comprising a greater proportion of the total demand each year. Under
this approach, the percentage of the total need to be met with
reclaimed material will rise from 20% to 29% of total demand in 2014,
though the total amount of reclaimed material supplied remains at
12,500 MT for all five years. EPA believes this is appropriate as it
facilitates meeting the demand in 2015, of which at least 29% must be
met with recovered material.
    Commenters who requested annual reductions in the amount of HCFC-22
allocations did not suggest that EPA annually reduce the allocations of
HCFC-142b. EPA is not reducing the allocation of HCFC-142b on an annual
basis because the Agency does not believe that the same rationale would
apply to HCFC-142b. Most recovered HCFC-22 comes from refrigeration and
air-conditioning appliances. The largest single use of HCFC-142b prior
to 2010 was to blow foam and recovery is not required from discarded
foam. The need for recovery is also less, given the small amounts of
HCFC-142b needed to service existing refrigeration equipment post-2010.
Finally, it is difficult to reclaim HCFC-142b from refrigerant blends
and such recovery is not widely practiced. Therefore, EPA is finalizing
annual reductions only for HCFC-22 and maintaining the allocations of
HCFC-142b as proposed.

C. Allocations of HCFC-22 and HCFC-142b

    EPA is revising the two types of tables in 40 CFR part 82 that
together specify the production and consumption allowances available to
allowance holders during specified control periods. Tables at Sec.
82.17 and Sec.  82.19 apportion baseline production allowances and
baseline consumption allowances, respectively, to individual companies
for individual HCFCs. Complementing these tables, the table at Sec.
82.16 lists the percentage of baseline allocated to allowance holders
for specific control periods. By selecting option 1, discussed in
Section IV.A. of the preamble above, EPA is retaining this framework of
complementary tables, revising them to reflect adjustments to
baselines, and granting percentages of baselines in a manner that
achieves the 2010 phasedown goal.
    The percentages for HCFC-22 and HCFC-142b in the table at Sec.
82.16 (Table 1 below) have changed from the proposed rule. In the
proposal, the allocation for HCFC-22 for 2010 was 35.2% of baseline. In
the final rule, the value is 41.9%. Similarly, the percent allocation
for HCFC-142b for 2010 was 4.9% of baseline in the proposed rule and is
0.47% in the final rule. These changes do not reflect a change in the
allocation amounts, as the total allocation for HCFC-22 in 2010 remains
50,000 MT (the same as the proposal), and the total allocation for
HCFC-142b 2010 remains at 100 metric tons (the same as the proposal).
Instead, these changes are due to not changing the baselines to reflect
inter-pollutant transfers occurring on an annual basis within a single
company. The proposal, which treated the intracompany transfer of HCFC-
142b to HCFC-22 as permanent, had a total consumption baseline of
141,865 MT. By not accounting for those transfers, the baseline in the
final rule decreased to 119,285 MT. With a smaller total

baseline, the factor that each baseline allowance holder must multiply
to reach the same amount of allowances is greater. Thus, 50,000 is
equal to 35.2% of 141,865 and 41.9% of 119,285. The opposite is true
for HCFC-142b, which had a proportionately smaller baseline in the
proposed rule but now has a larger baseline since EPA is not accounting
for inter-pollutant transfers.
    EPA is amending the table at Sec.  82.16 by including control
periods 2010-2014, by continuing to allocate zero percent to HCFC-141b,
and by allocating specified percentages (in separate columns) to HCFC-
22, HCFC-142b, and--as will be discussed later--other HCFCs. The
allocations for HCFC-22 decrease on an annual basis, rather than
remaining constant for each of the 2010-2014 control periods as was
proposed.

                                      Table 1--Phaseout Schedule for Class II Controlled Substances in 40 CFR 82.16
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Percent of      Percent of      Percent of      Percent of      Percent of      Percent of      Percent of
             Control period                  HCFC-141b        HCFC-22        HCFC-142b       HCFC-123        HCFC-124       HCFC-225ca      HCFC-225cb
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003....................................               0          100             100     ..............  ..............  ..............  ..............
2004....................................               0          100             100     ..............  ..............  ..............  ..............
2005....................................               0          100             100     ..............  ..............  ..............  ..............
2006....................................               0          100             100     ..............  ..............  ..............  ..............
2007....................................               0          100             100     ..............  ..............  ..............  ..............
2008....................................               0          100             100     ..............  ..............  ..............  ..............
2009....................................               0          100             100     ..............  ..............  ..............  ..............
2010....................................               0           41.9             0.47             125             125             125             125
2011....................................               0           38.0             0.47             125             125             125             125
2012....................................               0           34.1             0.47             125             125             125             125
2013....................................               0           30.1             0.47             125             125             125             125
2014....................................               0           26.1             0.47             125             125             125             125
--------------------------------------------------------------------------------------------------------------------------------------------------------

    EPA is allocating different baseline percentages for HCFC-22 and
HCFC-142b because EPA projects that the needs will differ for servicing
air-conditioning and refrigeration appliances during the 2010-2014
control periods. As discussed in Section IV.B.1. of the preamble above,
EPA's analysis shows that there will be a significantly greater need
for HCFC-22 than for HCFC-142b during the control periods 2010-2014.
Based on the Servicing Tail report and reporting information already
required by EPA regulations, the needs for individual HCFCs are not
uniform. Allocating the same percentage of baseline for HCFC-22 and
HCFC-142b would result in too few allowances for HCFC-22 and too many
allowances for HCFC-142b. While inter-pollutant transfers in accordance
with Sec.  82.23(b) could be used to trade allowances of one HCFC for
another, EPA does not believe it is appropriate to rely on such
transfers as a mechanism for large-scale corrections. Instead, EPA
anticipates that the continued availability of inter-pollutant
transfers will permit the market to self-correct for unforeseen changes
in demand and allow individuals to consider a range of options for
their allowances. EPA seeks to avoid unnecessary disruptions in the
marketplace and to promote a smooth transition for industry.
1. HCFC-22 Allowances for 2010-2014
    For 2010, EPA is allocating HCFC-22 consumption allowances to meet
80 percent of the servicing need, assuming that the remainder will be
met by recovered HCFC-22 that is either recycled or reclaimed. This
translates into 50,000 metric tons (2,750 ODP-weighted metric tons), or
approximately 72 percent of the total HCFC consumption cap for the 2010
control period. For the 2011-2014 control periods, EPA is annually
reducing the allocation amount in a linear fashion, reflecting the
declining servicing demand over that time.
    As it did in the 2003 allocation rule, EPA is allocating production
allowances among different chemicals using the same percentage
breakdown as for consumption allowances. This rule allocates 46,368
metric tons (2,550 ODP tons of the 3,884.25-ODP-ton production cap) to
HCFC-22 production in 2010, with the amount declining in each of the
control periods from 2010 through 2014. This is consistent with section
605(c) of the Clean Air Act, which requires that the phaseout schedule
for HCFC consumption be the same as that for HCFC production. EPA
recognizes that there is a difference between the amount of imported
and produced HCFCs and that the degree of difference may vary over
time. However, EPA does not believe it is necessary to use two
different chemical-by-chemical percentage breakdowns (i.e., one for
consumption allowances and another for production allowances) to ensure
compliance with the production and consumption caps. Therefore, for
simplicity and for consistency with section 605(c), EPA is using the
same percentages for production and consumption allocations--deriving
the percentages based on estimated need for each individual HCFC.
2. HCFC-142b Allowances for 2010-2014
    As discussed in the Servicing Tail report, the projected servicing
need for HCFC-142b is extremely low: Approximately 100 metric tons (6.5
ODP tons) in 2010 and decreasing to zero by 2015. Prior to 2010, the
primary use of HCFC-142b has been to blow foam, a use no longer allowed
after 2010. In estimating the need for 2010-2014, EPA has considered
the amount of HCFC-142b produced and imported into the United States as
reported to EPA in recent years under the existing requirements. Unlike
with HCFC-22, EPA has not considered the reclamation and recovery rates
of HCFC-142b in setting the allocation amounts. HCFC-142b has primarily
been used in foams, which is not recovered. The small amount of HCFC-
142b used in refrigeration and air conditioning applications is
typically used as a component of a blend which is more difficult to
reclaim. Furthermore, these blends have not gained any significant
market share, unlike blends containing HCFC-22. Given these factors,
the limited amount of data available to EPA indicates that less than 1
percent of HCFC-142b is recycled or reclaimed. EPA did not receive any
additional data in the public comment process that would suggest
otherwise.
    In light of the limited data available, and the extremely low
estimate of recycling and reclamation, EPA is allocating 100 percent of
the projected HCFC-142b servicing need. Because of the lack of data and
the small amounts being allocated, EPA is maintaining the

same allocation level for each of the 2010-2014 control periods, rather
than allocating declining amounts as EPA is doing for HCFC-22.
Therefore, EPA is issuing consumption allowances for HCFC-142b of 100
metric tons (6.5 ODP tons) in 2010-2014. EPA is also allocating
production allowances for HCFC-142b at the same proportion of the
production cap as was used to allocate consumption allowances as a
proportion of the consumption cap. Thus, EPA is allocating production
allowances for HCFC-142b at 118 metric tons (7.7 ODP tons).
3. How the Aggregate for HCFC-22 and HCFC-142b Translates Entity-by-
Entity
    EPA is allocating 50,000 metric tons of HCFC-22 consumption
allowances in 2010 with declining amounts in 2011-2014, 46,329 metric
tons of HCFC-22 production allowances in 2010 with declining amounts in
2011-2014, 100 metric tons of HCFC-142b consumption allowances, and 118
metric tons of HCFC-142b production allowances for years 2010-2014.
However, EPA actually allocates allowances to individual persons (i.e.,
legal entities). As discussed in Section IV.A.1 of this preamble, EPA
is apportioning baselines and allocating allowances on a pro-rata basis
to the entities that received baseline allowances in the 2003
allocation rule.
    Company-specific production and consumption baselines (also
referred to as ``baseline allowances'') for HCFC-141b, HCFC-22, and
HCFC-142b are listed at Sec. Sec.  82.17 and 82.19, respectively. The
percentage of baseline each entity receives in each control period from
2003 through 2014 appears at Sec.  82.16(a), as shown in Table 1 above.
    Allowances allocated for individual control periods are called
``calendar-year allowances'' to distinguish them from the baseline
production or consumption allowances (Sec.  82.17 and Sec.  82.19). For
2010-2014, EPA is apportioning production and consumption baselines for
HCFC-22, HCFC-141b, and HCFC-142b to the same entities that were
apportioned HCFC-22, HCFC-141b, and HCFC-142b baselines in the 2003
allocation rule. EPA is amending that list of entities and their
baselines to reflect changes in entities' names as well as mergers and
acquisitions, but only where EPA has been notified of changes in
writing before or during the comment period for this rulemaking.
    Consistent with past practice, EPA is publishing baseline allowance
information in this rule, having first notified the affected companies
of its intention to do so. Applying the approach described above, EPA
is apportioning production and consumption baselines for HCFC-141b,
HCFC-22, and HCFC-142b to the following entities in the following
amounts:

Table 2--Baseline Production Allowances of HCFC-22, HCFC-141b, and HCFC-
                          142b in 40 CFR 82.17
------------------------------------------------------------------------
                                        Controlled
              Person                    substance        Allowances (kg)
------------------------------------------------------------------------
Arkema...........................  HCFC-22............        28,219,223
                                   HCFC-141b..........        24,647,925
                                   HCFC-142b..........        16,131,096
DuPont...........................  HCFC-22............        42,638,049
Honeywell........................  HCFC-22............        37,378,252
                                   HCFC-141b..........        28,705,200
                                   HCFC-142b..........         2,417,534
MDA Manufacturing................  HCFC-22............         2,383,835
Solvay Solexis...................  HCFC-142b..........         6,541,764
------------------------------------------------------------------------

Table 3--Baseline Consumption Allowances of HCFC-22, HCFC-141b, and HCFC-
                          142b in 40 CFR 82.19
------------------------------------------------------------------------
                                        Controlled
              Person                    substance        Allowances (kg)
------------------------------------------------------------------------
ABCO Refrigeration Supply........  HCFC-22............           279,366
Altair Partners..................  HCFC-22............           302,011
Arkema...........................  HCFC-22............        29,524,481
                                   HCFC-141b..........        25,405,570
                                   HCFC-142b..........        16,672,675
Carrier Corporation..............  HCFC-22............            54,088
Condor Products..................  HCFC-22............            74,843
Continental Industrial Group.....  HCFC-141b..........            20,315
Coolgas, Inc.....................  HCFC-141b..........        16,097,869
Coolgas Investment Property......  HCFC-22............           590,737
Discount Refrigerants............  HCFC-22............           375,328
                                   HCFC-141b..........               994
DuPont...........................  HCFC-22............        38,814,862
                                   HCFC-141b..........             9,049
                                   HCFC-142b..........            52,797
H.G. Refrigeration Supply........  HCFC-22............            40,068
Honeywell........................  HCFC-22............        35,392,492
                                   HCFC-141b..........        20,749,489
                                   HCFC-142b..........         1,315,819
ICC Chemical Corp................  HCFC-141b..........            81,225
Ineos Fluor Americas.............  HCFC-22............         2,546,305
Kivlan & Company.................  HCFC-22............         2,081,018
MDA Manufacturing................  HCFC-22............         2,541,545
Mondy Global.....................  HCFC-22............           281,824
National Refrigerants............  HCFC-22............         5,528,316
Refricenter of Miami.............  HCFC-22............           381,293
Refricentro......................  HCFC-22............            45,979
R-Lines..........................  HCFC-22............            63,172

Saez Distributors................  HCFC-22............            37,936
Solvay Fluorides.................  HCFC-22............           413,509
                                   HCFC-141b..........         3,940,115
Solvay Solexis...................  HCFC-142b..........         3,047,386
Tulstar Products.................  HCFC-141b..........            89,913
USA Refrigerants.................  HCFC-22............            14,865
------------------------------------------------------------------------

D. HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb Allowances

    EPA is establishing and apportioning baselines for other HCFCs that
have been produced or imported in recent years by using information on
production, import, export, and other transactions that has been
reported to the Agency under existing regulations. Under the Montreal
Protocol, all HCFCs are subject to the phaseout cap and EPA must report
production, import, and export data for all HCFCs under Article 7 of
the Protocol. EPA therefore requires recordkeeping and reporting for
production, import, export, and trade of all HCFCs, including those for
which baseline allowances have not yet been established. The
recordkeeping and reporting requirements implement section 603 of the
Clean Air Act and ensure that companies are in compliance with
regulatory and Clean Air Act requirements and that the United States is
able to document compliance with international obligations.
    EPA reviewed HCFC production, import, and export data for the years
leading up to the 2003 allocation rule, and chose to establish
baselines and allocate allowances for the highest-ODP HCFCs (the
``worst-first'' approach) in a manner that ensured U.S. compliance with
the 2004 cap (35 percent below the U.S. baseline). Prior to the
tightening of the 2010 HCFC cap at the 19th Meeting of the Parties to
the Montreal Protocol in September 2007 from a 65 percent reduction to
a 75 percent reduction, EPA anticipated that limiting production and
consumption of HCFC-22 and HCFC-142b for the 2010-2014 control periods
would ensure sufficient room under the then-effective 65 percent
reduction cap without the need to restrict production and consumption
of other HCFCs. In preparing for the 19th Meeting of the Parties, EPA
conducted an analysis, which was shared with stakeholders, to ensure
that the U.S. could consider changes to our obligations that were both
meaningful for ozone layer protection and achievable, allowing
servicing needs to continue to be met. Considering that the September
2007 Montreal Adjustment provides for adjustment of the cap from a 65
percent to a 75 percent reduction, EPA is taking additional precautions
to ensure that the more stringent cap will not be exceeded. These
precautions include establishing and apportioning baselines for the
2010-2014 control periods for other HCFCs that were produced or
imported during the 2003-2007 control periods.
1. Baselines for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb
    EPA is amending Sec. Sec.  82.17 and 82.19 to include company-
specific production and consumption baselines for HCFC-123, HCFC-124,
HCFC-225ca, and HCFC-225cb. EPA data indicate that those four HCFCs
were produced, imported, or exported during the 2003-2007 control
periods.
    In the 2003 allocation rule, EPA did not issue allowances for all
HCFCs, noting in part ``that the continuously developing HCFC market
would be hampered by such distribution'' and that the market
proportions at that time ``of these lower-ODP HCFCs do not reflect the
rapidly expanding market and that distributing allowances for these
HCFCs at [that] time would unnecessarily restrict their supply and
impede transition to less ozone-depleting substances'' (68 FR 2823).
Considering the recent adjustments to the Montreal Protocol and the
evolution in the HCFC market, EPA believes it is now appropriate to
establish a baseline and apportion baseline allowances for HCFC-123,
HCFC-124, HCFC-225ca, and HCFC-225cb.
    All HCFCs are covered under the Montreal Protocol stepwise
reductions, and EPA must consider all HCFC production and import in
ensuring that the United States continues to meet its international
obligations. The four HCFCs addressed in this section are the only
remaining HCFCs commonly used in the United States that do not
currently have established baselines. Establishing baseline allowances
for these four HCFCs will not trigger additional recordkeeping or
reporting obligations, since companies that produce, import, or export
any HCFC already report production and consumption data to EPA. The
impacts on future production and consumption of these chemicals by
individual entities stem from the years chosen for establishing a
baseline, the apportionment of the baseline among companies, and the
percentage of baseline allocated for the control years 2010-2014. EPA
discusses these issues more specifically below.
    EPA recognizes that many different methods and data sources can be
used to establish baseline allowances. EPA proposed to use data
reported to the Agency under Sec.  82.24 and EPA is using that method
in this final rule. EPA did not receive any comments opposed to using
existing reported data. EPA also said in the proposed rule that it
could augment the data for completeness or to verify accuracy by
issuing requests for information under section 114 of the CAA. EPA did
not receive comment relating to this process specifically, but believes
that seeking additional information could delay the publication of the
final rule without providing significant additional benefit.
    EPA is making three changes to Table 5, which are found at 40 CFR
82.17 and 82.19, as compared to the proposed rule. First, EPA is adding
Perfect Technology Center, LP (doing business as Perfect Cycle) to the
list of companies being allocated baselines for the other HCFCs.
Perfect Technology Center, LP had imported HCFC-123 during the time
period used to set the baseline but its reporting forms--although
submitted in compliance with EPA regulations--were misdirected and the
information was not included in EPA's baseline calculations. Second,
DuPont corrected previously reported data, which has the effect of
adjusting DuPont's HCFC-123 baseline from 2,933,906 kg to 1,877,042 kg.
Third, Honeywell had corrected previous HCFC-124 production data but
EPA did not reflect that change in the proposed rule. EPA is reflecting
that correction now by changing Honeywell's HCFC-124 production
baseline from 1,804,121 kg to 1,759,681

kg. These changes do not affect the baselines or the allocation amounts
for the other companies receiving HCFC-123 or HCFC-124 allowances.
    In the 2003 allocation rule, EPA calculated each entity's HCFC-
141b, HCFC-22, and HCFC-142b baselines from that entity's highest
reported consumption and production over the years 1994-1997. EPA chose
that particular range of years because beginning in 1998, some entities
were aware of the impending rulemaking and could have increased
production or import in an effort to secure higher baseline allowances.
EPA stated in the 2003 allocation rulemaking that ``by not selecting a
year after 1997 it will avoid creating an uneven playing field that
skews allocations to those companies with ample resources and good
access to information'' (68 FR 2832). EPA did propose and finalize an
exception to the general approach by allowing new entrants that began
importing after the end of 1997 but before April 5, 1999, the date of
the ANPRM publication. EPA believed that such new entrants, typically
small businesses, might not have been aware of the impending rulemaking
that would affect their ability to continue in the HCFC market.
    EPA is using the same general approach for these four HCFCs as in
the 2003 allocation rule by considering the highest reported data from
a range of years rather than selecting a single baseline year. However,
EPA is not providing an exemption for new entrants. EPA did not receive
any comments requesting a new entrant provision for these four HCFCs
and does not believe that one is necessary as these baseline years
reflect participants in the market in 2005-2007 and thus take into
account relatively new entrants. As in the 2003 allocation rule, EPA is
choosing a range of years because the entities receiving allowances
have very different production and import histories and no one year is
representative for all companies. EPA believes that selecting the year
of highest activity for individual companies over a range of years
creates less of a disadvantage to the industry and the HCFC market as a
whole than selecting a single year. Therefore, in this final rule, EPA
is using an entity's highest reported consumption and production data
reported for the 2005-2007 control periods. By using past years, EPA
avoids any ramp-up in the level of production and consumption resulting
from a desire to maximize individual baselines in anticipation of the
final rule. By using recent data, EPA ensures that the baseline
reflects the current market as closely as possible, and addresses
issues raised when EPA decided to postpone allocating baseline
allowances for these HCFCs in 2003.
    Four commenters generally agreed with the proposal to establish
baselines for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb,
acknowledging that a baseline for these chemicals will help ensure the
United States meets its Montreal Protocol obligations and that the
method used to establish a baseline was successfully utilized for HCFC-
141b, HCFC-142b and HCFC-22. EPA did not receive any comments in
opposition to establishing baselines for these HCFCs.
    Two commenters disagree with EPA's proposal to establish the HCFC-
123 baseline as a company's highest-year production and consumption
between 2005 and 2007. One of those commenters stated a belief that the
market for chillers using HCFC-123 has been steadily declining over the
last several years and suggested that EPA instead select the lowest
reported data from 2005-2007 to set the HCFC-123 baseline. The other
commenter urged EPA to calculate the baseline using calendar year 2008
data, which it said better reflects the market. EPA disagrees with
these alternative methods for establishing the baseline for HCFC-123.
EPA does not support choosing the lowest year's reported data because
EPA is not seeking to actively restrict the market for HCFC-123 in this
rule. EPA does not wish to prejudge the market for HCFC-123, be it
increasing or decreasing. EPA also does not believe that selecting the
2008 year is appropriate because EPA's experience has been that a
single year's data may actually not be reflective of the market, even
if the date is closer to the present. For example, the economic
conditions in 2008 may have affected production for that year in a way
that is not reflective of the market in 2010 and beyond. Also, as
mentioned above, the entities receiving allowances have very different
production and import histories and no one year is representative for
all companies. For these reasons, EPA is establishing the HCFC-123
production and consumption baselines based on an entity's highest
reported consumption and production for the 2005-2007 control periods.
    EPA is apportioning production and consumption baselines for HCFC-
123, HCFC-124, HCFC-225ca, and HCFC-225cb to the following entities for
the following amounts, which are found in 40 CFR 82.17 and 82.19:

  Table 4--Baseline Production Allowances of HCFC-123, HCFC-124, HCFC-
                  225ca, and HCFC-225cb in 40 CFR 82.17
------------------------------------------------------------------------
                                        Controlled
              Person                    substance        Allowances (kg)
------------------------------------------------------------------------
AGC Chemicals Americas...........  HCFC-225ca.........           266,608
                                   HCFC-225cb.........           373,952
DuPont...........................  HCFC-124...........         2,269,210
Honeywell........................  HCFC-124...........         1,759,681
------------------------------------------------------------------------

  Table 5--Baseline Consumption Allowances of HCFC-123, HCFC-124, HCFC-
                  225ca, and HCFC-225cb in 40 CFR 82.19
------------------------------------------------------------------------
                                        Controlled
              Person                    substance        Allowances (kg)
------------------------------------------------------------------------
AGC Chemicals Americas...........  HCFC-225ca.........           285,328
                                   HCFC-225cb.........           286,832
Arkema...........................  HCFC-124...........             3,719
Condor Products..................  HCFC-124...........             3,746
Coolgas, Inc.....................  HCFC-123...........            20,000
DuPont...........................  HCFC-123...........         1,877,042
                                   HCFC-124...........           743,312
Honeywell........................  HCFC-124...........         1,284,265

ICOR.............................  HCFC-124...........            81,220
National Refrigerants............  HCFC-123...........            72,600
                                   HCFC-124...........            50,380
Perfect Technology Center, LP....  HCFC-123...........             9,100
Tulstar Products.................  HCFC-123...........            34,800
                                   HCFC-124...........           229,582
------------------------------------------------------------------------

2. Allocation Levels for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb
    As proposed, EPA is allocating 125 percent of the baseline
production and consumption allowances for HCFC-123, HCFC-124, HCFC-
225ca, and HCFC-225cb for the 2010-2014 control periods. These
allocations appear as additions to the table at Sec.  82.16, shown in
Table 1 above. EPA's intent in establishing baseline production and
consumption allowances for these HCFCs is to create a mechanism for
limiting growth in the production and consumption of these HCFCs during
those control periods. EPA has heard from stakeholders that some amount
of market expansion for these low-ODP HCFCs is possible during the
2010-2014 control periods. Unlike HCFC-22 and HCFC-142b, which are
subject to use restrictions beginning January 1, 2010, these four low-
ODP HCFCs are not subject to use restrictions until a later date. Given
the low ODPs for these HCFCs, allocating 125 percent of the baseline
for 2010-2014 allows for growth but still ensures that the United
States meets the overall HCFC cap of 75 percent below the baseline
during these control periods.
    Any growth in the non-prohibited use of these HCFCs will be
balanced to some extent by the 605(a) self-effectuating restrictions on
most uses of HCFCs. Regardless of any action by EPA, usage of these
HCFCs will be constrained, and in some instances prohibited, in 2015.
For example, HCFC-225ca and HCFC-225cb are generally used as solvents
but as of January 1, 2015, under section 605(a), HCFCs may not be used
in solvents. Refrigerant uses for other HCFCs may continue until 2020.
For example, while newly manufactured HCFC-22 cannot be produced or
imported for charging into new air-conditioning and refrigeration
appliances as of January 1, 2010 (40 CFR 82.16(c)), HCFC-123 can be
produced or imported for new appliances until 2020 (40 CFR 82.16(d)).
However, HCFC-123 is a transitional alternative for CFC-11 and is still
scheduled for phaseout in 2015 except in equipment manufactured before
2020. Because of the section 605(a) use ban, EPA anticipates that any
continued growth for these HCFCs will be considerably affected as of
January 1, 2015. The section 605(a) use provisions are discussed in
more detail below at Section VI of the preamble.
    Through this action, EPA is allocating allowances equaling 125
percent of the baseline for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-
225cb for the 2010-2014 control periods. If rapid growth were to occur,
creating the need for additional amounts of one or more of these HCFCs,
EPA believes that inter-pollutant transfers could be used to make
adjustments. EPA has calculated that 125 percent of the highest year's
consumption of HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb for all
the companies combined equals 137 ODP-weighted metric tons, which is
less than 4 percent of the total HCFC consumption cap of 3,810 ODP
tons. EPA data also show that 125 percent of the highest year's
production of HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb for all
the companies combined equals 135 ODP-weighted metric tons, which is
less than 4 percent of the total HCFC production cap of 3,884.25 ODP
tons.
    In general, commenters, including those who use these other HCFCs,
supported the proposed allocation amounts. The only comments
disagreeing with the proposed allocation amounts were with respect to
HCFC-123. Two commenters objected to an allocation of 125% of baseline
for HCFC-123, claiming that this would artificially increase demand.
These commenters proposed that EPA use a lower allocation amount, such
as 80% of baseline. Another commenter stated that EPA should encourage
the transition to non-ozone-depleting substances by accelerating the
phaseout of HCFC-123 and reducing the allocation amounts on an annual
basis. First, EPA disagrees that allocating more than 100% of baseline
for HCFC-123 will artificially increase demand for this compound.
Currently, there is no limit on HCFC-123 production or consumption. EPA
does not believe that placing such a limit in this rule would
artificially increase demand for this compound. As discussed above, EPA
chose more than 100% to allow for normal growth in the market, not to
impose any constraints or confer any benefits on the market. If the
full amount of allowances is not needed, then EPA expects that the
excess allowances may go unused or be transferred for other HCFCs.
Second, under current domestic regulations, HCFC-123 can be produced or
imported for new appliances until 2020 (40 CFR 82.16(d)). Third, EPA
does not believe that the continued use of HCFC-123 at this point will
threaten U.S. compliance with the overall HCFC cap. Therefore, the
Agency disagrees that it is necessary to accelerate that schedule in
this rule.
    Some commenters also questioned EPA's analysis of the HCFC-123
market in the Servicing Tail report. They stated that the 3 million
kilogram allocation to HCFC-123 surpasses their own estimate of needs.
While EPA did not use a straight needs-based analysis for allocating
HCFC-123, EPA did review the HCFC-123 needs analysis in the June 2008
Servicing Tail report and found that the source data used to project
needs were not the same as those used to establish the allocation of
HCFC-123. EPA has issued a final version of the Servicing Tail report
(accessible in the docket to this action and at http://www.epa.gov/
ozone). In any case, EPA has not chosen to allocate HCFC-123, HCFC-124,
HCFC-225ca, or HCFC-225cb at the estimated need as shown in the
Servicing Tail report. Instead, to allow for market growth as
previously discussed, EPA is setting allocation baselines in the same
manner for all four of these low-ODP HCFCs. Namely, EPA is setting each
company's baseline at the highest consumption or production in the
years 2005-2007, and allocating 125% of those baselines to avoid
interfering with the existing market.
    In accordance with the Montreal Protocol, EPA will issue a rule
prior to the 2015 HCFC milestone to limit aggregate production and
consumption

of all HCFCs to no more than 10 percent of the U.S. baselines for
production and consumption. At that time, EPA plans to consider the
appropriate level of allowances for 2015 and beyond based on market
demand and the section 605(a) restrictions on introduction into
interstate commerce and use discussed later in this preamble. Examples
of uses that will be prohibited by section 605(a) beginning in 2015 are
solvents, sterilants, and fire suppression uses. EPA anticipates other
changes as well. For example, EPA's allowance level for HCFC-123, HCFC-
124, HCFC-225ca, and HCFC-225cb does not assume a specified level of
recycling and reclamation. For HCFCs used in non-refrigeration
applications, such as solvents (e.g., HCFC-225ca and HCFC-225cb), the
section 608 prohibition on venting is not applicable. EPA received
comment that it should consider recovery and recycling or reclamation
of HCFC-123 in this rule when establishing production and consumption
allowances. HCFC-123 is used in chillers that in some cases are
replacing CFC chillers. Given that in many cases these appliances have
expected lifespans of more than 20 years, it will be some time before
significant amounts of HCFC-123 are recovered and recycled or
reclaimed. In future rulemakings, however, EPA may estimate the amount
of the total need for HCFC-123 that can be met through recycling and
reclamation. As the HCFC-123 market matures, the refrigerant recovery,
recycling, and reclamation requirements in 40 CFR part 82 subpart F
will result in a greater amount of reusable HCFC-123.

E. Other HCFCs

    As a result of EPA's allocation process, which is largely based on
projected 2010-2014 need for HCFC-22 and HCFC-142b, minus an amount of
HCFC-22 that is assumed to be recycled or reclaimed, the total
allocation is lower than the aggregate HCFC cap. EPA recognizes that
there could be some additional need for HCFCs not specifically included
in this rule. While some niche applications in the U.S. use other
HCFCs, such as HCFC-21, EPA is not aware of additional need for
production or import of these substances at this time, as adequate
amounts appear to be in inventory. However, EPA is not foreclosing the
possibility of additional production or import for these niche uses.
Also, some amount of HCFC-141b will likely continue to be produced or
imported via the petition process during the 2010-2014 control periods.
EPA believes that there is sufficient room under the cap for such
continued production and import. The current regulations at 40 CFR
82.15 ban the production and import of class II substances for which
EPA has apportioned baseline production and consumption allowances in
excess of allowances held by the producer or importer, but do not ban
the production and import of class II substances for which EPA has not
apportioned baseline production and consumption allowances. This rule
does not alter the current regulations in that respect. The producer or
importer of an HCFC that is not subject to the allowance system would
be required to report to EPA consistent with the existing recordkeeping
and reporting requirements. If necessary, EPA could amend the
regulations to set and apportion baselines and issue allowances for
these HCFCs. Therefore, retaining room under the cap provides the
benefit of accounting for unanticipated growth in HCFCs that do not
have allocations or other unforeseen events. However, those reasons are
not why EPA is reserving room under the cap. Instead, it is the result
of EPA's bottom-up approach of allocating allowances for HCFC-22 and
HCFC-142b according to the modeled demand for virgin and reclaimed
material.
    EPA received two comments that reserving 22% of the total HCFC cap
for ``other'' HCFCs is too excessive, given that HCFC-22 will have the
greatest servicing needs and projected shortages. EPA agrees that the
greatest need for all HCFC in the future will be for servicing existing
HCFC-22 equipment. However, as discussed in Section VI.B.1., EPA
carefully analyzed such needs through multiple iterations of its
Servicing Tail report to determine an allocation of HCFC-22 necessary
to avoid shortages. EPA believes that it is appropriate to allocate
HCFC-22 based on demand (and considering the role of reclamation)
because this will help the transition to the 2015 phase-down step, when
the cap is reduced from 25% to 10% of baseline. While EPA is not
``reserving'' room under the cap for these other HCFCs, the effect of
allocating allowances based on need is additional room under the
aggregate HCFC cap for any HCFCs that EPA has not specifically included
in Sec. Sec.  82.16, 82.18, and 82.19.
    One commenter encouraged EPA to retire the remaining allowances
that have not been allocated under this rulemaking. This commenter was
concerned that if EPA maintained a reserve, the market will look to the
Agency to allocate additional HCFC-22 allowances in the future instead
of seriously pursuing recovery and reclamation. EPA disagrees that the
unallocated room under that cap constitutes a set of allowances that
can be ``retired''; it simply represents the differential between the
cap and the amount of allowances allocated. As stated earlier, room
under the cap provides for potential market penetration of other HCFCs
that do not have allocations. Furthermore, the Agency is not
maintaining a ``reserve'' to be allocated at a future time but rather
is maintaining an accounting of the total U.S. HCFC production and
consumption to ensure compliance with the HCFC cap. EPA does not intend
to allocate the extra amount under the cap, except under unforeseen
extenuating circumstances, because it is important to promote greater
use of recycled and reclaimed material in anticipation of the next
phasedown step.

V. Article 5 Allowances

    Under the Montreal Protocol, industrialized countries and
developing countries have different schedules for phasing out ODS
production and consumption. Developing countries operating under
Article 5, paragraph 1 of the Montreal Protocol in most cases have
additional time in which to phase out ODS. Recognizing that it would be
inadvisable for developing countries to spend resources to build new
ODS manufacturing facilities to meet basic domestic needs for chemicals
they would ultimately phase out, the Parties to the Montreal Protocol
decided to permit a small amount of production in industrialized
countries, in addition to the amounts otherwise permitted for such
countries under the relevant phaseout schedules, for export to meet the
basic domestic needs of developing countries. As discussed above, at
the 19th Meeting of the Parties (MOP) to the Montreal Protocol held in
September 2007, the Parties agreed to a revised phaseout schedule for
both Article 5 and non-Article 5 Parties. Included with the changes to
the phaseout schedule were changes to the amount of production in
industrialized countries that would be permitted to meet the basic
domestic needs of Article 5 Parties. These changes were in keeping with
the more stringent phaseout schedule for developing countries.
Previously, the Montreal Protocol had allowed non-Article 5 countries
to produce at 15 percent of their baseline levels for export to Article
5 countries from 2016, the year in which Article 5 countries were
required to freeze consumption, through the terminal phaseout in 2040.
At the 19th MOP the Parties agreed that to satisfy basic domestic needs
of Article 5 countries,

non-Article 5 Parties would be allowed to produce up to 10 percent of
baseline levels until 2020. For the period after 2020, the Parties
agreed to consider further reduction of the production for basic
domestic needs no later than 2015 (UNEP/Ozl.Pro.19/7 Decision XIX/6:
Adjustments to the Montreal Protocol with regard to Annex C, Group I,
substances (hydrochlorofluorocarbons)).
    Section 605(d)(2) of the Clean Air Act states that notwithstanding
the restrictions on production, use, and introduction into interstate
commerce set forth in paragraphs (a) and (b) of that section, EPA ``may
authorize the production of limited quantities of a class II substance
in excess of the quantities otherwise permitted under such provisions
solely for export to and use in developing countries that are Parties
to the Montreal Protocol, as determined by the Administrator'' (42
U.S.C. 7671d(d)(2)). EPA's implementing regulation at 40 CFR 82.18(a)
provides for the allocation of ``Article 5 allowances'' for production
of specified HCFCs solely for export to Article 5 Parties to meet those
countries' basic domestic needs. Currently under Sec.  82.18(a) an
entity that is apportioned baseline HCFC production allowances receives
an amount of Article 5 allowances equal to 15 percent of that
production baseline. The Article 5 Parties are listed at 40 CFR part
82, subpart A, appendix C, annex 4. In the proposed rule, EPA cited
Appendix E of the same subpart which contained a less current list of
Article 5 Parties than the one at Appendix C, Annex 4. In this final
rule, EPA is updating both appendices to accurately reflect decisions
taken to date under the Montreal Protocol regarding the developing
country status of particular Parties.
    EPA is amending Sec.  82.18(a) to reflect the adjustment to the
Montreal Protocol at the 19th MOP and to ensure that the United States
does not permit a level of production to meet basic domestic needs in
Article 5 Parties that exceeds the level specified in the adjustments.
EPA is taking this action in accordance with section 606(a)(3) of the
Clean Air Act. EPA also is making minor changes to Sec.  82.15(c) to
clarify that HCFCs produced with Article 5 allowances may be introduced
into interstate commerce if destined for export.
    Prior to this final rule, Sec.  82.18(a)(1) stated that a person
apportioned baseline production allowances for specified HCFCs is also
apportioned Article 5 allowances for the specified HCFCs equal to the
following percentages of that person's baseline: For controls periods
through 2014, 15 percent; for controls periods from 2015 through 2029,
10 percent; and for control periods from 2030 through 2039, 15 percent.
While the Montreal Protocol previously permitted production for the
basic domestic needs of Article 5 countries equal to 15 percent of the
U.S. production baseline for each control period until 2040, section
605(d)(2)(B) of the Clean Air Act requires that for the period between
2015 and 2030 the production for Article 5 countries be limited to 10
percent of baseline. Thus, EPA regulations at Sec.  82.18(a) prior to
this rule restricted Article 5 allowances to 10 percent of production
baseline from January 1, 2015, through December 31, 2029, but otherwise
allowed the full 15 percent previously permitted by the Protocol.
    In this final rule, EPA is adopting the approach in the proposed
rule by amending Sec.  82.18(a) to allocate Article 5 allowances for
HCFC-22, HCFC-142b, and HCFC-141b at 10 percent of a person's baseline,
for the period 2010-2019, with no Article 5 allowances beyond 2019,
consistent with the recent changes to the Montreal Protocol. Prior to
2015, production for export to Article 5 Parties of HCFC-123, HCFC-124,
HCFC-225ca, or HCFC-225cb would not require expending Article 5
allowances.
    Given that Article 2F of the Montreal Protocol, as adjusted in
September 2007, does not provide for additional HCFC production to meet
the basic domestic needs of Article 5 Parties past 2019, EPA is
discontinuing the Article 5 allowance provision for all HCFCs at the
end of 2019 in the absence of further adjustments to the Protocol. If
the Parties were to adjust the basic domestic needs provisions of the
Protocol to permit continued production for such needs past 2019, EPA
would evaluate that adjustment and consider issuing a regulation to
extend the availability of Article 5 allowances for basic domestic
needs to the extent consistent with the Clean Air Act. Any such
regulation would include production levels and schedules that were at
least as stringent as those specified in the Montreal Protocol, as
adjusted.
    EPA did not receive adverse comments regarding the revisions to
Sec.  82.18(a).

VI. Accelerated Use Restrictions Under CAA Section 605

    In addition to allocating HCFC allowances, this rulemaking
completes the implementation of section 605 of the Clean Air Act.
Section 605(a) of the Clean Air Act is a self-effectuating ban on both
the introduction into interstate commerce and use of class II
substances. Section 605(a) reads:
    ``Effective January 1, 2015, it shall be unlawful for any person to
introduce into interstate commerce or use 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.
    As used in this subsection, the term `refrigerant' means any class
II substance used for heat transfer in a refrigerating system.''
    Although section 605(a) is effective by its own terms, Congress
directed EPA in section 605(c) to promulgate regulations restricting
the use of class II substances in accordance with section 605. In this
action, EPA is adding regulatory language to reflect the section 605
provisions on introduction into interstate commerce and use of class II
substances.
    The provisions governing HCFC-22 and HCFC-142b promulgated as part
of the 1993 phaseout rule were intended ``to prohibit the use of the
chemicals (virgin material only) for any use except as a feedstock or
as a refrigerant in existing equipment as of January 1, 2010'' (58 FR
15028). As promulgated, however, the regulatory prohibitions did not
control use directly, but instead banned production and import for most
uses. Through this action, EPA is adding the direct use prohibitions
contemplated in the 1993 phaseout rule as well as the corresponding
prohibitions on introduction into interstate commerce contained in
section 605(a). Consistent with the accelerated schedule adopted in the
1993 phaseout rule, the section 605(a) restrictions on use and
introduction into interstate commerce apply to HCFC-22 and HCFC-142b
beginning in 2010 and to all other HCFCs beginning in 2015.\7\ The
section 605(a) restrictions for 2010 also apply to blends containing
HCFC-22 or HCFC-142b. The restrictions on production and import, both
in general and for particular uses, that were promulgated in 1993 are
at 40 CFR 82.16(b) through (g). EPA is not changing these provisions in
this action. However, EPA is further implementing

section 605(a) by codifying a restriction at Sec.  82.15 on
introduction into interstate commerce and use and by clarifying its
interpretation of the statutory requirements. Limited exceptions to the
restrictions on the introduction into interstate commerce and use are
discussed in detail in Section VI.D.
---------------------------------------------------------------------------

    \7\ The petition process for HCFC-141b exemption allowances at
82.16(h) would sunset in 2015, since HCFC-141b is not used as a
refrigerant and thus does not meet the criteria established by
605(a) for an exception from the statutory ban on use. EPA intends
to revise Sec.  82.16(h) when it addresses the control periods 2015-
2019.
---------------------------------------------------------------------------

    The existing regulatory provisions at Sec.  82.16(c) prohibit the
production or import of HCFC-22 and HCFC-142b in 2010 and beyond for
purposes that are not exempted in that section, consistent with section
605(a).\8\ In this action EPA is amending Sec.  82.15 to add
prohibitions that specifically preclude any person from introducing
into interstate commerce or using (according to the interpretations
below) any HCFCs for purposes that are not consistent with section 605.
EPA believes that this is appropriate because section 605(a)
specifically bans use and introduction into interstate commerce. Under
the current regulatory structure the prohibitions apply to the
production and import of the HCFC compounds as bulk chemicals. The new
provisions promulgated in this action restrict uses of bulk chemicals,
and thus apply to use of HCFCs by manufacturers of appliances and other
products containing HCFCs, as well as use of HCFCs by anyone who
services such products.
---------------------------------------------------------------------------

    \8\ As discussed earlier in this action, there is an additional
exception for production to meet the basic domestic needs of Article
5 countries, consistent with section 605(d).
---------------------------------------------------------------------------

    The provisions relating to introduction into interstate commerce
and use also apply to blends containing HCFC-22 or HCFC-142b.\9\ Bulk
gases include both neat HCFC-22 (or HCFC-142b) and blends containing
HCFC-22 (or HCFC-142b). Blends of refrigerants are substances, not
products, and thus are subject to the restrictions that apply to non-
blended substances.
---------------------------------------------------------------------------

    \9\ Listed here with both the trade name and ASHRAE number where
available, they include, but are not limited to the following: MP-39
(R-401A), MP-66 (R-401B), MP-52 (R-401C), GHG (R-406A), FX-56 (R-
409A), Hot Shot (R-414B), GHG-X4 (R-414A), Choice Refrigerant (R-
420A), Freeze 12, Free Zone, GHG-HP, GHG-X5, HP-80 (R-402A), HP-81
(R-402B), FX-10 (R-408A), R-411A, R-411B, G2018C, R-403B, NARM-502.
---------------------------------------------------------------------------

    This action also revises the regulations on export production
allowances at 40 CFR 82.18(b) to ensure consistency with section
605(a). Export production allowances allow an HCFC that is subject to a
domestic phaseout to be produced for export to Parties that continue to
allow imports of that substance. Prior to this rulemaking, entities
holding baseline production allowances for HCFC-141b were allocated
export production allowances equal to 100 percent of their baseline
production allowances until December 31, 2029. To avoid a conflict with
the section 605(a) restrictions on use and introduction into interstate
commerce, EPA is discontinuing this provision on December 31, 2009.
Under the definition finalized in this rule, ``introduction into
interstate commerce'' includes release of HCFCs by the domestic
manufacturer for distribution and transport prior to export. HCFC-141b
is not used as a refrigerant and has not been used in transformation
processes; therefore, the current export production allowances would
have no remaining purpose with the implementation of the 605(a) use
ban. EPA is not allocating export production allowances for any other
HCFCs; however, as discussed in Section V, EPA is allocating Article 5
allowances for meeting the basic domestic needs of developing
countries. EPA received no negative comments on the discontinuation of
export production allowances.

A. Definition of ``Introduction Into Interstate Commerce''

    Since the promulgation of the 2003 allocation rule, EPA has
received questions from stakeholders regarding the Agency's
interpretation of section 605(a). Based on these questions, EPA has
included in this final rule a discussion of how it interprets that
section, particularly the terms ``introduction into interstate
commerce'' and ``use.'' This action promulgates a definition of
interstate commerce to facilitate the implementation of section 605(a).
    Section 605(a) states that ``it shall be unlawful for any person to
introduce into interstate commerce * * * any class II substance''
unless certain exceptions apply. Section 611 (Labeling) contains a
similar phrase, noting that certain products shall not be ``introduced
into interstate commerce'' unless the product bears a clearly legible
and conspicuous warning label. EPA's definition of interstate commerce
for section 611 purposes appears at 40 CFR 82.104(n):
    Interstate commerce means the distribution or transportation of any
product between one state, territory, possession or the District of
Columbia, and another state, territory, possession or the District of
Columbia, or the sale, use or manufacture of any product in more than
one state, territory, possession or District of Columbia. The entry
points for which a product is introduced into interstate commerce are
the release of a product from the facility in which the product was
manufactured, the entry into a warehouse from which the domestic
manufacturer releases the product for sale or distribution, and at the
site of United States customs clearance.
    After considering this regulatory definition, and noting the
similarities in the statutory language, EPA is amending Sec.  82.3 to
include a definition of ``interstate commerce'' that is identical to
the definition at Sec.  82.104(n), except that the phrase ``controlled
substance'' appears where the Sec.  82.104(n) definition uses the term
``product.'' This is because section 605(a) addresses bulk substances
rather than products. Adding a definition of interstate commerce to
Sec.  82.3 clarifies the applicability of the section 605(a)
provisions. Using a definition that is already well-established in the
labeling program minimizes stakeholder confusion.
    Under this definition, ``introduction into interstate commerce''
includes release of HCFCs by the domestic manufacturer of those HCFCs
for distribution and transport prior to export. The section 605(a) ban
thus has relevance to the export of HCFCs--limiting exports to HCFCs
that are ``used, recovered, and recycled'' (section 605(a)(1)); HCFCs
that are destined for transformation (section 605(a)(2)); HCFCs that
will be used as a refrigerant in appliances manufactured before the
date specified in the regulations (section 605(a)(3)); and HCFCs that
will be exported to Article 5 Parties (section 605(d)(2)). As a result,
HCFC exports to non-Article 5 Parties are limited as of January 1,
2010, for HCFC-22 and HCFC-142b (and blends containing those compounds)
and January 1, 2015, for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb
(and blends containing those compounds).
    One commenter expressed concern about its ability to export HCFC-
22, HCFC-142b, and blends thereof beginning January 1, 2010, and HCFC-
123, HCFC-124, and blends thereof beginning January 1, 2015, to non-
Article 5 countries. The commenter stated its belief that the exception
in section 605(a)(3) for use ``as a refrigerant in appliances
manufactured prior to January 2020'' is not limited to appliances
within the borders of the United States, and thus export of HCFCs
should be allowed to service such appliances outside the United States.
The commenter also provided regulatory language to support this idea,
suggesting EPA add to both 82.15(g)(2) and 82.15(g)(3) the language
``for other export as allowed under the provisions of the Montreal
Protocol.'' EPA agrees that the exemptions provided in 605(a) are not
limited to the boundaries of the

United States and reiterates that exports of HCFC-22 and HCFC-142b to
non-Article 5 Parties are allowable if those HCFCs (1) are used,
recovered, and recycled, (2) will be used for transformation, or (3)
will be used as a refrigerant in appliances manufactured before January
1, 2010. Because the current regulatory language does not prohibit such
exports, EPA does not believe it is necessary to change the regulatory
text as suggested by the commenter.
    Three commenters stated that the definition of ``introduction into
interstate commerce'' penalizes domestic manufacturers by effectively
banning the export of pre-charged appliances containing HCFC-22 to
Article 5 countries. One of these commenters requested that EPA treat
pre-charged equipment intended for export to Article 5 countries in the
same fashion as it does the export of bulk refrigerant. Specifically,
EPA should allow the factory to charge equipment intended for export
and count that usage of HCFC-22 against the total production cap.
Another commenter said the export ban to Article 5 countries could
detrimentally affect its partners' ability to fund the research and
development of new technologies for the domestic market. This commenter
stated that this export ban is contrary to the spirit of the Montreal
Protocol. The third commenter stated that this ban would only cost U.S.
manufacturing jobs without yielding an environmental benefit.
    The inability to export pre-charged appliances derives from the
section 605(a) prohibition on use of HCFCs, since manufacturers would
not be able to use HCFC-22 to charge newly manufactured appliances and
thus could not manufacture such equipment for either domestic or
foreign markets. At the point of entry into interstate commerce, any
appliances containing HCFC refrigerant would be covered under
provisions in the Pre-Charged Appliances rule (discussed in conjunction
with this rule in Section III of this preamble) regarding sale and
distribution in interstate commerce, not under the section 605(a)
introduction into interstate commerce provision, which pertains to
substances rather than products. Therefore, the comment suggesting that
EPA allow factories to charge equipment intended for export and to
count that usage of HCFC-22 against the total production cap is not
consistent with EPA's interpretation of the 605(a) use ban, as the use
of the bulk HCFC-22 to produce the new equipment is prohibited under
605(a). Furthermore, export of any new appliances and components
containing HCFC-22 is prohibited under the Pre-Charged Appliances rule.
    Section 605(d)(2) states that notwithstanding 605(a) and (b), which
contain the use and production restrictions on HCFCs, EPA may authorize
production of limited quantities of HCFCs ``solely for export to and
use in developing countries.'' The restrictions in section 605(a) and
(b) pertain to bulk substances, not to products. In addition, section
605(d)(2) refers to HCFCs directly, and not to products containing
HCFCs. EPA interprets section 605(d)(2) as allowing production of these
ODS where the ODS themselves, as bulk substances, will be exported to
developing countries for use in those countries. EPA does not interpret
section 605(d)(2) as allowing use of HCFCs in U.S. product manufacture,
even where the products are destined for use in developing countries.
    EPA notes that export of appliances that do not contain an HCFC
refrigerant charge is legal under both this final allocation rule and
the pre-charged products rule. In addition, as noted above, EPA is not
prohibiting introduction of HCFCs into interstate commerce for the
purpose of export to Article 5 countries.

B. Interpretation of the Term ``Use''

    In addition to banning ``introduction into interstate commerce'' of
HCFCs, section 605(a) also bans the ``use'' of HCFCs. This section
discusses EPA's interpretation of the term ``use'' in section 605(a).
This discussion builds on EPA's 1993 rulemaking that prohibited
production and import of HCFC-22 and HCFC-142b for most uses as of
January 1, 2010.
    Section 605(a) states that ``effective January 1, 2015, it shall be
unlawful for any person to * * * use 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.
    As used in this subsection, the term `refrigerant' means any class
II substance used for heat transfer in a refrigerating system.''
    Interpretation of the term ``use'' is important for the proper
implementation of section 605(a). EPA carefully considered what the
term ``use'' means for purposes of section 605(a). EPA analyzed whether
``use'' in this context pertains to end-users and how this could affect
the public's continued operation of products such as refrigeration and
air conditioning equipment. EPA also evaluated whether section 605(a)
pertains only to manufacturing and servicing use. The three exemptions
to the use prohibition found in 605(a) were helpful to EPA's
understanding of what ``use'' means for purposes of that section.
    With regard to products containing HCFCs for non-refrigerant
purposes such as TXVs, sterilant mixtures, and products exempt from the
section 610 ban on nonessential products, EPA interprets the term
``use'' as relating to the manufacture (and where applicable, the
service) of those products, not the utilization of those products in
the hands of an end-user. By accelerating section 605(a), EPA
prohibited all ``use'' of virgin HCFC-22 and HCFC-142b (and blends
thereof) for purposes other than the two exempted in section 605(a)(2)
and (3) (i.e. transformation and as a refrigerant in appliances
manufactured before January 1, 2010) beginning January 1, 2010. For
example, HCFC-142b may no longer be used to blow foam, which was its
primary use prior to 2010. EPA notes that uses not covered in section
605(a)(2) and (3) could continue if the HCFC is used, recovered, and
recycled per section 605(a)(1). EPA received comments that HCFC-22
continues to be used in a sterilant blend and in thermostatic expansion
valves (TXVs). In this final rule, EPA is creating limited exemptions
from the accelerated use prohibition for these specific uses.
    With regard to HCFCs used as refrigerants, EPA interprets the term
``use'' to mean initially charging as well as maintaining and servicing
refrigeration equipment. Again, EPA does not read use to mean the
continued utilization of a finished product owned by an end user. The
three statutory exceptions in Section 605(a) inform EPA's understanding
of the term ``use.'' While these exceptions apply to the ``interstate
commerce'' ban as well as the ``use'' ban, the discussion below focuses
on the ``use'' aspects of the exceptions.
    The first exception, at section 605(a)(1), applies to class II
substances that have been ``used, recovered, and recycled.'' This
exception confirms EPA's understanding of the use ban as limited to the
manufacture and servicing of HCFC products. If the ban applied to the
use of HCFCs by a consumer, it might include the continued operation of
an appliance (e.g., a residential air conditioner) where an HCFC acts
as the refrigerant. Under this broad definition of ``use,'' there would
be an incentive for consumers to

hire servicing technicians to recover the HCFCs from appliances already
in their homes and businesses, to recycle the HCFCs for reuse, and to
charge the HCFCs back into the same appliances. These steps should not
be necessary for continued operation of installed equipment. However,
by taking these steps, consumers could avail themselves of the
exception for ``used, recovered, and recycled'' substances at section
605(a)(1). There would be no environmental benefit to following such a
procedure. There could even be an environmental detriment, given the
potential for losses of refrigerant during the recovery and recycling
process. EPA does not believe that Congress intended such a result.
Moreover, EPA believes that Congress intended to permit the continued
use of previously manufactured appliances, as indicated by the third
exception to the use ban (section 605(a)(3)). EPA did not receive
comments indicating that ``use'' should be understood to include use by
the end-user. Thus, EPA is not interpreting use in a way that would
result in shortening the useful lifetime of appliances that were
manufactured prior to the effective date of the use restriction. EPA
concludes that the section 605(a) ``use'' ban does not apply to a
consumer's operation of equipment that contains HCFCs. Rather, it
applies to the manufacture and servicing of equipment containing HCFCs.
EPA believes that Congress meant for the section 605(a)(1) exception to
allow the use of ``used, recovered, and recycled'' HCFCs in appropriate
instances by servicing technicians and reclaimers.
    EPA had proposed to interpret this exception to allow use of
reclaimed HCFCs by manufacturers, as well. However, in the Pre-Charged
Appliances rule EPA is prohibiting sale and distribution in interstate
commerce of pre-charged appliances and components manufactured after
January 1, 2010, including any such appliances and components charged
with reclaimed material. Equipment charged with reclaimed HCFCs is
covered by the final pre-charged appliance prohibition due to the
difficulty of distinguishing between new and reclaimed material. The
prohibition on sale and distribution of the appliances effectively ends
the use of all HCFCs, including reclaimed HCFCs, in the manufacture of
the appliances. EPA believes this outcome is appropriate because it is
not practicable to achieve the Congressional goal of ending use of
virgin HCFCs in the manufacture of new appliances without
simultaneously banning use of reclaimed HCFCs in pre-charged
appliances. Further information can be found in the preamble and
response to comments document in the docket to that rule.
    The second exception, at section 605(a)(2), refers to HCFCs that
are ``used and entirely consumed (except for trace quantities) in the
production of other chemicals.'' Similar language appears as an
exception to the definition of ``production'' at section 601(11). EPA
regulations refer to this type of use as ``transformation'' (see the
definition of ``transform'' at 40 CFR 82.3). The current phaseout
schedule for HCFC production and consumption already includes a
transformation exception within Sec.  82.16. EPA did not receive any
comments on this issue. EPA is implementing the transformation
exception in section 605(a)(2) consistent with the transformation
exception to the HCFC production phaseout.
    The third exception, at section 605(a)(3), provides for HCFCs that
are ``used as a refrigerant in appliances manufactured prior to January
1, 2020.'' EPA reads this exception as allowing appliances, as defined
in the CAA, manufactured before the specified date to be serviced with
virgin HCFCs. (The meaning of the term ``manufactured'' is discussed
below.) This is consistent with the legislative history of the
exception. The predecessor to section 605(a)(3) in the Senate bill was
an exception for ``other regulated substances'' (such as HCFCs) that
are ``used to maintain and service household appliances or commercial
refrigeration units manufactured prior to January 1, 2015.'' The House
amendment contained identical language. While the language that emerged
in the Conference Agreement is less specific, we can infer that this
exception was intended to address, at a minimum, maintenance and
servicing needs.
    Based on these three exceptions to the ban, EPA interprets the term
``use'' in section 605(a) to mean, with regard to HCFCs used as
refrigerants, initially charging as well as maintaining and servicing
refrigeration equipment. Any finished product that is owned by end
users may continue to be utilized. As written, the section 605(a)(3)
exception would permit some newly manufactured appliances (i.e., those
manufactured prior to January 1, 2020) to be charged with virgin HCFCs
following the effective date of the use ban. In the 1993 phaseout rule,
however, EPA banned production and import of HCFC-22 and HCFC-142b,
effective January 1, 2010, for use in equipment manufactured after
January 1, 2010. EPA also indicated in the preamble to that rule that
it intended to ban use of virgin HCFC-22 and HCFC-142b in such
equipment. Consistent with decisions made in the 1993 rule, EPA is
applying the section 605(a)(3) exception such that virgin HCFC-22 and
HCFC-142b, and blends containing HCFC-22 or HCFC-142b, may be used for
servicing and maintenance of appliances manufactured before 2010 but
may not be used in the manufacture of equipment after January 1, 2010.
EPA is taking this action under the authority of section 606 of the
Clean Air Act. EPA notes that allowable servicing could entail a wide
range of activities including replacing parts or components. Per the
accompanying Pre-Charged Appliances rule, these parts and components
may contain HCFCs (including virgin material) if manufactured prior to
January 1, 2010, but must be shipped without HCFC (i.e. dry or with a
nitrogen holding charge) if manufactured after January 1, 2010. For the
low-ODP refrigerants covered by section 82.16(d) (HCFC-123, HCFC-124,
HCFC-225ca, and HCFC-225cb), however, EPA is not accelerating the
January 1, 2015, effective date or the January 1, 2020, cutoff date in
section 605(a)(3). Thus, for these low-ODP refrigerants, virgin
material may be used as a refrigerant in appliances manufactured before
January 1, 2020. This will allow initial charging of appliances using
low-ODP HCFCs for a limited period following the effective date of the
use restriction as well as servicing and maintenance uses.
    Although EPA has not received comment on it, HCFC-22 and HCFC-142b,
both neat or in blends with other fluids, have also been used in a
broader range of products, including some products subject to, and
other products exempt from, the nonessential products ban at section
610 of the CAA. Section 610(d) includes a self-effectuating ban on the
sale of aerosol products and other pressurized dispensers, and plastic
foam products that are not insulating foam products that contain HCFCs.
EPA promulgated regulations that established a list of products
exempted from the nonessential products ban. These products, listed in
40 CFR 82.70, consist of lubricants, coatings, or cleaning fluids for
electrical or electronic equipment; lubricants, coatings, or cleaning
fluids used for aircraft maintenance; mold release agents used in the
production of plastic and elastomeric materials; spinnerette lubricants
and cleaning sprays used in the production of synthetic fibers;
document preservation sprays; portable fire extinguishing equipment
used for

non-residential applications; wasp and hornet sprays for use near high-
tension power lines; and foam insulation products (as defined in Sec.
82.62).
    While certain products containing HCFC-22, HCFC-142b, or blends
thereof, are exempt from the nonessential products ban, EPA reads
section 610 and section 605(a) together. By prohibiting use and
introduction into interstate commerce of HCFCs as bulk substances,
section 605(a) effectively prohibits the continued manufacture of any
products containing HCFCs (which qualifies as a type of ``use'') unless
specifically exempted in that section. None of the products exempt from
the section 610(d) nonessential products ban fall under the 605(a)
exemptions. Therefore, EPA clarifies here that such products are
prohibited from continued manufacture, unless manufactured with
recovered HCFCs. EPA believes that this will not impose any burden as
manufacturers of these products have transitioned to alternatives.
    Finally, EPA does not interpret ``use'' to include destruction,
recovery for disposal, discharge consistent with all other regulatory
requirements, or other similar actions where the substance is part of a
disposal chain. At the point disposal-related actions occur, other
statutory and regulatory provisions generally govern. For example,
Congress addressed the issue of disposal under section 608. EPA has
promulgated regulations to implement section 608 for appliances: These
safe disposal requirements are codified at 40 CFR part 82 subpart F. In
some instances, HCFCs may need to be introduced into interstate
commerce in order to reach an appropriate destruction facility.
Consistent with its interpretation of ``use,'' EPA is interpreting the
interstate commerce prohibition to exclude introduction into interstate
commerce for the purpose of destruction.

C. Interpretation of the Phrase ``Appliances Manufactured Prior To''

    The exception in section 605(a)(3) limits introduction into
interstate commerce and use to situations where the HCFC ``is used as a
refrigerant in appliances manufactured prior to'' the specified date.
EPA did not propose a definition of ``appliance'' specific to this
action as ``appliance'' is already defined in 40 CFR part 82, subpart
F, \10\ based on the definition provided in section 601 of the Clean
Air Act. Commenters requested clarification from EPA on what is an
appliance, therefore, to facilitate understanding of this issue EPA is
adding this same definition to Subpart A in 40 CFR 82.3. An appliance
is ``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.'' Many devices meet the section 601
definition of appliance. For example, commercial refrigeration includes
end uses such as retail food refrigeration and cold storage. Industrial
process refrigeration includes complex customized appliances used in
the chemical, pharmaceutical, petrochemical, and manufacturing
industries. This sector includes industrial ice machines, appliances
used directly in the generation of electricity, and ice skating rinks.
Other types of appliances include household refrigerators and freezers;
chillers; water coolers; vending machines; residential dehumidifiers;
and unitary systems including residential and light commercial heat
pumps. Appliances are separate from components, which are the
individual parts of an appliance, such as a condensing unit or line
set, that by themselves cannot function to provide a cooling effect. In
considering the meaning of ``manufactured,'' EPA has considered the
definition of appliance carefully, particularly evaluating at what
point a group of components become a manufactured appliance.
---------------------------------------------------------------------------

    \10\ See 40 CFR 82.152 which contains the definition of
``appliance'' as well as examples of types of appliances in the
definitions of ``commercial refrigeration,'' ``industrial process
refrigeration,'' and ``small appliances.''
---------------------------------------------------------------------------

    In the final rule, EPA is providing a definition of the term
``manufactured.'' This definition can also be found in the companion
Pre-Charged Appliances rule. The term manufactured ``for an appliance,
means the date upon which the appliance's refrigerant circuit is
complete, the appliance can function, the appliance holds a full
refrigerant charge, and the appliance is ready for use for its intended
purposes; and for a pre-charged appliance component, means the date
that such component is completely produced by the original equipment
manufacture, charged with refrigerant, and is ready for initial sale or
distribution in interstate commerce.''
    Small appliances, such as refrigerators and window air-
conditioners, thus are ``manufactured'' at the manufacturing facility.
For instance, an appliance that has been pre-charged with the desired
amount of refrigerant, 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) is
``manufactured'' when it is placed into the manufacturer's initial
inventory. Appliances used in commercial refrigeration and industrial
process refrigeration typically involve more complex installation
processes and may require custom-built parts and thus are considered
differently. Appliances that are field charged or have the refrigerant
circuit completed onsite, regardless of whether additional refrigerant
is added or not, are ``manufactured'' at the point when installation of
all of the components and other parts are completed and the appliance
is fully charged with refrigerant. Some components, such as condensing
units for split-system air conditioners, contain a refrigerant charge
from the factory but are then typically adjusted in the field at the
time the appliance is installed to account for different line sizes and
indoor unit configurations. EPA considers the ``manufacture'' of that
split-system similar to that for field-charged equipment; that is,
manufacture is not complete until the device is installed in the field
and fully charged. EPA clarifies that ``the date upon which the
appliance's refrigerant circuit is complete'' means the initial date,
and does not include any opening and re-closing of the refrigerant loop
as a result of servicing.
    EPA received thirteen comments regarding its interpretation of the
term ``manufacture.'' Commenters were primarily concerned with the
effect that this interpretation will have on inventory that is still
unsold after January 1, 2010. EPA discusses below its effort to
minimize the effect on existing inventory. Eight commenters recommended
that EPA define manufacture as the date the product, whether it is a
complete appliance or not, leaves the original equipment manufacturer's
(OEM) final assembly process, is packaged for shipment, and placed into
initial inventory. EPA believes the commenters' concern arises with how
the two terms ``appliance'' and ``manufacture'' are applied together.
Small appliances, i.e., devices that have a completed refrigerant
circuit, are fully charged, and are functional and ready for use at the
time they leave the factory are ``manufactured'' at the time they are
placed into initial inventory at the factory and are shipped as
complete ``appliances'' rather than as a set of components. In
contrast, appliances used in commercial refrigeration and industrial
process refrigeration are not placed in inventory or shipped as
complete ``appliances.'' In such cases, OEMs are manufacturing
components, not appliances. The point of manufacture of the commercial
or industrial process refrigeration

appliance occurs after the components have left the factory. EPA has
consistently stated its interpretation that individual components such
as condensers, evaporators, compressors, line sets, and valves in
themselves do not constitute an appliance. 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 to the
companion Pre-Charged Appliances rule noted that EPA provides similar
language on its refrigerant sales restriction factsheet (found at
(www.epa.gov/ozone/title6/608/sales/sales.html), which states 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.'' EPA defines
``pre-charged components'' in the Pre-Charged Appliances rulemaking. In
this HCFC allocation rule, EPA is clarifying that the appliance itself
is not manufactured until the component parts, whether pre-charged or
not, are fully installed and charged.
    Five commenters stated that the proposed interpretation would
negatively affect HVAC equipment used in commercial and residential
buildings (including modular buildings). For example, a situation could
arise where both the pre-charged condensing unit and indoor coil would
be produced and possibly shipped prior to January 1, 2010, but the
refrigerant loop would not be completed until after that date. As
described above, EPA believes that placement of components into initial
inventory or partial installation of certain components does not make
sense as a definition of manufacture for split systems or other such
appliances. In effect, what these commenters are requesting is that the
appliance be considered manufactured when all of its component parts,
or one specific part, are placed into initial inventory, not when those
various parts are combined into a functional appliance, as defined at
Section 82.152.
    Fourteen commenters expressed concern that EPA's interpretation of
manufacture will strand existing inventory of components and present a
financial burden to OEMs, distributors, and contractors holding that
equipment. EPA disagrees with the comment that inventory will have to
be scrapped or that there are no further uses of that equipment. First,
section 605(a) provides an exception to the use ban for used, recycled,
or reclaimed refrigerant. Thus, reclaimed refrigerant could be used to
charge components being installed in the field so as to manufacture a
completely new appliance so long as charging occurs at the installation
site rather than at the factory. Note that under the Pre-Charged
Appliance rule, components could not be shipped with a charge of HCFC-
22 or HCFC-142b, or blend thereof (even if reclaimed), but could be
charged with a nitrogen holding charge or shipped dry. Second, pre-
charged components manufactured before 2010 can be sold to service
existing equipment. For example, an HCFC-22 condensing unit that fails
after 2010 may be replaced with a similar HCFC-22 condensing unit that
was manufactured prior to January 1, 2010. There is no limitation on
whether the component contains virgin or reclaimed HCFC-22 or is
shipped dry in this instance as the component was manufactured prior to
January 1, 2010, and is being used for servicing rather than appliance
manufacture. These continued uses of existing equipment allow holders
of existing inventory to continue selling such equipment.
Manufacturers, however, are prohibited from producing and charging with
HCFC-22 components designed for use solely in the manufacture of new
HCFC-22 systems after December 31, 2009. Based on comments submitted to
this rule and made in prior stakeholder meetings, EPA does not
anticipate OEMs producing such components or systems after December 31,
2009.
    The continued sale of existing inventory will both reduce burden to
stakeholders and be protective of the environment. EPA considers
replacement of components as within the definition of servicing of
existing equipment. EPA's Vintaging Model takes into account repairs
such as these when modeling the lifetime of the appliance. Thus,
allowing replacement of components with existing inventory does not
change the estimated servicing demand. Furthermore, there may be no
overall benefit to the environment in requiring companies holding
existing equipment to scrap their inventory. In addition to the solid
waste generated, there is the potential for losses of refrigerant
during recovery and subsequent handling of the refrigerant.
    EPA also received comments requesting a limited waiver for HCFC-22
and HCFC-142b appliances that had been scheduled for use in projects,
such as construction projects, prior to January 1, 2010, but not yet
completed. Commenters provided a range of scenarios in which building
plans were established, but ground had not yet been broken, or
appliance components ordered but not yet installed. Commenters noted
that an increased financial burden would be borne by those who had made
``good faith'' attempts to adhere to the HCFC-22/HCFC-142b use ban
prior to 2010, 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. Commenters stated that EPA
should accommodate new installations specifying HCFC-22 or HCFC-142b
appliances that have entered into contracts, completed the bidding
process, or have received building code approval prior to January 1,
2010.
    In response to these concerns, EPA is granting flexibility in
limited instances where projects have begun but due to delays have not
yet been completed prior to January 1, 2010. EPA is adding to Sec.
82.15(g)(2) the following exception: ``Introduction into interstate
commerce and use of HCFC-22 is not subject to the prohibitions in
paragraph (g)(2)(a)) of this section if the HCFC-22 is * * * for use as
a refrigerant in appliances manufactured before January 1, 2012,
provided that the components are manufactured prior to January 1, 2010,
and are specified in a building permit or a contract dated before
January 1, 2010, for use on a particular project.'' EPA does not intend
to establish an across-the-board exemption to the phaseout period, but
is adjusting the accelerated section 605(a) phaseout to allow for
unforeseen delays in limited circumstances. In general, the Agency
feels that ample time has been granted to allow chemical, appliance,
and component manufacturers to phase out the manufacture of products
dependent on HCFC-22, HCFC-142b, and blends thereof that are not
intended to service existing installations. In 1993 EPA issued the
first rule banning the production of HCFC-22 and HCFC-142b for use in
equipment manufactured before January 1, 2010. Nonetheless, after
considering comments, EPA is granting some flexibility to address
particular circumstances affected by the definition of ``manufacture''
proposed in the December 23, 2008, proposal. EPA believes that a two
year grandfathering provision will provide sufficient time to those who
are bound by either a contract or building permit but facing

delays to complete the installation (i.e., ``manufacture'') of such
equipment.
    EPA recognizes that building permits and contractual arrangements
exist for construction projects that involve air-conditioning systems
that will not be ``manufactured'' (e.g., completion of the refrigerant
circuit) until after December 31, 2009. In response to comments
expressing this concern, this rule establishes a grandfathering
provision which allows appliances containing HCFC-22, HCFC-142b, or
blends thereof to be ``manufactured'' onsite for a particular project
between January 1, 2010, and December 31, 2011, if their components are
made prior to January 1, 2010, and specified for use at that project
under a building permit or contract dated before January 1, 2010. EPA
believes this will provide relief to the various concerns that were
expressed by stakeholders.
    EPA does not anticipate that this grandfathering will affect total
modeled demand. The Vintaging Model assumes that this equipment was
installed in 2009 and estimates servicing need based on 2009 as the
date of manufacture. If not installed in 2009 but rather installed in
subsequent years, the model already assumes it is installed, so the
total servicing demand is not affected, though it is shifted forward in
time. Thus, the model may underestimate actual annual demand from 2010
onward.

D. Exceptions to the Accelerated Use Restrictions

    In the proposed rule, EPA clarified its prior interpretation from
the 1993 phaseout rule (58 FR 15028) that the Agency was accelerating
the section 605(a) prohibition on use of virgin HCFC-22, HCFC-142b, and
blends thereof, except as a feedstock or as a refrigerant in existing
equipment as of January 1, 2010. The accelerated use ban derives from
EPA's authority under section 606 of the Clean Air Act to phase out the
use of class II substances more rapidly than the schedule set forth in
section 605. Under section 606, the Administrator is to accelerate the
schedule ``if based on the availability of substitutes for listed
substances, the Administrator determines that such more stringent
schedule is practicable, taking into account technological
achievability, safety, and other relevant factors.'' As discussed
above, EPA believes that alternatives are available for HCFC-22 and
HCFC-142b and therefore believes it is appropriate to accelerate the
schedule. However, EPA received comments that described niche
applications for HCFC-22. These two uses are for medical equipment and
for thermostatic expansion valves (TXVs). In those two instances, EPA
does not believe that the accelerated 605(a) ban is practicable,
because while alternatives exist, it is not feasible to implement them
immediately. In this final rule, EPA is exempting virgin HCFC-22 for
use in TXVs and for medical equipment from the 2010 accelerated ban on
introduction into interstate commerce and use.
    The existing regulations at 40 CFR 82.16(c) prohibit, beginning
January 1, 2010, the production and import of HCFC-22 for all uses
except for use in a process that results in their transformation or
destruction, for use as a refrigerant in equipment manufactured prior
to January 1, 2010, or for limited export. Therefore, these users have
had notice of the upcoming ban on production. However, EPA believes
that there is benefit in allowing for the continued use of already
produced material in these few specific non-refrigerant uses.
Therefore, under this rule EPA is exempting the use of HCFC-22 produced
prior to January 1, 2010, for TXVs and medical equipment. This limited
exception ends December 31, 2014, as that is the date upon which all
uses of HCFCs, except for those specifically enumerated in section
605(a), are banned.
1. Thermostatic Expansion Valves
    EPA received several comments regarding the effect the proposed
rule would have on the use and manufacture of thermostatic expansion
valves (TXV). A TXV is a hermetically sealed valve that uses a very
small amount of HCFC-22; one commenter said that they contain as little
as 3 grams of HCFC-22. TXVs increase the efficiency of air conditioning
and refrigeration equipment by carefully regulating the flow of
refrigerant in the refrigerant circuit. The HCFC-22 contained in a TXV
is separate from the HCFCs that act as refrigerants in the refrigerant
circuit. As such, one commenter stated that TXVs should be exempt from
regulation because the HCFC-22 charged in the TXV bulb does not provide
cooling effect. EPA believes the intent of this comment was to allow
for the continued sale of TXVs under EPA's companion Pre-Charged
Appliances rule. EPA agrees that the HCFC-22 sealed within TXVs is not
used for heat transfer purposes and not part of the refrigerant loop.
Since it is not used for heat transfer in a refrigeration system the
HCFC-22 used in TXVs is therefore not used as a ``refrigerant'' as
defined in section 605(a). Therefore, this use of HCFC-22 is not
exempted under section 605(a)(3).
    Under section 605(a), the manufacture of TXVs containing HCFC-22
and HCFC-142b could continue if the HCFC in the TXV is used, recycled,
or reclaimed.\11\ Commenters argued that reclaimed HCFCs would not be
appropriate for TXVs. They stated that virgin HCFC-22 has 100-200 ppmv
volatile impurities while the ARI Standard 700 allows a maximum of
5,000 ppmv volatile impurities in reclaimed refrigerant. Commenters
stated that the effects of these additional impurities are not yet
understood and the TXV industry has not yet analyzed the effects or
searched for alternatives to HCFC-22 in TXVs. Commenters told EPA that
they expect they could complete such research within two years. In the
meantime, however, they expressed concerns that not using an
appropriate valve could cause a system to run inefficiently and
possibly lead to catastrophic failure, with the associated possible
loss of ODS.
---------------------------------------------------------------------------

    \11\ EPA is not aware of any TXVs that use HCFC-142b; thus this
provision only addresses TXVs containing HCFC-22.
---------------------------------------------------------------------------

    One commenter argued against banning the sale of TXVs because they
said that any loss from a leaky valve would be less than the de minimis
loss associated with routine servicing. EPA disagrees with the
commenter's suggestion to consider providing a de minimis exception in
this instance. EPA has regulated many products that individually
contain small amounts of ozone-depleting substances, such as aerosols
and metered dose inhalers. While EPA agrees that a single TXV contains
a small amount of HCFC-22, the amount of HCFC contained within a single
product is not determinative of whether the total amount of HCFCs
contained in such products is trivial.
    EPA understands that the TXV manufacturers may not have been aware
of the effects this rulemaking would have and agrees relief is
appropriate to allow TXV manufacturers time to research appropriate
alternatives, including reclaimed material. Such alternatives include
cross-charge valves, which are valves that contain a different HCFC
from the refrigerant found in the refrigerant loop. These valves
currently exist but not all air-conditioning and refrigeration systems
are compatible with a cross-charge valve. Further research can also be
conducted to ascertain whether reclaimed HCFCs are suitable for use in
TXVs.
    As described above, EPA's interpretations of ``introduction into
interstate commerce'' and ``use'' do not affect products manufactured
prior to January 1, 2010. Therefore, existing

TXVs may be used as replacements in existing air-conditioning and
refrigeration equipment. Based on the comment that millions of TXVs are
used each year, EPA does not believe that the existing inventory can
meet the servicing demand of all remaining existing equipment. Nor does
EPA believe that production of additional TXVs could be increased so
shortly before January 1, 2010.
    The lack of a TXV could result in a system running less efficiently
or, in a worst case scenario, lead to compressor damage. EPA is
concerned that failing to ensure an adequate supply of TXVs will result
in the unintended consequence of removing existing equipment from
service faster than anticipated. While likely rare, EPA wants to avoid
the result of requiring existing equipment owners to have to replace an
entire system due to the unavailability of an inexpensive valve.
Therefore, this final rule allows for the introduction into interstate
commerce and use of HCFC-22 produced prior to January 1, 2010, to be
used until January 1, 2015, for the manufacture of TXVs.
2. Medical Equipment
    Commenters to this rule also informed EPA that two companies
continue to use a product containing ethylene oxide, HCFC-124, and
HCFC-22 to sterilize medical equipment. One is a major manufacturer of
intraocular lenses that are surgically implanted into the eye to treat
cataracts. The other reprocesses costly heart catheters that were once
discarded after a single use. After the close of the comment period,
EPA received comment that another company continues to use a
refrigerant blend containing HCFC-22 in a medical equipment device that
provides therapy for women suffering from menorrhagia (excessive
bleeding) by reducing menstrual flow. While this equipment uses HCFC-22
in a refrigerant blend, it is not an ``appliance'' under the Clean Air
Act. Under the section 601(1) definition of ``appliance,'' the device
must be ``used for household or commercial purposes, including any air
conditioner, refrigerator, chiller, or freezer.'' This device is used
for medical purposes and does not provide comfort cooling or
refrigeration. Beginning in 2010 it would be unlawful for the chemical
producer to introduce the HCFC-22 into interstate commerce and for
medical companies to use the HCFC-22 in their manufacture of medical
equipment.
    The two companies began transitioning from the blend containing
HCFC-22 to pure ethylene oxide but they are currently two to four years
away from fully implementing that alternative. Pure ethylene oxide, a
SNAP-approved non-ozone-depleting compound, is explosive and must be
used in specially designed and constructed facilities. Once the
facilities are constructed, they must then be approved by the Food and
Drug Administration (FDA) before they can begin manufacturing medical
devices. Thus, while an alternative is approved for sterilant use,
these two companies are still in the process of constructing and
receiving approval for new facilities which would allow them to
transition to that alternative.
    EPA agrees with the commenter that the use of recovered and
reclaimed HCFC-22 as a component of a sterilant is not a viable
solution for sterilizing medical equipment. First, reclaimed HCFC-22 is
purified according to Air-Conditioning, Heating, and Refrigeration
Institute (AHRI) standards. The ARI Standard 700, among other things,
requires that reclaimed HCFC-22 be 99.5% pure before being resold. This
standard was designed to ensure that refrigeration equipment will work
equally well regardless of whether the HCFC-22 is reclaimed or virgin.
This standard does not consider medical uses of HCFC-22, where a 0.5%
contamination level could have deleterious health effects. In addition,
because reclaimed HCFC-22 is recovered from a variety of sources, the
nature and the composition of the contaminants are varied and unknown.
By contrast, commenters have told EPA that the contaminants in virgin
HCFC-22 are constant and known because the source and production
methods remain the same. Therefore, these contaminants have been
screened for any medical effects and accounted for in the FDA approval
of the sterilants for that medical use.
    After the close of the comment period, EPA also heard from a
manufacturer of medical equipment that contains HCFC-22 in a
refrigerant blend and is used to ablate endometrial tissue. This
company explained that it has taken significant steps to replace the
HCFC-22 blend with an alternative refrigerant and was on schedule to
have the replacement approved to be used in the medical device by the
Underwriters Laboratory (UL) but the UL approval will not take place in
2009. This company requested a one-year exemption from the HCFC-22 use
restriction, giving it enough time to complete the UL approval process.
    EPA believes that an exception for the medical equipment described
above is reasonable. First, such an exception is the type that was
contemplated by Congress when writing the Clean Air Act. Section 605(d)
authorizes EPA and FDA, in consultation, to allow the limited
production and use of class II substances for medical devices after the
statutory phaseout date of 2015. The existing regulation at 40 CFR
82.15(f) is reserved for a potential future exception for medical
devices under Section 605(d). EPA is not invoking its authority under
section 605(d) to create the exception for medical devices in this
final rule because section 605(a) does not require a use phaseout until
2015. Nevertheless, EPA finds this exemption illustrative of the
importance that Congress placed on medical uses. EPA is not inclined to
create an exception for medical uses of HCFC-22 under section 605(d)
when it issues allocations for the 2015-2019 control periods because
EPA expects it will be practicable to implement alternatives by 2015.
Based on the comments received in this rule, the few remaining users of
HCFC-22 for medical purposes have plans in place to transition to
alternatives prior to 2015.
    Second, this exception will not have any adverse effects on the
stratospheric ozone layer. EPA is limiting this exception to HCFC-22
that was produced under consumption allowances expended prior to
January 1, 2010. The existing regulatory text in section 82.16(c) does
not allow for HCFC-22 production beginning in 2010 for these sterilant
uses and this use exemption would not change those provisions.
Therefore, this exception will not result in additional production. EPA
finally notes that the total volume of HCFC-22 needed for this use is
small. The three companies estimate that only 57,000 kg of HCFC-22 will
be needed between 2010 and the end of 2014.

IV. 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.'' Accordingly, EPA
submitted this action to the Office of Management and Budget (OMB) for
review under EO 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.
    EPA did not conduct a specific analysis of the benefits and costs
associated with this action. Many previous analyses provide a wealth of
information on the costs and benefits of the U.S. HCFC phaseout
including:
     The 1993 Addendum to the 1992 Phaseout Regulatory Impact
Analysis: Accelerating the Phaseout of CFCs,

Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.
     The 1999 Report Costs and Benefits of the HCFC Allowance
Allocation System.
     The 2000 Memorandum Cost/Benefit Comparison of the HCFC
Allowance Allocation System.
     The 2005 Memorandum Recommended Scenarios for HCFC
Phaseout Costs Estimation.
     The 2006 ICR Reporting and Recordkeeping Requirements of
the HCFC Allowance System.
     The 2007 Memorandum Preliminary Estimates of the
Incremental Cost of the HCFC Phaseout in Article 5 Countries.
     The 2007 Memorandum Revised Ozone and Climate Benefits
Associated with the 2010 HCFC Production and Consumption Stepwise
Reductions and a Ban on HCFC Pre-charged Imports.

A memorandum summarizing these analyses is available in the docket.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden.
EPA already requires recordkeeping and reporting requirements and
through this action is not proposing to amend those provisions.
However, the Office of Management and Budget (OMB) has previously
approved the information collection requirements contained in the
existing regulations at 40 CFR part 82 subpart A under the provisions
of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned
OMB control number 2060-0498. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this proposal on small
entities, a small entity is defined as: (1) A small business as defined
by the Small Business Administration's (SBA) regulations at 13 CFR
121.201; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
    This action will affect the following categories:

----------------------------------------------------------------------------------------------------------------
                  Category                     NAICS code       SIC code        Examples of regulated entities
----------------------------------------------------------------------------------------------------------------
Industrial Gas Manufacturing...............          325120            2869  Fluorinated hydrocarbon gases
                                                                              manufacturers and reclaimers.
Other Chemical and Allied Products Merchant          424690            5169  Chemical gases and compressed gases
 Wholesalers.                                                                 merchant wholesalers.
Air-Conditioning and Warm Air Heating                333415            3585  Air-Conditioning Equipment and
 Equipment and Commercial and Industrial                                      Commercial and Industrial
 Refrigeration Equipment Manufacturing.                                       Refrigeration Equipment
                                                                              manufacturers.
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.
Plumbing, Heating, and Air-Conditioning              238220      1711, 7623  Central air-conditioning system and
 Contractors.                                                                 commercial refrigeration
                                                                              installation; HVAC contractors.
----------------------------------------------------------------------------------------------------------------

    After considering the economic impacts of the final rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. EPA is not
changing the methodology for the 2010-2014 control periods. Instead,
EPA is continuing to allocate production and consumption allowances
using the same approach currently used for control periods 2003-2009.
Thus the 13 small businesses eligible for allowances for HCFC-22 and
HCFC-142b identified in that rulemaking (68 FR 2845) are still eligible
for allowances under this rule. In addition, small businesses eligible
for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb allowance
allocations using the same methodology, are eligible for allowances.
EPA is not modifying the recordkeeping or reporting provisions and thus
will not have any impact on the burden to these businesses.
    While EPA does not believe this action has a significant economic
impact on a substantial number of small entities, nonetheless, EPA
continues to try to reduce further any impacts on small entities. With
respect to the allowance allocation system as a whole, EPA is
continuing to provide flexibility. Consistent with the methodology for
establishing baselines for HCFC-141b, HCFC-22, and HCFC-142b, while
small entities will be on the same footing as larger entities, EPA is
again using the highest year of consumption. EPA is also limiting
consideration of company-specific baseline adjustments to reflect only
permanent inter-company transfers made prior to June 16, 2008, to avoid
skewing baselines to entities with ample resources or access to
information. The ability to transfer allowances among entities provides
the greatest flexibility for small entities to manage their allocation.
As noted in the 2003 allocation rule (68 FR 2846), unlike with the
class I substances, there is no restriction to limit inter-pollutant
transfers to groups of substances. Both inter-pollutant and inter-
company transfers of allowances are possible. A small entity can opt
for short-term or long term decisions concerning the allowances it
holds after evaluating its place in the overall market.
    EPA has also tried to reduce the impact to small businesses from
the section 605(a) provisions restricting the introduction into
interstate commerce and use of HCFC-22 and HCFC-142b. Commenters
expressed concern that under EPA's interpretation of the term
``manufactured,'' components that are still in inventory on January 1,
2010, would be stranded. In this final rule, EPA is clarifying that
distributors and contractors, typically small businesses, may continue
to sell such equipment in order to service existing equipment that uses
HCFC-22. Such servicing includes the replacement of whole condensing
units, compressors, or line sets. While the proposed rule prohibited
the manufacture of new appliances containing HCFC-22, HCFC-142b, or
blends thereof, EPA is providing a limited exception in this final rule
to

allow for continued manufacture of such appliances between January 1,
2010, and December 31, 2011, if the components are made prior to
January 1, 2010, and specified for use at that project under a building
permit or contract dated before January 1, 2010. Finally, EPA is
clarifying that new appliances may continue to be manufactured from dry
components if the competed appliance is charged with recovered,
recycled, or reclaimed refrigerant. EPA believes these three options
will provide relief to the various concerns that were expressed by
stakeholders.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C.
1531-1538 for State, local, or tribal governments or the private
sector. First, UMRA does not apply to rules that are necessary for the
implementation of international treaty obligations. This rule
implements the 2010 milestone for the phaseout of HCFCs under the
Montreal Protocol. The requirements already established at 40 CFR part
82 subpart A already govern the production, import, and export of ODS.
The regulatory changes for the next major milestone in the phaseout
continue to implement the same general framework previously
established. This action will not have any significant direct impacts
or State, local and tribal governments or private sector entities.
Therefore, 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. This action
apportions production and consumption allowances and establishes
baselines for private entities, 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 action does not have federalism implications. It does not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. This action is expected to
primarily affect producers, importers, and exporters of HCFCs. Thus,
the requirements of section 6 of the Executive Order do not apply. In
the spirit of Executive Order 13132, and consistent with EPA policy to
promote communications between EPA and State and local governments, EPA
specifically solicited comment on this action from State and local
officials.

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

    This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This action not
significantly or uniquely affect the communities of Indian tribal
governments. It does not impose any enforceable duties on communities
of Indian tribal governments. Thus, Executive Order 13175 does not
apply to this action.

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 of
excessive exposure to UV radiation on children: (1) Westerdahl J,
Olsson H, Ingvar C. ``At what age do sunburn episodes play a crucial
role for the development of malignant melanoma,'' Eur J Cancer 1994;
30A:1647-54; (2) Elwood JM, Japson J. ``Melanoma and sun exposure: an
overview of published studies,'' Int J Cancer 1997; 73:198-203; (3)
Armstrong BK, ``Melanoma: childhood or lifelong sun exposure,'' In:
Grobb JJ, Stern RS, Mackie RM, Weinstock WA, eds. ``Epidemiology,
causes and prevention of skin diseases,'' 1st ed. London, England:
Blackwell Science, 1997; 63-6; (4) 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 reduces the potential continued use of Class II
controlled substances and the emissions of such substances. It
implements 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. While on an ODP-weighted basis, this is not as
large a step as previous actions, such as the 1996 Class I phaseout, it
is one of the most significant remaining actions the United States can
take to complete the overall phaseout of ODS and further 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 issues allowances for
the production and consumption of HCFCs, and prohibits the introduction
into interstate commerce or use of products containing HCFCs.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. The 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 action 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 without
having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or low-
income population. By allocating allowances for HCFCs and thus
restricting the amount of HCFCs available as of January 1, 2010, this
rule avoids emissions of these ozone-depleting substances, 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 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)

Subpart A--Production and Consumption Controls

0
2. Amend Sec.  82.3 by adding in alphabetical order the definition of
``Appliance'', ``Interstate commerce'', and ``Manufactured'' to read as
follows:

Sec.  82.3  Definitions for class I and class II controlled substances.

* * * * *
    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.
* * * * *
    Interstate commerce means the distribution or transportation of any
controlled substance between one state, territory, possession or the
District of Columbia, and another state, territory, possession or the
District of Columbia, or the sale, use or manufacture of any controlled
substance in more than one state, territory, possession or District of
Columbia. The entry points for which a controlled substance is
introduced into interstate commerce are the release of a controlled
substance from the facility in which the controlled substance was
manufactured, the entry into a warehouse from which the domestic
manufacturer releases the controlled substance for sale or
distribution, and at the site of United States customs clearance.
* * * * *
    Manufactured, for an appliance, means the date upon which the
appliance's refrigerant circuit is complete, the appliance can
function, the appliance holds a full refrigerant charge, and the
appliance is ready for use for its intended purposes; and for a pre-
charged appliance component, means the date that such component is
completely produced by the original equipment manufacture, charged with
refrigerant, and is ready for initial sale or distribution in
interstate commerce.
* * * * *

0
3. Amend Sec.  82.15 by revising paragraph (c) and adding paragraph (g)
to read as follows:

Sec.  82.15  Prohibitions for class II controlled substances.

* * * * *
    (c) Production with Article 5 allowances. No person may introduce
into U.S. interstate commerce any class II controlled substance
produced with Article 5 allowances, except for export to an Article 5
Party as listed in Annex 4 of Appendix C of this subpart. Every
kilogram of a class II controlled substance produced with Article 5
allowances that is introduced into interstate commerce other than for
export to an Article 5 Party constitutes a separate violation under
this subpart. No person may export any class II controlled substance
produced with Article 5 allowances to a non-Article 5 Party. Every
kilogram of a class II controlled substance that was produced with
Article 5 allowances that is exported to a non-Article 5 Party
constitutes a separate violation under this subpart.
* * * * *
    (g) Introduction into interstate commerce or use. (1) Effective
January 1, 2010, no person may introduce into interstate commerce or
use HCFC-141b (unless used, recovered, and recycled) for any purpose
except for use in a process resulting in its transformation or its
destruction; for export to Article 5 Parties under Sec.  82.18(a); for
HCFC-141b exemption needs; as a transhipment or heel; or for exemptions
permitted in paragraph (f) of this section.
    (2)(i) Effective January 1, 2010, no person may introduce into