[Federal Register: August 27, 2007 (Volume 72, Number 165)]
[Proposed Rules]
[Page 48956-48981]
[DOCID:fr27au07-12]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2006-1016; FRL-8461-2]
RIN 2060-A030

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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing an exemption to the phaseout of methyl
bromide to meet the needs of 2008 critical uses. Specifically, EPA is
proposing uses that qualify for the 2008 critical use exemption and the
amount of methyl bromide that may be produced, imported, or supplied
from existing stocks 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 (Protocol) at the 18th Meeting of the
Parties (MOP). EPA is seeking comment on the list of critical uses and
on EPA's determination of the amounts of methyl bromide needed to
satisfy those uses.

DATES: Comments must be submitted by September 26, 2007. Any party
requesting a public hearing must notify the contact person listed below
by 5 p.m. Eastern Standard Time on September 4, 2007. If a hearing is
requested it will be held on September 11, 2007 and comments will be
due to the Agency October 11, 2007. EPA will post information regarding
a hearing, if one is requested, on the Ozone Protection Web site http://www.epa.gov/ozone.
 Persons interested in attending a public hearing

should consult with the contact person below regarding the location and
time of the hearing.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2006-1016, by one of the following methods:
     http://www.regulations.gov: Follow the on-line instructions for

submitting comments.
     E-mail<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>.
     Mail: Docket , Air and Radiation Docket and
Information Center, U.S. Environmental Protection Agency, Mail Code:
6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: Docket  EPA-HQ-OAR-2006-1016, Air
and Radiation Docket at EPA West, 1301 Constitution Avenue, NW., Room
B108, Mail Code 6102T, Washington, DC 20460. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2006-1016. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information provided,

unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through http://www.regulations.gov or e-mail.

The http://www.regulations.gov Web site is an ``anonymous access'' system,

which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through http://www.regulations.gov

your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: For further information about this
proposed rule, contact Aaron Levy by telephone at<PHONE_NUMBER>, 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 for further information about EPA's Stratospheric

Ozone Protection regulations, the science of ozone layer depletion, and
other related topics.

SUPPLEMENTARY INFORMATION: This proposed 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
proposing and seeking comment on 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 stocks for
proposed critical uses in 2008.

Table of Contents

I. General Information
    A. Regulated Entities
    B. What Should I Consider When Preparing My Comments?
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 Proposed Rulemaking Relate to Previous Critical
Use Exemption Rulemakings?
    C. Proposed Critical Uses
    D. Proposed Critical Use Amounts
    1. Background of Proposed Critical Use Amounts
    2. Calculation of Available Stocks
    3. Proposed Approach for Determining Critical Use Amounts
    4. Treatment of Carry-Over Material
    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 Total Volumes of
Critical Use Methyl Bromide
    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

I. General Information

A. Regulated Entities

    Entities potentially regulated by this proposed 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, 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 proposed action. This table lists the types of entities that
EPA is aware could potentially be regulated by this proposed action. To
determine whether your facility, company, business, or organization is
regulated by this proposed 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.

B. What Should I Consider When Preparing My Comments?

    1. Confidential Business Information. Do not submit this
information to EPA through http://www.regulations.gov or e-mail. Clearly mark

the part or all of the information that you claim to be CBI. For CBI
information in a disk or CD-ROM that you mail to EPA, mark the outside
of the disk or CD-ROM as CBI and then identify electronically within
the disk or CD-ROM the specific information that is claimed as CBI. In
addition to one complete version of the comment that includes
information claimed as CBI, a copy of the comment that does not contain
the information claimed as CBI must be submitted for inclusion in the
public docket. Information so marked will not be disclosed except in
accordance with procedures set forth in 40 CFR Part 2.
    2. Tips for Preparing Your Comments. When submitting comments,
remember to:
     Identify the rulemaking by docket number and other
identifying information (subject heading, Federal Register date and
page number).
     Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives
and substitute language for your requested changes.
     Describe any assumptions and provide any technical
information and/or data that you used.
     If you estimate potential costs or burdens, explain how
you arrived at your estimate in sufficient detail to allow for it to be
reproduced.
     Provide specific examples to illustrate your concerns, and
suggest alternatives.
     Explain your views as clearly as possible, avoiding the
use of profanity or personal threats.
     Make sure to submit your comments by the comment period
deadline identified.

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.unep.org/ozone 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 authority. 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 proposed 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 would be affected by
provisions of this proposal 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 proposed action 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 new 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 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 of the rule, setting 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 1992
Meeting of the Parties in Copenhagen.
    At their 1995 meeting, 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 their
1997 meeting, the Parties agreed to further adjustments to the phaseout
schedule for methyl bromide in industrialized countries, with reduction
steps leading to a 2005 phaseout for industrialized countries.

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 second rule that added
additional 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, EPA is proposing in this

action the uses that will qualify as approved critical uses in 2008 and
the amount of methyl bromide required to satisfy those uses.
    This proposed action reflects Decision XVIII/13, taken at the
Eighteenth Meeting of the Parties in October 2006. In accordance with
Article 2H(5), 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. The
status of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, D.C. 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
proposed 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 to 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 yearly requests for critical use exemption
applications published in the Federal Register, applicants have
provided data on the technical and economic feasibility of using
alternatives to methyl bromide. Applicants further 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 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 with 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 such as this 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 clerical 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 United Nations
Environment Programme. 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 proposed rule reflects the analysis contained in those documents.

B. How Does This Proposed 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 proposes the uses that will qualify as critical
uses for 2008 and the amounts of CUAs and CSAs to be allocated for
those uses. The uses that EPA is proposing to qualify as 2008 critical
uses are the uses which USG included in the fourth CUN, and which were
approved by the Parties in Decision XVIII/13. In this action, EPA is
also proposing to refine its approach for determining the amount of
CSAs to allocate in 2008 and each year thereafter. EPA discusses this
proposal in detail in Section V.D. of this preamble.

C. Proposed 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,
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
proposing to allow limited amounts of new production or import of
methyl bromide for critical uses for 2008 up to the amount of 3,101,076
kg (12.2% of baseline), with 1,715,438 kg (6.7% of baseline) coming
from stocks. To clarify, while the Parties require only 760,906 kg of
stockpile consumption if the entire U.S. allotment is utilized, EPA is
proposing consumption of 1,715,438 kg of stockpiles for critical uses.
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    \1\ NPMA stands for National Pest Management Association.
---------------------------------------------------------------------------

    In this proposed rule, EPA is proposing to modify Columns B and C
of Appendix L to 40 CFR Part 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 proposing to amend 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
is seeking comment on the technical analysis (which is provided in the
docket) and seeks information regarding changes to the registration or
use of alternatives that may have transpired after the 2008 U.S.
nomination was written. 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. EPA notes that while we may, in response to
comments, reduce the proposed quantities of critical use methyl
bromide, or decide not to approve uses authorized by the Parties, we do
not intend to increase the quantities or add new uses in the final rule
beyond those authorized by the Parties. Therefore, if there has been a
change in registration of an alternative that results in that
alternative no longer being available to a particular use, EPA does not
intend to add uses or amounts of methyl bromide to the critical use
exemption program beyond those identified here. Under such
circumstances, the user should apply to EPA, requesting that the U.S.
nominate its use for a critical use exemption in the future. Based on
the information described above, EPA is proposing 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.
                               Arkansas, Kentucky,  Moderate to severe
                               Louisiana,            soilborne disease
                               Mississippi, North    infestation.
                               Carolina, South      Moderate to severe
                               Carolina,             root knot nematode
                               Tennessee, and        infestation.
                               Virginia.            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.
                              (g) Michigan          Moderate to severe
                               herbaceous            nematode
                               perennials growers.   infestation.
                                                    Moderate to severe
                                                     soilborne disease
                                                     infestation.
                                                    Moderate to severe
                                                     yellow nutsedge and
                                                     other weed
                                                     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
                               California and        soils.
                               Washington.          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.
    Peppers.................  (b) 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.
                              (c) 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.
                              (d) 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.
                              (e) 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.
                              (c) Alabama,          Moderate to severe
                               Arkansas, Florida,    yellow or purple
                               Georgia, Kentucky,    nutsedge
                               Louisiana,            infestation.
                               Mississippi, North   Moderate to severe
                               Carolina, South       soilborne disease
                               Carolina,             infestation.
                               Tennessee, and       Moderate to severe
                               Virginia growers.     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 or
                               members of the USA    moths.
                               Rice Millers         Older structures
                               Association.          that can not be
                                                     properly sealed to
                                                     use an alternative
                                                     to methyl bromide.
                                                    Presence of
                                                     sensitive
                                                     electronic
                                                     equipment subject
                                                     to corrosion.
                                                    Time to transition
                                                     to an alternative.
                              (b) Pet food          Moderate to severe
                               manufacturing         infestation of
                               facilities in the     beetles, moths, or
                               U.S. who are active   cockroaches.
                               members of the Pet   Older structures
                               Food Institute (For   that can not be
                               this proposed rule,   properly sealed to
                               ``pet food'' refers   use an alternative
                               to domestic dog and   to methyl bromide.
                               cat food).           Presence of
                                                     sensitive
                                                     electronic
                                                     equipment subject
                                                     to corrosion.
                                                     Time to transition
                                                     to an alternative.
                              (c) Bakeries in the   Older structures
                               U.S.                  that can not be
                                                     properly sealed to
                                                     use an alternative
                                                     to methyl bromide.
                                                    Presence of
                                                     sensitive
                                                     electronic
                                                     equipment subject
                                                     to corrosion.
                                                    Time to transition
                                                     to an alternative.
                              (d) Members of the    Moderate to severe
                               North American        beetle infestation.
                               Millers'             Older structures
                               Association in the    that can not be
                               U.S.                  properly sealed to
                                                     use an alternative
                                                     to methyl bromide.
                                                    Presence of
                                                     sensitive
                                                     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          Older structures
                               associated with dry   that can not be
                               commodity structure   properly sealed to
                               fumigation (cocoa)    use an alternative
                               and dry commodity     to methyl bromide.
                               fumigation           Presence of
                               (processed food,      sensitive
                               herbs and spices,     electronic
                               dried milk and        equipment subject
                               cheese processing     to corrosion.
                               facilities).         Time to transition
                                                     to an alternative.
    Commodities.............  (a) California        Rapid fumigation is
                               entities storing      required to meet a
                               walnuts, beans,       critical market
                               dried plums, figs,    window, such as
                               raisins, dates (in    during the holiday
                               Riverside county      season, rapid
                               only), and            fumigation is
                               pistachios in         required when a
                               California.           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 and      Red legged ham
                               Smithfield Inc.       beetle infestation.
                                                    Cheese/ham skipper
                                                     infestation.
                                                    Dermested beetle
                                                     infestation.
                                                    Ham mite
                                                     infestation.
------------------------------------------------------------------------

    EPA is proposing to amend the table in 40 CFR part 82, subpart A,
Appendix L, as reflected above. Specifically, EPA is adding six
references and deleting four references in column B. 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 Critical Use
Nomination; 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 turfgrass 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.
    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., EPA is
allowing sale of 15,491 kg of methyl bromide from existing stocks for
research purposes.
    In accordance with the recommendations in Table 9 of the TEAP's
September 2006 Final Report titled ``Evaluations of 2006 Critical Use
Nominations for Methyl Bromide and Related Matters,'' available on the
docket for this rulemaking, EPA is proposing that the following sectors
be allowed 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. Proposed 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. When added together, the authorized
critical use amounts 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 as defined at 40 CFR 82.3. However, the
maximum amount of 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).

    EPA is proposing to exempt limited amounts of new production and
import of methyl bromide for critical uses for 2008 up to the amount of
3,101,076 kg (12.2% of baseline) as shown in Table II. EPA is also
proposing to allow sale of 1,715,438 kg (6.7% of baseline) of existing
inventories for critical uses in 2008. EPA is seeking comment on the
proposed total levels of exempted new production and import for
critical uses and the amount of material that may be sold from stocks
for critical uses. The subsections below explain EPA's reasons and
refined approach for proposing the above critical use amounts for 2008.
1. Background of Proposed Critical Use Amounts
    The Framework Rule and subsequent CUE rules each took note of
language regarding stocks of methyl bromide in relevant decisions of
the Parties. In developing this proposed action, the Agency notes 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 (69 FR 52366) 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. EPA is not proposing changes to these
basic CSA provisions for calendar year 2008.
    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, EPA did not adopt the
proposed methodology for determining available stocks in the final
Framework Rule. 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 5997), 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
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). By allocating additional CSAs, EPA adjusted the portion of
CUE methyl bromide to come from new production and import as compared
to the proportion to come from stocks so that the total amount of
methyl bromide exempted for critical uses did not exceed the total
amount authorized by the Parties for that year.
    EPA viewed the 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, importation, 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).
    Data on the aggregate amount of methyl bromide held in inventory at
the end of calendar years 2003, 2004, 2005, and 2006 is available in
the public docket for this rulemaking. Using this aggregated inventory
data, and other data gathered by EPA, the Agency estimates that on
January 1, 2008 the aggregate inventory will be less than one-year's
supply of critical use methyl bromide.
    The benefits of pre-phaseout methyl bromide inventories for
critical uses were discussed at the 18th Meeting of the Parties (MOP).
The Parties did not take a decision at the 18th 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. Instead, they left
the matter for future discussion, and left open the possibility that a
decision related to the issue might be taken at the 19th Meeting of the
Parties in September 2007. EPA notes, however, that in another
instance--namely the Essential Use Exemption process for CFC inhalers--
the Parties have allowed companies to maintain working stocks 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 this action, EPA is not proposing 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
is, however, proposing 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 importation to allow for
critical uses in 2008. Section V.D.2. describes EPA's proposed method
to calculate the amount of existing stocks that is available for
critical use in 2008. Section V.D.3. explains how EPA proposes to apply
the calculated amount of available stocks in the Agency's critical use
amount determinations.
    The proposed methods for determining the critical use amounts,
described in Section V.D.2. and V.D.3. of this preamble, refine the
Agency's approach for determining how much critical use methyl bromide
may be produced and imported and how much may be sold to critical users
from existing inventories in a given year. EPA proposes to use these
refinements in 2008 and, as feasible and appropriate, each year
thereafter. Through data collection and experience, EPA has gained
information about the CUE program that the Agency did not have when the
program began. The pre-phaseout inventory has gradually declined to the
point where, for the first time, EPA estimates that at the start of
next year (2008) inventory will represent less than a one-year supply
of critical use methyl bromide. The proposed approach for determining
CUE production and import levels addresses the decline in methyl
bromide inventories by considering in a more transparent manner the
amount of existing stocks that is available for critical uses. As
described below, the proposed approach establishes a clear and
repeatable process for the Agency to make 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.
Thus, while EPA does not view refinements to its approach as legally
required, EPA does view them as an appropriate discretionary action for
the reasons given here. EPA seeks comment on the refined approach for
determining critical use methyl bromide levels, which is described in
detail in Sections V.D.2. and V.D.3. of this preamble, and also in a
Technical Support Document available on the public docket for this
rulemaking (EPA-HQ-OAR-2006-1016).

2. Calculation of Available Stocks

    In this action, EPA is proposing to adjust the authorized level of
new production and consumption for critical uses to account for the
amount of existing stocks that is ``available'' for critical uses. This
section explains how EPA proposes to calculate the amount of existing
stocks that is available for critical uses in 2008. As described in
more detail in Section V.D.3. of this preamble, EPA proposes to allow
sale of the amount of existing inventory that the Agency has determined
to be available for critical uses by issuing an equivalent number of
critical stock allowances (CSAs), on a one-CSA-per-one-kilogram-of-
methyl-bromide basis. EPA wants to be clear that in this action the
Agency is not proposing to create a methyl bromide reserve or strategic
inventory of any kind, or to guarantee that a certain amount of methyl
bromide would always be held in inventory. Furthermore, in this action
EPA is not proposing to add any new restrictions on sales of methyl
bromide inventories.
    The Parties to the Protocol recognized in their Decisions that the
level of existing stocks may differ from the level of available stocks
as discussed in the Proposed Framework Rule. Most recently, Decision
XVIII/13(4) states, ``That a Party with a critical use exemption level
in excess of permitted levels of production and consumption for
critical uses is to make up any such differences between those levels
by using quantities of methyl bromide from stocks that the Party has
recognized to be available.'' Thus, in Decisions XVIII/13, XVII/9, Ex.
II/1, XVI/2, Ex. I/3 and IX/6 the Parties recognized that not all
existing stocks may be available to meet critical needs. Section
604(d)(6) of the Clean Air Act does not require that EPA adjust the
amount of new production and import to reflect the availability of
stocks: However, making such an adjustment is a reasonable exercise of
EPA's discretion under this provision. Section 604(d)(6) provides that,
``to the extent consistent with the Montreal Protocol'' EPA ``may''
exempt production, importation, and consumption of methyl bromide for
critical uses, thus providing the Agency substantial discretion to
determine whether, and to what extent, production and import is
appropriate for critical uses.
    One commenter disagreed with EPA's interpretation in the Proposed
Framework Rule that the Agency has the authority, as recognized by the
Parties in Decision Ex. I/3 and similar Decisions, to ``assess how much
methyl bromide is available from existing inventories'' (69 FR 52373).
According to the commenter, EPA was making a ``false distinction''
between the terms ``available'' stocks and ``existing'' stocks of
methyl bromide. The commenter submitted that the only difference
between ``available'' and ``existing'' is the deduction to reflect
developing country needs. The commenter based this argument on the
language in Decision IX/6(1)(b)(ii), which states the condition that
methyl bromide ``is not available in sufficient quality and quantity
from existing stocks of banked or recycled methyl bromide, also bearing
in mind the developing countries' need for methyl bromide.'' Thus, the
commenter argued that Dec. Ex.I/3 does not create a new meaning for
``available'' that encompasses more deductions than for the developing
country needs.
    EPA disagrees with the commenter's broad application of the
language in Decision IX/6(1)(b)(ii). EPA believes that in Dec. IX/
6(1)(b)(ii) the Parties were stressing the importance of developing
countries' needs, and not precluding the consideration of other factors
in each individual Party's determination of available stocks of methyl
bromide. Dec. IX/6(1)(b)(ii) says * * * ``also bearing in mind
developing countries'' need,'' it does not say ``only bearing in mind *
* *'' Furthermore, EPA underscores Dec. XVIII/13(4) and similar
decisions which use the phrasing, ``quantities of methyl bromide from
stocks that the Party has recognized to be available.'' EPA believes
that in that Decision, and in similar language in other decisions, the
Parties acknowledged that individual Parties have the discretion to
determine their level of available stocks. For these reasons, EPA
believes it is acting consistently with the relevant decisions. In
addition, given the substantial discretion afforded by Congress under
section 604(d)(6) of the Clean Air Act, EPA believes it has the
authority to determine, through a notice and comment rulemaking
process, what factors to include in the method for estimating the
amount of existing stocks that is available.
    Today's proposed approach is a logical extension of the approach
used in EPA's 2006 and 2007 CUE allocation rules where EPA concluded
that it was reasonable to adjust the proportion of

CUE methyl bromide to come from new production and import as compared
to the proportion to come from stocks. Furthermore, it is appropriate
for EPA to refine its approach in light of new information.
    EPA is considering new information it has gathered about the
availability of stocks for critical uses. That information is included
in a Technical Support Document available in the docket for this
rulemaking. EPA is proposing, and seeking comment on, the following
approach to calculate the amount of existing stocks that is available
for critical uses. EPA's proposed methodology for calculating the
amount of available stocks can be 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 is described
below and in more detail in the Technical Support Document. Using the
above method, EPA calculates that 1,715,438 kg (6.7% of baseline) of
existing pre-phaseout stocks of methyl bromide will be ``available''
for critical uses on January 1, 2008. EPA seeks comment on the amount
of the pre-phaseout stock that it estimates will be available for
critical uses on January 1, 2008.
    In the above formula ``existing stocks'' refers to pre-phaseout
inventory--i.e., methyl bromide that was produced before January 1,
2005 that is still held by domestic producers, distributors and third-
party applicators. January 1, 2005 was the phaseout date for production
and import of methyl bromide in the United States. ES does not include
critical use methyl bromide that was produced after January 1, 2005 and
carried over into subsequent years. That ``carry-over'' amount is
treated separately as described in Section V.D.4. of this preamble. For
the reasons discussed in Section V.D.4., EPA deducts an amount
equivalent to the carry-over amount from the amount of allowable new
production for the control period in question. ES also does not include
methyl bromide produced under the exemption for quarantine and
preshipment (QPS), methyl bromide produced with Article 5 allowances to
meet the basic domestic needs of Article 5 countries, or methyl bromide
produced for feedstock or transformation purposes. Such amounts have
been removed from the calculation of the amount of ``available stocks''
for critical uses. Methyl bromide produced for QPS uses or for export
to Article 5 countries may not be sold to domestic entities for
critical uses. That methyl bromide, therefore, is separate from the CUE
program.
    To estimate the drawdown of existing stocks during 2007, the ``D''
term in the above method, EPA proposes to project the size of the pre-
phaseout methyl bromide inventory on January 1, 2008 with a simple
linear fit estimation using EPA data about the size of that inventory
on January 1 of the years for which EPA has data: 2004, 2005, 2006, and
2007. Using a simple linear fit, EPA projects that the pre-phaseout
methyl bromide inventory, which was 7,671,091 kg on January 1, 2007,
will be drawn down by 3,224,351 kg during 2007. Therefore, EPA
estimates that the size of the pre-phaseout inventory will be 4,447,740
kg on January 1, 2008. EPA's methodology for estimating the inventory
drawdown is described in more detail in the Technical Support Document
available on the public docket for this rulemaking.
    EPA's proposed method for determining the amount of existing stocks
that is available for critical uses includes a ``supply chain factor.''
The supply chain factor represents EPA's technical estimate of the
amount of methyl bromide inventory that would be adequate to meet a
need for critical use methyl bromide after an unforeseen domestic
production failure. For 2008, EPA proposes to use a supply chain factor
equal to 2,731,211 kg in the Agency's calculation of the amount of
available stocks. EPA wants to be very clear that in this action the
Agency is not proposing to create a ``reserve'' or ``strategic
inventory'' of any kind. The supply chain factor is merely a more
transparent analytical tool that will foster greater understanding of
the Agency's process in determining CSA amounts.
    There is one active methyl bromide production facility in the
United States. EPA estimates that following an unforeseen shutdown of
that facility (e.g., due to an explosion, fire, hurricane), it would
take 6-12 months to restart production, but only 15 weeks for
significant imports of methyl bromide to reach the U.S. As discussed in
the Technical Support Document, EPA estimates that after 15 weeks, U.S.
demand for critical use methyl bromide could be adequately supplied
with imported material. In Decision XVIII/13, the Parties authorized
5,355,946 kg for U.S. critical uses in 2008. If supply is evenly
distributed across each 15-week period of 2008, then a supply
disruption would cause a 15-week shortfall of 1,544,984 kg (15 weeks/52
weeks * 5,355,946 kg). However, EPA data--collected pursuant to the
reporting requirements at 40 CFR 82.13--shows that a disproportionate
amount of critical use methyl bromide is produced in the first 15 weeks
of each year. EPA's analysis in the Technical Support Document suggests
that heavy production at the beginning of each year is related to peak
demand during the spring planting season. Therefore, EPA estimates that
a supply disruption at or near the beginning of 2008 would cause a
supply shortfall greater than 1,544,984 kg.
    EPA proposes a conservative estimate of the supply chain factor
that considers a supply disruption during the estimated peak 15-week
period of critical use supply. As explained in more detail in the
Technical Support Document, EPA estimates that since the beginning of
the CUE program on January 1, 2005, critical use methyl bromide
production in the first 15 weeks of each year has accounted for 51.0%
of annual critical use methyl bromide production. EPA, therefore,
estimates that the peak 15-week shortfall in 2008 could be 2,731,211 kg
(51.0% * 5,355,946 kg). For the reasons discussed above, EPA proposes
to include a supply chain factor of 2,731,211 kg in its calculation of
the amount of available stocks in 2008. EPA's analysis considers many
factors including foreign production capacity, shipping container
capacity, shipping logistics and market dynamics. EPA seeks comment on
the proposed supply chain factor in its calculation of the amount of
available stocks in 2008, and on its methods and reasoning for this
proposal as described in the Technical Support Document.
    This estimate of a 15 week supply disruption assumes that
registrants of methyl bromide products have equal access to all sources
of available methyl bromide. The Agency recognizes that not all
registrants are allowed to access alternative sources of methyl
bromide. Therefore, registrants may need to submit applications to
amend their existing registrations to legally allow alternative sources
of methyl bromide to be used in formulating methyl bromide end-use
products. Because such applications may require the submission of
product chemistry and acute toxicology data, registrants should plan
accordingly, bearing in mind the registration requirements under FIFRA
and the Pesticide Registration Improvement Act (PRIA). As it is
uncertain how the amendment process would affect the estimate of supply
disruption, EPA will use the 15 week

figure unless other information becomes available.
    There are other limitations associated with EPA's 15 week supply
disruption estimate, which are discussed in the Technical Support
Document. One of these limitations is that under the reporting
requirements at 40 CFR 82.13, EPA collects information about the amount
of pre-phaseout inventory and which entities own it, but the Agency
does not collect information about the characteristics of that
inventory. These unknown characteristics, such as the purity of the
pre-phaseout inventory, could affect users' ability to use this
inventory to meet their critical needs. For example, 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 fumigations
that require pure methyl bromide. EPA seeks information about the
characteristics of the pre-phaseout inventory, because that information
could help EPA refine its proposed CSA allocation amount. For example,
if EPA were to obtain verifiable information that none of the pre-
phaseout inventory was of the necessary composition for post-harvest
uses, the Agency might decide not to allocate CSAs for post-harvest
sectors and could instead allocate that amount of CSAs as post-harvest
CUAs.
    EPA believes there is precedent for allowing a reasonable amount of
a chemical that has been phased out to remain in the supply chain to
meet the needs of exempted uses. For example, in the context of the
essential use exemption, 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.'' That
action is consistent with Decision XVI/12(3), which specifies that
``Parties, when preparing essential use nominations for CFCs, should
give due consideration to existing stocks, whether owned or agreed to
be acquired from a metered-dose inhaler manufacturer, of banked or
recycled controlled substances as described in paragraph 1(b) of
decision IV/25, with the objective of maintaining no more than one
year's operational supply.'' As stated previously, however, neither EPA
nor FDA maintains a reserve on behalf of any essential use
manufacturer, or guarantees that a certain amount of CFCs will always
be held in inventory. Likewise, EPA is not proposing 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.
    Given that today's proposal is to make methyl bromide available for
critical uses in 2008, the small number of methyl bromide production
facilities around the world, and the continued drawdown of existing
methyl bromide inventories make a major supply disruption an important
issue for Agency consideration. The fact that EPA is not aware of a
major methyl bromide supply disruption does not mean that such a
disruption is impossible or even improbable in the future.
    The Technical Support Document discusses in detail the efficacy and
limitations of importing methyl bromide from abroad in the event of a
domestic production plant failure. In fact, EPA estimates that in the
event of a plant production failure, importing methyl bromide from
abroad is likely to be the fastest and most practical short-term way to
replace the lost production. Therefore, issues such as foreign excess
production capacity, shipping container capacity, shipping logistics,
and market dynamics are the primary focus of EPA's analysis.
    As explained above, EPA is not proposing to set aside, or
physically separate, stocks as an inventory reserve. By including a
supply chain factor in its calculation of available stocks EPA is
considering the drawdown of stocks and allocating critical use amounts
that reflect the size of the existing stockpile of pre-phaseout
material. Under EPA's proposed approach, stocks of methyl bromide may
be used to ``fill the distribution chain'' and simultaneously provide
some buffer in case of a major supply disruption.
    Exports were an important consideration in EPA's inclusion of the
supply chain factor. The U.S. faces different circumstances from many
other Parties because it is a methyl bromide producing country as well
as a user country. In fact, historically the U.S. has been the world's
largest supplier of methyl bromide. Since U.S. companies supply a
significant portion of the world demand for methyl bromide, a supply
disruption in the U.S. would not only affect U.S. users, but would
probably affect users with agreed critical uses in developed countries
as well as users in developing countries that have basic domestic needs
for methyl bromide. Therefore, depending on how domestic suppliers
manage their inventories, the supply chain factor could indirectly
reduce the risks for entities in other countries which need methyl
bromide.
    As explained in the Technical Support Document, EPA did not
directly consider domestic demand for methyl bromide for QPS uses in
its estimation of the possible shortfall of methyl bromide supplies in
the event of a major supply disruption. Congress provided separate
grants of authority to EPA for the quarantine and preshipment exemption
and the critical use exemption in CAA sections 604(d)(5) and 604(d)(6),
respectively. Therefore, methyl bromide produced for QPS uses is
regulated under a completely separate exemption program from the CUE.
On January 2, 2003 EPA published the QPS Rule in the Federal Register
(68 FR 2138), which established the framework and guidelines for
regulating methyl bromide produced for uses that meet the definition of
QPS uses, as defined in that rule and at 40 CFR 82.3. The QPS exemption
program does not restrict the amount of methyl bromide that is newly
produced and imported for QPS purposes. In addition, existing
regulations allow manufacturers and distributors of QPS methyl bromide
to manage stockpiles of QPS methyl bromide.
    EPA is acting consistently with the Montreal Protocol by not
including QPS methyl bromide in calculating consumption and inventory
levels related to the phase-out of methyl bromide and the CUE. Article
2H(6) of the Protocol states that the 1991 baseline level of
consumption and production ``shall not include the amounts used by the
Party for quarantine and pre-shipment purposes.''
    Similarly, EPA did not consider domestic demand for methyl bromide
for feedstock and transformation purposes in its calculation of the
supply chain factor. As with the QPS exemption, methyl bromide
producers are allowed to responsibly manage inventories of feedstock
methyl bromide. Therefore, EPA does not find compelling reasons to
account for domestic demand for feedstock methyl bromide in the supply
chain factor. In this action, EPA is not proposing to change or add
restrictions on methyl bromide produced for feedstock and
transformation purposes.
    In the past, stakeholders have raised concerns about their ability
to understand exactly how EPA derives CSA amounts. One of EPA's
motivations for introducing the refined methodology, described above in
this section, is to provide more clarity about how proposed amounts are
derived, and to make EPA's calculations more transparent. For these
reasons, EPA tried to make the terms in the proposed method for
calculating available stocks

proposed in this preamble as clear and definitive as possible. Since
the original proposed rule, EPA has gained significant experience and
information pertaining to the CUE program, and the methyl bromide
industry more generally. EPA is using its added knowledge to propose a
more transparent and definitive method for calculating the amount of
available stocks. Further detail about the factors in the method
proposed in this preamble is provided in the Technical Support Document
available on the public docket for this rulemaking.
3. Proposed Approach for Determining Critical Use Amounts
    EPA estimates that, as of January 1, 2008, 1,715,438 kg of pre-
phaseout inventory will meet the definition of ``available stocks'' as
calculated using the approach described in Section V.D.2. of this
preamble. Based on these calculated figures and the allocation approach
described in this Section, and after making reductions for carry-over
amounts as explained in Section V.D.4. of this preamble, EPA proposes
to allocate critical use allowances (CUAs) permitting 3,101,076 kg of
new methyl bromide production and import for critical uses in 2008, and
to allow sale of 1,715,438 kg from existing stocks for critical uses by
allocating an equivalent number of critical stock allowances (CSAs).
EPA's proposed allocation amounts will result in CSAs that exceed the
difference between the total critical use amount and the new production
amount in the Parties' decision. As discussed above, this is similar to
the approach taken in EPA's rules for the previous two years. EPA seeks
comment on the amount of CUAs and CSAs that the Agency is proposing to
distribute in 2008. EPA also seeks comment on the more refined
allocation approach that the Agency is proposing to use in 2008 and
beyond, as described below in this Section.
    In this action, EPA is proposing to refine its allocation approach
for 2008 and beyond. EPA proposes that in 2008 and in each year
thereafter, when appropriate and feasible, it will allocate CSAs in an
amount equal to the number of kilograms of available stocks on January
1 of the year in question, as estimated by EPA using the method
described in Section V.D.2. of this preamble. As in past years, EPA
intends to allocate a total number of CUAs such that the total number
of CUAs and CSAs is not greater than the total critical use amount
authorized by the Parties for the year in question. To account for
carry-over amounts of methyl bromide, amounts for research purposes, or
for other appropriate reasons, including updated information on
alternatives, EPA may allocate a total number of CUAs and CSAs that is
less than the total critical use amount authorized by the Parties for
the year in question. As in previous CUE rules, if EPA does allow less
than the total amount authorized by the Parties, the Agency will
propose and seek comment on the reasons for, and amounts of, each
reduction before finalizing any such reductions. In this action EPA is
not proposing to create a methyl bromide reserve or strategic inventory
of any kind, or to guarantee that a certain amount of methyl bromide
would always be held in inventory. Furthermore, EPA is not proposing to
add any restrictions on sales of methyl bromide inventories.
    EPA recognizes that in a future CUE allocation rule proposal, the
Agency could estimate, using the method described in Section V.D.2.,
that the amount of available stocks at the beginning of a future year
is less than the difference between the total critical use amount
authorized by the Parties and the amount of new production and imports
authorized by the Parties for the year in question. This scenario can
be described with the following inequality: Available Stocks <  (Total
CUE Amount Authorized--New Production and Imports Authorized). Under
the refined approach described above, in such a case EPA would propose
to allow the maximum amount of new production and imports authorized by
the Parties, minus any reductions as described below. EPA would also
allow critical users to access a limited amount of existing stocks by
allocating a number of CSAs equal to the difference between the total
CUE amount authorized by the Parties and the amount of new production
and imports authorized for the year in question (CSA = Total CUE Amount
Authorized--New Production and Imports Authorized), again minus any
reductions as discussed here. EPA will continue to collect inventory
data and make critical use allocations on an annual basis. Similarly,
unless the Parties approve multi-year critical use exemptions, EPA
proposes to calculate the amount of available stocks on an annual basis
and to explain those calculations in the annual CUE allocation
rulemaking process. To account for carry-over amounts of methyl
bromide, amounts for research purposes, or for other appropriate
reasons, including updated information on alternatives, EPA could
allocate a total number of CUAs and CSAs that is less than the total
critical use amount authorized by the Parties for the year in question.
As in previous CUE rules, if EPA does allow less than the total amount
authorized by the Parties, the Agency will propose and seek comment on
the reasons for, and amounts of, each reduction before finalizing any
such reductions.
    Finally, for completeness, EPA recognizes that as a theoretical
matter it could estimate, using the method described in Section V.D.2.,
that the amount of available stocks at the beginning of a future year
is greater than the total critical use amount authorized by the Parties
for the year in question. This scenario can be described with the
following inequality: Available Stocks > Total CUE Amount Authorized.
In that theoretical scenario, EPA would propose to allocate a number of
CSAs that is equivalent to the total CUE amount authorized by the
Parties for the year in question. However, EPA could still make
reductions, such as for amounts of carry-over CUE material. Therefore,
in the situation described by the above inequality, EPA would not
allocate any CUAs for the year in question.
4. Treatment of Carry-Over Material
    As described in the December 23, 2004 Framework Rule (69 FR 76997),
EPA is not permitting entities to build stocks of methyl bromide
produced or imported after January 1, 2005 under the critical use
exemption. Under the current regulations, quantities of methyl bromide
produced, imported, exported, or sold to end-users under the critical
use exemption in a calendar year must be reported to EPA the following
year. These reporting requirements appear at Sections 82.13(f)(3),
82.13(g)(4), 82.13(h)(1), 82.13(bb)(2), and 82.13(cc)(2). EPA uses the
reported information to calculate the amount of methyl bromide produced
or imported under the critical use exemption, but not exported or sold
to end-users in that year. An amount equivalent to this ``carry-over,''
whether pre-plant or post-harvest, is then deducted from the total
level of allowable new production and import in the year following the
year of the data report. For example, the amount of carry-over from
2005, which was reported in 2006, was deducted from the allowable
amount of production or import for critical uses in 2007. As discussed
in Section V.D.2., carry over material is not included in EPA's
definition of existing stocks (ES) as it applies to the proposed
formula for determining the amount of available stocks (AS). EPA is not
including carry-over amounts as part of ES, because doing so could lead
to a double-

counting of carry-over amounts, and thus a double reduction of critical
use allowances (CUAs).
    In 2007, 53 entities reported information to EPA under the
reporting requirements at 40 CFR 82.13 about critical use methyl
bromide production, imports, exports, sales and/or inventory holdings
in 2006. 6,923,926 kg of critical use methyl bromide was acquired
through production or import in 2006. The information reported to EPA
indicates that 6,384,493 kg of critical use methyl bromide was exported
or sold to end-users in 2006. EPA calculates that the carry-over amount
at the end of 2006 was 539,433 kg, which is the difference between the
reported amount of critical use methyl bromide acquired in 2006 and the
reported amount of exports or sales of that material to end users in
2006 (6,923,926 kg - 6,384,493 kg = 539,433 kg). EPA's calculation of
the amount of carry-over at the end of 2006 is consistent with the
method used in the final 2007 CUE Rule, and with the method agreed to
by the Parties in Decision XVI/6, which established the Accounting
Framework for critical use methyl bromide, for calculating column L of
the U.S. the Accounting Framework. The 2006 U.S. Accounting Framework
is available in the public docket for this rulemaking. EPA seeks
comment on its method for calculating the amount of carry-over critical
use material at the end of each year. Commenters suggesting alternative
methods for calculating the amount of carry-over material at the end of
each year should be detailed and comprehensive; address what changes
would be needed to the reporting requirements; and the degree of
administrative burden that alternative practice might impose. EPA also
seeks comment on ways to improve the completeness of data reporting by
affected companies. It is important for stakeholders to recognize that
the process for calculating the amount of carry-over CUE material each
year relies on sales to end-user data reported to EPA by distributors
and applicators. EPA specifically requests comment on whether requiring
producers, importers, and distributors to report to the Agency the
names of distributors and third-party applicators to whom they have
sold critical-use methyl bromide would result in more complete
reporting of sales to end-user data, and whether this would justify the
additional burden of such requirements.
    In previous CUE rules, EPA has used the approach described in the
Framework Rule for implementing carry-over reductions. Consistent with
that approach, EPA is proposing to reduce the total level of new
production and import for critical uses by 539,432 kg to reflect the
total level of carry-over material available at the end of 2006. After
applying this reduction to the total volumes of allowable new
production or import, EPA pro-rated CUAs to each company based on their
1991 baseline market share.
    Chemtura Corporation has submitted a petition available on the
public docket for this rulemaking that recommends alternative methods
for apportioning carry-over reductions among CUA holders. Some of
Chemtura's proposals would require increases to existing reporting
requirements for producers, distributors or third-party applicators.
EPA encourages interested parties to consult Chemtura's petition. EPA
seeks comment on the recommendations in that petition, as well as any
additional suggestions regarding the apportionment of carry-over among
companies. Comments suggesting alternative methods for implementing
carry-over reductions should be detailed and comprehensive; address
what changes, if any, would be needed to the reporting requirements;
and the degree of burden the alternative practice might impose.
5. Amounts for Research Purposes
    Decision XVII/9(7) ``request[ed] Parties to endeavor to use stocks,
where available, to meet any demand for methyl bromide for the purposes
of research and development.'' Consistent with that Decision, in the
2007 CUE Rule, EPA reduced the amount of new production and import by
21,702 kilograms, which was the amount needed for research. Consistent
with Decision XVII/9, EPA continued to encourage methyl bromide
suppliers to sell inventory to researchers and encouraged researchers
to purchase inventory.
    Decision XVIII/15(1) authorizes ``the production and consumption of
[methyl bromide] necessary to satisfy laboratory and analytical
critical uses.'' Paragraph 2 of that decision states that methyl
bromide produced under the exemption for laboratory and analytical uses
may be used as a reference or standard; in laboratory toxicology
studies; to compare the efficacy of methyl bromide and its alternatives
inside a laboratory; and as a laboratory agent which is destroyed in a
chemical reaction in the manner of feedstock. In a separate notice-and-
comment rulemaking titled the ``Global Essential Laboratory and
Analytical Use Exemption,'' EPA is proposing to implement the exemption
authorized in Decision XVIII/15. More information about that rulemaking
process is available on the docket for that rule (EPA-HQ-OAR-2007-
0384).
    There continues to be a need for methyl bromide for research
purposes that do not meet the criteria for laboratory and analytical
uses, as defined in Decision XVIII/15. A common example is an outdoor
field experiment that requires methyl bromide as a standard control
treatment with which to compare the trial alternatives' results. The
critical use sectors that were approved by the Parties to use methyl
bromide for research purposes in 2008 are listed in Section V.C. and
have ``research purposes'' listed in their limiting critical conditions
in Table I of this preamble.
    In this action, EPA is proposing to allow sale of 15,491 kg of
existing stocks for research purposes in 2008 to account for the amount
authorized for those purposes. EPA proposes to allow methyl bromide
sale from stocks for exempted research purposes by expending CSAs. An
explanation of what amounts of methyl bromide and of what sectors
qualify for research purposes can be found in Section V.C. of this
preamble. If EPA adopts this proposal it will continue to encourage
methyl bromide suppliers to sell inventory to researchers and to
encourage researchers to purchase inventory for research purposes. EPA
seeks comment on its proposal to issue CSAs for sale of methyl bromide
stocks for exempted research purposes.
6. Methyl Bromide Alternatives
    In the 2006 CUE Rule (71 FR 5985) EPA allocated less methyl bromide
for critical uses than was authorized by the Parties in order to
account for the recent registration of sulfuryl fluoride. The
allocation reductions in that rule reflected transition rates that were
included for the first time in the 2007 U.S. Critical Use Nomination
(CUN). In the 2007 CUE Rule, EPA explained why a similar reduction was
made in that rule: ``The report of the Methyl Bromide Technical Options
Committee (MBTOC) indicated that the MBTOC did not make any reductions
in these [post-harvest] use categories for the uptake of sulfuryl
fluoride in 2007 because the United States Government indicated that it
would do so in its domestic allocation procedures. Therefore, EPA is
reducing the total volume of critical use methyl bromide by 53,703
kilograms to reflect the continuing transition to sulfuryl fluoride''
(75 FR 75390).
    The United States continues to make progress transitioning to
alternatives to methyl bromide fumigation. Preliminary results of a
study (forthcoming) indicate

that the cost of post-harvest cocoa fumigation with sulfuryl fluoride
is not substantially greater than the cost of using methyl bromide for
that fumigation. As a result the National Pest Management Association
(NPMA) decided to withdraw its nomination request for critical use
methyl bromide for cocoa for calendar year 2009 and not to seek
critical use methyl bromide for cocoa at all in calendar year 2010.
    NPMA, however, has expressed the need for some critical use methyl
bromide for cocoa in 2008 as the sector transitions to sulfuryl
fluoride. NPMA explained to EPA that some larger companies have already
begun integrating sulfuryl fluoride into their operations. However,
there are other companies that have not begun that transition. NPMA
believes that those companies would be unprepared if EPA does not allow
a portion of the 50,188 kg of critical use methyl bromide for cocoa
approved by the Parties for 2008. Given the circumstances discussed
above, EPA seeks comment on how much of the 50,188 kg of critical use
methyl bromide approved by the Parties for cocoa for 2008 should be
allowed by the Agency. Commenters on this topic should recommend
specific amounts of critical use methyl bromide for cocoa in 2008, and
provide detailed justifications for their recommendations.
    Besides the issues regarding post-harvest cocoa fumigation
discussed above, EPA is not proposing to make any other reductions in
post-harvest or pre-plant critical use allowances to account for the
uptake of sulfuryl fluoride, or any other pre-plant or post-harvest
alternatives. In the 2008 CUN the Agency applied transition rates for
all critical use sectors. The MBTOC report of September 2006 included
reductions in its recommendations for critical use categories based on
the transition rates in the 2008 CUN. MBTOC's recommendations were then
considered in the Parties' 2008 authorization amounts, as listed in
Decision XVIII/13. Therefore, transition rates, which account for the
uptake of alternatives, have already been applied for authorized 2008
critical use amounts. Furthermore, the 2009 CUN, which represents the
most recent analysis and the best available data for methyl bromide
alternatives, does not conclude that transition rates should be
increased for 2008.
    As the 2009 CUN reflects, besides the post-harvest cocoa issue
discussed above in this section, the United States Government has not
found new information that supports changing the 2008 transition rates
included in the 2008 CUN and applied by MBTOC. EPA continues to gather
information about methyl bromide alternatives through the CUE
application process, and by other means. For example, in August 2006,
under the authority of Section 114 of the Clean Air Act, EPA collected
information from a group of millers and fumigators about their
experiences with sulfuryl fluoride and methyl bromide.
    EPA seeks comment on its proposal not to make further reductions in
2008 to account for the uptake of methyl bromide alternatives, because
the Agency has already accounted for alternatives' transition rates.
EPA continues to support research and adoption of methyl bromide
alternatives, and to request information about the economic and
technical feasibility of all existing and potential alternatives.

E. The Criteria in Decisions IX/6 and Ex. I/4

    Paragraphs 2 and 6 of Decision XVIII/13 request parties to ensure