000.0
 Services)........................................
ACT Commodities...................................                  77.8
Advance Auto Parts................................             190,699.1
AFK & Co..........................................             193,335.9
AFS Cooling.......................................             200,000.0
AllCool Refrigerant Reclaim.......................             200,000.0
American Air Components...........................             200,000.0
Automart Distributors DBA Refrigerant Plus........             200,000.0
CC Packaging......................................             194,000.0
Certified Refrigerant Services....................             200,000.0
Chemp Technology..................................             200,000.0
Creative Solution.................................             200,000.0
Cross World Group.................................             200,000.0
EDX Industry......................................             200,000.0
Fireside Holdings DBA American Refrigerants.......             199,978.5
Freskoa USA.......................................             200,000.0
Golden Refrigerant................................             200,000.0
Hungry Bear.......................................             200,000.0
Kidde-Fenwal......................................             200,000.0
Lina Trade........................................             200,000.0
Meraki Group......................................             200,000.0
Metalcraft........................................             161,000.0
North American Refrigerants.......................             200,000.0
O23 Energy Plus...................................             200,000.0
Perfect Score Too DBA Perfect Cycle...............              37,876.0
Reclamation Technologies..........................             200,000.0
RTR Suppliers.....................................             198,000.0
Saalok............................................             200,000.0
Sciarra Laboratories..............................               8,700.0
SDS Refrigerant Services..........................             200,000.0
Summit Refrigerants...............................             200,000.0
SynAgile Corporation..............................               1,125.1
TradeQuim.........................................             200,000.0
Tyco Fire Products................................             200,000.0
USA United Suppliers of America DBA USA                        200,000.0
 Refrigerants.....................................
USSC Acquisition Corp.............................             131,451.0
Wesco HMB.........................................             200,000.0
                                                   ---------------------
    Total.........................................           6,716,243.4
------------------------------------------------------------------------

    EPA notes the restrictions in 40 CFR 84.15(e)(3) that new market 
entrants are allocated up to 0.2 MMTEVe (200,000 MTEVe) for calendar 
year 2022. Accordingly, entities that requested more than 200,000 MTEVe 
as a new market were allocated the regulatory maximum of 200,000 MTEVe. 
And, in accordance with 40 CFR 84.15(f)(1) set-aside allowances 
allocated to new market entrants cannot be transferred.
    After making the allocations noted in Tables 1 and 2, there were 
2,198,889.9 production allowances and 482,646.5 consumption allowances 
remaining in the set-aside pool. In accordance with 40 CFR 84.15(e)(4), 
those allowances have been distributed to the October 1, 2021, general 
pool allowance holders on a pro rata basis. EPA has made this pro rata 
distribution as shown in Tables 3 and 4.

 Table 3--Set-Aside Production Allowances Distributed Pursuant to 40 CFR
                               84.15(e)(4)
------------------------------------------------------------------------
                                                    Number of production
                      Entity                          allowances issued
                                                           (MTEVe)
------------------------------------------------------------------------
Arkema............................................             265,221.2
Chemours..........................................             491,227.0
Honeywell International...........................           1,114,441.9

[[Page 19686]]

 
Iofina Chemical...................................                  11.4
Mexichem Fluor DBA Koura..........................             327,988.4
------------------------------------------------------------------------

Table 4--Set-Aside Consumption Allowances Distributed Pursuant to 40 CFR
                               84.15(e)(4)
------------------------------------------------------------------------
                                                          Number of
                                                         consumption
                      Entity                          allowances issued
                                                         (MTEVe) \1\
------------------------------------------------------------------------
A-Gas.............................................               5,926.5
Advanced Specialty Gases..........................                 526.9
Air Liquide USA...................................                 920.6
Altair Partners...................................               5,390.0
Arkema............................................              57,387.2
Artsen............................................               1,897.6
AutoZone Parts....................................               4,592.1
AW Product Sales & Marketing......................                 359.2
Bluon.............................................                  61.8
Chemours..........................................              61,647.9
Combs Gas.........................................               2,378.4
ComStar International.............................                 690.8
Daikin America....................................               5,763.4
Electronic Fluorocarbons..........................                 192.6
First Continental International...................               1,421.7
FluoroFusion Specialty Chemicals..................               4,713.8
GlaxoSmithKline...................................                 990.5
Harp USA..........................................               1,413.8
Honeywell International...........................             152,348.3
Hudson Technologies...............................               5,518.1
ICool USA.........................................               6,291.7
IGas Holdings.....................................              47,912.0
Iofina Chemical...................................                   2.3
Lenz Sales & Distribution.........................               2,050.4
Linde.............................................                 983.4
Mexichem Fluor DBA Koura..........................              47,053.8
Mondy Global......................................                 588.6
National Refrigerants.............................              36,577.3
Nature Gas Import and Export......................               1,513.6
Refrigerants, Inc.................................                  49.0
RMS of Georgia....................................               2,994.0
Showa Chemicals of America........................                 135.7
Solvay Fluorides..................................               2,035.9
Technical Chemical................................               1,798.9
Transocean Offshore Deepwater Drilling............                   0.0
Tulstar Products..................................               1,355.7
Walmart...........................................               4,211.6
Waysmos USA.......................................               1,171.7
Weitron...........................................              11,705.0
Wilhelmsen Ships Service..........................                  74.6
------------------------------------------------------------------------
\1\ Numbers may not sum due to rounding.

    This allocation of set-aside allowances should not be construed to 
limit the ability of EPA to apply administrative consequences under 40 
CFR 84.35, or to limit the ability of the United States to exercise any 
authority to pursue enforcement action under the AIM Act and 40 CFR 
part 84, or under other federal laws or regulations.
    For example, if future information reveals an entity provided 
false, inaccurate, or misleading information or did not disclose 
financial or familial relationships between a new entrant and another 
allowance holder, EPA may pursue administrative consequences and refer 
the entity for any and all appropriate enforcement actions.
    On March 31, 2022, EPA also provided notice to three entities of 
the Agency's intent to take administrative consequences in accordance 
with 40 CFR 84.35 and retire an identified set of those companies' 
allowances. Using this authority, EPA can retire, revoke, or withhold 
the allocation of allowances, or ban a company from receiving, 
transferring, or conferring allowances.

Judicial Review

    The AIM Act provides that certain sections of the Clean Air Act 
(CAA) ``shall apply to'' the AIM Act and ``any rule, rulemaking, or 
regulation promulgated by the Administrator of [EPA] pursuant to [the 
AIM Act] as though [the AIM Act] were expressly included in title VI of 
[the CAA].'' Id. Sec.  7675(k)(1)(C). Among the applicable

[[Page 19687]]

sections of the CAA is section 307, id. Sec.  7607, which includes 
provisions on judicial review. Section 307(b)(1) provides, in part, 
that petitions for review must be filed in the United States Court of 
Appeals for the District of Columbia Circuit: (i) When the agency 
action consists of ``nationally applicable regulations promulgated, or 
final actions taken, by the Administrator,'' or (ii) when such action 
is locally or regionally applicable, but ``such action is based on a 
determination of nationwide scope or effect and if in taking such 
action the Administrator finds and publishes that such action is based 
on such a determination.'' For locally or regionally applicable final 
actions, the CAA reserves to the EPA complete discretion whether to 
invoke the exception in (ii).
    This final action is ``nationally applicable'' within the meaning 
of CAA section 307(b)(1). In the alternative, to the extent a court 
finds this final action to be locally or regionally applicable, the 
Administrator is exercising the complete discretion afforded to him 
under the CAA to make and publish a finding that this action is based 
on a determination of ``nationwide scope or effect'' within the meaning 
of CAA section 307(b)(1).\2\ This final action consisted of the Agency 
issuing hydrofluorocarbon allowances to applicants that met the 
applicable criteria from the set-aside pool and redistributing 
allowances remaining in the set-aside pool to entities that received 
general pool production and consumption allowances on October 1, 2021. 
The applicants and entities are located throughout the country in 
varying judicial circuits.\3\ This final action is based on a common 
core of factual findings concerning the eligibility of applicants to 
the set-aside pool. For these reasons, this final action is nationally 
applicable or, alternatively, the Administrator is exercising the 
complete discretion afforded to him by the CAA and hereby finds that 
this final action is based on a determination of nationwide scope or 
effect for purposes of CAA section 307(b)(1) and is hereby publishing 
that finding in the Federal Register.
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    \2\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator has 
also taken into account a number of policy considerations, including 
his judgment balancing the benefit of obtaining the D.C. Circuit's 
authoritative centralized review versus allowing development of the 
issue in other contexts and the best use of Agency resources.
    \3\ In the report on the 1977 Amendments that revised section 
307(b)(1) of the CAA, Congress noted that the Administrator's 
determination that the ``nationwide scope or effect'' exception 
applies would be appropriate for any action that has a scope or 
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 
323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
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    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the District of Columbia Circuit within 60 days from the date this 
final action is published in the Federal Register. Filing a petition 
for reconsideration by the Administrator of this final action does not 
affect the finality of the action for the purposes of judicial review, 
nor does it extend the time within which a petition for judicial review 
must be filed and shall not postpone the effectiveness of such rule or 
action.

Hans Christopher Grundler,
Director, Office of Atmospheric Programs.
[FR Doc. 2022-07152 Filed 4-4-22; 8:45 am]
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