EPA expects more than 90% of reporting entities were reporting
electronically at the start of 2019. Thus, the EPA estimates initial
CDX registration and electronic signature costs incurred in the first
year would be $2,000 because most entities have previously registered
in CDX and are reporting electronically. The EPA estimates the annual
costs savings to reporters to be $4,000 per year for electronic
reporting.
    As discussed in the supporting statement for the accompanying ICR
available in the docket to this rule, the EPA also expects to reduce
its own burden as the result of receiving electronic submissions and
communicating electronically with entities. The agency resources and
time requirements to review and process data would decrease, and
document storage and retrieval would require fewer resources. The
electronic submission of data through CDX would allow for the direct
import of data into the ODS Tracking System. This would reduce the time
the agency spends manually entering data into the ODS Tracking System
from paper forms as well as reduce the potential for human error that
exists when data are entered by hand. Agency personnel would also be
able to communicate more efficiently with entities electronically. The
conversion to an electronic reporting system as well as the adoption of
CDX to facilitate form submission and processing are expected to create
long-term burden reductions and increased efficiencies for the EPA.
Annual costs to the EPA would be associated with the operation and
maintenance of CDX for the data flow.
    The EPA seeks comment on its proposal to require electronic
reporting for ODS data under 40 CFR part 82, subpart A, with exceptions
for a few low-volume forms. In addition, the EPA seeks input on
experience to date with electronic reporting of ODS data and whether
entities that have already transitioned to electronic reporting have
been able to lower their reporting costs, and if so, by how much. The
EPA also requests comment on the proposal that the requirement for
electronic reporting would begin 30 days after the effective date of
any final rule and on whether additional time would be needed to comply
with the electronic reporting requirements.

B. Changes to Reporting Requirements in Sec. Sec.  82.13, 82.23, and
82.24

    This section presents the EPA's proposal to consolidate and
harmonize ODS reporting elements. The agency has provided the option of
electronic reporting for most submissions since 2008 to assist
stakeholders in the reporting process. The proposed regulatory changes
would reflect current practices by entities that can be designed into
electronic forms. The EPA monitors company compliance, in part, through
the recordkeeping and reporting regulations at Sec. Sec.  82.13 and
82.24. The EPA is proposing these updates under CAA sections 603 and
114. Many of these proposed regulatory changes would ease the reporting
burden. For example, the EPA is proposing to remove reporting elements
in Sec. Sec.  82.23(a), 82.24(b), and 82.24(c) that require the
reporter to calculate values from data already provided. Requiring this
of the entity is unnecessary because if finalized as proposed, the
requirement to report electronically through CDX means these values can
automatically be calculated and populated. This would save reporting
entities time in reporting and reduce errors in submissions. The EPA is
also proposing to change Sec. Sec.  82.13(h) and 82.24(d) so that the
quantity (rather than the percentage) of used, recycled, or reclaimed
class I and class II substances, respectively, would be a required
reporting element. This change would improve consistency with the
importer reporting requirements and correspond with the way companies
report their annual data. It would also streamline the exporter
reporting forms by eliminating the need for an entity to calculate a
percentage. The EPA is also proposing to remove references to expended
and unexpended production and consumption allowances at Sec.
82.13(f)(3)(iv) and (g)(4)(viii), which

likewise can be calculated automatically with the use of electronic
reporting forms.
    Other proposed regulatory changes would harmonize the requirements
for class I and class II substances. For example, the EPA is proposing
that the timeframe submitters have to make revisions to forms for class
I and class II substances be the same. Currently under Sec.  82.24
class II reporters have 180 days from the end of the applicable
reporting period to make revisions while the class I provisions in
Sec.  82.13 are silent on the issue. The EPA is proposing to address
this omission in the class I regulations by adding a provision that
revisions to reports for class I substances under Sec.  82.13 be made
within 180 days of the end of the applicable reporting period. This
would conform to the current practices followed by entities that make
revisions to class I reports and is consistent with the EPA's current
practice of allowing such revisions to the reports for class I
substances. These changes would also be consistent with the current
regulations in Sec.  82.24 for revisions to reports for class II
substances.
    The EPA is further proposing to amend Sec.  82.24(d)(1) to clarify
that exporters who submit a Request for Additional Consumption
Allowances (RACA) must still include that export on their quarterly
exporter report. Under Sec.  82.20, companies may submit a request for
additional consumption allowances if they export class II substances
that were previously produced in or imported into the United States
using consumption allowances. Currently, the regulatory text at Sec.
82.24(d)(1) excludes from quarterly reporting those RACAs even though
exporters do typically include those exports in their quarterly
reporting. For ease of review by the EPA and for consistency of
reporting by exporters, the agency is proposing that all exports be
included in the quarterly export report, even if the EPA had issued
additional consumption allowances to the exporter for that export. This
proposed change matches current practice, so the agency does not
anticipate an increase in burden for the exporter.
    The EPA is also proposing to amend the reporting requirements at
Sec.  82.13(v) to add the contact information for the source company
from which the material was purchased and the laboratories to whom the
material is sold. This proposal would allow the EPA to better track the
sale of ODS for laboratory purposes through the Class I Laboratory
Supplier Report.
    Lastly, the EPA is proposing to correct class I reporting
requirements for exporters by replacing the term ``Employee
Identification Number'' with the correct term ``Employer Identification
Number'' in Sec.  82.13(h).
    The EPA seeks comment on its proposed regulatory changes to the
reporting requirements under 40 CFR part 82, subpart A. The EPA
welcomes comment on any other changes that would ease burden on
reporters.

C. Changes to Methyl Bromide Provisions in Sec. Sec.  82.4 and 82.13

    The EPA is proposing to amend the existing regulatory provisions
related to the QPS exemption for methyl bromide under CAA section
604(d)(5) and ensure that QPS methyl bromide is not used in a manner
inconsistent with the exemption. The EPA's regulations implementing CAA
section 604(h) set January 1, 2005 as the production and import
phaseout date (Sec.  82.4(b), (d)). Certain exceptions apply, including
an exemption for methyl bromide produced or imported for quarantine and
preshipment applications. Quarantine applications and preshipment
applications are both defined at Sec.  82.3. Briefly, quarantine
applications are treatments to prevent the introduction, establishment,
and/or spread of quarantine pests (including diseases), or to ensure
their official control. These can include commodities entering or
leaving the United States or any State (or political subdivision
thereof). Preshipment applications are those non-quarantine
applications applied within 21 days before export to meet the official
requirements of the importing country or existing official requirements
of the exporting country. The current recordkeeping and reporting
regulations relating to QPS methyl bromide appear at Sec.  82.13 and
establish specific requirements for producers, importers, distributors,
and applicators, including in some instances requirements for written
certifications that the methyl bromide will be used only for QPS
applications in accordance with the definitions in Sec.  82.3.
    This section discusses three types of proposed changes to the QPS
regulations. As a brief overview, first, the EPA is proposing to
clarify that it is a violation to sell or use methyl bromide produced
under the QPS exemption for any uses other than QPS applications.
Second, the EPA is proposing to extend the existing certification
requirements to all purchasers of QPS methyl bromide. Third, the EPA is
proposing to make non-substantive changes to Sec. Sec.  82.4 and 82.13
to improve readability, including changes to the naming convention for
methyl bromide where appropriate and removal of unnecessary references
to ``used'' material.
    These proposed changes are, in part, in response to the misuse of
QPS methyl bromide by applicators and distributors in the U.S. Virgin
Islands and Puerto Rico. As described in the Centers for Disease
Control's (CDC) Morbidity and Mortality Weekly Report (MMWR), on March
18, 2015,\26\ a U.S. Virgin Islands pest control company, Terminix
International USVI LLC, fumigated a condominium complex in St. John
with a product containing methyl bromide for the purpose of
exterminating household pests. As a result, a family of four suffered
acute methyl bromide poisoning resulting in three family members having
life-altering illnesses. On March 25, 2015, the U.S. Virgin Islands
Department of Planning and Natural Resources issued a stop-use order
for methyl bromide to the company that performed the fumigation. A
subsequent investigation by the Department of Planning and Natural
Resources and the EPA revealed that a previous fumigation with methyl
bromide had occurred on October 20, 2014, at the same condominium
resort. In total, 37 persons may have been exposed to methyl bromide as
a result of the October 2014 and March 2015 fumigations (Kulkarni et
al., 2015). Terminix, LP and Terminix, USVI were sentenced to pay a
total of $10 million in criminal fines and restitution for violating
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).\27\
The companies were also ordered to perform community service following
an investigation and guilty pleas to their use and application of
illegal fumigants in multiple residential locations in the U.S. Virgin
Islands.
---------------------------------------------------------------------------

    \26\ 1. Kulkarni, P.A., Duncan, M.A, Watters, M.T., Graziano,
L.T., Vaouli, E., Cseh, L.F., Risher, J.F., Orr, M.F., Hunte-Ceasar,
T.C., Ellis, E.M. (2015) Severe Illness from Methyl Bromide Exposure
at a Condominium Resort-U.S. Virgin Islands, March 2015 Morbidity
Monthly and Weekly Report (MMWR) Center for Disease Control, 64(28);
pg. 763-766. Available at: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6428a4.htm.
    \27\ EPA. (2017). ``Press Release: Terminix Companies Sentenced
for Applying Restricted-Use Pesticide to Residences in the U.S.
Virgin Islands.'' Available at: https://www.epa.gov/newsreleases/terminix-companies-sentenced-applying-restricted-use-pesticide-residences-us-virgin.
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    As a result of the exposures in the U.S. Virgin Islands, as well as
documented misuse of QPS methyl bromide in Puerto Rico, and the high
health risk potential from mishandling or misuse of QPS methyl bromide,
the EPA is proposing to add a regulatory provision at Sec.  82.4(r) to
expressly prohibit the sale or use of QPS methyl

bromide for any uses other than QPS applications. The proposed
provision would also explicitly state that it is a violation of subpart
A to sell or use methyl bromide produced or imported under the QPS
exemption for any uses other than QPS applications.
    The existing regulations at Sec.  82.13(y)(1) and (z)(2) require
certification statements from distributors, applicators, commodity
owners, shippers or their agent that methyl bromide ``will be used only
for quarantine and preshipment applications.'' Similarly, Sec.
82.13(f)(2)(xviii) and (xix) describe the exempted quantities of methyl
bromide as ``produced solely for quarantine and preshipment
applications.'' The EPA interprets this existing text as already
prohibiting the use of methyl bromide produced or imported under the
QPS exemption for any uses other than QPS applications. Although the
EPA is proposing to add an express statement of the prohibition at
Sec.  82.4(r) to add clarity and enforceability to this prohibition,
the EPA does not view this as changing the existing requirements. The
proposed prohibition that would appear at Sec.  82.4(r) for the QPS
exemption is modelled on the language at Sec.  82.4(n), which contains
an express prohibition on using controlled substances produced under
the essential use exemption.
    Second, to help avoid future exposures stemming from misuse of QPS
methyl bromide, the EPA is proposing to extend the existing
certification requirements to all purchasers of QPS methyl bromide,
including purchasers who purchase for further distribution. Under the
existing recordkeeping and reporting requirements at Sec.
82.13(f)(2)(xviii), producers of methyl bromide must maintain
certifications that methyl bromide produced for QPS applications has
been purchased by distributors or applicators to be used only for QPS
applications. Under Sec.  82.13(y), distributors of QPS methyl bromide
must certify when they purchase or receive QPS material from producers
and importers that the controlled substances will be used only for QPS
applications. Applicators of QPS methyl bromide must also certify to
distributors that the controlled substance will only be used only for
QPS applications under the existing regulation at Sec.  82.13(z).
    The EPA has identified a gap in this certification chain when the
material is sold through multiple distributors before reaching the
applicator. When one distributor sells to a second distributor, neither
distributor is required to certify or maintain a certification that the
material will be used only for a QPS application. The EPA is proposing
to revise Sec.  82.13(y) to extend the certification requirement to
purchasers who purchase or receive material for further distribution to
address this gap.
    The proposed extension of the certification requirement would help
to ensure that distributors are knowledgeable of the requirements for
the sale of QPS methyl bromide. The sales and misapplications of QPS
methyl bromide in Puerto Rico and the U.S. Virgin Islands demonstrate
that distributors may not have been aware of, or may have ignored, the
limitations on the use of this material. The purpose of the requirement
when established was to ensure that anyone selling or purchasing QPS
methyl bromide signed a certification verifying that they would comply
with requirements under Title VI of the CAA (66 FR 37760). Distributors
are more likely to make themselves aware of those requirements and be
mindful of the fact that QPS methyl bromide can only be used for QPS
applications if they are required to sign a certification addressing
these requirements and provide it before each purchase. This proposal
would fill the gap in the distribution chain and ensure the original
intent of the regulation is implemented.
    The EPA is therefore proposing to extend the existing requirement
that every distributor of QPS methyl bromide certify to the producer or
importer from whom they purchased or received the material that
quantities purchased or received would be sold only for quarantine
applications or preshipment applications to also require such a
certification when the material is purchased or received from a
distributor. Likewise, the existing requirement that such distributors
receive from any applicator, to whom they sold or delivered the methyl
bromide a certification, prior to delivery of the quantity, stating
that the quantity would be used or sold solely for QPS applications in
accordance with definitions in subpart A would be extended to sales and
deliveries to any exporter or distributor under the proposed changes.
For exporters, the invoice or sales agreement currently required in
Sec.  82.13(h)(2)(viii) is enough for this purpose. The EPA is
proposing to make these changes to Sec.  82.13(y).
    The EPA is also proposing that the distributor certify that they
are selling the material for a QPS application rather than certify that
it will be used for a QPS application, as is required in the existing
regulations. This would better align the rule text with the
distributor's role. The proper sale of the material is within the
distributor's control whereas the use may not be, given that the
material may be resold by another distributor and applied by an end
user or third-party applicator.
    The EPA seeks comment on its proposed addition of Sec.  82.4(r)
relating to the prohibition against using QPS methyl bromide for
anything other than QPS uses and its proposed changes to the
certification requirements for QPS methyl bromide.
    The EPA is also proposing edits to Sec.  82.13(h)(2), which
contains the recordkeeping requirements for exporters of certain
``types'' of methyl bromide by companies that did not produce the
material. The EPA is proposing edits to clarify what is meant by
``type'' of methyl bromide. Specifically, the EPA is proposing to more
clearly state that the provision requires reporting of the quantity of
methyl bromide exported for transformation, destruction, critical use,
and QPS uses. These are the only exempted uses of methyl bromide, and
this would match the information requested in the existing reporting
forms. The EPA is also proposing to remove the requirement in the
existing provision that exporters state how much of the exports are of
``used, recycled or reclaimed material.'' Unlike other ODS, methyl
bromide is a product that is registered and controlled under FIFRA and
thus is not sold ``used'' or ``recycled'' or ``reclaimed.'' Therefore,
these adjectives are not applicable to methyl bromide and this phrase
is not needed.
    Lastly, the EPA is proposing to replace references to ``class I,
Group VI controlled substances'' with ``methyl bromide'' where
appropriate for readability throughout Sec. Sec.  82.4 and 82.13.
``Class I, Group VI controlled substances'' is how methyl bromide is
classified under the EPA's regulations in appendix A to subpart A, but
methyl bromide is the only compound within this category. Using the
common name would improve the readability of the QPS regulations.
    The EPA seeks comment on these proposed changes to Sec. Sec.  82.4
and 82.13 for readability and clarity of the regulations, as well as on
the proposed changes to the recordkeeping requirements at Sec.
82.13(h)(2) for exports of certain types of methyl bromide.

D. Changes to Provisions for the Import of Ozone-Depleting Substances
in Sec. Sec.  82.3, 82.4, 82.13, 82.15, and 82.24

    Under CAA sections 604, 605, and 606, the EPA restricts the import
of ODS consistent with both the CAA and the

Montreal Protocol. As discussed previously in Section II of this
notice, importing virgin ODS requires the importer to expend
consumption allowances. Controlling the number of allowances and
knowing who holds those allowances allows the EPA to ensure that the
phaseout obligations under the Montreal Protocol as implemented through
the CAA are met. Used ODS \28\ can be imported without consumption
allowances, and generally without use restrictions, if certain
conditions are satisfied. Imports of used ODS are currently regulated
under Sec.  82.13(g)(2)-(3) (for imports of used class I substances)
and Sec.  82.24(c)(3)-(4) (for imports of used class II substances).
The EPA has reviewed the import petition process and is proposing
amendments to improve data collection. Such changes would require
collection of additional information when additional verification is
needed to determine whether the material has been previously used and
remove data elements that are currently collected but that are no
longer needed. The EPA is also proposing to create a procedure for
imports of both used and virgin ODS when they are imported for
destruction. This proposal may lead to more used ODS being imported for
reuse or destruction because of the less burdensome reporting
requirements, which is beneficial for fostering a smooth transition to
alternatives and reducing emissions of ODS to the atmosphere. In a
recent example, the EPA granted a petition for the import of virgin ODS
for destruction. The agency anticipates additional petitions for
imports of virgin material may be received by the agency as the global
phaseout of HCFCs continues and because the United States has a greater
capacity for destruction. Additionally, these proposals would reduce
the chance that virgin ODS are imported under the false pretense that
it is ``used.''
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    \28\ Used ODS have been recovered from their intended use
systems (e.g., refrigeration and AC equipment) and may include
controlled substances that have been, or may be subsequently,
recycled or reclaimed. See 40 CFR 82.3
---------------------------------------------------------------------------

    Anyone wanting to import used ODS must currently submit a petition
to the agency and receive a ``non-objection notice'' approving the
import. The petition to import a used ODS must contain certain
information, which the EPA considers in determining whether the ODS is
in fact used. Required information includes: A description of the
previous use of the substance; the identity of source facilities from
which the material was recovered; a contact person at each source
facility; the name, make, and model number of the equipment from which
the material was recovered at each source facility; a best estimate of
when the material was removed; and an export license from the
appropriate government agency from the country of export. See
Sec. Sec.  82.13(g)(2) and 82.24(c)(3). After review, the EPA responds
to the petition by issuing either a ``non-objection notice,'' which
allows the import to proceed, or an ``objection notice,'' which has the
effect of prohibiting the import because a non-objection notice is
required for the lawful import of such material.
    The EPA established the petition process to import used class I ODS
(under CAA sections 603 and 604) in 1998 (63 FR 41626) and in 2003 (68
FR 2819) for class II ODS (under CAA sections 603 and 605) out of
concern that some importers were circumventing the production and
import controls by importing virgin class I and class II substances
that had been intentionally mislabeled as used. The petition process
has been effective in addressing this potential problem because the
information requirements and the review undertaken by the EPA make it
difficult for importers to falsify documents. Sections 604, 605, and
606 of the CAA provide statutory authority for controlling the import
of ODS, including the petition process and the proposed changes to that
process. Section 603 of the CAA requires reporting of the amount of ODS
imported on a quarterly basis or on a basis determined by the
Administrator. To the extent that these proposed changes involve
recordkeeping and reporting of information, the EPA also relies upon
its authority under CAA section 114, which authorizes the EPA to
require recordkeeping and reporting in carrying out any provision of
the CAA (with certain exceptions that do not apply here). Specifically,
the EPA is proposing changes to the recordkeeping and reporting
requirements to carry out the import provisions of sections 604, 605,
and 606.
    Despite the effectiveness of the petition process at providing
information that allows the EPA to verify that ODS are used before they
are imported, the EPA has identified potential improvements to the
process. For example, the current requirements are difficult to satisfy
if the imported material comes from a halon bank or other ODS banks.
The current regulations exempt only halon 1301 aircraft bottles from
the petition process for hydrostatic testing, yet aircraft bottles
containing halon 1211 are also imported for such testing. The current
petition process also does not distinguish imports of used ODS that are
intended to be destroyed from imports of all other used material that
are intended to be reclaimed for continued use, though the agency
recognizes that the verification requirements do not need to be as
rigorous when the ODS are to be destroyed. The existing regulations
also do not provide a mechanism to pre-approve the import of virgin
material for destruction, resulting in delays at the port of entry
while the shipment is verified by the EPA.
i. Changes to the Petition Process To Import Used ODS for Reuse in
Sec. Sec.  82.13 and 82.24
    The EPA is proposing changes to the petition process that would
generally ease the burden on importers, while still allowing the agency
to verify that the material being imported is used. Specifically, the
agency is proposing to: Allow, under certain circumstances, submission
of an official letter from the appropriate government agency in that
country where the material is stored attesting that a class I substance
is ``used'' in lieu of detailed equipment-level source information;
\29\ allow submission of an application for an export license in lieu
of the license itself; require that petitions include email addresses
in contact information (while removing the requirement to provide fax
numbers) and commodity codes for the material; and specifically
authorize the agency to request additional information when additional
verification is needed before issuing a non-objection notice. In
general, the EPA anticipates these changes would increase the
availability of used class I substances in the United States and thus
help to provide a greater supply of used material for servicing
existing equipment, which might otherwise have to be retired before the
end of its useful life.
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    \29\ The EPA is not proposing similar changes for class II ODS
given the production phaseout for these substances is still
underway.
---------------------------------------------------------------------------

    First, the EPA is proposing to amend Sec.  82.13(g)(2) in
recognition that banks \30\ of halon and other class I ODS overseas are
a potential source of used ODS. Since halons were phased out in the
United States and other non-Article 5 countries in 1994, many countries
and organizations established halon banks where they aggregate and
store

previously used and recovered halon for reuse in fire suppression
applications.\31\ In most cases the managers of such banks do not have
the complete information required by the EPA's petition process
especially since the material may have been recovered more than two
decades ago. As detailed above, the import petition must currently
contain information about the used ODS including the source facility
and name, make, and model number of the equipment and from which the
material was recovered. Petitioners sourcing class I substances from
banks, therefore, rarely have enough records to provide all the
information required in the petition process, and as a result the
petitions are subject to denial.
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    \30\ The EPA uses the term ``bank'' here to refer to a company-
run or nationally government-run facility that collects and stores
previously-recovered ODS (e.g., a halon bank) for reuse at a later
date, not the ``bank'' of ODS installed in existing equipment and
products.
    \31\ Halons were phased out in Article 5 countries in 2010.
---------------------------------------------------------------------------

    The EPA is proposing to waive the requirement for specific source
information for halon and other class I substances stored in either a
national government ODS bank or a privately-operated bank authorized by
a national government to collect and manage ODS if the petitioners
include an official letter from the appropriate national government
agency of the exporting country attesting that the class I substance(s)
proposed for export to the United States is used. The EPA would
consider this official letter along with all the other evidence
provided in determine whether the material is used. However, providing
an official letter does not mean that the EPA would automatically
approve the petition. The EPA is proposing to define ``bank'' for
clarity in the regulatory text.
    Stakeholders have indicated to the agency that this type of change
to the petition process would allow U.S. companies to potentially
access large reserves of halon held overseas for which source
information cannot be obtained. Halons are used for fire protection
applications, such as in civil aviation, military, and oil and gas
drilling and the continued availability of used halons remains
important to many U.S. operations. Industry in the United States has
successfully managed the recovery and use of halons since the domestic
phaseout of production in 1994 and the EPA anticipates that they will
continue to do so. However, as we get further from the phaseout, the
available supply of halons decreases.
    The Montreal Protocol's Technology and Economic Assessment Panel
(TEAP) has provided information on the availability and expected need
for halons in the future. The TEAP issued a report in September 2018,
noting continued demand for halons, in particular for servicing fire
suppression equipment for civilian aviation.\32\ Civil aircraft will
continue to need halon to meet fire protection requirements for
lavatory bottles, handheld extinguishers, engine nacelles, auxiliary
power units, and cargo compartments \33\ until there is a transition to
alternatives for all applications on new aircraft as well as to service
the civil aircraft fleet. This proposal would allow halon to be more
easily sourced from overseas banks and thus should make more halon
available to service aircraft in the United States. In addition, the
military and oil and gas drillers continue to need halons for fire
suppression applications.
---------------------------------------------------------------------------

    \32\ UNEP. (2018) Montreal Protocol on Substances on Substances
that Deplete the Ozone Layer. Report of the Technology and Economic
Assessment Panel. September 2018 Volume 2 Decision XXIX/8 on the
Future Availability of Halons and their Alternatives; pg. 1-32.
Available at: https://ozone.unep.org/index.php.
    \33\ FAA (2004). ``FAA Halon ARC Final Report Findings &
Recommendations'' Halon Replacement Aviation Rulemaking Committee;
pg. 1-49. Available at: https://www.faa.gov/regulations_policies/rulemaking/committees/documents/index.cfm/committee/browse/committeeID/397.
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    Second, the EPA is proposing to amend the criteria for when the EPA
may issue an objection notice to a petition to import a used ODS. When
enough information is not provided with the initial petition for a
determination, the EPA requests additional information from the
petitioner in order to verify that the material was used. The EPA is
therefore proposing to clarify that not providing this requested
information could be grounds for issuing an objection notice to the
petition. As one example of information that may be requested, the EPA
may request results of purity sampling of class I or class II
substances. The EPA understands that if a halon is used, the purity
will typically be much lower (on the order of 90 to 95 percent pure)
than if the material is virgin. The EPA may request the results of
purity tests in situations where having those results would give the
EPA and the company receiving the used ODS information that could
confirm, before the material is imported, that the ODS is in fact used.
Under this proposal, if petitioners fail to respond to requests from
the agency for addition information, the EPA could issue an objection
notice.
    Other examples of information that the EPA has requested in
reviewing petitions to verify the substances is used before issuing a
non-objection notice include: A photo of each unit that contained the
used ODS, with serial numbers visible; photos of a representative
sample of the cylinders, with serial numbers visible; a description of
the facility from which the used ODS originates, which includes what is
produced at the facility, the location of the facility, and how long
the facility has been in the location; a description of each unit from
which the used ODS originates; links to websites showing brochures,
photographs, and/or descriptions of each different unit from which the
used ODS originates; copies of the original, signed work orders
authorizing collecting of the used ODS; copies of the paperwork showing
that the company completed the work; copies of payment to the company
that collected the used ODS for their services, with redactions for
confidential or sensitive information such as bank account numbers;
copies of business licenses from the government authorizing collection
companies to do this type of work; and information on how transport
will occur within the exporting country and to the United States. For
used ODS from Europe, the EPA has requested a screenshot of the
European Commission export license; the name and contact information
for the European Commission official who signed the Export License; and
copies of all paperwork required for movement within the European
Union, such as the ``Notification document for transboundary movement/
shipments of waste.'' The EPA is not proposing to collect all such
information for each petition and thus is not proposing to revise the
regulatory text to require that it be provided in every petition.
However, the agency does wish to provide notice to petitioners that it
may request additional information to confirm that the ODS is in fact
used and is proposing to amend the regulations to make clear that
failure to provide such information when requested would be a ground to
issue an objection notice. The EPA specifically requests comment on
this proposal for an additional ground for denying a petition to import
used ODS and on whether the EPA should specifically list the types of
information in the regulations that the agency may, on a case by case
basis, request from the petitioner after reviewing the initial
submission to confirm that the material is used. If the agency were to
add a list of specific types of information that it might request on a
case-by-case basis, that list could include some or all the information
described in the prior paragraphs of this notice that the EPA has
requested in reviewing petitions in the past.
    Third, the EPA is proposing multiple minor amendments to the
petition

process to ensure accuracy, faster review, and facilitate the import of
used ODS. In particular, the EPA is proposing to update the requested
contact information by requiring email addresses and removing fax
numbers. The EPA is also proposing to require that the petition for
import include the amount of material authorized under the export
license or export license application to ensure the petitioned amount
is equal to or less than the amount that arrives at the United States
port of entry. The EPA is also proposing to require that petitioners
provide the commodity code associated with the ODS to be imported. The
commodity codes are classifications for goods and services traded among
countries. This proposal would match the agency's other import and
export requirements in Sec. Sec.  82.13(g) and (h) and 82.24(c) and (d)
and help to ensure that the data are correctly entered in Customs and
Border Protection's Automated Commercial Environment and International
Trade Data System (ACE/ITDS).
    The EPA is also proposing to update the commodity codes for HCFC-
123 and HCFC-124 in Appendix K. The U.S. International Trade Commission
is responsible for publishing the Harmonized Tariff Schedule of the
United States Annotated (HTSA). The HTSA provides the applicable tariff
rates and statistical categories for all merchandise imported into the
United States. It is based on the international Harmonized System, the
global system of nomenclature that is used to describe most world trade
in goods. This action updates the commodity codes for HCFC-123 and
HCFC-124 in the appendix so that they coincide with those currently in
effect and in use by the U.S. International Trade Commission.
    In addition, the EPA is proposing to amend Sec. Sec.  82.13(g)(2)
and 82.24(c)(3) to allow importers of class I and class II substances,
respectively, to provide an application for an export license in lieu
of an actual export license, as is currently required. For example,
Canada, the largest exporter of used ODS to the United States, requires
the EPA to approve the export before they issue an export license. As
such, petitioners are only able to provide the submitted application
for an export license with their petition. Considering this, the agency
has worked with Canada to accept the submitted application in lieu of
the export license. However, there may be other countries that also
require approval prior to export, and the EPA wants to ensure all
countries receive equal treatment and that all petitioners are aware of
this option. As such, the agency desires to formalize the option in the
regulations. The EPA is also proposing to require an English
translation of the export license application or export license to
facilitate the agency's review.
    The existing regulations for petitions for imports of used material
also require that if the imported substance is intended to be sold as a
refrigerant, the petition must include contact information for the U.S.
reclaimer who will bring the material to the standard required under
CAA section 608 and Sec.  82.152(g), if it is not already reclaimed to
those specifications. The EPA is proposing to add ``EPA-certified'' to
the description of reclamation facilities in the provisions containing
this requirement, Sec. Sec.  82.13(g)(2)(xiii) and 82.24(c)(3)(xiii).
This proposal would highlight the existing expectation for petitions to
import used material to be sold as a refrigerant that the reclamation
facility that will receive the material in the United States must be
EPA-certified. The EPA's reclamation program is described at https://www.epa.gov/section608/stationary-refrigeration-refrigerant-reclamation-requirements.
    Finally, the agency is proposing to allow flexibility for the
timing of the import when the non-objection notices was issued towards
the end of the year. The EPA currently requires the import to occur in
the same control period (i.e., calendar year) that the non-objection
notice was issued. However, this can result in petitioners postponing
their requests until the start of the next year. To avoid that
unnecessary delay, the EPA is proposing that importers have one year
from the date stamped on the non-objection notice to import that
shipment.
    The EPA is soliciting comments on these proposed changes to the
petition process for importing used ODS. The agency is particularly
interested in whether streamlining the petition process, including to
facilitate imports of material from banks for class I ODS, would affect
compliance with the prohibition on import of virgin ODS. The EPA
welcomes suggestions from the regulated community on how the petition
process may be further streamlined while ensuring compliance.
b. Exemption for Imports of Halon 1211 Aircraft Bottles in Sec.  82.3
    To facilitate the import and testing of more types of aircraft
halon bottles for hydrostatic testing, the EPA is proposing to extend
the definition of ``aircraft halon bottles'' in Sec.  82.3 to also
include vessels containing halon 1211. The current regulations in Sec.
82.13(g)(2) exempt aircraft halon bottles that are imported for
hydrostatic testing from the import petition process. The EPA has
defined ``aircraft halon bottle'' in Sec.  82.3 as a vessel used as a
component of an aircraft fire suppression system containing halon 1301.
    FAA regulations at 14 CFR 25.851(a)(6) require the presence of
halon bottles, or the equivalent, aboard transport category aircraft,
and they must be tested under United States Department of
Transportation (DOT) regulations in 49 CFR 180.205 and per National
Fire Protection Association standards if damaged or discharged (NFPA,
2018a). In particular, such bottles undergo hydrostatic testing, which
detects leakage and determines whether the bottles are functioning
properly. This testing is important both for safety as well as for
detecting and averting emissions of halon, a highly potent ODS.
    In 2009, the EPA exempted aircraft fire extinguishing spherical
pressure vessels containing halon 1301 (``aircraft halon bottles'')
being imported for hydrostatic testing from the import petition
requirements (74 FR 10182). The EPA sought comment in that rule on
whether to include halon 1211 in the exemption for aircraft halon
bottles, and the agency did not receive comment indicating these
imports occur. Therefore, the EPA limited the exemption only to
aircraft halon bottles containing halon 1301. The 2009 rule reduced the
administrative burden on entities when they import aircraft halon
bottles for the purpose of maintaining these bottles to commercial
safety specifications and standards. More information on the history
and the goals of the import petition process and an explanation of why
an exemption was warranted for aircraft halon bottles containing halon
1301 can be found in the 2009 rule.
    Since that time, the EPA has determined based on import petitions
received for halon 1211 and discussions with stakeholders that aircraft
halon bottles containing halon 1211 are imported for hydrostatic
testing. Thus, the EPA is proposing to extend the exemption created for
aircraft bottles containing halon 1301 to those containing halon 1211.
This proposed change would be accomplished by adding aircraft bottles
containing halon 1211 to the definition of ``aircraft halon bottles''
in Sec.  82.3. The reasons for exempting bottles containing halon 1211
are the same as for bottles containing halon 1301, discussed at 74 FR
10182. For example, this proposed exemption would facilitate proper
maintenance of bottles containing halon 1211 and allow transit and
testing to

occur more quickly for such bottles. Promoting proper maintenance of
these additional fire suppression devices would help ensure the bottles
operate correctly to extinguish fires on aircraft. Proper maintenance
of the storage vessels also prevents the accidental emission of this
high-ODP compound. Lastly, reducing the import petition requirements
could also allow hydrostatically tested bottles to be available more
readily for aircraft.
    The proposed exemption of imports of aircraft bottles containing
halon 1211 for hydrostatic testing would only exempt them from the
petition process. Recordkeeping and reporting are currently required,
and would still be required, for the import and export of aircraft
halon bottles. In particular, if the proposed exemption were finalized,
importers of such bottles would still need to maintain import records,
as set forth in Sec.  82.13(g)(1), submit quarterly reports within 30
days of the end of the applicable quarter in accordance with Sec.
82.13(g)(4), and submit an annual export report 30 days after the end
of the calendar year, in accordance with Sec.  82.13(h).
    The EPA seeks comment on this proposal and is particularly
interested in whether this would affect the ability of technicians,
aircraft owners, and fire suppression equipment manufacturers to
continue maintaining existing equipment.
c. Changes to Requirements for Imports of ODS for Destruction in
Sec. Sec.  82.3, 82.4, 82.13, 82.15, and 82.24
    This portion of the notice discusses two sets of proposed changes
to the import process for ODS specifically imported for
destruction.\34\ First, the EPA is proposing to establish a streamlined
approach for importing used ODS for destruction. Second, the EPA is
proposing to extend that approach to virgin ODS, as there is currently
no mechanism for the EPA to pre-approve import of virgin ODS for
destruction.
---------------------------------------------------------------------------

    \34\ The EPA refers to the import of ODS intended to be
destroyed in the United States throughout this notice as ``imports
for destruction.''
---------------------------------------------------------------------------

    ODS from decommissioned equipment, unwanted stockpiles, and
mixtures that are contaminated and cannot be reclaimed are often
imported to the United States for destruction. Facilitating the
destruction of ODS is beneficial to the environment since it averts ODS
emissions into the atmosphere and thus is consistent with the
overarching goal of Title VI to protect stratospheric ozone. The
Montreal Protocol's Scientific Assessment Panel estimated that capture
and destruction of CFC, halon, and HCFC banks in 2015 could avoid 1.8
million ODP-weighted metric tons of future emission through 2050.\35\
It also estimated that if all 2015 halon, CFC, and HCFC banks \36\ were
destroyed in 2015, the stratospheric chlorine levels at mid-latitude
would return to 1980 levels more than six years sooner than in the
baseline scenario. The EPA recognizes that there is ongoing commercial
demand for certain substances, as discussed earlier in this notice with
respect to halons and other ODS. Some ODS may, however, be unwanted and
thus susceptible to release; this risk may be higher when they are
stored in countries that do not have adequate capability to properly
reclaim or destroy them. Creating a process for the import of ODS for
destruction would help facilitate the destruction of such ODS and thus
reduce the risk of such releases. More information on the destruction
facilities that destroy ODS and their technologies is available in the
report entitled ``U.S. Destruction in the United States and Abroad.''
Destruction of unwanted ODS in the United States may also generate
revenue for domestic destruction facilities.\37\
---------------------------------------------------------------------------

    \35\ UNEP. (2014) Scientific Assessment of Ozone Depletion: 2014
World Meteorological Organization Global Ozone Research and
Monitoring Project--Report No. 55 pg. 1-416. Available at: https://www.esrl.noaa.gov/csd/assessments/ozone/2014/report.html.
    \36\ As used here, ``banks'' refers to the total ODS that have
already been manufactured but not yet released to the atmosphere.
This can include ODS contained within closed cell foams, installed
in appliances, held in original containers, etc.
    \37\ EPA. (2018) ``U.S. Destruction in the United States and
Abroad'' pg. 1-63. Available at: https://www.epa.gov/sites/production/files/2018-03/documents/ods-destruction-in-the-us-and-abroad_feb2018.pdf.
---------------------------------------------------------------------------

    As discussed earlier in this notice, the EPA's petition processes
for the import of used ODS is designed to allow the agency to verify
prior use of the material so that virgin ODS are not entering the
United States marketplace under the pretense of being ``used.'' Under
the current regulations at Sec. Sec.  82.13(g)(2) and 82.24(c)(4),
anyone wishing to import used class I or class II ODS, respectively,
for destruction must submit a petition providing the same information
as for any other petition to import used ODS. It is then the obligation
of the second-party destruction facility to provide a verification
report to the importer or producer that the material was destroyed
(Sec. Sec.  82.13(k) and 82.24(e)). Importers are required to keep
records on imports for destruction of ODS under Sec. Sec.  82.13(g)(1)
and 82.24(c)(2) and to submit quarterly reports, in accordance with
Sec. Sec.  82.13(g)(4) and 82.24(c)(1). The current regulations contain
an exception to the prohibition on import of virgin ODS without
consumption allowances in the case of imports for destruction but do
not provide a specific process for such imports.
    The EPA is proposing to create a new petition process for the
import of used and virgin ODS for destruction, called a Certification
of Intent to Import ODS for Destruction (``certification''), in
Sec. Sec.  82.13(g)(6) and 82.24(c)(7). Under this process, the
importer would submit the certification at least 30 working days before
the shipment's departure from the foreign port. After review, the EPA
would send either a non-objection notice or an objection notice. The
proposed period is shorter than the corresponding period for the import
petition process, which is 40 working days from departure, because the
certification would contain less information for the EPA to review and
verify than in the current process for a petition for import of used
ODS. The EPA believes 30 working days would be enough for the EPA to
review the certification and that this timeframe would not impede the
import. The agency would be authorized to issue an objection notice for
any reason it could currently issue an objection notice to a petition
to import, such as if the petition provides insufficient information or
if it contains false or misleading information. The EPA is also
proposing to require that the petitioner submit a destruction
verification 30 days after destruction under Sec. Sec.  82.13(g)(6) and
82.24(c)(7). The EPA is also proposing to require the certification and
any supporting documents, including the destruction verification, to be
submitted electronically through CDX, for the reasons discussed in
Section IV.A of this notice. In particular, the EPA is proposing to add
the requirement for electronic submission of these documents via CDX in
Sec.  82.14.
    The information that would be required in the certification is
modeled in large part on the petition to import used ODS. Specifically,
the certification would include the following elements, which are
similar those required in an import petition: Name, commodity code, and
quantity in kilograms of each controlled substance to be imported;
source country; intended date of import; shipment importer number; an
English translation of the export license (or application for an export
license) from the appropriate government agency in the country of
export and, if recovered in a country other than the country of export;
the quantity in kilograms authorized on the license(s); United

States port of entry for the import; name, address, contact person,
phone, and email address of the person responsible for destruction at
the facility.
    The EPA is proposing to omit the detailed source information that
is required in import petitions, as that information is not necessary
if the ODS is to be destroyed. The EPA is proposing to collect
information from the petitioner about the destruction for the
certification process. In particular, the certification would not
include the following: Information about all previous source facilities
from which the ODS was recovered; a detailed description of the
previous use at each source facility and a best estimate or documents
indicating when the specific controlled substance was put into the
equipment at each source facility; a list of the name, make and model
number of the equipment from which the material was recovered at each
source facility; contact information of all persons to whom the
material was transferred or sold after it was recovered from the source
facility; or a description of the intended use of the ODS.
    The EPA is proposing to omit these information elements because
they are collected for import petitions to verify that the material is
used, and the agency believes it is not necessary to verify that ODS is
used if it is being imported for destruction. Simplifying the
information requirements would decrease the regulatory burden on
existing importers who follow the current import petition process to
import used ODS for destruction by providing a streamlined regulatory
mechanism for such imports. In addition, the current information
requirements for petitions to import used ODS has the potential to
hinder imports for destruction because petitioners may be unable to
provide all the necessary information. Certain elements, such as
information about each piece of equipment or each source facility from
which the controlled substance was removed, may be particularly
difficult for petitioners to provide because used controlled substances
intended for disposal are often part of a mixture of chemical waste
recovered from a variety of systems and detailed information pertaining
to each system may not be available. Although the certification process
would in effect relax the information requirements for importing used
ODS for destruction compared to the existing import petition process,
the EPA believes that this relaxation would benefit the environment
because companies wishing to import used ODS into the United States for
destruction would be able to do so more easily, and therefore more used
ODS would be destroyed. This would be consistent with the overarching
goal of Title VI to protect stratospheric ozone.
    The EPA is proposing to add provisions Sec. Sec.  82.13(g)(9) and
82.24(c)(10) to require importers to keep certain records, including
records about the destruction of the ODS. In particular, the EPA is
proposing that importers of ODS for destruction maintain: A copy of the
certificate of intent to import for destruction; a copy of the non-
objection notice; a copy of the export license or export license
application; Customs and Border Protection (CBP) entry documents for
the import that must include the commodity codes; records of that date,
amount, and type of controlled substance sent for destruction per
shipment; an invoice from the destruction facility verifying shipment
was received; and a copy of the destruction verification.
    In addition to proposing to create the Certification of Intent to
Import ODS for Destruction, the EPA is also proposing to extend the
certification to imports of virgin ODS for destruction. While the
certification is modeled in large part on the petition to import used
ODS, the EPA believes there are also benefits to facilitating the
import of virgin ODS for destruction. Currently, virgin ODS that are to
be destroyed may be imported without consumption allowances (see
Sec. Sec.  82.4(d) and 82.15(b)). However, there is no regulatory
mechanism for the EPA to review and pre-approve those imports. As such,
shipments may be held at the border while the EPA determines whether
the import is in fact bound for destruction. In some instances,
proactive importers have petitioned the agency to import virgin ODS for
destruction and the EPA has allowed these imports on a case-by-case
basis. However, the absence of a regulatory mechanism for such
approvals has created some uncertainty for these imports when they
reach the border. Moreover, the EPA believes that establishing
regulatory requirements for such imports would help ensure that imports
of virgin ODS for destruction are destroyed.
    The EPA believes that providing a mechanism to import virgin ODS
for destruction would be beneficial to importers and the EPA. Having a
transparent process that allows approval occur before the shipment
reaches the border would facilitate such imports and reduce potential
delays and costs associated with the current approach to imports of
virgin ODS for destruction, as well as providing more certainty as to
which imports could proceed. In turn, this would encourage imports of
unwanted virgin ODS for destruction, potentially avoiding the emission
of such ODS. This would be consistent with the overarching goal of
Title VI to protect stratospheric ozone. The proposed extension would
also close a gap in regulatory provisions for the import of virgin
material for destruction. As discussed previously in this notice, the
EPA originally established the import petition process for used ODS to
verify that virgin ODS was not being imported under the pretext of
being used to circumvent the regulatory requirements for expending
consumption allowances. In the same way, the EPA believes that a
mechanism is needed to verify that virgin ODS imported for destruction
will be destroyed and that claims of importing for destruction are not
used to circumvent the requirement to expend consumption allowances. In
addition, the EPA has historically used the petition process as a
mechanism to approve imports for destruction of used material and has
applied an analogous but simpler process to imports of virgin material
on a case-by-case basis. Based on this experience and these common
goals for imports of used and virgin ODS for destruction, the EPA
believes that having the same process for imports for destruction of
both used and virgin ODS is both feasible and appropriate. Furthermore,
establishing a consistent process for used and virgin ODS would
simplify the administration of this proposed approach because the same
requirements would generally apply regardless of the type of ODS to be
imported for destruction. Thus, the EPA is proposing to have the same
requirements for both used and virgin ODS in this new proposed process.
    As part of this proposal, the EPA would also revise the definitions
of ``individual shipment'' and ``non-objection notice'' at Sec.  82.3,
both of which currently refer only to the import of used material. The
EPA is proposing to amend these definitions by removing references to
``used'' controlled substances, so that ``individual shipment'' and a
``non-objection notice'' may apply to shipments of virgin ODS imported
for destruction under a Certification of Intent to Import for
Destruction, as well as to shipments of used ODS.
    Like the proposal in the import petitions process, the agency is
also proposing to allow flexibility for the timing of imports for
destruction. In the current petitions process, the EPA requires the
import to occur in the same control period (i.e., calendar year) that

the non-objection notice was issued. The EPA is proposing that non-
objection notices issued for the Certification of Intent to Import for
Destruction for both used and virgin material have a year to import the
material. Therefore, once a non-objection notice is issued, the person
receiving the non-objection notice would be required to import the
individual shipment within a year of the date stamped on the non-
objection notice. For instance, a non-objection letter issued on
October 1, would not need to be destroyed until September 30 of the
following year. This would provide flexibility to imports for
destruction that may be operate on a calendar year basis.
    The EPA is soliciting comments on its proposal to create the
Certification of Intent to Import ODS for Destruction for both used and
virgin ODS. The EPA is particularly interested in whether the reduced
information elements encourage additional imports of ODS for
destruction or reduce burden for importers. The EPA is also interested
in the burden of applying the proposed certification process to the
import of virgin ODS and providing a year to destroy used or virgin
material. The EPA welcomes comment from entities that currently import
ODS for destruction or that have considered importing ODS for
destruction.

E. Prohibiting the Sale of Illegally Imported Controlled Substances

    Based on the EPA's experience with the CFC phaseout, the incentive
to illegally import class II substances will increase as the allocation
for HCFC-22 reaches zero in 2020. HCFC-22 is the most widely used HCFC
in the United States and the EPA anticipates continued demand for HCFC-
22 beyond the phaseout in 2020. In addition, there continues to be risk
of illegal imports of class I substances. The EPA works closely with
CBP to ensure compliance with the phaseout of ODS under CAA sections
604-606. However, recent illegal imports have demonstrated to the
agency that additional tools are needed to address the potential for
domestic distribution of illegally imported material, as such material
would generally be considered consumption. Thus, the EPA is proposing
to add to Sec. Sec.  82.4(s) and 82.15(g)(8) an express prohibition
against the sale or distribution, or offer for sale or distribution, of
any class I or class II substance, respectively, that the seller knows,
or has reason to know, was illegally imported into the United
States.\38\
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    \38\ The EPA has previously issued restrictions on sale as a
means for implementing restrictions on consumption. See, e.g., Sec.
82.3(h) (``No person may sell in the U.S. any Class I controlled
substance produced explicitly for export to an Article 5 country'');
Sec.  82.3(n)(2) (``Any person selling unused class I controlled
substances produced or imported under authority of essential-use
allowances or the essential-use exemption for uses other than an
essential-use is in violation of this subpart.'').
---------------------------------------------------------------------------

    For this proposal, the EPA is relying primarily on its authority
under CAA sections 604(c) and 605(c). Section 604(c) directs the
Administrator to promulgate regulations to ``insure that the
consumption of class I substances in the United States is phased out
and terminated'' in accordance with the applicable schedules for the
phaseout and termination of production of class I substances under the
CAA. Similarly, section 605(c) directs the Administrator to promulgate
regulations to ``insure that the consumption of class II substances in
the United States is phased out and terminated'' in accordance with the
applicable schedules for the phaseout and termination of production of
class II substances under the CAA. ``Consumption'' is defined in CAA
section 601 as the amount of a substance produced in the United States,
plus the amount of that substance imported, minus the amount exported.
    As noted above, the EPA remains concerned about the illegal import
of ODS. This concern is based largely on the risk that such illegal
imports would interfere with the already-completed phaseout of
consumption of class I substances and the ongoing phaseout of
consumption of class II substances. For example, HCFC-22 that is
imported without allowances would generally count toward the United
States' consumption cap unless additional action is taken to remove the
ODS from the U.S. market (e.g., the illegally imported ODS is destroyed
or re-exported in the same year). While there is sufficient space under
the HCFC cap currently such that the illegal import would not result in
an exceedance of the cap set forth under the Montreal Protocol and CAA,
there is be a greater risk that illegal imports not destroyed or re-
exported could cause an exceedance following the 2020 stepdown, and
more importantly the 2030 phaseout of HCFCs. This is of even greater
concern for illegally imported CFCs and other class I ODS, given that
the consumption cap for class I ODS is zero.
    To address this concern, the EPA is proposing to strengthen its
ability to enforce the phaseout of ODS by adding at Sec. Sec.  82.4(s)
and 82.15(g)(8) an express prohibition against the sale or
distribution, or offer for sale or distribution, of any class I or
class II substance, respectively, that the seller knows, or had reason
to know, had been imported into the United States in violation of the
import regulations. It would therefore be illegal to sell or distribute
any material that the seller knows or had reason to know was imported
into the United States without expending the appropriate consumption
allowances or otherwise qualifying for an exemption provided for in the
regulations (e.g., for transformation or destruction, or for used ODS).
The proposed revisions would also explicitly state that every kilogram
of illegally imported material sold or distributed, or offered for sale
or distribution, constitutes a separate violation.
    This proposal would strengthen the EPA's ability to enforce against
illegal trade, which in turn helps ensure that consumption remains
under the Montreal Protocol and CAA caps. It would increase the EPA's
compliance and enforcement options where the agency is not able to
identify the importer. For example, this proposal could allow the EPA
to pursue investigations where distributors or other sellers of CFCs
attempt to sell virgin CFCs in the domestic market knowing that they
were imported into the United States after the phaseout of CFCs, which
occurred in 1996, without qualifying for any exemption from the
consumption phaseout. Actions taken against such distributors would not
only address their violations but could also allow the agency to gather
the necessary information to identify the smuggler who illegally
imported the material in the first place and to pursue compliance and
enforcement action against them under existing authorities in
Sec. Sec.  82.4 and 82.15, which could help deter illegal imports.
Avoiding illegal imports helps to maintain the complete phaseout of
class I ODS and achieve the phaseout of class II ODS, which is
consistent with CAA sections 604(c) and 605(c), as well as with the
overarching goals of Title VI of the CAA.
    Finally, this proposed change would encourage distributors to be
more cautious when purchasing ODS that seems suspiciously priced or
packaged. Since the phaseout of class I ODS, the EPA has warned
distributors of the risk of purchasing black market ODS and provided
information on ways to identify illegally-imported material.
Distributors and other resellers have numerous ways to identify
illegally-imported material. They can look at where the ODS was
produced, the brand

name the material is being sold under, and the name of the
manufacturer. They can also make sure the material meets industry
purity standards, ask the seller for documents of prior ownership of
the product and a laboratory analysis of the quality, and inspect the
packaging for the material since illegally imported refrigerant is
sometimes packaged in wrong-size containers or fixed with improper
valves. While the incentive to circumvent the import controls will
always exist, the EPA hopes that this proposal would help to reduce the
market for smuggled ODS, which should also reduce illegal imports.
    The agency welcomes comments on these proposed prohibitions against
the sale or distribution or offer for sale or distribution of illegally
imported controlled substances.

V. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Product Ban

    The EPA is proposing to add polyurethane foam systems containing
CFCs to the existing list of nonessential products under 40 CFR part
82, subpart C. This proposal would prohibit the sale or distribution,
or offer for sale or distribution, of any polyurethane foam system
containing CFCs in interstate commerce. Historically, CFC-11, CFC-12,
and CFC-114 were used as foam blowing agents, but CFC production has
been globally phased out since 2010. Nevertheless, recent reports show
that the rate of decline in CFC-11 concentrations in the atmosphere,
which had been steady, slowed dramatically starting in 2013, and this
proposal is in response to those reports. After reviewing the EPA's
import restrictions and the nonessential product ban, the agency has
identified the potential for sale or distribution, or offer for sale or
distribution, of imported polyurethane foam systems \39\ containing
illegally-produced CFCs. The EPA is not aware that this is currently
occurring in the United States but believes that this is a potential
gap that can be addressed by amending the list of nonessential products
in Sec.  82.66.
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    \39\ These systems are also referred to as polyols, which are
defined in Montreal Protocol reports as pre-blended foam chemicals.
---------------------------------------------------------------------------

    Researchers recently discovered that starting in 2013 the
concentration of CFC-11 in the atmosphere was not declining as rapidly
as it had been in the prior decade.\40\ This slowdown is contrary to
the modeled decline based on reported global production. In Montzka et
al., the modeled concentration was expected to decrease rapidly
beginning in 2002, without continued CFC-11 production. However, CFC-11
concentrations did not decline more rapidly each year. Global CFC-11
atmospheric concentrations declined at a constant rate in the decade
after 2002. CFC-11 concentrations declined about half as quickly over
the past three years compared with the rate measured from 2002-2012.
The scale of observations suggests that there may have been unreported
production of CFC-11 despite the global phaseout of CFC production in
2010 under the Montreal Protocol. The researchers determined that
emissions of CFC-11 began increasing in 2012 and that in the period
between 2014 to 2016 emissions were higher than average annual
emissions from previous decades. Monitoring data indicate that areas in
eastern Asia may be the sources of these elevated emissions. The
researchers concluded that damage to the ozone layer could be minor if
the source of these emissions can be identified and mitigated, but if
not, there would be delays in stratospheric ozone recovery. A
subsequent investigation by the Environmental Investigation Agency, a
non-governmental environmental organization, indicates that CFC-11 may,
in part, be used in foam systems.\41\ Additional monitoring data
identifies China as the source for much of the CFC-11 emissions.\42\
---------------------------------------------------------------------------

    \40\ Montzka, S.A., Geoff S. Dutton, G.S., Yu, P., Ray, E.,
Portmann, R.W., Daniel, J.S., Kuijpers, L., Hall1, B.D., Mondeel,
D., Siso, C., Nance, J.D., Rigby, M., Manning, A.J., Hu, L., Moore,
F., Miller, B.R., and Elkins, J.W. ``An unexpected and persistent
increase in global emissions of ozone-depleting CFC-11'' Nature 557;
(2018): 413-429.
    \41\ Environmental Investigation Agency (EIA). (2018) Blowing
It: Illegal Production and Use of Banned CFC-11 in China's Foam
Blowing Industry. Available at: https://eia-global.org/reports/20180709-blowing-it-illegal-production-and-use-of-banned-cfc-11-in-chinas-foam-blowing-industry.
    \42\ Rigby, M. et al. ``Increase in CFC-11 emissions from
eastern China based on atmospheric observations.'' Nature 569.7757
(2019): 546-550.
---------------------------------------------------------------------------

    In response to this finding, the EPA evaluated potential uses of
CFCs and whether domestic controls were enough. The EPA wants to ensure
that the United States is not inadvertently contributing to demand for
CFC production. Except for feedstock applications, production and
import of CFCs has been prohibited \43\ in the United States since
1996. The nonessential products ban already prohibits sale or
distribution, and the offer for sale or distribution, of certain
products manufactured with or containing CFCs, including most plastic
foam products. The EPA is not aware of any U.S. manufacturer currently
using CFC-11 or any other class I substance for polyurethane foam
systems. Nonetheless, to ensure that the United States is not
inadvertently contributing to demand for CFCs and to avoid potential
CFC emissions in the United States, the EPA is proposing to add
polyurethane foam systems containing CFCs to the list of nonessential
products at Sec.  82.66.
---------------------------------------------------------------------------

    \43\ Historically, limited amounts of CFC production and
consumption were authorized domestically for essential uses.
---------------------------------------------------------------------------

    The EPA is also proposing to define ``polyurethane foam systems''
in Sec.  82.62, which is used for thermal insulation. A polyurethane
foam system typically consists of two transfer pumps that deliver
ingredients (polyisocyanate or isocyanate from one side and a mixture
including the blowing agent, catalysts, flame retardants, and
stabilizers from the other side) to a metering/mixing device which
allows the components to be delivered in the appropriate proportions.
The components are then sent to a mixing gun and dispensed as foam
directly to a surface such as a roof or tank. These polyurethane foam
systems are packaged and sold as complete systems, containing all the
ingredients including the polyisocyanate and the blowing agent.
    A polyurethane foam system is different from bulk ODS because it is
contained in a system and packaged as a product. Under the existing
regulations in subpart A, bulk CFCs are included in the definition of a
``controlled substance'' and thus are subject to import controls such
as the consumption allowance regime under Sec.  82.4. However, the
definition of ``controlled substance'' in Sec.  82.3 excludes ``any
such substance or mixture that is in a manufactured product other than
a container used for the transportation or storage of the substance or
mixture.'' Because the CFCs in polyurethane foam system are contained
in a system that is sold as a product, they are not subject to the same
import controls as bulk CFCs. If polyurethane foam systems are imported
and sold through distribution chains in the United States, they could
result in emissions of CFCs during their use. These foam systems are
also distinct from a plastic foam product in that the foam product has
already been blown. Plastic foam products manufactured with or
containing a CFC are currently listed at Sec.  82.66(c) and thus are
banned from sale or distribution, or the offer for sale or
distribution, in interstate commerce.
    The EPA is concerned about the potential sale or distribution, or
offer for sale or distribution, of polyurethane foam systems even with
the current nonessential product ban on plastic foam products. The
proposed addition

of polyurethane foam systems to the list of nonessential products would
result in the prohibitions of the sale or distribution of such products
in interstate commerce, and thus would prevent emissions of CFCs in the
United States from domestic use of these foam systems.
    Section 610 of the CAA, titled ``Nonessential products containing
chlorofluorocarbons,'' directs the EPA to issue regulations identifying
nonessential products that ``release class I substances into the
environment (including any release occurring during manufacture, use,
storage, or disposal)'' and ``prohibit[ing] any person from selling or
distributing any such product, or offering any such product for sale or
distribution, in interstate commerce.'' Section 610(b)(1) and (2)
specify that ``[a]t a minimum'' this prohibition shall apply to
``chlorofluorocarbon-propelled plastic party streamers and noise
horns'' and ``chlorofluorocarbon-containing cleaning fluids for
noncommercial electronic and photographic equipment.'' Section
610(b)(3) provides that the prohibition shall apply to other consumer
products determined by the EPA to release class I substances into the
environment (including releases during manufacture, use, storage, and
disposal) and to be nonessential.
    Section 610 further states that in determining whether a product is
nonessential, the EPA shall consider the following criteria: ``the
purpose or intended use of the product, the technological availability
of substitutes for such product and for such class I substance, safety,
health, and other relevant factors.'' The CAA requires the EPA to
consider each criterion listed in section 610 but does not establish
either a ranking or a methodology for comparing their relative
importance, nor does it require that any minimum standard within each
criterion be met. Thus, section 610 provides the EPA discretion in
determining how to consider the listed criteria and the relative weight
to give to each. In addition, section 610 gives the EPA latitude to
consider ``other relevant factors'' beyond the specific criteria set
forth in the statute.
    As indicated above, polyurethane foam systems are products that
release blowing agent to the environment during use. If CFCs are used
as the blowing agent, they would be emitted during the use of such
systems. In proposing to list polyurethane foam systems containing CFCs
as a nonessential product, the EPA has considered the purpose or
intended use of these systems, the technological availability of
substitutes, and safety and health considerations. The first criterion,
the purpose or intended use, relates to the importance of the product,
in terms of benefits to society, specifically whether the product is
sufficiently important that the benefits of its continued production
outweigh the associated danger from the continued use of a class I
ozone-depleting substance in it, or alternatively, whether the product
has little benefit, such that even a lack of available substitutes
might not prevent the product from being considered nonessential. While
foam products, particularly closed-cell rigid polyurethane foams,
provide benefits to society, for more than two decades U.S.
manufacturers have replaced the use of CFCs in foam production without
compromising these benefits.
    The intended use of polyurethane foam systems is often for
insulation in buildings and residences. While insulation has benefits,
such as reducing energy use and costs associated with heating and
cooling, in previous rulemakings the EPA's consideration of this
criterion has also been informed by consideration of whether use of the
class I substance in the product is nonessential (see 58 FR 4474, 66 FR
57514). For example, use of a class I substance in a product may be
considered nonessential where substitutes are readily available, even
if the product itself is important (see 58 FR 4474, 66 FR 57514). This
is reasonable because if the social benefits from a product can be
provided by a similar product without use of the class I substance,
that tends to support the conclusion that the product using the class I
substance is nonessential. U.S. manufacturers successfully transitioned
from using class I substances for foam products more than two decades
ago meaning that they were able to also replace the use of class I
substances in foam blowing systems. Moreover, the same U.S. industry
also replaced the use of class II substances in these plastic foam
products. There are alternative foam blowing agents that can be used in
foam systems as well as alternative methods and products for insulating
buildings and residences that do not use class I substances. For
instance, there are a variety of insulation types that can be applied
throughout the building envelope to save energy and reduce leaks in
buildings and homes with a similar R-value as a polyurethane foam
system intended for use in insulation. The R-value refers to an
insulating material's resistance to conductive heat flow and is
measured or rated in terms of its thermal resistance. Alternative non-
polyurethane foam insulation products with similar R-values include:
Fiberglass, cellulose, and rigid foam boards.
    For the criterion of technological availability of substitutes, the
EPA considers the existence and accessibility of alternative products
or alternative chemicals for use in, or in place of, products releasing
class I substances. The EPA has interpreted this criterion to include
both currently available substitutes and potentially available
substitutes (see 58 FR 4474). There are numerous substitutes for CFCs
in polyurethane foam systems that are listed as acceptable under the
SNAP program and have been widely used by the foam industry since the
mid-1990s. The current list of SNAP approved substitutes is available
here: https://www.epa.gov/snap/substitutes-foam-blowing-agents. In the
initial class I nonessential products rule, the EPA stated that in
sectors where the great majority of manufacturers have already shifted
to substitutes, the use of a class I substance in that product may very
well be nonessential (58 FR 4774). As in previous considerations of
this criterion, in this proposal the EPA is examining sectors where the
market has previously switched to substitutes. Given the class I
nonessential products ban that included plastic foam products was
promulgated more than two decades ago and there were also subsequent
restrictions on the use of class II substances promulgated under 40 CFR
part 82, for polyurethane foam systems, the EPA believes that all U.S.
manufacturers have switched from CFCs to non-ODS alternatives such as
hydrofluorocarbons, hydrofluoroolefins, hydrocarbons, carbon dioxide,
water, and other compounds listed as acceptable substitutes under SNAP
in foam blowing.
    For the criteria of safety and health, as in prior rules related to
the nonessential product ban (see e.g., 66 FR 57514), the EPA
interprets these criteria to mean the effects on human health and the
environment of products releasing CFCs or their substitutes. As in past
rules, in evaluating these criteria, the EPA considers the direct and
indirect effects of product use, and the direct and indirect effects of
alternatives, such as ozone depletion potential, flammability,
toxicity, corrosiveness, energy efficiency, ground-level air hazards,
and other environmental factors (see, e.g., 66 FR 57514). The ODPs of
CFC-11, CFC-12, and CFC-114 are 1. For the purposes of evaluating other
direct and indirect effects for foam systems, the agency does not
believe there is a substantive

difference between foam systems and plastic foam products given the
former is a precursor for the latter. In developing the class I
nonessential products ban, the agency provided information in the
docket concerning the known alternatives at that time. Subsequently,
alternatives that were already in use as well as additional
alternatives for foam-blowing have been evaluated and listed as
acceptable under the SNAP program, such as hydrofluorocarbons,
hydrofluoroolefins, hydrocarbons, carbon dioxide, and water. The
current SNAP list of acceptable substitutes is more expansive than what
was in considered in the initial class I nonessential products ban. The
range of alternatives includes those that have ODPs ranging from zero
to between 0.00024 and 0.00034, significantly lower than the ODP of
CFC-11 which is 1, and considers many of the factors identified in the
initial class I nonessential products ban. The Montreal Protocol's TEAP
also provides a quadrennial global assessment of alternatives for foam
blowing including information concerning many of the direct and
indirect factors identified above (UNEP, 2014). The EPA considered all
these sources of information when deciding whether to propose to add to
the list of banned products foam systems that contain phased out CFCs
and considered that U.S. industry has already successfully transitioned
away from using CFCs.
    Considering all three factors together, the EPA proposes to
conclude that polyurethane foam systems containing CFCs meet the
criteria in section 610 for listing as a nonessential product.
    The EPA is requesting comment on its proposal to amend Sec.
82.66(f) to add polyurethane foam systems containing CFCs to the
nonessential class I product ban and to add a definition of a
``polyurethane foam system'' to Sec.  82.62. Additionally, the EPA is
interested in comments on whether anyone in the United States is using
CFCs for foam blowing or is importing foam systems containing CFCs as a
blowing agent. While the EPA is not aware of any other CFC-containing
products that warrant addition to the list of nonessential products,
the EPA seeks comment on whether there are other products using CFCs
that could also create demand for imports of illegally-produced CFCs.

VI. Updates to Sec. Sec.  82.3, 82.104, and 82.270 Related to
Destruction

    The EPA is proposing to amend certain provisions in 40 CFR part 82,
subparts A, E, and H related to the concept of destruction of ODS.
Title VI does not state how to treat destruction of ODS in calculating
production or consumption; however, the EPA's longstanding regulations
address this issue. The regulatory definition of ``production'' at
Sec.  82.3 excludes amounts that are destroyed by technologies approved
by the Parties to the Montreal Protocol. In addition, amounts imported
for destruction are excluded from the import prohibitions at Sec. Sec.
82.4 and 82.15.
    The EPA added a definition of the term ``destruction'' to Sec.
82.3 in 1993. (58 FR 65047-65048). The existing regulatory definition
of ``destruction'' includes a limited list of technologies that may be
used for destruction. When the EPA established the initial list of
destruction technologies the agency also noted that it intended to
propose authorizing use of additional destruction technologies through
future rulemakings, as such technologies are approved by the Parties
(58 FR 65049).
    The agency is proposing to update the definition of ``destruction''
in Sec.  82.3 to add destruction technologies that have been approved
by the Parties to the Montreal Protocol since the issuance of the 1993
rule. The agency is proposing to add these destruction technologies so
that industry in the United States has a greater variety of
technological options for the destruction of ODS. All of these
technologies are capable of destroying ODS or converting them into
byproducts and can be grouped into three broad categories:
Incineration, plasma, and other non-incineration technologies. The EPA
is proposing to add nitrogen plasma arc, portable plasma arc, argon
plasma arc, microwave plasma, and inductively coupled radio frequency
plasma to allow for additional plasma technologies to allow for greater
industry flexibility for using plasma destruction technologies. Plasma
arc technologies are generally designed to be relatively small,
compact, and transportable. They consume a large amount of energy in
order to generate the plasma but tend to have very high destruction
efficiencies and low emissions. The EPA is also proposing to add an
additional incineration technology--porous thermal reactor. Porous
reactors are high-temperature systems with a porous layer that
facilitates the decomposition of ODS and other industrial waste gases.
Destruction takes place in an oxidizing atmosphere with a continuous
supply of an auxiliary gas. The EPA is also proposing to add four non-
incineration technologies, including chemical reaction with hydrogen
(H2) and carbon dioxide (CO2). Revising the
definition of destruction to include these technologies would not
affect the applicability of other regulatory requirements relating to
use of these technologies. Because one of the non-incineration
technologies that the EPA is proposing to add, chemical reaction with
H2 and CO2, is a conversion technology that
converts the ODS into non-ozone depleting constituents that are capable
of being reused, the EPA is also proposing to amend the definition of
``destruction'' to modify the statement that that the process must not
result in a commercially useful end product. The EPA is also proposing
edits to provisions in Sec.  82.104 (Subpart E ``The Labeling of
Products Using Ozone-Depleting Substances'') and Sec.  82.270 (Subpart
H ``Halon Emissions Reduction'') to conform with the proposed changes
in this definition.
    The existing regulations define the term ``destruction'' at Sec.
82.3 and Sec.  82.104. The two existing definitions are intended to
convey the same meaning but are slightly different. For instance, the
definition in Sec.  82.104 refers to a code of good housekeeping
contained in a United Nations Environment Programme report while the
definition in Sec.  82.3 does not. In addition, both provide a list of
destruction technologies approved under decisions of the Parties to the
Montreal Protocol. The list at Sec.  82.3 contains seven technologies
while the list at Sec.  82.104 contains five.\44\ Both lists are out of
date in that they fail to include certain technologies that can destroy
ODS or converting them into byproducts and have been approved under
more recent decisions of the Parties. Similarly, the existing
prohibition on disposing of halons in Sec.  82.270 includes an
exception for destruction that also provides an outdated list of
destruction technologies. The EPA is therefore proposing to harmonize
these three definitions of destruction and update the list of
destruction technologies to allow the use of more destruction
technologies in the United States.
---------------------------------------------------------------------------

    \44\ Similarly, the definition of ``completely destroy'' at
Sec.  82.104 refers to using ``one of the five'' destruction
processes approved by the Parties. The EPA is also proposing to
remove that outdated language.
---------------------------------------------------------------------------

    The Parties to the Montreal Protocol have at times requested that
the TEAP report to the Parties information on technologies for
destroying surplus stocks of ODS based on an assessment of their
technical capability to permanently decompose all or a significant
portion of the ODS.\45\ The

Parties to the Montreal Protocol have approved the use of destruction
technologies through various decisions, including Decisions V/26, VII/
35, XIV/6, XXII/10, XXIII/12, and at the recent 30th MOP Decision XXX/
6. With the proposed revisions to the list of technologies in the
definition of ``destruction'' at Sec.  82.3, the EPA's regulations
would reflect all technologies approved for ODS destruction under
decisions of the Parties. Specifically, the EPA is proposing to add the
following destruction technologies to the existing list: Nitrogen
plasma arc, portable plasma arc, argon plasma arc, chemical reaction
with H2 and CO2, inductively coupled radio
frequency plasma, microwave plasma, porous thermal reactor, gas phase
catalytic de-halogenation, superheated steam reactor, and thermal
reaction with methane. An explanation of these technologies appears in
the EPA's report on destruction ``ODS Destruction in the United States
and Abroad,'' which is available in the docket.
---------------------------------------------------------------------------

    \45\ UNEP. (2018) Montreal Protocol on Substances on Substances
that Deplete the Ozone Layer. Report of the Technology and Economic
Assessment Panel. April 2018 Volume 2 Decisions XXIX/4 TEAP Task
Force Report on Destruction Technologies for Controlled Substances;
pg. 1-67. Available at: http://conf.montreal-protocol.org/meeting/oewg/oewg-40/presession/Background-Documents/TEAP-DecXXIX4-TF-Report-April2018.pdf.
---------------------------------------------------------------------------

    The EPA is also proposing to revise the definition of
``destruction'' in Sec.  82.104 and the prohibition in Sec.  82.270 by
removing the outdated lists found in those provisions and adding a
cross reference to the list of destruction technologies in Sec.  82.3.
This would conform the list of destruction technologies that can be
used across subparts A, E, and H. The destruction technologies that
would be included the list in Sec.  82.3 under the proposal discussed
above in this section are also applicable to these other subparts,
although the EPA notes that the listing of municipal waste incinerators
in the existing regulations at Sec.  82.3 is limited to the destruction
of foams, and thus the added cross reference to Sec.  82.3 in Sec.
82.270 would not make that technology available for the exception for
the destruction of halons at Sec.  82.270. The addition of the cross
reference to Sec.  82.3 would also simplify updating Sec.  82.104 and
Sec.  82.270 in the future. If additional destruction technologies are
demonstrated in future to be capable of destroying ODS or converting
them into byproducts, the EPA may consider proposing to add those
technologies to the definition of ``destruction'' in Sec.  82.3 to
further increase the options for ODS destruction in the United States,
to the extent consistent with approvals by the Parties and as
appropriate. The added cross references would mean that the EPA would
only need to revise the list in Sec.  82.3 for the technologies to be
approved for destruction under all three provisions.
    The EPA is also proposing to amend the definitions of
``destruction'' at Sec. Sec.  82.3 and 82.104 to modify language
regarding commercially useful end products. The current definition
contains a restriction that a destruction technology cannot result in a
commercially useful product. The EPA is proposing to revise that
restriction in part because one of the destruction technologies
proposed to be added to the definition of destruction breaks down ODS
into substances that have commercial viability. The process ``Chemical
Reaction with H2 and CO2'' converts fluorinated
compounds to hydrofluoric acid, hydrochloric acid, carbon dioxide,
chlorine, and water. The reaction technology separates and collects the
byproducts at a high purity allowing for them to be sold, potentially
improving the economics of using this technology. The EPA does not
believe that a process that would otherwise qualify as ``destruction''
should fail to qualify simply because one of the outputs is a
commercially useful end product. The EPA is therefore proposing to
revise the definition of ``destruction'' so that the mere existence of
such an end product does not bar the technology from being included in
the definition. The proposed revisions further clarify that the
commercial usefulness of the end product is secondary to the act of the
ODS destruction. Thus, the EPA's proposed changes to the definition of
destruction recognize that while production of a commercially useful
end product is not the primary purpose of a destruction process, the
destruction process may nevertheless result in a commercially useful
product.
    The proposed clarification that the usefulness of an end product
should be secondary to ODS destruction is intended to maintain a
distinction between the terms ``destruction'' and ``transformation.''
The EPA established the definitions of ``destruction,'' ``production,''
and ``transformation'' in the 1993 rule (58 FR 65048-65049). Among
other things, the agency excluded from the definition of
``production'': (1) Amounts of controlled substances that are destroyed
using approved destruction technologies and (2) the manufacture of a
controlled substance that is subsequently transformed. Similarly, the
regulatory import prohibitions excluded both amounts destroyed, and
amounts transformed. The definition of ``destruction'' noted that it
does not result in a commercially useful end product whereas the
definition of ``transformation'' noted that it occurs in a process
specifically for the manufacture of other chemicals for commercial
purposes. Thus, the original distinction in the definitions of these
two terms related to whether the process was undertaken to
intentionally result in a commercially useful end product or not. The
distinction mattered (and is still relevant) because as explained in
the 1993 rule, if a portion of the ODS remained after destruction, the
destroyed portion could be excluded from production, but the material
had to be entirely consumed in the process (except for trace
quantities) to qualify for the transformation exclusion (58 FR 65048).
The EPA is proposing to remove one aspect of the distinction between
these two processes in the original definitions (whether the processes
result in a commercially useful end product). The proposed changes to
the text would clarify that the usefulness of the product is secondary
to the act of destruction. Conversely, transformation is the use of ODS
as a feedstock with the goal of manufacturing other chemicals.
    Intent has been an important aspect of the distinction between
``destruction'' and ``transformation'' since these definitions were
first promulgated. For example, in the 1993 rule establishing the
definition of ``destruction,'' in a discussion of whether heat or
energy are commercially useful end products, the agency said ``[t]he
intent of the destruction process is to destroy the substance, for
which a byproduct in the way of heat or energy may be produced, rather
than production of an end product being the goal of the destruction
activity.'' (58 FR 65049). This discussion recognizes that something
useful may incidentally result from destruction. Similarly, the 1993
rule recognized the possibility of a destruction technology converting
ODS into other useful substances. In explaining the inclusion of
reactor cracking as a destruction technology, the EPA stated ``[s]ince
1983, this process has treated waste gases resulting from the
production of CFCs. The gases are converted to hydrofluoric acid,
hydrochloric acid, carbon dioxide, chlorine, and water. The two acids
are usable in-house and/or marketable, and the chlorine is scrubbed,
leaving only water vapor, oxygen, and carbon dioxide as waste gases.''
(58 FR 65047, emphasis added).
    Consistent with that recognition and with the proposed inclusion of
a new destruction technology with commercially useful end products, the
EPA believes that the creation of a

commercially useful end product should not in itself preclude a
technology from being listed in the definition of ``destruction.'' The
creation of such an end product does not change whether chemical
decomposition occurs. Many destruction processes incinerate the
chemicals, but other technologies break down the controlled substance.
In breaking down the chemical, it is possible that the result includes
a commercially valuable end product that is not a controlled substance.
``Transformation,'' on the other hand, means to use and entirely
consume a controlled substance in the manufacture of other chemicals
for commercial purposes. The purpose is to create new compounds using
the ODS as a feedstock rather than the decomposition of ODS as a waste.
    The EPA welcomes comment on the proposal to update and harmonize
definitions related to ODS destruction in Sec. Sec.  82.3, 82.104, and
82.270, including the proposal to add to the list of destruction
technologies and amend the definition of ``destruction'' to allow
inclusion of destruction technologies that incidentally result in
commercially useful end products. The EPA specifically invites comments
from entities that destroy ODS or send ODS to facilities for
destruction.

VII. Removing Obsolete Provisions in Sec. Sec.  82.3, 82.4, 82.9,
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24

    The EPA is proposing to remove certain provisions that have been
made obsolete due to the phaseout of class I ODS or certain class II
ODS. Specifically, this notice proposes to remove outdated provisions
for class I ODS related to Article 5 allowances, transformation and
destruction credits, and transfers of allowances issued prior to the
phaseout. The EPA is also proposing to remove definitions and reporting
provisions for HCFC-141b exemption allowances and export production
allowances.
    These changes increase readability and reduce confusion. Removing
obsolete provisions would assist the regulated community by making it
easier to locate the currently applicable requirements and reduce
potential confusion from presentation of requirements that no longer
apply. The EPA is not proposing to remove outdated provisions that
provide historical context which could assist the reader or that would
affect the level of environmental protection provided under subpart A.
    The EPA welcomes comments on the proposed removal of these
provisions. The agency is particularly interested in any comments
indicating these proposed changes may affect current obligations or may
be important to the existing requirements.

A. Class I Article 5 Allowances

    Before the worldwide phaseout of CFCs and other class I ODS, the
EPA historically had provided additional production allowances, known
as ``Article 5 allowances,'' for production of certain class I ODS for
export to and use by Article 5 countries consistent with the Montreal
Protocol.\46\ These are countries that were subject to a later
production and consumption phaseout schedule than non-Article 5
countries such as the United States. Section 82.9(a) of the existing
regulations granted Article 5 allowances until 2010, when the phaseout
of these substances was completed in Article 5 countries. Because these
provisions no longer have any purpose or effect, the EPA is proposing
to remove the schedule for issuing Article 5 allowances found at Sec.
82.9(a) and the corresponding recordkeeping and reporting requirements
in Sec.  82.13(f)(2)(v) and (f)(3)(ix). Section 82.9(b) of the existing
regulations provides that holders of Article 5 allowances may produce
class I controlled substances for export to Article 5 countries and
transfer Article 5 allowances. Because there are no more holders of
Article 5 allowances, the EPA is proposing to remove these provisions
as well.
---------------------------------------------------------------------------

    \46\ For the purposes of the Montreal Protocol, this is called
production for basic domestic need.
---------------------------------------------------------------------------

B. Class I Allowances and Credits Related to Transformation and
Destruction

    Before the domestic phaseout of class I ODS, the EPA historically
had provided additional production allowances in cases where class I
ODS were destroyed or transformed. Because these provisions no longer
have any purpose or effect, the EPA is proposing to remove these
provisions and to remove references to these obsolete allowances in
certain other provisions.
    Section 82.9(e) of the existing rules contains the provisions
related to such allowances, including detailing the information needed
in a request for allowances based on having destroyed or transformed a
specified quantity of class I ODS. The EPA stopped issuing such
allowances in 1996 for all class I controlled substances (except methyl
bromide) and in 2005 for methyl bromide. The EPA is proposing to remove
Sec.  82.9(e) and related obsolete reporting and recordkeeping
requirements in Sec.  82.13(f)(2)(iv), (g)(1)(xv), (g)(4)(xi), and
(h)(4)(xi).
    Section 82.9(f) authorized persons who were nominated for an
essential use exemption to obtain destruction and transformation
credits between 1996 and 2000. The EPA established these provisions
because of the difference between the phaseout date for class I
substances under the CAA and the phaseout date for the same substances
under the Montreal Protocol. These provisions include a description of
the information needed and the grounds for which the EPA can disallow
the request. Section Sec.  82.4(f) addresses production and import with
destruction and information credits. The EPA stopped issuing such
credits in 2000. Because these provisions no longer have any purpose or
effect, the EPA is proposing to remove Sec. Sec.  82.4(f) and 82.9(f).

C. Class I Consumption Allowances

    Before the phaseout of class I ODS, the EPA historically had
provided additional consumption allowances where class I ODS were
exported, transformed or destroyed, or where an amount of production
was transferred from another Party to the Montreal Protocol. Section
82.10 contains provisions related to these additional consumption
allowances, including detailing the information needed in a request for
them. The EPA stopped issuing those allowances in 1996 for all class I
controlled substances (except methyl bromide) and in 2005 for methyl
bromide. Because these provisions no longer have any purpose or effect,
the EPA is proposing to remove them and reserve Sec.  82.10 in its
entirety. The EPA is also proposing to remove references to Sec.  82.10
from the definition of ``consumption allowance'' in Sec.  82.3; Sec.
82.9(c), (e) and (f); Sec.  82.13(h)(1) and (2); and Sec.  82.13(i) as
those references are no longer applicable.

D. Transfers of Class I Allowances

    The EPA historically had allowed for the transfer of production and
consumption allowances for class I substances in various ways. Under
section 607 of the CAA, the EPA was required to issue regulations
providing for inter-pollutant allowance transfers and allowance
transfers between companies. For class I substances, those regulations
appear at Sec.  82.12. Due to the class I phaseout, the EPA no longer
allocates production or consumption allowances for class I substances.
Because these provisions no longer have any purpose or effect, the EPA
is proposing to remove provisions related to pre-1996 allowance
transfers for class I ODS (and pre-2005 for methyl

bromide) found at Sec.  82.12(a)(1) and (b)(1), as any such transfers
occurred years ago and these provisions no longer have any purpose or
effect.
    As discussed in earlier in this section, the EPA is proposing to
remove certain provisions governing Article 5 allowances and
destruction and transformation credits. The EPA is therefore also
proposing to remove provisions allowing for the transfer of Article 5
allowances and destruction and transformation credits found at Sec.
82.12(a)(2), (b)(2)-(5), and (c) as those provisions are longer needed.

E. HCFC-141b Allowances

    In 2003, the EPA issued regulations (68 FR 2820, January 21, 2003)
to ensure compliance with the first reduction milestone in the HCFC
phaseout. In that rule, the EPA established chemical-specific
consumption and production baselines for HCFC-141b, HCFC-22, and HCFC-
142b for the initial regulatory period ending December 31, 2009. The
rule phased out the production and import of HCFC-141b effective
January 1, 2003 (see Sec.  82.16(b)). The EPA created a petition
process at Sec.  82.16(h) to allow applicants to request ``HCFC-141b
exemption allowances'' to produce or import small amounts of HCFC-141b
beyond the phaseout. The agency removed Sec.  82.16(h) from the
regulations and terminated the HCFC-141b exemption allowance program,
effective January 1, 2015 (79 FR 64267, October 28, 2014). At that
time, the EPA did not remove definitions and reporting and
recordkeeping requirements that pertain only to HCFC-141b exemption
allowances.
    The EPA is now proposing to remove the definitions in Sec.  82.3
specific to HCFC-141b production or import after the 2003 phaseout,
including the definitions of ``Formulator,'' ``HCFC-141b exemption
allowances,'' and ``Unexpended HCFC-141b exemption allowances.'' The
definitions for HCFC-141b exemption allowances are no longer relevant
since the EPA has removed the substantive regulations that these
definitions support. For the same reasons, the EPA is proposing to
remove references to HCFC-141b in the definition of ``Confer,'' but
would retain the remainder of that definition. The EPA is also
proposing to remove references and recordkeeping and reporting
requirements specifically relating to HCFC-141b exemption allowances.
These edits would be made in Sec.  82.24(b)(1)(ix) and (xi); Sec.
82.24(b)(2)(xiv); Sec.  82.24(c)(1)(xi); Sec.  82.24(c)(2)(xvi); and
Sec.  82.24(g).
    The EPA also created provisions at Sec.  82.18(b) to allow
producers to use ``export production allowances'' to produce HCFC-141b
for export beyond the phaseout. These allowances ended in 2010 and
therefore these provisions have no further purpose or effect. The EPA
is proposing to retain the definition of export production allowances
and certain references where appropriate to provide context to the
reader but remove the recordkeeping and reporting provisions. These
edits would be made in Sec.  82.16(e)(1) and (2); Sec.  82.24(b)(1)(iv)
and (ix); Sec.  82.24(b)(2)(iv), and (xii); and Sec.  82.24(d)(2).

VIII. Economic Analysis

    In total, the EPA estimates that the quantified costs and benefits
of this proposal would result in a net savings of $13,000 per year. The
agency analyzed the quantitative benefits associated with the overall
burden reduction from transitioning to electronic reporting, the
streamlined petition process for used ODS, the certification to import
ODS for destruction, and costs associated with proposed labeling
requirements. For this action, the EPA has provided in the docket
technical support documents that consider the costs and the benefits
commensurate with changes to ODS phaseout regulations, such as the
requirement to use electronic reporting. Further, many of the proposed
changes to the ODS phaseout regulations, such as the removal of
obsolete requirements, would not result in any new costs or benefits.
The quantifiable costs and benefits of this rule primarily result from
the proposed revisions to the reporting and recordkeeping requirements
and the requirement to use electronic reporting. For the phaseout of
ODS, the EPA previously considered the domestic costs and benefits of
the United States' phaseout.\47\
---------------------------------------------------------------------------

    \47\ The following documents are available in the docket: ``EPA.
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010;''
``EPA. 1992. Regulatory Impact Analysis: Compliance with Section 604
of the Clean Air Act for the Phaseout of Ozone Depleting
Chemicals;'' and ``EPA. 1993. Addendum to the 1992 Phaseout
Regulatory Impact Analysis: Accelerating the Phaseout of CFCs,
Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.''
---------------------------------------------------------------------------

    The EPA anticipates that electronic reporting would allow for
faster review and transmission of submissions to the EPA. Additionally,
all information submitted electronically would be linked in an improved
tracking system, which would facilitate document management efforts.
The intent is that this would allow companies to manage past and future
submissions easier. The EPA expects that the estimated burden hours and
labor costs would decrease as a result of the complete transition from
paper to electronic reporting. Even accounting for the one-time burden
for entities that have not yet registered in CDX of $2,000, the
electronic reporting would result in an overall burden reduction for
respondents of approximately $4,000. Similarly, the estimated agency
burden hours and labor costs would also decrease. For example, by
requiring electronic reporting the agency would no longer have to
manually enter data into the ODS Tracking System.
    The streamlined petitions process and new certification to import
ODS for destruction would decrease the total estimated respondent
burden. There would be a reduction in reporting requirements for
imports for destruction relative to the current petition process.
Specifically, the number of reporting elements for importers for
destruction would be reduced from 13 to 8 and reduce burden hours per
response by four hours. The EPA also estimates that exempting halon
1211 used in aircraft bottles from the petition process would reduce
the number of responses per respondent by one, as detailed in
descriptions of the recordkeeping and reporting burden, including cost
savings to the agency, which can be found in the supporting statement
for the Information Collection Request available in the docket to this
rule.
    The EPA estimates that the proposed requirements to redesign the
existing labels on containers of Halotron[supreg] I would result in a
one-time cost between $1,000 to $3,000. Administrative and graphic
design labor costs are estimated based on the total amount of hours
required to redesign existing labels as well as hourly labor costs.
These hourly costs include wages, overhead rates, and fringe rates.
Additional information on this analysis is available in the docket.
    There are also effects of this rule that the agency has not or
cannot quantify. The EPA did not conduct a specific analysis of the
benefits and costs associated with prohibiting the sales of QPS methyl
bromide for non-QPS purposes, prohibiting sales of polyurethane foam
systems, other elements of the proposal, and allocating allowances of
HCFC-123 and HCFC-124. Prohibiting both the sales of QPS methyl bromide
for non-QPS purposes and the sales of illegally imported ODS is
designed to improve compliance with the existing provisions. Costs are
unquantifiable as the scale of these sales are unknown but anticipated
to be small. The proposed prohibition on sales and distribution of
polyurethane foam systems containing CFCs should have no cost. Updating
the definition of destruction would allow for the use of

new destruction technologies that are currently not in use, but the
agency is unable to estimate the market for the use of those new
technologies if they are adopted. The proposed removal of obsolete
provisions is not anticipated to have any material cost or benefit.
    For the allocation of HCFC-123 and 124, previous analyses provide
information on the costs and benefits of the United States' ODS
phaseout, and specifically the phaseout of all HCFCs through 2030, but
do not quantify the costs and benefits of each individual phaseout step
for each individual chemical. A memorandum summarizing these analyses,
including the original regulatory impact analysis for the full phaseout
of ODS, is available in the docket.\48\ Finalizing this proposed rule
would allow for the production and consumption of HCFC-123 and HCFC-124
that would otherwise not be allowed in the absence of this rulemaking
under existing regulations. The benefit of issuing allowances
consistent with this proposal outweighs the disbenefit associated with
no action.
---------------------------------------------------------------------------

    \48\ EPA. 2008. ``HCFC Cost Analysis.'' and EPA. 2018.
``Overview of CFC and HCFC Phaseout.''
---------------------------------------------------------------------------

    Since the allocation for HCFC-123 is the largest component of this
rule, the following discusses the potential costs and benefits of the
proposed and alternative allocation levels for HCFC-123. As discussed
in the allocation section of this notice, the consumption baseline of
the United States under the Montreal Protocol in 2020 for all HCFCs, on
an ODP-weighted basis, will be 0.5% of the historic HCFC baseline. This
equates to 3,810 MT of HCFC-123. Under section 605(c) of the CAA, the
consumption of HCFCs by any person is limited to the quantity consumed
by that person during the baseline year. The baseline \49\ for HCFC-123
is the aggregated quantity consumed in the baseline years and equates
to 2,014 MT. In developing the proposed allocations, the EPA considered
the quantities needed to satisfy estimated demand for HCFC-123 to
service equipment manufactured before 2020. Lastly, the EPA estimated a
range for the amount HCFC-123 that will likely be reclaimed annually,
and thus be available to meet part of the servicing demand for HCFC-
123. These are summarized in Table 3.
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    \49\ Baseline from 40 CFR 82.19.

                                            Table 3--HCFC-123 Servicing Demand and Estimated Reclamation (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         2020     2021     2022     2023     2024     2025     2026     2027     2028     2029    Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Estimated Demand...............................      820      790      770      750      720      700      670      650      630      600    7,100
Estimated Reclamation Low............................      300      310      320      330      340      350      360      370      380      390    3,450
Estimated Reclamation High...........................      350      378      407      436      465      494      523      552      581      610    4,796
Total Need for New Production with Low Reclaim.......      520      480      450      420      380      350      310      280      250      210    3,650
Total Need for New Production with High Reclaim......      470      412      363      314      255      206      147       98       49        0    2,314
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The agency's intent is to accomplish the complete phaseout in 2030
in a manner that achieves a smooth transition to alternatives without
stranding equipment. This is important because the EPA estimates that
36,000 appliances using HCFC-123 will still be in operation in
2030.\50\ At that time, no more HCFC-123 may be produced or imported
into the United States.
---------------------------------------------------------------------------

    \50\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030). See Table 3.

                                      Table 4--Projected Number of HCFC-123 AC and Refrigeration Units in Operation
                                                                    [1000s of Units]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Equipment type                       2020     2021     2022     2023     2024     2025     2026     2027     2028     2029     2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chillers (AC)........................................       47       45       43       41       39       37       35       33       31       29       27
IPR..................................................       14       13       13       12       12       11       11       10       10        9        9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA does not want to strand existing equipment because of an
inadequate supply of HCFCs, but also must achieve a complete phaseout
of production and consumption by 2030. A viable reclamation market is
important to support the continued availability of HCFCs after the 2030
phaseout, and during 2020 through 2029 can support the fire suppression
market and decrease the need for new production and import. As noted
previously, the EPA is requesting comment on the HCFC demand estimates
included in the 2019 Draft Servicing Tail Report, which is included in
the docket for this rulemaking.
    Table 5 presents the three allocation amounts for HCFC-123 raised
for comment in this proposed rule. The agency proposes to issue
consumption allowances equal to the 2020 estimated HCFC-123 demand for
servicing existing refrigeration and air-conditioning and fire
suppression equipment for years 2020 through 2022 and to then decrease
the number of allowances issued in each subsequent year by an equal
amount each year such that there are zero allowances issued in 2030.
Alternative 1 is equal to the estimated demand minus the low end of
estimated reclaim. Alternative 2 is 100% of the domestic HCFC-123
consumption baseline, which as discussed previously is the full amount
that can be allocated under the CAA.

                                         Table 5--Comparison of HCFC-123 Consumption Allowance Allocations (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         2020     2021     2022     2023     2024     2025     2026     2027     2028     2029    Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal.............................................      650      650      650      570      490      410      330      250      170       90    4,260

Alternative 1........................................      520      480      450      420      380      350      310      280      250      210    3,650
Alternative 2........................................    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014   20,140
0.5% of HCFC Consumption Baseline....................    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810   38,100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA expects more disbenefits in allocating significantly above
projected demand. Because of the limited numbers of allowance holders,
the EPA does not expect the price of HCFC-123 to appreciably decrease
if the agency allocates 100% of the HCFC-123 baseline (Alternative 2 in
Table 5). The disbenefits the EPA is concerned about include near and
longer term available supply of reclaimed and recycled HCFC-123, as
well as emissions of ODS, given the agency's assumption that all
refrigerant produced is eventually emitted into the atmosphere. More
allocated allowances would likely suppress the recovery and reclamation
market and cause more HCFC material to be vented at the end of the
equipments' lifetime. In the near term, this would also have an adverse
effect on the availability of reclaimed HCFC-123 for the fire
suppression sector because reclamation is the only source of HCFC-123
for the manufacture of new fire suppression equipment; it is projected
that the fire suppression sector would need between 170 to 225 MT for
the manufacture of new equipment. Thus, if the reclaim market is
suppressed from 2020 through 2029, there will be less supply and higher
costs for HCFC-123, especially from 2030 onwards when the only supply
of HCFC-123 will be from the reclaim market. Based on the 2019 Draft
Servicing Tail Report, HCFC-124 consumption has been approximately 250
MT per year and reclamation has been minimal. Recent sales data from
the California Air Resources Board as well as other information
indicate that demand for HCFC-124 should be between 100 and 200 MT in
2020. Like HCFC-123, providing HCFC-124 allowances significantly in
excess of demand may not foster transition. Thus, the EPA is proposing
to allocate 200 MT for the first three years and then gradually
decrease over the next seven years by an equal amount each year. The
EPA is taking comment on the assumptions and projections in this
section.
    Regardless of allocation level, for the purposes of analyzing the
impact of this proposal on small business, the EPA finds there is no
significant impact on a substantial number of small entities (SISNOSE).
The EPA performed a sales test to assess the economic impact of a
regulatory option on small businesses and compared the results of the
sales test. Based on the screening analysis of allowance holders of
HCFC-123 and HCFC-124, this proposed rulemaking could be presumed to
have no SISNOSE because it is expected to result in a net benefit to
small business through the ability to continue producing, importing
and/or selling HCFC-123 and HCFC-124. The EPA notes that there are only
eight companies total that hold consumption allowances for HCFC-123 and
HCFC-124, only two of which are small businesses.
    Table 6 summarizes the environmental effect, in ODP-weighted metric
tons, of the various HCFC-123 allocation levels over the length of the
2020-2029 regulatory period. For comparison, the EPA estimates total
demand for HCFC-123 over the next decade to equal 7,100 MT, or 142 ODP-
weighted metric tons. About 70% to 75% of this amount is for servicing
existing equipment and can be met with newly-imported HCFCs, and the
remainder must be met with reclaimed or recycled HCFCs. Not all
allowances may be expended so this does not reflect the actual impact
to the stratospheric ozone layer of these three options. However, the
EPA does assume that all refrigerant produced is eventually emitted
into the atmosphere. Alternative 1 followed by the proposed allocation
amounts would have the least impact on the stratospheric ozone layer.
For HCFC-124, the EPA estimates total demand over the next decade equal
to 1,000 to 2,000 MT, or 22 to 44 ODP-weighted metric tons.

 Table 6--Environmental Effects of the HCFC-123 and HCFC-124 Allocation
                                 Amounts
                          [Total of 2020-2029]
------------------------------------------------------------------------
                                                           ODP-weighted
                                                MT          metric tons
------------------------------------------------------------------------