[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Rules and Regulations]
[Page 74117-74152]
[DOCID:fr28de07-25]

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Part IV

Environmental Protection Agency

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40 CFR Part 82

Protection of Stratospheric Ozone: The 2008 Critical Use Exemption From
the Phaseout of Methyl Bromide; Final Rule

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2006-1016; FRL-8510-8]
RIN 2060-A030

Protection of Stratospheric Ozone: The 2008 Critical Use
Exemption From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing an exemption to the phaseout of methyl
bromide to meet the needs of 2008 critical uses. Specifically, EPA is
authorizing uses that qualify for the 2008 critical use exemption and
the amount of methyl bromide that may be produced, imported, or
supplied from existing pre-phaseout inventory for those uses in 2008.
EPA is taking action under the authority of the Clean Air Act to
reflect recent consensus decisions taken by the Parties to the Montreal
Protocol on Substances that Deplete the Ozone Layer at the 18th Meeting
of the Parties.

DATES: This rule is effective on December 28, 2007.

ADDRESSES: EPA has established a docket for this action identified
under Docket ID No. EPA-HQ-OAR-2006-1016. All documents in the docket
are listed on the http://www.regulations.gov site. Although listed in

the index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available only through http://www.regulations.gov
 or in hard copy. To obtain copies of materials in

hard copy, please call the EPA Docket Center at<PHONE_NUMBER> between
the hours of 8:30 a.m.-4:30 p.m. E.S.T., Monday-Friday, excluding legal
holidays, to schedule an appointment. The EPA Docket Center's Public
Reading Room address is EPA/DC, EPA West, Room 3334, 1301 Constitution
Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Aaron Levy by telephone at (202) 343-
9215, or by e-mail at<EMAIL_ADDRESS>or by mail at Aaron Levy, U.S.
Environmental Protection Agency, Stratospheric Protection Division,
Stratospheric Program Implementation Branch (6205J), 1200 Pennsylvania
Avenue, NW., Washington, DC, 20460. You may also visit the Ozone
Depletion Web site of EPA's Stratospheric Protection Division at http://www.epa.gov/ozone/strathome.html
 for further information about EPA's

stratospheric ozone protection regulations, the science of ozone layer
depletion, and other related topics.

SUPPLEMENTARY INFORMATION: This final rule concerns Clean Air Act (CAA)
restrictions on the consumption, production, and use of methyl bromide
(a class I, Group VI controlled substance) for critical uses during
calendar year 2008. Under the Clean Air Act, methyl bromide consumption
(consumption is defined under the CAA as production plus imports minus
exports) and production was phased out on January 1, 2005, apart from
allowable exemptions, namely the critical use exemption and the
quarantine and pre-shipment exemption. With this action, EPA is
authorizing the uses that will qualify for the 2008 critical use
exemption as well as specific amounts of methyl bromide that may be
produced, imported, or sold from pre-phaseout inventory for critical
uses in 2008.
    Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C.
Chapter 5, generally provides that rules may not take effect earlier
than 30 days after they are published in the Federal Register. EPA is
issuing this final rule under section 307(d) of the Clean Air Act,
which states: ``The provisions of section 553 through 557 * * * of
Title 5 shall not, except as expressly provided in this section, apply
to actions to which this subsection applies.'' CAA section 307(d)(1).
Thus, section 553(d) of the APA does not apply to this rule. EPA is
nevertheless acting consistently with the policies underlying APA
section 553(d) in making this rule effective on December 28, 2007. APA
section 553(d) provides an exception for any action that grants or
recognizes an exemption or relieves a restriction. This final rule
grants an exemption from the phaseout of methyl bromide.

Table of Contents

I. General Information
    Regulated Entities
II. What Is Methyl Bromide?
III. What Is the Background to the Phaseout Regulations for Ozone
Depleting Substances?
IV. What Is the Legal Authority for Exempting the Production and
Import of Methyl Bromide for Critical Uses Authorized by the Parties
to the Montreal Protocol?
V. What Is the Critical Use Exemption Process?
    A. Background of the Process
    B. How Does This Final Rulemaking Relate to Previous Critical
Use Exemption Rulemakings?
    C. Critical Uses
    D. Critical Use Amounts
    1. Background of Critical Use Amounts
    2. Calculation of Available Stocks
    3. Adjusting New Production and Import Amounts to Account for
Available Stocks
    4. Treatment of Carryover Material
    a. Reporting Requirements to Calculate Carryover Amounts
    b. Apportionment of Carryover Reductions Among Producers
    5. Amounts for Research Purposes
    6. Methyl Bromide Alternatives
    E. The Criteria in Decisions IX/6 and Ex. I/4
    F. Emissions Minimization
    G. Critical Use Allowance Allocations
    H. Critical Stock Allowance Allocations and the Confidentiality
of Information About the Aggregate Methyl Bromide Inventory
    I. Stocks of Methyl Bromide
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act

I. General Information

Regulated Entities

    Entities potentially regulated by this action are those associated
with the production, import, export, sale, application, and use of
methyl bromide covered by an approved critical use exemption.
Potentially regulated categories and entities include:

------------------------------------------------------------------------
             Category                  Examples of regulated entities
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Industry.........................  Producers, Importers, and Exporters
                                    of methyl bromide; Applicators and
                                    Distributors of methyl bromide;
                                    Users of methyl bromide, e.g.,
                                    farmers of vegetable crops, fruits,
                                    and seedlings; Owners of stored food
                                    commodities and structures such as
                                    grain mills and processors; and
                                    Agricultural researchers.
------------------------------------------------------------------------

    The above table is not intended to be exhaustive, but rather to
provide a guide for readers regarding entities likely to be regulated
by this action. This table lists the types of entities that EPA is
aware could potentially be regulated by this action. To determine
whether your facility, company, business, or organization is regulated
by this action, you should carefully examine the regulations
promulgated at 40 CFR Part 82, Subpart A. If you have questions
regarding the applicability of this action to a particular entity,
consult the person listed in the preceding section.

II. What Is Methyl Bromide?

    Methyl bromide is an odorless, colorless, toxic gas which is used
as a broad-spectrum pesticide and is controlled under the CAA as a
class I ozone-depleting substance (ODS). Methyl bromide is used in the
U.S. and throughout the world as a fumigant to control a variety of
pests such as insects, weeds, rodents, pathogens, and nematodes.
Additional characteristics and details about the uses of methyl bromide
can be found in the proposed rule on the phaseout schedule for methyl
bromide published in the Federal Register on March 18, 1993 (58 FR
15014), and the final rule published in the Federal Register on
December 10, 1993 (58 FR 65018). Information on methyl bromide can be
found at http://www.epa.gov/ozone/mbr and http://www.ozone.unep.org or
by contacting the Stratospheric Ozone Hotline at 1-800-296-1996.
    Because it is a pesticide, methyl bromide is also regulated by EPA
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
and other statutes and regulatory authority, as well as by States under
their own statutes and regulatory authorities. Under FIFRA, methyl
bromide is a restricted use pesticide. Restricted use pesticides are
subject to certain Federal and State requirements governing their sale,
distribution, and use. Nothing in this final rule implementing the
Clean Air Act is intended to derogate from provisions in any other
Federal, State, or Local laws or regulations governing actions
including, but not limited to, the sale, distribution, transfer, and
use of methyl bromide. All entities that are affected by provisions of
this action must continue to comply with FIFRA and other pertinent
statutory and regulatory requirements for pesticides (including, but
not limited to, requirements pertaining to restricted use pesticides)
when importing, exporting, acquiring, selling, distributing,
transferring, or using methyl bromide for critical uses. The
regulations in this final rule are intended only to implement the CAA
restrictions on the production, consumption, and use of methyl bromide
for critical uses exempted from the phaseout of methyl bromide.

III. What Is the Background to the Phaseout Regulations for Ozone
Depleting Substances?

    The current regulatory requirements of the stratospheric ozone
protection program that limit production and consumption of ozone-
depleting substances can be found at 40 CFR Part 82, Subpart A. The
regulatory program was originally published in the Federal Register on
August 12, 1988 (53 FR 30566), in response to the 1987 signing and
subsequent ratification of the Montreal Protocol on Substances that
Deplete the Ozone Layer (Protocol). The Protocol is the international
agreement aimed at reducing and eliminating the production and
consumption of stratospheric ozone depleting substances. The U.S. was
one of the original signatories to the 1987 Montreal Protocol and the
U.S. ratified the Protocol on April 12, 1988. Congress then enacted,
and President George H.W. Bush signed into law, the Clean Air Act
Amendments of 1990 (CAAA of 1990) which included Title VI on
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85,
Subchapter VI, to ensure that the United States could satisfy its
obligations under the Protocol. EPA issued regulations to implement
this legislation and has made several amendments to the regulations
since that time.
    Methyl bromide was added to the Protocol as an ozone depleting
substance in 1992 through the Copenhagen Amendment to the Protocol. The
Parties to the Montreal Protocol (Parties) agreed that each
industrialized country's level of methyl bromide production and
consumption in 1991 should be the baseline for establishing a freeze in
the level of methyl bromide production and consumption for
industrialized countries. EPA published a final rule in the Federal
Register on December 10, 1993 (58 FR 65018), listing methyl bromide as
a class I, Group VI controlled substance, freezing U.S. production and
consumption at this 1991 level of 25,528,270 kilograms, and, in 40 CFR
82.7, EPA also set forth the percentage of baseline allowances for
methyl bromide granted to companies in each control period (each
calendar year) until 2001, when the complete phaseout would occur. This
phaseout date was established in response to a petition filed in 1991
under sections 602(c)(3) and 606(b) of the CAAA of 1990, requesting
that EPA list methyl bromide as a class I substance and phase out its
production and consumption. This date was consistent with section
602(d) of the CAAA of 1990, which for newly listed class I ozone
depleting substances provides that ``no extension [of the phaseout
schedule in section 604] under this subsection may extend the date for
termination of production of any class I substance to a date more than
7 years after January 1 of the year after the year in which the
substance is added to the list of class I substances.'' EPA based its
action on scientific assessments and actions by the Parties to the
Montreal Protocol to freeze the level of methyl bromide production and
consumption for industrialized countries at the Fourth Meeting of the
Parties (MOP) in 1992 in Copenhagen, Denmark.
    At the Seventh MOP in 1995, the Parties made adjustments to the
methyl bromide control measures and agreed to reduction steps and a
2010 phaseout date for industrialized countries with exemptions
permitted for critical uses. At that time, the U.S. continued to have a
2001 phaseout date in accordance with the CAAA of 1990 language. At the
Ninth MOP in 1997, the Parties agreed to further adjustments to the
phaseout schedule for methyl bromide in industrialized countries, with
reduction steps leading to a 2005 phaseout.

IV. What Is the Legal Authority for Exempting the Production and Import
of Methyl Bromide for Critical Uses Authorized by the Parties to the
Montreal Protocol?

    In October 1998, the U.S. Congress amended the CAA to prohibit the
termination of production of methyl bromide prior to January 1, 2005,
to require EPA to bring the U.S. phaseout of methyl bromide in line
with the schedule specified under the Protocol, and to authorize EPA to
provide exemptions for critical uses. These amendments were contained
in section 764 of the 1999 Omnibus Consolidated and Emergency
Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and
were codified in section 604 of the CAA, 42 U.S.C. 7671c. The amendment
that specifically addresses the critical use exemption appears at
section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout
schedule for methyl bromide production and consumption in a direct
final rulemaking on November 28, 2000 (65 FR 70795), which allowed for
the phased reduction in methyl bromide consumption and extended the
phaseout to 2005. EPA again amended the revised phaseout to allow for
an

exemption for quarantine and preshipment purposes on July 19, 2001 (66
FR 37751), with an interim final rule and with a final rule on January
2, 2003 (68 FR 238).
    On December 23, 2004 (69 FR 76982), EPA published a final rule
titled ``Protection of Stratospheric Ozone: Process for Exempting
Critical Uses From the Phaseout of Methyl Bromide'' (the ``Framework
Rule'') in the Federal Register that established the framework for the
critical use exemption; set forth a list of approved critical uses for
2005; and specified the amount of methyl bromide that could be supplied
in 2005 from stocks and new production or import to meet the needs of
approved critical uses. EPA then promulgated a supplemental rule on
December 13, 2005 that added critical uses to the exemption program for
2005 and allocated additional stock allowances (70 FR 73604). EPA
published a final rule on February 6, 2006, to exempt production and
import of methyl bromide for 2006 critical uses and indicated which
uses met the criteria for the exemption program for that year (71 FR
5985). EPA published another final rule on December 14, 2006, to exempt
production and import of methyl bromide for critical uses in 2007 and
indicated which uses met the criteria for critical uses for that year
(71 FR 75386). Under authority of section 604(d)(6) of the CAA, this
action lists the uses that qualify as approved critical uses in 2008
and the amount of methyl bromide that may be produced, imported, or
supplied from inventory to satisfy those uses.
    This action reflects Decision XVIII/13, taken at the Eighteenth
Meeting of the Parties in October 2006. In accordance with Article
2H(5) of the Montreal Protocol, the Parties have issued several
Decisions pertaining to the critical use exemption. These include
Decisions IX/6 and Ex. I/4, which set forth criteria for review of
proposed critical uses (see Section V.E. of this preamble). The status
of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, DC Cir. 2006)
and in EPA's ``Supplemental Brief for the Respondent,'' filed in NRDC
v. EPA and available in the docket for this action. In this final rule,
EPA is honoring commitments made by the United States in the Montreal
Protocol context.

V. What Is the Critical Use Exemption Process?

A. Background of the Process

    Starting in 2002, EPA began notifying applicants of the process for
obtaining a critical use exemption from the methyl bromide phaseout. On
May 8, 2003, the Agency published its first notice in the Federal
Register (68 FR 24737) announcing the availability of the application
for a critical use exemption and the deadline for submission of the
requisite data. Applicants were informed that they may apply as
individuals or as part of a group of users (a ``consortium'') who face
the same limiting critical conditions (i.e. specific conditions that
establish a critical need for methyl bromide). EPA has repeated this
process annually since then. The critical use exemption is designed to
permit production and import of methyl bromide for uses that do not
have technically and economically feasible alternatives.
    The criteria for the exemption initially appeared in Decision IX/6
of the Parties to the Protocol. In that Decision, the Parties agreed
that ``a use of methyl bromide should qualify as `critical' only if the
nominating Party determines that: (i) The specific use is critical
because the lack of availability of methyl bromide for that use would
result in a significant market disruption; and (ii) there are no
technically and economically feasible alternatives or substitutes
available to the user that are acceptable from the standpoint of
environment and public health and are suitable to the crops and
circumstances of the nomination.'' These criteria are reflected in
EPA's definition of ``critical use'' at 40 CFR 82.3.
    In response to the annual requests for critical use exemption
applications published in the Federal Register, applicants provide data
on the technical and economic feasibility of using alternatives to
methyl bromide. Applicants also submit data on their use of methyl
bromide, on research programs into the use of alternatives to methyl
bromide, and on efforts to minimize use and emissions of methyl
bromide.
    EPA's Office of Pesticide Programs reviews the data submitted by
applicants, as well as data from governmental and academic sources, to
establish whether there are technically and economically feasible
alternatives available for a particular use of methyl bromide and
whether there would be a significant market disruption if no exemption
were available. In addition, EPA reviews other parameters of the
exemption applications such as dosage and emissions minimization
techniques and applicants' research or transition plans. This
assessment process culminates in the development of a document referred
to as the critical use nomination, or CUN. The U.S. Department of State
submits the CUN annually to the United Nations Environment Programme
(UNEP) Ozone Secretariat. The CUNs of various countries are
subsequently reviewed by the Methyl Bromide Technical Options Committee
(MBTOC) and the Technical and Economic Assessment Panel (TEAP), which
are independent advisory bodies to Parties to the Montreal Protocol.
These bodies make recommendations to the Parties on the nominations.
The Parties then take a Decision to authorize a critical use exemption
for a particular country. The Decision also identifies how much methyl
bromide may be supplied for the exempted critical uses. As required in
section 604(d)(6) of the Clean Air Act, for each exemption period, EPA
consults with the United States Department of Agriculture and other
departments and institutions of the Federal government that have
regulatory authority related to methyl bromide, and provides an
opportunity for public comment on the amounts of methyl bromide that
the Agency has determined to be necessary for critical uses and the
uses that the Agency has determined meet the criteria of the critical
use exemption.
    For more information on the domestic review process and methodology
employed by the Office of Pesticide Programs, please refer to a
detailed memo titled ``Development of 2003 Nomination for a Critical
Use Exemption for Methyl Bromide for the United States of America''
available on the docket for this rulemaking. While the particulars of
the data continue to evolve and administrative matters are further
streamlined, the technical review itself has remained the same since
the inception of the exemption program.
    On January 24, 2006, the U.S. Government (USG) submitted the fourth
Nomination for a Critical Use Exemption for Methyl Bromide for the
United States of America to the Ozone Secretariat of the UNEP. This
fourth nomination contained the request for 2008 critical uses. In
March 2006, MBTOC sent questions to the USG concerning technical and
economic issues in the nomination. In April 2006, the USG transmitted
responses to MBTOC's requests for clarification. The USG received
MBTOC's second round of questions in June 2006, and sent responses to
MBTOC in August 2006. These documents, together with reports by the
advisory bodies noted above, can be accessed in the public docket for
this rulemaking. The determination in this final rule reflects the
analysis contained in those documents.

B. How Does This Final Rulemaking Relate to Previous Critical Use
Exemption Rulemakings?

    The December 23, 2004, Framework Rule (69 FR 76982) established the
operational framework for the critical use exemption program in the
U.S., including trading provisions and recordkeeping and reporting
obligations. The Framework Rule defined the terms ``critical use
allowances'' (CUAs) and ``critical stock allowances'' (CSAs) at 40 CFR
82.3. Today's action authorizes the uses that will qualify as critical
uses for 2008 and the amounts of CUAs and CSAs that will be allocated
for those uses. The uses that EPA is authorizing as 2008 critical uses
are the uses which the USG included in the fourth CUN, and which were
approved by the Parties in Decision XVIII/13. In this action, EPA is
also refining its approach for determining the amount of CSAs to
allocate in 2008 and each year thereafter. EPA discusses the refined
approach in detail in Section V.D. of this preamble.

C. Critical Uses

    In Decision XVIII/13, taken in October 2006, the Parties to the
Protocol agreed as follows: ``for the agreed critical-use categories
for 2008, set forth in table C of the annex to the present decision for
each Party to permit, subject to the conditions set forth in the
present decision and decision Ex.I/4, to the extent that those
conditions are applicable, the levels of production and consumption for
2008 set forth in table D of the annex to the present decision which
are necessary to satisfy critical uses * * *''
    The following uses are those set forth in table C of the annex to
Decision XVIII/13: Commodities, Cocoa beans (NPMA \1\ subset), NPMA
food processing structures (cocoa beans removed), Mills and processors,
Smokehouse ham, Cucurbits--field, Eggplant--field, Forest nursery,
Nursery stock--fruit, nut, flower, Orchard replant, Ornamentals,
Peppers--field, Strawberry--field, Strawberry runners, Tomatoes--field,
and Sweet potato slips. The agreed critical-use levels for 2008 total
5,355,946 kilograms (kg), which is equivalent to 21.0% of the U.S. 1991
methyl bromide consumption baseline of 25,528,270 kg. However, the
maximum amount of allowable new production and import as set forth in
table D of Decision XVIII/13 is 4,595,040 kg (18.0% of baseline). For
the reasons described in Section V.D. of this preamble, EPA is allowing
up to 3,083,763 kg (12.1% of baseline) of new production or import of
methyl bromide for critical uses for 2008, with 1,729,689 kg (6.8% of
baseline) coming from stocks. To clarify, while the Parties require
only 760,906 kg of stockpile use if the entire U.S. allotment is
utilized, EPA is allowing use of 1,729,689 kg of pre-phaseout inventory
for critical uses and reducing allowable production accordingly.
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    \1\ NPMA stands for National Pest Management Association.
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    In this final rule, EPA is amending columns B and C of Appendix L
to 40 CFR art 82, subpart A to reflect the agreed critical-use
categories identified in Decision XVIII/13 for the 2008 control period
(calendar year). The Agency is amending the table of critical uses
based, in part, on the technical analysis contained in the 2008 U.S.
nomination that assesses data submitted by applicants to the critical
use exemption program as well as public and proprietary data on the use
of methyl bromide and its alternatives. EPA sought comment on the
analysis contained in the 2008 nomination and, in particular, any
information regarding changes to the registration or use of
alternatives that may have transpired after the 2008 nomination was
submitted. The Agency stated that such information has the potential to
alter the technical or economic feasibility of an alternative and could
thus cause EPA to modify the analysis that underpins EPA's
determination as to which uses and what amounts of methyl bromide
qualify for the critical use exemption. Based on Decision XIII/13 and
the 2008 U.S. CUN, EPA is determining that the uses in Table I:
Approved Critical Uses, with the limiting critical conditions
specified, qualify to obtain and use critical use methyl bromide in
2008.

                    Table I.--Approved Critical Uses
------------------------------------------------------------------------
          Column A                  Column B              Column C
------------------------------------------------------------------------
                                                      Limiting critical
                                                       conditions that
                                                      either exist, or
                                Approved critical     that the approved
   Approved critical uses     user and location of      critical user
                                       use           reasonably expects
                                                     could arise without
                                                       methyl bromide
                                                         fumigation
------------------------------------------------------------------------
Pre-Plant Uses:
    Cucurbits...............  (a) Michigan growers  Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Southeastern      Moderate to severe
                               U.S. limited to       yellow or purple
                               growing locations     nutsedge
                               in Alabama,           infestation.
                               Louisiana,           Moderate to severe
                               Mississippi, North    soilborne disease
                               Carolina, South       infestation.
                               Carolina,            Moderate to severe
                               Tennessee, and        root knot nematode
                               Virginia.             infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) Georgia growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     root knot nematode
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.

    Eggplant................  (a) Florida growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features and soils
                                                     not supporting
                                                     seepage irrigation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Georgia growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Moderate to severe
                                                     pythium collar,
                                                     crown and root rot.
                                                    Moderate to severe
                                                     southern blight
                                                     infestation.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) Michigan growers  Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
    Forest Nursery Seedlings  (a) Growers in        Moderate to severe
                               Alabama, Arkansas,    yellow or purple
                               Georgia, Louisiana,   nutsedge
                               Mississippi, North    infestation.
                               Carolina, Oklahoma,  Moderate to severe
                               South Carolina,       soilborne disease
                               Tennessee, Texas,     infestation.
                               and Virginia.        Moderate to severe
                                                     nematode
                                                     infestation.
                              (b) International     Moderate to severe
                               Paper and its         yellow or purple
                               subsidiaries          nutsedge
                               limited to growing    infestation.
                               locations in         Moderate to severe
                               Alabama, Arkansas,    soilborne disease
                               Georgia, South        infestation.
                               Carolina, and Texas.
                              (c) Public            Moderate to severe
                               (government-owned)    weed infestation
                               seedling nurseries    including purple
                               in Illinois,          and yellow nutsedge
                               Indiana, Kentucky,    infestation.
                               Maryland, Missouri,  Moderate to severe
                               New Jersey, Ohio,     Canada thistle
                               Pennsylvania, West    infestation.
                               Virginia, and        Moderate to severe
                               Wisconsin.            nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                              (d) Weyerhaeuser      Moderate to severe
                               Company and its       yellow or purple
                               subsidiaries          nutsedge
                               limited to growing    infestation.
                               locations in         Moderate to severe
                               Alabama, Arkansas,    soilborne disease
                               North Carolina, and   infestation.
                               South Carolina.      Moderate to severe
                                                     nematode or worm
                                                     infestation.
                              (e) Weyerhaeuser      Moderate to severe
                               Company and its       yellow nutsedge
                               subsidiaries          infestation.
                               limited to growing   Moderate to severe
                               locations in Oregon   soilborne disease
                               and Washington.       infestation.
                              (f) Michigan growers  Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     Canada thistle
                                                     infestation.
                                                    Moderate to severe
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
    Orchard Nursery           (a) Members of the    Moderate to severe
     Seedlings.                Western Raspberry     nematode
                               Nursery Consortium    infestation.
                               limited to growing   Presence of medium
                               locations in          to heavy clay
                               Washington.           soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits on use of
                                                     this alternative
                                                     have been reached.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.

                              (b) Members of the    Moderate to severe
                               California            nematode
                               Association of        infestation.
                               Nursery and Garden   Presence of medium
                               Centers               to heavy clay
                               representing          soils.
                               Deciduous Tree       Prohibition on use
                               Fruit Growers.        of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits on use of
                                                     this alternative
                                                     have been reached.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) California rose   Moderate to severe
                               nurseries.            nematode
                                                     infestation.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits on use of
                                                     this alternative
                                                     have been reached.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
    Strawberry Nurseries....  (a) California        Moderate to severe
                               growers.              soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) North Carolina    Moderate to severe
                               and Tennessee         black root rot.
                               growers.             Moderate to severe
                                                     root-knot nematode
                                                     infestation.
                                                    Moderate to severe
                                                     yellow and purple
                                                     nutsedge
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
    Orchard Replant.........  (a) California stone  Moderate to severe
                               fruit growers.        nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Replanted (non-
                                                     virgin) orchard
                                                     soils to prevent
                                                     orchard replant
                                                     disease.
                                                    Presence of medium
                                                     to heavy soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits on use of
                                                     this alternative
                                                     have been reached.
                              (b) California table  Moderate to severe
                               and raisin grape      nematode
                               growers.              infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Replanted (non-
                                                     virgin) orchard
                                                     soils to prevent
                                                     orchard replant
                                                     disease.
                                                    Medium to heavy
                                                     soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
                              (c) California wine   Moderate to severe
                               grape growers.        nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Replanted (non-
                                                     virgin) orchard
                                                     soils to prevent
                                                     orchard replant
                                                     disease.
                                                    Medium to heavy
                                                     soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
                              (d) California        Moderate to severe
                               walnut growers..      nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Replanted (non-
                                                     virgin) orchard
                                                     soils to prevent
                                                     orchard replant
                                                     disease.
                                                    Medium to heavy
                                                     soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.

                              (e) California        Moderate to severe
                               almond growers.       nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Replanted (non-
                                                     virgin) orchard
                                                     soils to prevent
                                                     orchard replant
                                                     disease.
                                                    Medium to heavy
                                                     soils.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
    Ornamentals.............  (a) California        Moderate to severe
                               growers.              soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Florida growers.  Moderate to severe
                                                     weed infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features and soils
                                                     not supporting
                                                     seepage irrigation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) Michigan          Moderate to severe
                               herbaceous            nematode
                               perennials growers.   infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     yellow nutsedge and
                                                     other weed
                                                     infestation.
    Peppers.................  (a) Alabama,          Moderate to severe
                               Arkansas, Kentucky,   yellow or purple
                               Louisiana,            nutsedge
                               Mississippi, North    infestation.
                               Carolina, South      Moderate to severe
                               Carolina,             nematode
                               Tennessee, and        infestation.
                               Virginia growers.    Moderate to severe
                                                     pythium root,
                                                     collar, crown and
                                                     root rots.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Florida growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features and soils
                                                     not supporting
                                                     seepage irrigation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) Georgia growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation, or
                                                     moderate to severe
                                                     pythium root and
                                                     collar rots.
                                                    Moderate to severe
                                                     southern blight
                                                     infestation, crown
                                                     or root rot.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (d) Michigan growers  Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.

    Strawberry Fruit........  (a) California        Moderate to severe
                               growers.              black root rot or
                                                     crown rot.
                                                    Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Prohibition on use
                                                     of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
                                                    Time to transition
                                                     to an alternative.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Florida growers.  Moderate to severe
                                                     yellow or purple
                                                     nutsedge
                                                     infestation.
                                                    Moderate to severe
                                                     nematode
                                                     infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Carolina geranium or
                                                     cut-leaf evening
                                                     primrose
                                                     infestation.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features and soils
                                                     not supporting
                                                     seepage irrigation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (c) Alabama,          Moderate to severe
                               Arkansas, Georgia,    yellow or purple
                               Illinois, Kentucky,   nutsedge
                               Louisiana,            infestation.
                               Maryland,            Moderate to severe
                               Mississippi,          nematode
                               Missouri, New         infestation.
                               Jersey, North        Moderate to severe
                               Carolina, Ohio,       black root and
                               South Carolina,       crown rot.
                               Tennessee, and       A need for methyl
                               Virginia growers.     bromide for
                                                     research purposes.
    Sweet Potato Slips......  (a) California        Prohibition on use
                               growers.              of 1,3-
                                                     dichloropropene
                                                     products because
                                                     local township
                                                     limits for this
                                                     alternative have
                                                     been reached.
    Tomatoes................  (a) Michigan growers  Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     fungal pathogen
                                                     infestation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
                              (b) Alabama,          Moderate to severe
                               Arkansas, Florida,    yellow or purple
                               Georgia, Kentucky,    nutsedge
                               Louisiana, North      infestation.
                               Carolina, South      Moderate to severe
                               Carolina,             soilborne disease
                               Tennessee, and        infestation.
                               Virginia growers.    Moderate to severe
                                                     nematodes.
                                                    Restrictions on
                                                     alternatives due to
                                                     karst topographical
                                                     features, and in
                                                     Florida, soils not
                                                     supporting seepage
                                                     irrigation.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
Post-Harvest Uses:
    Food Processing.........  (a) Rice millers in   Moderate to severe
                               all locations in      infestation of
                               the U.S. who are      beetles, weevils,
                               members of the USA    or moths.
                               Rice Millers         Presence of
                               Association.          sensitive
                                                     electronic
                                                     equipment subject
                                                     to corrosion.
                                                    Time to transition
                                                     to an alternative.
                              (b) Pet food          Moderate to severe
                               manufacturing         infestation or
                               facilities in the     beetles, moths, or
                               U.S. who are active   cockroaches.
                               members of the Pet   Presence of
                               Food Institute (for   sensitive
                               this rule, ``pet      electronic
                               food'' refers to      equipment subject
                               domestic dog and      to corrosion.
                               cat food).           Time to transition
                                                     to an alternative.
                              (c) Bakeries in the   Presence of
                               U.S..                 sensitive
                                                     electronic
                                                     equipment subject
                                                     to corrosion.
                                                    Time to transition
                                                     to an alternative.
                              (d) Members of the    Moderate to severe
                               North American        beetle infestation.
                               Millers'             Presence of
                               Association in the    sensitive
                               U.S.                  electronic
                                                     equipment subject
                                                     to corrosion.
                                                    Time to transition
                                                     to an alternative.

                              (e) Members of the    Moderate to severe
                               National Pest         beetle or moth
                               Management            infestation.
                               Association          Presence of
                               treating cocoa        sensitive
                               beans in storage      electronic
                               and associated        equipment subject
                               spaces and            to corrosion.
                               equipment and        Time to transition
                               processed food,       to an alternative.
                               cheese, herbs,
                               spices and spaces
                               and equipment in
                               associated
                               processing
                               facilities.
    Commodities.............  (a) California        Rapid fumigation is
                               entities storing      required to meet a
                               walnuts, beans,       critical market
                               dried plums, figs,    window, such as
                               raisins, and dates    during the holiday
                               (in Riverside         season, rapid
                               county only) in       fumigation is
                               California.           required when a
                                                     buyer provides
                                                     short (2 working
                                                     days or less)
                                                     notification for a
                                                     purchase or there
                                                     is a short period
                                                     after harvest in
                                                     which to fumigate
                                                     and there is
                                                     limited silo
                                                     availability for
                                                     using alternatives.
                                                    A need for methyl
                                                     bromide for
                                                     research purposes.
    Dry Cured Pork Products.  (a) Members of the    Red legged ham
                               National Country      beetle infestation.
                               Ham Association.     Cheese/ham skipper
                                                     infestation.
                                                    Dermested beetle
                                                     infestation.
                                                    Ham mite
                                                     infestation.
                              (b) Members of the    Red legged ham
                               American              beetle infestation.
                               Association of Meat  Cheese/ham skipper
                               Processors.           infestation.
                                                    Dermested beetle
                                                     infestation.
                                                    Ham mite
                                                     infestation.
                              (c) Nahunta Pork      Red legged ham
                               Center (North         beetle infestation.
                               Carolina).           Cheese/ham skipper
                                                     infestation.
                                                    Dermested beetle
                                                     infestation.
                                                    Ham mite
                                                     infestation.
                              (d) Gwaltney of       Red legged ham
                               Smithfield Ltd.       beetle infestation.
                                                    Cheese/ham skipper
                                                     infestation.
                                                    Dermested beetle
                                                     infestation.
                                                    Ham mite
                                                     infestation.
------------------------------------------------------------------------

    The National Pest Management Association (NPMA) requested that the
language in Column B of Table I describing the NPMA be changed to
``Members of the National Pest Management Association treating cocoa
beans in storage and associated spaces and equipment and processed
food, cheese, dried milk, herbs, spices and spaces and equipment in
associated processing facilities.'' EPA has incorporated this revised
language describing the NPMA because it clarifies that commodities will
be fumigated as part of space fumigations, as indicated in NPMA's
application.
    Dow Agrosciences LLC (Dow) commented that sulfuryl fluoride
(ProFume) can replace methyl bromide for all post-harvest uses during
the 2008 control period. Dow also states that some post-harvest use
limiting critical conditions are no longer relevant and should be
removed. The commenter noted that sulfuryl fluoride has superseded
phosphine and heat as the preferred alternative in post-harvest use
categories. The commenter requested removal of the following limiting
critical conditions:

 Time to transition to an alternative
 Older structures that cannot be properly sealed
 Presence of sensitive electronic equipment subject to
corrosion by phosphine
 Rapid fumigation

    First, EPA addresses the transition rate and overall feasibility of
sulfuryl fluoride for post-harvest sectors in Section V.D.6. of this
preamble. Second, EPA agrees that the inability to properly seal older
structures in preparation for fumigation should not be the sole
condition for granting critical use exemption status to food processing
facilities. The 2008 CUN does not state that the inability to seal
older structures is a basis for methyl bromide need. Therefore, EPA
agrees and has removed this limiting critical condition from the rule
text.
    Third, as discussed in the 2008 CUN, research is still ongoing
regarding the efficacy of sulfuryl fluoride for the post-harvest
critical uses listed in Table I, and EPA must ensure that post-harvest
sectors have sufficient time to validate and adopt the new technology.
Therefore, the presence of sensitive electronic equipment remains a
proper limiting critical condition for critical use applications that
would otherwise use phosphine, which corrodes electronic equipment.
    Finally, regarding the rapid fumigation limiting critical condition
for certain post-harvest sectors, the United States Department of
Agriculture (USDA) Agriculture Research Service (ARS) is currently
conducting research on the efficacy and practicality of using
alternative fumigants, including sulfuryl fluoride, to control post-
harvest pests of durable commodities such as nuts and dried fruit.
While acknowledging that sulfuryl fluoride appears to have the
potential to provide effective and rapid vacuum fumigation of nuts and
dried fruit, the Agency must ensure that the tree nut and dried fruit
industry has sufficient time to validate and adopt the new technology.
Therefore, rapid fumigation remains a valid limiting critical condition
for the sectors where it is listed in Table I.

    Dow commented that EPA should remove or modify some of the pre-
plant limiting critical conditions in the final rule. The commenter
stated that with the availability of 1,3-Dichloropropene (1,3-D) as a
nematicide, ``nematode infestations'' should not qualify as a limiting
critical condition. The 2008 CUN explained that methyl bromide is the
only option to effectively control the target pests, including
nematodes, found in the Southeastern U.S. where pest pressures commonly
exist at moderate to severe levels. EPA responds in more detail in the
Response to Comments document for this action.
    At the public hearing for this action the Florida Golf Course
Superintendents Association and a researcher from Florida University
argued that the golf and turf industry should qualify for critical use
methyl bromide. EPA responds to these comments in a Response to
Comments document available on the docket for this rulemaking.
    EPA is finalizing the proposed changes amending the table in 40 CFR
Part 82, subpart A, Appendix L, as reflected above. EPA is adding six
references and deleting four references in column B, changing the
description of one critical use in column B, and removing one limiting
critical condition from five post-harvest sectors in column C.
Specifically, the changes are as follows: Adding Mississippi to the
approved locations for cucurbit growers because that location was
included in the approved Southeast Cucurbit Consortium application for
2008; removing Florida from the approved forest seedling locations
because a 2008 application for that location was not submitted to EPA;
removing Maryland from the approved strawberry nursery locations
because a 2008 application for that location was not submitted to EPA;
removing California from the approved locations for pepper growers
because the United States Government did not reflect this location in
its 2008 CUN; adding Mississippi to the approved locations for pepper
growers because that location was included in the approved Southeast
Pepper Consortium application for 2008; adding Mississippi and Missouri
to the approved locations for strawberry fruit growers because those
locations were included in the approved Southeastern Strawberry
Consortium application for 2008; adding California sweet potato slip
growers to reflect the authorization of that use in Decision XVIII/13;
adding Mississippi to the approved locations for tomato growers because
that location was included in the approved Southeastern Tomato
Consortium application for 2008; removing turf grass because that use
was not agreed to by the Parties in Decision XVIII/13; adding Gwaltney
and Smithfield Inc. to the approved entities for dry cured pork
products because their application was approved for 2008; changing the
description of members of the National Pest Management Association
(NPMA) as requested by NPMA; and deleting the limiting critical
condition ``older structures that can not be properly sealed to use an
alternative to methyl bromide'' for post-harvest sectors.
    The categories listed in Table I above have been designated
critical uses for 2008 in Decision XVIII/13 of the Parties. The amount
of methyl bromide approved for research purposes is included in the
amount of methyl bromide approved by the Parties for the commodities
for which ``research purposes'' is indicated as a limiting critical
condition in the table above. As explained in Section V.D.5. of this
preamble, EPA is allowing sale of 15,491 kg of methyl bromide from
existing stocks for research purposes, and adjusting new production
accordingly.
    In accordance with the recommendations in Table 9 of the TEAP's
September 2006 Final Report entitled ``Evaluations of 2006 Critical Use
Nominations for Methyl Bromide and Related Matters,'' available on the
docket for this rulemaking, EPA is allowing the following sectors to
use critical use methyl bromide for research purposes: Commodities,
cucurbits (field), eggplant (field), nursery stock (fruit, nut,
flower), ornamentals, peppers (field), strawberry (field), strawberry
runners, and tomatoes (field). In their applications to EPA, these
sectors identified research programs that require the use of methyl
bromide.

D. Critical Use Amounts

    Section V.C. of this preamble explains that Table C of the annex to
Decision XVIII/13 lists critical uses and amounts agreed to by the
Parties to the Montreal Protocol (Parties). When added together, the
critical use amounts authorized by the Parties for the U.S. in 2008
total 5,355,946 kilograms (kg), which is equivalent to 21.0% of the
U.S. 1991 methyl bromide consumption baseline of 25,528,270 kg.
However, the limit on authorized new production or import as set forth
in Table D of the annex to Decision XVIII/13 is 4,595,040 kg (18.0% of
baseline). The difference between allowable new production and import
and the total critical use amount is to be made up from pre-phaseout
inventory that was produced before January 1, 2005. EPA further
discusses the breakout between new production or import and stocks in
sections V.D.1-3. of this preamble.
    EPA is establishing the following reductions to the amount of newly
produced or imported methyl bromide authorized in Decision XVIII/13 to
satisfy critical uses:
    (a) Reductions to account for the amount of available stocks;
    (b) Reductions to account for unused critical use methyl bromide at
the end of 2006;
    (c) Reductions to account for methyl bromide for research purposes
that EPA encourages researchers to purchase from available stocks;
    (d) Reductions to accommodate uptake of sulfuryl fluoride for post-
harvest cocoa bean fumigation in 2008; and
    (e) Reduction to accommodate a certain amount of transition to the
recently registered fumigant iodomethane for some pre-plant uses.
    After accounting for the reductions listed above, in this action
EPA is issuing 3,083,763 kg of critical use allowances (CUAs), which
allow limited amounts of new production and import of methyl bromide
for 2008 critical uses up to the amount of 3,083,763 kg (12.1% of
baseline) as shown in Table II. EPA is also issuing 1,729,689 kg of
critical stock allowances (CSAs), which allow sales of 1,729,689 kg
(6.8% of baseline) from existing pre-phaseout inventories for critical
uses in 2008. Sections V.H. and V.I. of this preamble provide
definitions for the terms CUA and CSA. EPA explains each of the
reductions listed above in subsequent sections of this preamble.
    EPA received five comments that object to the Agency's proposed
reductions and state that EPA should grant the full amount of new
production allowed by the Parties to the Montreal Protocol in Decision
XVIII/13.
    EPA received one comment from Chemtura Corporation (Chemtura)
asserting that EPA ``arbitrarily'' reduces the amount of production
authorized by the Parties and ``never deigns to explain how amounts for
production previously determined to be critical are deemed no longer to
be critical.'' At the public hearing for this action three commenters
argued that the methyl bromide allocations have been reduced at each
stage of the review process and do not need to be further reduced by
the Agency in this rulemaking. When the USG prepares a critical use
nomination, it is making a determination as to the level of critical
need. It is not making a determination that a particular portion of
that need should be met from new

production as compared to stocks. The Parties' Decisions contain a
determination as to the level of critical need as well as a maximum
amount of that total need that may be met from new production. The
Parties' Decisions do not specify a minimum amount that must be met
from new production. It is not accurate to state, as the commenter
does, that a particular production amount is itself ``critical.'' As
explained elsewhere in this preamble, EPA is adjusting the amount of
new production to take into account stocks that it has determined to be
available.
    Fumigation Service and Supply, Inc. (FSS) commented that the
Copenhagen Amendment was signed by the U.S. to phase out methyl bromide
14 years ago, and stated that this time period should have been
adequate for all users of methyl bromide to switch to alternative
fumigation methods. The commenter stated that EPA's proposed
allocations will penalize companies that have already phased out methyl
bromide. The Natural Resources Defense Council (NRDC) requested that
EPA reduce the 2008 CUE allocations by at least 1,275,000 kg and by
larger amounts in 2009 due to advancements in using sulfuryl fluoride
and iodomethane. The comments on EPA's proposed allocation amounts are
addressed in subsequent sections of this preamble and in the Response
to Comments document available on the docket for this action.
1. Background of Critical Use Amounts
    The Framework Rule (69 FR 76982) and subsequent CUE rules each took
note of language regarding stocks of methyl bromide in relevant
decisions of the Parties. In developing this action, the Agency noted
that paragraph six of Decision XVIII/13 contains the following
language: ``that each Party which has an agreed critical use renews its
commitment to ensure that the criteria in paragraph 1 of decision IX/6
are applied when licensing, permitting or authorizing critical use of
methyl bromide and that such procedures take into account available
stocks of banked or recycled methyl bromide, in particular, the
criterion laid down in paragraph 1(b)(ii) of decision IX/6.'' Language
calling on Parties to address stocks also appears in prior Decisions
related to the critical use exemption.
    In the Framework Rule, which established the architecture of the
CUE program and set out the exempted levels of critical use for 2005,
EPA interpreted paragraph 5 of Decision Ex. I/3, which is similar to
Decision XVIII/13(6), ``as meaning that the U.S. should not authorize
critical use exemptions without including provisions addressing
drawdown from stocks for critical uses'' (69 FR 76987). Consistent with
that interpretation, the Framework Rule established provisions
governing the sale of pre-phaseout inventories for critical uses,
including the concept of CSAs and a prohibition on the sale of pre-
phaseout inventories for critical uses in excess of the amount of CSAs
held by the seller. In addition, EPA noted that stocks were further
taken into account through the trading provisions that allow CUAs to be
converted into CSAs. In developing this final rule, EPA did not propose
changes to these basic CSA provisions.
    In the August 25, 2004, Proposed Framework Rule (69 FR 52366), EPA
proposed to adjust the authorized level of new production and
consumption for critical uses by the amount of ``available'' stocks.
The methodology for determining the amount of ``available'' stocks
considered exports, methyl bromide for feedstock uses, and the need for
a buffer in case of catastrophic events. However, the Final Framework
Rule did not adopt the proposed methodology for determining available
stocks. Instead, EPA issued CSAs in an amount equal to the difference
between the total authorized CUE amount and the amount of new
production or import authorized by the Parties (Total Authorized CUE
Amount--Authorized New Production and Import).
    In the 2006 CUE Rule, published February 6, 2006 (71 FR 5985), EPA
applied the approach described in the Framework Rule by allocating as
CSAs the difference between the total authorized CUE amount and the
amount of new production and import authorized by the Parties (2.0% of
baseline), as well as the small supplemental allocation in Decision
XVII/9 (0.4% of baseline). EPA also issued CSAs allowing additional
amounts of existing stocks to be sold for critical uses (roughly 3.0%
of baseline). In the 2006 CUE Rule, EPA issued a total of 1,136,008 kg
as CSAs, equivalent to 5.0% of baseline. Similarly, in the 2007 CUE
Rule, EPA issued a number of CSAs that represented not only the
difference between the total authorized CUE amount and the amount of
authorized new production and import (6.2% of baseline), but also an
additional amount (1.3% of baseline) for a total of 1,915,600 CSAs
(7.5% of baseline).
    EPA viewed the allocation of additional CSA amounts as an
appropriate exercise of its discretion. EPA reasoned that the Agency
was not required to allocate the full amount of authorized new
production and consumption. The Parties agreed to ``permit'' a
particular level of production and consumption; they did not--and could
not--mandate that the U.S. authorize this level of production and
consumption domestically. Nor does the CAA require EPA to exempt the
full amount permitted by the Parties. Section 604(d)(6) of the Clean
Air Act (CAA) does not require EPA to exempt any amount of production
and consumption for critical uses, but instead specifies that the
Agency ``may'' exempt amounts for production, import, and consumption,
thus providing EPA with substantial discretion in creating critical use
exemptions.
    In the July 6, 2006, Proposed 2007 CUE Rule (71 FR 38325), EPA
sought comment on ``whether, in the critical use exemption context, it
would be appropriate to adjust the level of new production and import
with the goal of maintaining a stockpile of some specified duration [*
* *] and on how many months of methyl bromide inventory would be
appropriate, in order to maintain non-disruptive management of this
chemical in the supply chain'' (71 FR 38339). In the Final 2007 CUE
Rule, EPA noted that ``the Parties have not taken a decision on an
appropriate amount of inventory for reserve. Nor has EPA reached any
conclusion regarding what amount might be appropriate. Given this
uncertainty, and the continuing decline in inventory levels, EPA is
exercising caution in this year's CSA allocation. EPA will consider
various approaches to this issue in the future based on the data
received during this notice and comment rulemaking process and other
information obtained by the Agency'' (71 FR 75399).
    The benefits of pre-phaseout methyl bromide inventories for
critical uses were discussed at the 18th and 19th Meetings of the
Parties (MOPs). The Parties did not take a decision at the 18th or 19th
MOP on whether it would be appropriate to allow some specific amount of
pre-phaseout stocks to remain in inventory, or what amount that might
be. However, at the 19th MOP, the Parties did recognize that it is
appropriate to adjust new production and import levels to account for
the amount of ``available stocks.'' In Table D of the Annex to Decision
XIX/9, the Parties authorized new production and consumption for
critical uses in the United States during 2009 of 3,961,974 kg, ``minus
available stocks.''
    In the proposed rule, EPA noted that in another instance--essential
use exemption process for the use of chlorofluorocarbons in the
manufacture of metered-dose inhalers--the Parties have allowed
companies to maintain

working stocks of up to one year's supply. As explained in the FDA
Determination Letter available on the public docket for this
rulemaking, FDA bases its determination of the amount of CFC production
that is necessary for medical devices ``on an estimate of the quantity
of CFCs that would allow manufacturers to maintain as much as a 12-
month stockpile.'' However, neither FDA nor EPA maintains a CFC reserve
on behalf of any essential use manufacturer, or guarantees that a
certain amount of CFCs will always be held in inventory.
    Similarly, in developing this action, EPA did not propose to
maintain a reserve of methyl bromide for critical uses, or to guarantee
that a certain amount of methyl bromide would always be held in
inventory. EPA did, however, propose to calculate the amount of
existing methyl bromide stocks that is available for critical uses in
2008, and to consider this amount in the Agency's determination of how
much sale of existing stocks and how much production and import to
allow for critical uses in 2008. Section V.D.2. of the proposed rule
described EPA's proposed method to calculate the amount of stocks
available for critical uses in 2008. Section V.D.3. of the proposed
rule explained how EPA proposed to adjust new production and import
levels to account for the Agency's calculation of the amount of
available stocks.
    In the proposed rule, EPA explained that through data collection
and experience, EPA has gained information about the CUE program that
the Agency did not have when the program began. For example, data on
the aggregate amount of methyl bromide held in inventory at the end of
calendar years 2003, 2004, 2005, and 2006 is now available in the
public docket for this rulemaking. The pre-phaseout inventory has
gradually declined to the point where, for the first time, EPA
estimates that at the start of the 2008 control period the pre-phaseout
inventory will represent less than a one-year supply of critical use
methyl bromide. EPA explained that the proposed approach is intended as
a clear and repeatable process for the Agency to make responsible
allocations that reflect a reasonable estimate of the amount of
inventory available in a future control period based on data collected
from earlier control periods.

2. Calculation of Available Stocks

    In developing this action, EPA proposed a formula to calculate the
amount of available stocks in 2008, expressed as follows: AS = ES--D--
SCF, where AS = available stocks on January 1, 2008; ES = existing pre-
phaseout stocks of methyl bromide held in the United States by
producers, importers, and distributors on January 1, 2007; D =
estimated drawdown of existing stocks during calendar year 2007; and
SCF = a supply chain factor, the calculation of which was described in
the proposed rule and in the Technical Support Document (TSD) available
on the public docket for this rulemaking. Using the methodology
described in the proposed rule, EPA proposed that ES = 7,671,091 kg; D
= 3,224,351 kg; and SCF = 2,731,211 kg. EPA proposed that 1,715,438 kg
(6.7% of baseline) of pre-phaseout methyl bromide stocks will be
available for critical uses in 2008. The Agency sought comments on its
proposed methodology.
    The Methyl Bromide Industry Panel (MBIP) correctly noticed in its
comments that EPA made a mathematical error in its calculation of
available stocks in the proposed rule. Even though EPA listed existing
stocks as 7,671,091 kg, which is the correct value, the Agency used the
value 7,671,000 kg in its calculation. As a result, EPA proposed
1,715,438 kg of available stocks in 2008, when EPA intended to proposed
available stocks of 1,715,529 kg. In other words, EPA underestimated
available stocks by 91 kg. EPA has corrected its calculations in this
final rule.
    The North American Millers' Association (NAMA) commented that the
mechanisms for reporting pre-phaseout inventory and usage are
imprecise, and therefore the Agency's calculations of inventory levels
are likely inaccurate. The commenter did not explain why it stated that
the mechanisms for reporting stocks and usage are imprecise, and EPA
has not found any specific reason to question the accuracy of its
aggregate pre-phaseout inventory data.
    EPA received seven comments supporting the creation of a supply
chain factor (SCF), but these comments asserted that the 15-week SCF
suggested for use in the event of a supply disruption is inadequate and
recommended a one-year supply instead. The commenters may have
misunderstood the assumption in the TSD, which explains EPA's analysis
of how large the SCF should be, that it would take up to 15 weeks for
adequate amounts of methyl bromide imports to reach the U.S. if there
is a domestic production failure. Because the Agency proposed an SCF
that would provide insurance against a production failure during the
peak production season (i.e. the beginning of the calendar year), the
Agency's proposed SCF is actually equivalent to about 51% of the
5,355,946 kg authorized for U.S. critical uses in 2008, or roughly a
six-month supply if demand were constant throughout the year. The
commenters provide a number of reasons why they recommend a larger
supply buffer, and EPA responds to those comments below.
    Chemtura stated that EPA's proposed SCF is inappropriate because it
conflicts with the USG's position at the 19th Meeting of the Parties
(MOP) to the Montreal Protocol in Montreal, Canada, where the commenter
asserted the USG delegation requested a six month reserve for critical
uses. NRDC commented that the Parties rejected the U.S. proposal to
allow maintenance of a half-year supply chain reserve at the 19th
Meeting of the Parties. EPA disagrees with Chemtura's characterization
of the events at the September 2007 MOP, and with Chemtura's assertion
because a negotiating position does not constitute a factual basis for
a rulemaking, or a specific policy or technical finding of the USG.
Furthermore, as explained in the proposed rule (72 FR 48966), EPA's
proposed SCF provides a technical basis for calculating available
stocks that is consistent with the Montreal Protocol, and therefore
clearly within EPA's authority under Section 604(d)(6) of the Clean Air
Act. EPA also disagrees with NRDC's assertion, because the Parties
neither adopted nor rejected the creation of such a reserve. More
information about the 2007 MOP is provided in the Report of the
Nineteenth MOP, available on the docket for this action.
    Chemtura and MBIP quoted the technical limitations discussed in the
TSD and stated that these limitations render the final calculation
invalid. The Agency does not agree that any of the acknowledged
technical limitations individually, or taken together, invalidate
either the proposed SCF or EPA's calculation of available pre-phaseout
inventory. EPA's proposed SCF should be considered within the context
of the United States' renewed commitment in paragraph six of Decision
Ex.II/1, which was restated in Decision XVIII/13, to ensure that the
criteria in Decision IX/6(1), which is explained above, are applied
when allowing the use of methyl bromide. One of the primary ways that
EPA met this commitment in previous years was to consider the aggregate
quantity of existing stocks, and to reduce authorized new production
levels to encourage a more rapid drawdown of existing stocks than
required by the Parties. EPA's consideration of stocks in

determining the appropriate production level is partially responsible
for steadily shrinking the volume of pre-phaseout inventory to less
than half of its 2003 amount, and the Agency projects that aggregate
stocks will represent less than a one year supply of critical use
methyl bromide at the beginning of 2008. With existing inventories
declining significantly, EPA asked, at what point should the Agency
stop facilitating a more rapid inventory drawdown? To answer this
question, and to enhance the transparency and uniformity of future CUE
allocation rules, EPA proposed to estimate the level of aggregate
inventory that would be necessary to respond to a scenario in which all
methyl bromide production in the U.S. is abruptly halted during peak
production season. The Agency did not conduct a statistical or
probability analysis of the likelihood of this scenario. EPA chose this
scenario because in the U.S. methyl bromide, unlike most commercial
chemicals, is produced at only one facility. Therefore, a scenario in
which this facility completely ceases production is of special concern.
In estimating the amount of methyl bromide that would be necessary in
such a scenario, EPA considered the effect of such a production failure
during the peak production season. EPA chose this conservative approach
partly in recognition that there could be other contingencies that
might affect critical users' ability to obtain methyl bromide.
    Five commenters raised examples of other events that could occur,
and argued that the SCF should account for all of these contingencies
happening together. EPA notes that the probability that all of these
contingencies occurring together is lower than the probability that any
of them will occur individually. In addition, many of the possible
events described by the commenters would have an uncertain effect not
easily quantified. The scenario that EPA used as a basis for the size
of the proposed SCF is straightforward and allows for quantification.
In general, EPA relies on private entities to take prudent steps to
protect themselves against various contingencies. The inclusion of the
SCF in the calculation of available stocks provides suppliers an
opportunity to maintain a buffer, but is not designed to guarantee the
availability of pre-phaseout inventory in all conceivable
circumstances.
    NRDC and Dow stated that EPA has no basis for assuming a
catastrophic loss at the U.S. methyl bromide production plant, as no
such event has ever occurred at this location. In addition, they found
unlikely EPA's assumption of such an event happening right after the
first of the year. First, EPA points out--as it did in the proposed
rule--that the methyl bromide industry is unlike many others because
there is only one active production facility in the United States. EPA
recognizes that a catastrophic loss is unlikely, but this does not
obviate the need to plan for such a scenario. While EPA expects private
entities to take prudent steps to protect themselves, EPA does not wish
to render them incapable of maintaining a reasonable supply buffer. In
developing the TSD, the Agency estimated that significant imports could
arrive in up to 15 weeks. Depending on what season the production
failure occurred, EPA estimated that the lost production would be
within the range of 11-51% of the 2008 demand for 2008 critical use
methyl bromide. EPA proposed the conservative value, an SCF equivalent
to 51% of the 2008 need for critical use methyl bromide, in part to
account for a wider range of other supply disruption scenarios that
could occur.
    Below, EPA reiterates the technical limitations of the TSD, and
explains why each limitation does not render the final estimate
invalid, as a number of the commenters contended.
    The TSD stated that, ``pre-2005 inventory is held by multiple
companies, and the sale of that inventory is governed by market forces.
Hence, in the event of a production failure, the stockpile could be
purchased by any user (i.e., critical use/non-critical use, quarantine
and preshipment, feedstock, or foreign users). Most likely, the
stockpile would go to the user willing to pay the highest price in time
of short-term global shortage. Second, there may also be existing
contract agreements that must be honored. As a result, there is no
guarantee that the existing pre-2005 inventory of methyl bromide will
flow towards U.S. critical uses in the case of a production failure.''
Quarantine and preshipment (QPS) refers to the exemption from the
phaseout of methyl bromide for quarantine and preshipment applications
as defined in the January 2, 2003, QPS Final Rule (68 FR 238) and at 40
CFR 82.3. EPA believes that methyl bromide for QPS, feedstock, and
exempted Article 5 country (developing country) uses would not have to
be supplied from pre-phaseout inventory after a supply disruption,
because, as explained in the proposed rule, existing regulations allow
manufacturers and distributors to manage inventories of methyl bromide
designated for those purposes (72 FR 48968).
    There is precedent in the CUE program for allowing methyl bromide
distributors to respond to market forces. In the Proposed Framework
Rule, EPA explained that, ``The issuance of critical stock allowances
(CSAs) does not obligate holders to make these quantities available to
critical uses if they choose for practical or business reasons not to
sell or distribute stocks to critical uses. However, EPA believes that
these firms will respond to market conditions'' (69 FR 52376).
Similarly, EPA's consideration of a SCF in its calculation of available
stocks does not obligate suppliers to sell their stocks to critical
users following a supply disruption. EPA is unable to predict exactly
how stocks would be used after a disruption. All things considered, EPA
does not believe that the possibility that some inventory would be
consumed by non-critical users after a supply disruption should
invalidate or alter the size of the proposed SCF.
    The TSD also stated that, ``it is not clear that a contingency plan
exists amongst the various methyl bromide producers as to how to
respond to a major supply disruption. Thus, the reallocation of
shipping containers to import methyl bromide into the United States may
not occur smoothly over the first weeks or months while the various
manufacturers, shippers, and customers sort out their arrangements.''
Similarly, two commenters expressed concern that importing the methyl
bromide necessary to meet U.S. demand would take far longer than 15
weeks due to inflexibilities in the methyl bromide shipping system.
Chemtura stated that ``adjusting distribution patterns to accommodate a
sudden shift in worldwide demand and supply, as would occur with the
loss of U.S. production, would require an extensive, ad hoc redesign of
this distribution system with very little, if any, lead time.''
    The possibility that methyl bromide distributors have not conducted
emergency response planning does not invalidate the SCF estimate
described in the TSD. Methyl bromide distribution is the responsibility
of the methyl bromide industry and not EPA. EPA's role is to allow
producers and distributors to satisfy critical needs for methyl
bromide, not to guarantee that they will do so. The Agency carefully
considered physical shipping constraints that dictate how rapidly
methyl bromide distribution patterns can shift, including ISO container
capacity, the length and timing of shipping routes, and the volume of
methyl bromide that could be shipped internationally to maintain the
global distribution system following a

U.S. production failure. However, for the reasons expressed above, the
TSD does not assume that distributors would need long periods of time
to redesign their distribution patterns in order to respond.
Furthermore, since each shipping route would take weeks to complete,
the TSD assumed that industry would have ample planning time to re-
route containers as necessary.
    Finally, the TSD stated that, ``characteristics such as the purity
of the pre-2005 inventory of methyl bromide could affect users' ability
to use this inventory to meet their needs for methyl bromide; however,
these characteristics are not known. For example, some of the methyl
bromide held in inventory intended for pre-plant uses may be pre-mixed
with chloropicrin in compressed gas cylinders and therefore could not
be used for post-harvest fumigation.'' Similarly, EPA received comments
from The Industrial Fumigant Company (IFC) and MBIP that expressed
concern about the availability of stocks of methyl bromide free of
chloropicrin for the post-harvest sector. MBIP stated that chloropicrin
is premixed in ``virtually the entire'' U.S. inventory of existing
stocks. IFC was especially concerned about the possible need for
emergency fumigation treatments, which would require pure methyl
bromide.
    EPA's current reporting requirements do not request information
about all of the characteristics, or composition, of the existing
stockpile. Just prior to publishing the proposed rule, the Agency
received anecdotal information suggesting that a large percentage of
the existing stockpile is mixed with chloropicrin, and therefore
unsuitable for post-harvest uses. EPA has also heard conflicting
reports stating that a substantial portion of the existing stockpile is
pure methyl bromide. The Agency is currently considering options to
obtain more information about the existing stockpile, including but not
limited to, requesting information from holders of pre-phaseout
inventory using information-gathering authority under section 114 of
the Clean Air Act. Because the CUA amount in today's final rule is less
than the production amount authorized by the Parties, EPA may consider
allowing the conversion of some CSAs to CUAs in appropriate
circumstances. The Agency also notes that if pre-phaseout inventory
contains very small amounts of pure methyl bromide, then allowing for a
larger supply buffer composed of that inventory would not remedy the
commenters' concerns.
    Chemtura commented that EPA needs to acknowledge methyl bromide's
role as a tool in responding to catastrophic events such as a need to
provide widespread re-fumigation after a natural disaster, and that
methyl bromide has security as well as economic importance. EPA agrees
with the commenter and acknowledges methyl bromide's role in responding
to the situations described by the commenter. Methyl bromide's role in
responding to such challenges as those listed by the commenter is one
of the reasons EPA proposed a SCF in its analysis of available stocks,
and based its estimate of the SCF on conservative assumptions.
    Four commenters stated that the SCF should be a one-year supply
because of the global ramifications that the supply disruption from the
U.S.'s one plant could have. EPA agrees that a severe critical use
methyl bromide shortage in the U.S. could have important global
ramifications. That is one reason EPA considered international factors
in its SCF analysis. For example, after close scrutiny, EPA estimated
that foreign production capacity is capable of meeting global demands
for methyl bromide. While the commenters did not provide a specific
basis for why a one-year supply would be most appropriate, EPA responds
to some of their other concerns below and in the Response to Comments
document on the docket for this rulemaking.
    Four commenters raised concerns about the ability of the Israeli
plant, which could supply critical use methyl bromide to the U.S. after
a domestic production failure, to divert methyl bromide to the U.S.,
especially in light of conflicts occurring in the Middle East. The
commenters did not provide specific information about the likelihood or
consequences of the Israeli supply disruption that they mentioned. The
TSD required a determination about which contingencies to use as the
basis for the analysis. Contingencies that were too speculative or
whose effects could not be readily quantified were not included in the
analysis. However, EPA adopted a conservative approach in recognition
that its analysis could not address all possible contingencies. One of
the commenters stated that the U.S. would not be sacrificing
environmental goals by maintaining a one-year SCF because stockpiled
methyl bromide that is not in use can do no harm to the environment.
EPA notes that using existing methyl bromide can displace the need for
new production, with corresponding environmental benefits.
    MBIP and Chemtura both asserted that importing methyl bromide to
meet U.S. demand would take longer than the 15 weeks EPA estimates.
MBIP claimed that the current capacity of specialized ISO containers,
which are used to ship methyl bromide overseas, is inadequate to
maintain global distribution following a supply disruption. MBIP
stated, ``Assuming round trip times of 45 days for shipments from
Israel to Europe and 90 days for all other trips, the current worldwide
fleet of ISO containers would need to immediately grow by more than 35%
to establish and maintain the global distribution system for methyl
bromide within the 15-week period estimated by EPA.'' In their public
comments Chemtura stated, ``To assist the Agency further in
understanding the logistical challenges raised by a shut-down of U.S.
production, Chemtura is submitting, as business-confidential exhibits,
two diagrams showing its estimates of the current global distribution
map, and how the distribution map would change if U.S. production were
suddenly disrupted.''
    EPA disagrees with MBIP's claim that the current fleet of ISO
containers would be unable to maintain the global distribution system
for methyl bromide within the 15-week period estimated by the Agency.
The conclusions described in the TSD are based, in part, on a detailed
analysis of the capacity of the existing ISO container fleet, and other
shipping logistics. EPA could not reconcile the differences between the
Agency's estimate and MBIP's estimate, because MBIP did not provide
details about how it concluded that the existing fleet of containers
would be inadequate.
    After close analysis, EPA found a number of points of disagreement
with the assumptions in Chemtura's confidential submission. In general,
these disagreements are related to concerns that Chemtura raised in its
public comments, which EPA addresses in this preamble. For
confidentiality reasons, the Agency is unable to elaborate on how
Chemtura's submission conflicts with the analysis explained in the TSD.
The Agency closely analyzed Chemtura's confidential submissions and did
not find a specific reason therein to revise the TSD, or the size of
the proposed SCF. EPA's detailed response to Chemtura's confidential
comments has been placed on a confidential section of the docket
because it includes information claimed as confidential business
information.
    MBIP raised several concerns about the amount of time it would take
for foreign methyl bromide producers--specifically Israel Chemicals
Ltd. (ICL)--to ramp-up production after a U.S. production failure. MBIP
stated that increasing foreign production would take longer than EPA
estimated because: Methyl bromide manufacturers

typically plan production several months in advance; foreign producers
may have to wait for government approval before increasing their
production; and an immediate increase in methyl bromide production may
not be possible due to limited storage capacity.
    In the analysis underpinning the TSD, EPA built in a certain amount
of time--starting when U.S. production fails--for foreign producers to
make arrangements and adjustments to their production schedules before
they would need to ramp-up production. EPA considered the ability of
foreign producers to ramp-up production, including gaining access to
raw materials and storage capacity. Foreign producers could increase
production and exports to the United States without approval from the
Parties to the Montreal Protocol, so long as entities holding CUA
allowances are willing to expend their CUAs to import that material.
MBIP did not provide specific information about how the concerns it
raised should change the analysis contained in the TSD, or whether
there are steps that foreign producers could take in advance as
contingency measures that could alleviate these concerns. EPA responds
to these comments in more detail in the Response to Comments document
on the docket for this action.
    MBIP noted that ``significant regulatory challenges could hamper
companies' ability to obtain a sufficient supply of chloropicrin for
methyl bromide formulations'' and that ``if quantities of chloropicrin
had to be exported from the U.S. to Israel, several CWC [Chemical
Weapons Convention] regulatory requirements would be triggered.'' While
it is true that the export of chloropicrin to Israel would involve
certain export certificates, it is not clear that quantities of
chloropicrin would need to be exported from the U.S. to Israel.
    According to preliminary Form R reports from the 2006 Toxic Release
Inventory (TRI), as well as past reports from 2005, methyl bromide/
chloropicrin products are currently formulated at five or more
facilities around the United States (EPA has placed information
collected from the TRI on the docket for this action). Thus, at least
for the products sold by these distributors to U.S. critical users,
chloropicrin would not be required to be exported to Israel for
formulation. The commenter did not provide specific information about
the likelihood that the CWC, or other regulatory measures, would impede
the supply of methyl bromide products to U.S. critical users, or
whether advance planning could help resolve potential difficulties.
    MBIP commented that the distribution system for methyl bromide in
the U.S. is complex and that imports would not reach all repackaging
locations in the same time period. The commenter stated that 500,000
kilograms of methyl bromide must remain in the system (a minimum of
3,231 metric tons of pre-phaseout stocks) to keep the domestic
distribution system functional. EPA specifically accounted for this
concern in the proposed SCF analysis. The SCF would replace lost
production for 15 weeks until imports arrive. Assuming these imports
are all shipped to the location where methyl bromide is currently
produced in the U.S., imported methyl bromide could be expected to
reach repackaging locations in the same amount of time as it would if
there were no production failure. EPA recognizes that the timely
distribution of pre-phaseout stocks after a domestic production failure
would depend upon business decisions made by suppliers. However, the
proposed SCF is large enough to give suppliers the opportunity to
provide uninterrupted distribution in the analyzed scenario.
    In its comments, MBIP stated: ``EPA does not consider regulatory
obstacles that may delay the availability of alternate supply * * * In
addition, formulations of methyl bromide are regulated by EPA as
pesticides under FIFRA. As such, suppliers of these products must
maintain registrations with EPA. Under FIFRA, the source of methyl
bromide used in the products must be identified to EPA and detailed
information about the manufacturing process must be submitted. In
addition, the labels for all products must bear a special number that
denotes the pesticide producing establishment where the product is
formulated. If production is shifted to another location, the source
information, manufacturing process data, and labels for all affected
products would have to be updated before the products could be imported
or distributed in the U.S. For example, if the methyl bromide that is
sourced from Israel is made using a different manufacturing process
than those on file with EPA, U.S. registrants may need to notify EPA of
the change in the formulation process that is on file or even file an
amendment to that process.''
    Pesticide registration information is highly confidential, but
critical sales data shows that imported methyl bromide is registered
for some critical uses in the U.S. EPA does not obligate producers to
register their products for all U.S. critical uses, but the Agency
believes that firms will respond to market conditions, and undertake
appropriate emergency response planning. A firm's decision about
whether to register its product for critical uses is similar to
business planning decisions under the established critical stock
allowance policy noted above; in which EPA let firms respond to market
conditions, instead of requiring them to sell methyl bromide to
critical users (69 FR 52376). The Agency believes that the added
transparency of the SCF approach will help companies respond to market
conditions more rapidly and appropriately.
    NRDC and Dow objected to the proposal to create an SCF and believe
the methyl bromide in question should be used to reduce or eliminate
the need for new production and import allocations for 2008. The Agency
explained the reasons for proposing an SCF in the proposed rule. EPA
responds to the commenters' specific concerns below and in the Response
to Comments document.
    NRDC stated that the SCF will be equivalent to existing stockpiles
and will be easy to get and use by those with restricted use pesticide
licenses. NRDC also stated that stocks will not be maintained for the
purpose of the SCF--the stocks intended for the SCF that remain
unallocated for CUEs can be freely used by non-critical users. The
commenter is correct that this supply buffer would be composed of
methyl bromide produced before the January 1, 2005, phaseout. The
commenter is also correct that non-critical users are not barred from
purchasing pre-phaseout methyl bromide inventory. In the Final
Framework Rule, EPA explained its rationale and authority for allowing
non-critical users to access pre-phaseout inventory (69 FR 76988). EPA
is not revisiting that issue in this rulemaking.
    The Agency does not believe that the fact that producers and
distributors may sell pre-phaseout inventory to non-critical users
invalidates the proposed SCF, or EPA's proposed estimation of the
amount of available stocks in 2008. The commenter is speculating about
what suppliers would do given the opportunity to maintain a buffer,
which is something that has not yet been tested. Information on pre-
phaseout inventory drawdown during 2008 will inform EPA's future CUE
rulemakings.
    While EPA did not propose to require that distributors keep the SCF
amount as a supply buffer for critical users, Section V.D.3. of the
proposed rule laid out an approach in which the Agency would stop
drawing down stocks faster

than the minimum agreed by the Parties, if EPA determines that
available stocks will be less than the SCF amount. By considering a SCF
in its analysis of the amount of stocks that are available for critical
uses, EPA is giving producers and distributors the opportunity to
provide a reasonable supply buffer to satisfy critical needs.
    At the public hearing for this action the California Strawberry
Commission (CSC) and Ameribrom Inc. commented that the private
companies that own pre-phaseout inventory have no obligation to sell
it. Ameribrom commented that the SCF needs to be held by manufacturers
and importers because distributors, who own a large portion of the pre-
phaseout inventory, do not distribute the methyl bromide when it is
needed. EPA notes that the supply of pre-phaseout inventories to
critical users is based upon private business decisions that the Agency
does not control and responds to these comments in more detail in the
Response to Comments document available on the docket for this action.
    Dow stated that the SCF should be based on what it called ``the
actual 2008 methyl bromide demand (4,816,514 kg) as determined by the
U.S. Government and as proposed in the rule,'' rather than the amount
approved by the Parties (5,355,946 kg). The commenter stated that an
SCF calculated based upon a methyl bromide volume that exceeds the
critical need for 2008 renders the SCF value and basis for the
calculation nonsensical. Dow concluded that this simple recalculation
would reduce overall new production in 2008 by more than 250,000 kg.
    It appears that the Dow's figure for ``actual methyl bromide
demand'' is derived by subtracting the proposed 539,432 kg carryover
amount (72 FR 48969), from the critical use amount agreed to by the
Parties (5,355,946 kg). As discussed in Section V.D.4. of this
preamble, EPA reduces new production to account for carryover critical
use material in order to prevent companies from building inventories of
newly produced critical use methyl bromide. EPA reduces new production
amounts to account for carryover, but in doing so the Agency is not
reopening the issue of the overall amount of total critical need. EPA
expects that critical users will satisfy the remainder of their
critical needs by using the critical use methyl bromide that was unused
in previous control periods. Therefore, the SCF is only affected by
reductions to account for the feasibility of alternatives. Accordingly,
for the reasons explained in Section V.D.6. of this preamble, EPA is
reducing the total 2008 CUE by 27,769 kg to account for the increased
uptake of sulfuryl fluoride and iodomethane in 2008. The Agency has re-
calculated the SCF by applying a revised 2008 critical use demand of
5,328,177 kg. This adjustment reduces the SCF by 14,160 kg.
    To clarify, EPA proposed that the SCF should represent about 51% of
the total critical need in 2008. In the proposed rule, the Agency
assumed that the total critical need in 2008 would be 5,355,946 kg, as
agreed to by the Parties in Decision XVIII/13. Therefore, EPA proposed
an SCF of 2,731,211 kg (5,355,946 kg * 50.994% = 2,731,211 kg). As
explained in Section V.D.6. of this preamble, EPA now estimates that
the total critical need in 2008 will be 27,769 kg less than the Parties
authorized in Decision XVIII/13, because EPA is making further
reductions to account for the uptake of sulfuryl fluoride for cocoa
bean fumigation, and for the newly registered fumigant iodomethane.
Therefore, in this final rule EPA estimates that the total critical
need in 2008 will be 5,328,177 kg. Accordingly, EPA now calculates an
SCF of 2,717,051 kg (5,328,177 kg * 50.944% = 2,717,051 kg).
    Dow commented that the SCF is counterproductive to the phase-out of
methyl bromide and offers disincentives to companies to invest in
alternatives. EPA recognizes that a very large methyl bromide inventory
could have the counterproductive effects that the commenter mentioned.
In response to this concern, EPA has encouraged a faster draw down of
the pre-phaseout inventory than the minimum agreed by the Parties. The
Agency has also explained the rigorous technical review process for
critical uses both domestically and internationally. Companies should
be aware that as soon as technically and economically feasible methyl
bromide alternatives are available for particular uses, critical use
exemptions will be reduced accordingly. Because the SCF is a percentage
of the current year's estimated critical need, companies should also
consider that, all things being equal, the SCF will change in
accordance with critical use exemption levels.
    NRDC objected to the SCF because Congress and the Parties did not
intend for EPA to designate stocks as ``unavailable.'' EPA did not
propose to designate any amount of pre-phaseout inventory, or any
specific holdings, as ``unavailable.'' EPA proposed to recognize the
amount of existing stocks that is available. As discussed above and in
the proposed rule, in paragraph 4 of Decision XVIII/13, and similar
Decisions, the Parties indicated that each individual Party has
discretion to recognize the amount of existing stocks that is available
for critical uses. Most recently, Table D of the Annex to Decision XIX/
9 explicitly indicates that for the 2009 control period the United
States will reduce authorized new production levels to account for the
amount of available stocks. Thus, EPA's proposed approach is consistent
with the practice under the Montreal Protocol. It is also an
appropriate exercise of the discretion granted by Congress under
Section 604(d)(6) of the Clean Air Act.
    NRDC stated that no chemical company keeps more than a two- or
three-month supply of a chemical, yet the SCF is nearly a four-month
supply. The commenter provided no evidence for its assertion that no
chemical company keeps more than a two- to three-month supply of a
chemical. Furthermore, the methyl bromide industry is unusual because
there is only one production facility in the United States and in fact
in the Western Hemisphere. The proposed rule estimated that the SCF for
2008 should be 2,731,211 kg, or roughly a six-month supply of critical
use methyl bromide if demand were constant throughout the year.
    NRDC commented that methyl bromide users can make temporary
adjustments at a manageable cost in the event of a supply disruption,
such as using alternatives or shifting fumigation schedules. EPA agrees
that depending on when a supply disruption occurs, it is possible that
a limited number of entities might be able to delay scheduled
fumigations. It is also possible that some non-critical users might
need to access the pre-phaseout inventory for security or other
emergency purposes. We do not know whether these effects would occur or
to what extent they would offset each other. Such speculation does not
change the validity of EPA's estimate that 2,717,051 kg is a reasonable
SCF for 2008. EPA disagrees with the commenter's assertion that
critical users could readily switch to alternatives following a supply
disruption. By definition, and as confirmed by several rounds of expert
review, entities that qualify for critical use methyl bromide do not
have access to technically and economically feasible alternatives.
    In this final rule, EPA is adopting the proposed formula for
calculating the amount of stocks available for critical uses in 2008,
expressed as follows: AS2008 = ES2007-
D2007-SCF2008, where AS2008 =
available stocks on January 1,

2008; ES2007 = existing pre-phaseout stocks of methyl
bromide held in the United States by producers, importers, and
distributors on January 1, 2007; D2007 = estimated drawdown
of existing stocks during calendar year 2007; and SCF2008 =
a supply chain factor for 2008, the calculation of which was described
in the proposed rule and in the TSD available on the public docket for
this rulemaking. Using the methodology described in the proposed rule,
correcting for mathematical errors explained above, and reducing 2008
critical needs by 27,769 kg to account for the uptake of sulfuryl
fluoride and iodomethane explained below in Section V.D.6., EPA finds
that ES2007 = 7,671,091 kg; D2007 = 3,224,351 kg;
and SCF2008 = 2,717,051 kg. Therefore, EPA calculates that
1,729,689 kg (6.8% of baseline) of pre-phaseout methyl bromide stocks
will be available for critical uses in 2008.
    EPA believes 1,729,689 kg is a reasonable estimate of the amount of
stocks that should be considered available for critical uses in 2008,
especially given the U.S. role as one of the world's largest suppliers