Document ID: EPA-HQ-OAR-2003-0230-0318
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-12-16T05:00Z

1.
Amount
from
Stocks
EPA
is
allowing
up
to
1,283,214
kilograms
of
methyl
bromide
from
inventories
stockpiled
before
the
phaseout
date
of
January
1,
2005
to
be
sold
for
approved
critical
uses.
In
evaluating
the
issue
of
what
amount
of
the
critical
use
level
for
2005
should
be
met
from
stocks,
EPA
considered
comments
received
and
the
following
statements
in
Decision
Ex
I/
3.
Decision
Ex
I/
3(
1)
permits
a
level
of
production
and
consumption
equal
to
30%
of
the
1991
baseline
and
establishes
an
agreed
critical
use
level
equal
to
35%
of
the
1991
baseline.
With
regard
to
drawdown
from
existing
inventory,
Decision
Ex
I/
3(
2)
states:
"
That
a
Party
with
a
critical­
use
exemption
level
in
excess
of
permitted
levels
of
production
and
consumption
for
critical
uses
is
to
make
up
any
such
difference
between
those
levels
by
using
quantities
of
methyl
bromide
from
stocks
that
the
Party
has
recognized
to
be
available."
The
availability
of
stocks
is
also
addressed
in
Decision
Ex
I/
3(
5),
which
states:
"
That
each
Party
which
has
an
agreed
critical
use
should
ensure
that
the
criteria
in
paragraph
1
of
decision
IX/
6
are
applied
when
licensing,
permitting
or
authorizing
the
use
of
methyl
bromide
and
that
such
procedures
take
into
account
available
stocks."
Additional
references
to
Decision
IX/
6
appear
in
preambular
language
("
Mindful
that
exemptions
must
fully
comply
with
decision
IX/
6
.
.
.
",
"
Mindful
also
that
decision
IX/
6
permits
the
production
and
consumption
of
methyl
bromide
for
critical
uses
only
if
it
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide.")
In
acting
in
accordance
with
Decision
Ex.
I/
3,
EPA
must
look
looks
to
Paragraph
(
3)
of
that
Decision,
which
states
that
a
Party
"
shall
prohibit"
the
use
of
stocks
when
the
usage
of
stocks
combined
with
production
and
consumption
exceeds
the
total
level
of
critical
uses
agreed
to
by
the
Parties,
and
with
Paragraph
(
2),
which
states
that
a
Party
with
a
use
exemption
exceeding
allowable
production
and
consumption
"
is
to
make
up"
any
such
difference
by
using
stocks
recognized
to
be
available.
Additionally,
Paragraph
(
5)
of
Decision
Ex.
I/
3
states
that
Parties
should
ensure
that
Decision
IX/
6'
s
criteria
are
applied,
and
Decision
IX/
6
states
that
production
and
consumption
should
not
be
permitted
where
stocks
are
recognized
to
be
available.
Taking
into
account
the
desire
to
act
in
accordance
with
the
language
of
Decision
Ex.
I/
3'
s
first
three
Paragraphs,
and
the
fact
that
the
fifth
Paragraph
and
Decision
IX/
6
are
is
hortatory,
EPA
concludes
that
the
appropriate
level
of
stocks
utilization
is
set
forth
in
Decision
Ex.
I/
3(
1),
which
establishes
a
critical
use
level
of
35%
but
permits
production
and
consumption
of
only
30%.
Paragraph
(
1)
of
Decision
Ex.
I/
3,
read
in
conjunction
with
paragraph
(
2)
of
the
same
Decision,
specifies
the
amount
of
the
critical
use
level
for
2005
that
should
be
met
from
stocks.
Paragraph
(
1)
establishes
a
critical
use
level
of
35%
of
baseline
but
permits
production
and
consumption
of
only
30%.
Paragraph
(
2)
explains
that
the
difference
is
to
made
up
by
using
available
stocks.
In
other
words,
the
amount
of
the
United
States'
2005
critical
use
level
that
should
be
met
from
stocks
is
1,283,214
kilograms,
i.
e.,
an
amount
equivalent
to
5%
of
baseline.
EPA's
conclusion
accords
with
both
the
preambular
language
quoted
above
(
which
explains
why
the
Decision
permits
a
level
of
production
and
consumption
that
is
less
than
the
critical
use
level)
as
well
as
Paragraph
(
5)
of
Decision
Ex.
I/
3.
That
Paragraph
requests
each
Party
with
an
agreed
critical
use
to
take
into
account
available
stocks
when
authorizing
the
use
of
methyl
bromide.
Given
the
language
in
Paragraphs
(
1)
and
(
2)
of
Decision
Ex.
I/
3,
EPA
interprets
Paragraph
(
5)'
s
language
as
meaning
that
the
U.
S.
should
not
authorize
critical
use
exemptions
without
including
provisions
addressing
drawdown
from
stocks
for
critical
uses.
EPA
is
acting
consistently
with
Paragraph
(
5)
by
establishing
requirements
governing
the
sale
of
pre­
phaseout
inventories
for
approved
critical
uses.
In
section
V.
F
of
today's
rulemaking,
EPA
describes
the
mechanism
by
which
the
Agency
is
allowing
stocks
of
methyl
bromide
to
be
sold
for
approved
critical
uses.
In
addition,
EPA
is
taking
into
account
stocks
through
the
trading
provisions
outlined
in
section
V.
G
of
today's
rulemaking,
which
allow
critical
use
allowances
to
be
converted
into
critical
stock
allowances.
EPA
had
proposed
to
undertake
an
independent
analysis
of
the
amount
to
come
from
stocks
and
to
adjust
the
authorized
level
of
new
production
and
consumption
for
critical
uses
by
the
amount
of
"
available"
stocks
determined
through
this
analysis.
The
methodology
proposed
for
this
analysis
was
elaborated
in
the
NPRM
and
also
in
a
Technical
Support
Document
that
can
be
obtained
from
the
rulemaking
docket.
EPA
also
sought
comment
on
an
alternative
approach:
"
For
the
2005
calendar
year,
the
Agency
could
make
a
determination
that
the
amount
of
methyl
bromide
available
from
existing
stocks
is
simply
based
on
the
difference
between
the
limit
on
methyl
bromide
for
critical
uses
(
8,942
metric
tons)
and
the
limit
on
new
production
and
import
(
7,659
metric
tons)
in
the
Decision
Ex.
I/
3."
69
FR
52375.
This
is
essentially
the
approach
adopted
in
today's
final
rule.
EPA
is
clarifying,
however,
the
appropriate
level
of
stock
drawdown
for
critical
uses
is
set
out
in
Decision
Ex.
I/
3.
"
EPA
received
10
comments
on
the
independent
assessment
approach
proposed
in
the
NPRM
for
determining
available
stocks:
five
comments
in
favor
of
this
approach
and
nine
comments
suggesting
further
refinements
to
the
methodology.
However,
since
EPA
is
not
using
the
methodology
to
determine
available
stocks
for
the
2005
control
period,
the
Agency
is
not
responding
to
the
details
of
the
comments
in
today's
rulemaking.
One
commenter
stated
that
EPA
should
use
a
"
mathematical"
approach,
under
which
the
amount
from
stocks
would
equal
the
difference
between
the
limit
on
methyl
bromide
for
critical
uses
and
the
limit
on
new
production
and
import.
EPA
believes
that
the
approach
adopted
in
this
final
rule
is
consistent
with
these
commenters'
recommendation."
Two
commenters
stated
that
all
stocks
must
be
used
before
any
new
production
is
permitted
and
that
all
stocks
other
than
those
for
export
to
developing
countries
should
be
considered
"
available"
for
critical
uses.
One
commenter
refers
to
Decision
IX/
6,
paragraph
(
1)(
b),
in
which
the
Parties
agreed:
"
That
production
and
consumption,
if
any,
of
methyl
bromide
for
critical
uses
should
be
permitted
only
if:
.
.
.(
ii)
Methyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide,
also
bearing
in
mind
the
developing
countries'
need
for
methyl
bromide."
EPA
does
not
believe
that
this
is
an
accurate
characterization
of
Decision
IX/
6
as
it
relates
to
Decision
Ex.
I/
3.
Paragraph
2
of
Decision
Ex.
I/
3
states
that
a
Party
"
is
to
make
up"
the
difference
between
an
agreed
use
level
and
production
and
consumption
"
from
stocks
that
the
Party
has
recognized
to
be
available."
Moreover,
Decision
IX/
6
asks
Parties
to
permit
production
and
consumption
where
"
methyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
and
recycled
methyl
bromide,
also
bearing
in
mind
the
developing
countries'
need
for
methyl
bromide."
Both
of
these
statements
contemplate
the
possibility
that
available
stocks
could
be
less
than
existing
stocks.
Moreover,
the
United
States
and
other
countries
have
interpreted
identical
decisional
language
in
the
essential
use
exemption
context
not
to
require
the
use
of
all
existing
stocks,
and
Decision
Ex.
I/
3'
s
consideration
of
stocks
is
consistent
with
this
interpretation.
In
addition,
EPA
disagrees
with
the
commenter's
assumption
that
all
stocks
that
are
not
specifically
designated
for
export
to
developing
countries
are
available
for
critical
uses.
For
example,
there
may
be
stocks
in
the
U.
S.
produced
specifically
for
quarantine
and
pre­
shipment
uses
or
stocks
held
on
behalf
of
another
entity
for
a
non­
critical
use
during
their
transition
to
alternatives.
In
addition,
the
U.
S.
is
a
global
supplier
of
methyl
bromide
and
existing
inventories
may
be
tagged
for
critical
uses
in
other
developed
countries.

C.
Access
to
Stocks
In
the
proposed
rule
EPA
described
several
different
approaches
to
controlling
access
to
stocks
of
methyl
bromide
produced
or
imported
before
the
phaseout
date
of
January
1,
2005.
EPA
proposed
a
limit
on
the
sale
of
stocks
to
approved
critical
users.
In
addition,
EPA
proposed
to
prohibit
sale
of
stocks
to
end
users
in
nominated
sectors
who
lacked
the
limiting
critical
conditions
that
make
methyl
bromide
use
critical
for
the
categories
listed
in
Decision
Ex.
I/
3.
EPA
sought
comment
on
whether
to
apply
use
restrictions
to
other
groups.
The
Agency
recognizes
that
a
person
who
qualifies
as
an
approved
critical
user
may
have
both
approved
critical
uses
and
other
uses.
Further,
the
Agency
also
recognizes
the
possibility
that
an
approved
critical
user
could
grow
two
distinct
crops
or
fumigate
two
distinct
commodities
in
the
same
field
or
structure
during
a
single
control
period.
In
today's
rule,
EPA
is
restricting
access
to
stocks
for
approved
critical
uses.
Approved
critical
uses
are
listed
in
Appendix
L
to
40
CFR
Part
82,
Subpart
A.
The
total
amount
of
pre­
phaseout
inventory
that
may
be
sold
as
critical
use
methyl
bromide
is
equivalent
to
5%
of
the
1991
baseline.
As
discussed
below,
this
rule
creates
critical
stock
allowances
(
CSAs)
in
this
amount.
For
each
kilogram
of
methyl
bromide
sold
from
prephaseout
inventories
as
critical
use
methyl
bromide,
a
CSA
holder
must
expend
one
CSA.
In
finalizing
the
provisions
on
access
to
stocks,
EPA
considered
comments
received
and
the
language
of
Decision
Ex
I/
3(
3),
which
states:
"
That
a
Party
using
stocks
under
paragraph
2
above
shall
prohibit
the
use
of
stocks
in
the
categories
set
forth
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties
to
the
Montreal
Protocol
when
amounts
from
stocks
combined
with
allowable
production
and
consumption
for
critical
uses
exceed
the
total
level
for
that
Party
set
forth
in
annex
II
A
to
the
present
report."
EPA
received
four
comments
supporting
unlimited
access
to
stocks
for
approved
critical
uses
and
24
additional
comments
supporting
unlimited
access
to
stocks
for
all
uses.
EPA
also
received
1
comment
stating
that
there
is
no
legal
basis
for
allowing
use
of
stocks
by
users
that
did
not
apply
for
or
did
not
qualify
for
critical
use
status,
and
no
basis
for
the
Agency's
supposition
that
some
users
did
not
apply
for
CUE
status
because
they
were
counting
on
use
of
stocks.
EPA
reads
Decision
Ex
I/
3(
3)
as
requiring
limitations
on
the
use
of
stocks
only
with
respect
to
uses
agreed
by
the
Parties
to
be
critical.
Annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
is
titled
"
Agreed
critical­
use
categories."
Paragraph
(
1)
of
Decision
Ex.
I/
3
permits
limited
production
and
consumption
"[
f]
or
the
agreed
critical
uses
set
forth
in
annex
II
A."
Because
paragraph
(
3)
of
Decision
Ex
I/
3
also
refers
to
Annex
II
A,
EPA
concludes
that
the
burden
of
the
stock
restriction
is
coextensive
with
the
benefit
of
the
new
production
and
import.
EPA
does
not
believe
that
Decision
Ex
I/
3(
3)
can
be
read
to
allow
unlimited
access
to
stocks
for
approved
critical
uses
because
the
prohibition
is
directly
linked
to
"
the
categories
set
forth
in
annex
II
A,"
which
are
the
categories
of
critical
uses
agreed
to
by
the
Parties.
Nor
can
the
Decision
be
read
to
allow
unlimited
access
to
stocks
for
all
uses:
that
would
fail
to
give
any
effect
to
the
phrase
"
shall
prohibit
the
use
of
stocks."
EPA
disagrees
with
the
comment
that
there
is
no
legal
basis
for
allowing
use
of
stocks
by
users
that
did
not
apply
for
or
did
not
qualify
for
critical
use
status.
Decision
Ex
I/
3(
3)
does
not
require
that
individual
Parties
prohibit
use
of
stocks
by
users
whose
uses
fall
outside
the
categories
of
agreed
critical
uses.
Nothing
in
the
Protocol
or
the
CAA
mandates
that
EPA
limit
drawdown
from
stocks
for
such
uses.
In
anticipating
that
some
users
did
not
apply
for
CUE
status
because
they
were
counting
on
use
of
stocks,
the
Agency
did
not
assume
that
any
user
had
special
knowledge
of
the
total
amount
of
stocks
available
but
rather
that
an
individual
user
might
have
confirmed
with
its
supplier
that
enough
methyl
bromide
would
be
available
from
that
supplier's
inventory
to
meet
the
individual
user's
limited
transitional
needs.
For
example,
some
onion
growers
in
the
southeastern
U.
S.
informed
EPA
in
their
comments
on
the
rulemaking
they
did
not
apply
for
an
exemption
because
they
intend
to
avail
themselves
of
existing
stocks
Nine
commenters
stated
that
EPA
does
not
have
legal
authority
to
restrict
the
use
of
methyl
bromide
stocks.
These
commenters
argue
that
no
provision
of
the
CAA
authorizes
EPA
to
impose
such
restrictions.
Specifically,
they
state
that
section
604(
d)(
6)
refers
only
to
production,
importation,
and
consumption,
and
that
by
addressing
use
in
other
sections
of
the
CAA,
Congress
demonstrated
its
intent
to
deny
EPA
authority
to
regulate
stocks
under
604(
d)(
6).
However,
section
604(
d)(
6)
directly
relates
to
use:
the
exempted
production,
importation
and
consumption
is
for
critical
"
uses."
While
Congress,
in
the
Clean
Air
Act,
generally
mandated
that
production
and
consumption
of
ozone­
depleting
substances
be
phased
out
across
the
board,
regardless
of
use,
the
Act
does
contain
certain
provisions,
including
section
604(
d)(
6),
that
authorize
EPA
to
provide
exceptions
on
the
basis
of
use.
Thus,
section
604(
d)(
6)
is
one
of
the
provisions
of
the
Clean
Air
Act
where
use
is
clearly
at
issue.
In
today's
final
rule,
EPA
is
imposing
narrowly
tailored
use
restrictions
as
a
condition
of
obtaining
new
production
and
import.
EPA
believes
that
section
604(
d)(
6)
mandates
this
result.
In
section
604(
d)(
6),
Congress
provided
EPA
authority
to
exempt
production
and
import
of
methyl
bromide
for
critical
uses,
but
only
"
to
the
extent
consistent
with
the
Protocol."
The
use
restrictions
in
today's
final
rule
are
necessary
to
ensure
that
total
usage
for
critical
uses
does
not
exceed
the
limit
agreed
to
by
the
Parties
in
implementing
the
critical
use
provision
in
Article
2H
of
the
Protocol.
The
relationship
between
sections
604(
d)(
6)
and
614(
b)
of
the
CAA
and
the
Protocol
and
its
Decisions
is
discussed
in
detail
in
the
NPRM
and
in
the
background
section
of
this
preamble.
The
commenters
further
argue
that
EPA
cannot
rely
on
Decision
Ex
I/
3
to
justify
restrictions
on
use
of
stocks.
They
state
that
while
Decisions
may
be
used
to
interpret
existing
requirements
in
the
Protocol,
they
cannot
be
used
to
substantively
change
those
requirements.
However,
EPA
is
not
suggesting
that
Decision
Ex
I/
3
substantively
changed
the
requirements
of
Article
2H.
Article
2H
establishes
a
prohibition
on
the
production
and
consumption
of
methyl
bromide,
but
states
that
the
prohibition
shall
not
apply
"
to
the
extent
the
Parties
decide
to
permit
the
level
of
production
and
consumption
that
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses."
The
Parties
have
not
interpreted
Article
2H
in
the
manner
the
commenters
desire.
Instead,
they
understood
the
terminology
referring
to
"
uses
agreed
by
them
to
be
critical
uses"
to
allow
the
Parties
to
tie
the
determinations
of
production
and
consumption
to
use.
Under
international
law,
this
interpretation
and
practice
of
the
Parties
may,
in
the
current
situation,
be
read
to
be
an
accurate
interpretation
of
Article
2H's
language.
Although
Decision
Ex.
I/
3
focuses
on
regulating
production
and
consumption,
the
Parties
could
reasonable
set
related
conditions
on
agreeing
to
production
and
consumption
at
a
particular
level.
Therefore,
the
stock
restrictions
are
an
integral
part
of
the
Parties'
decision
regarding
the
level
of
production
and
consumption
necessary
to
satisfy
critical
uses.
The
commenters
further
characterize
the
restrictions
on
access
to
stocks
proposed
in
the
NPRM
as
"
an
attempt
by
the
Agency
to
bypass
the
Treaty
Clause
of
the
U.
S.
Constitution
by
unilaterally
amending
the
Montreal
Protocol
through
a
rulemaking,
without
the
advice
and
consent
of
the
Senate."
EPA
rejects
this
characterization.
Article
2H
explicitly
assigns
to
the
Parties
the
task
of
deciding
what
level
of
production
and
consumption
"
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses..."
Therefore,
EPA
looks
to
the
Parties'
Decisions
to
provide
the
details
of
the
exemption
authorized
in
Article
2H.
In
Decision
Ex
I/
3,
the
Parties
decided
what
level
of
production
and
consumption
was
necessary
given
certain
assumptions
about
stocks.
Accordingly,
in
compliance
with
Article
2H,
this
final
rule
addresses
both
production
and
consumption
and
the
use
of
stocks.