[Federal Register Volume 79, Number 151 (Wednesday, August 6, 2014)]
[Rules and Regulations]
[Pages 46011-46040]
[FR Doc No: 2014-18146]

Vol. 79

Wednesday,

No. 151

August 6, 2014

Part IV

Department of Transportation

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Pipeline and Hazardous Materials Safety Administration

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49 CFR Parts 171, 172, 173, et al.

 Hazardous Materials: Transportation of Lithium Batteries; Final Rule

Federal Register / Vol. 79 , No. 151 / Wednesday, August 6, 2014 /
Rules and Regulations

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 171, 172, 173, 175

[Docket No. PHMSA-2009-0095 (HM-224F)]
RIN 2137-AE44

Hazardous Materials: Transportation of Lithium Batteries

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: Final rule.

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SUMMARY: PHMSA, in consultation with the Federal Aviation
Administration (FAA), is modifying the requirements governing the
transportation of lithium cells and batteries. This final rule revises
hazard communication and packaging provisions for lithium batteries and
harmonizes the Hazardous Materials Regulations (HMR) with applicable
provisions of the United Nations (UN) Model Regulations, the
International Civil Aviation Organization's Technical Instructions for
the Safe Transport of Dangerous Goods by Air (ICAO Technical
Instructions) and the International Maritime Dangerous Goods (IMDG)
Code.

DATES: Effective Date: August 6, 2014.
    Voluntary Compliance Date: Voluntary compliance with all amendments
is authorized August 6, 2014.
    Delayed Compliance Date: Unless otherwise specified, compliance
with the amendments adopted in this final rule is February 6, 2015.
    The incorporation by reference of certain publications listed in
the rule is approved by the Director of the Federal Register as of
August 6, 2014.

FOR FURTHER INFORMATION CONTACT: Charles E. Betts or Kevin A. Leary
Standards and Rulemaking Division, Pipeline and Hazardous Materials
Safety Administration, telephone<PHONE_NUMBER>, or Janet McLaughlin,
Office of Hazardous Materials Safety, Federal Aviation Administration,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Contents

I. Executive Summary
II. Background
III. Section-by-Section Review
    A. Part 171
    B. Part 172
    C. Part 173
    D. Part 175
    E. Compliance Date
IV. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for this Rulemaking
    B. Executive Order 12866, Executive Order 13563, and DOT
Regulatory Policies and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act, Executive Order 13272, and DOT
Procedures and Policies
    F. Paperwork Reduction Act
    G. Regulatory Identifier Number (RIN)
    H. Unfunded Mandates Reform Act
    I. Environmental Assessment
    J. Privacy Act
    K. Executive Order 13609 and International Trade Analysis

I. Executive Summary

    In this final rule, PHMSA is revising requirements in the HMR
applicable to the transport of lithium cells and batteries consistent
with the UN Model Regulations, the ICAO Technical Instructions and the
IMDG Code. The final rule:
    (1) Replaces equivalent lithium content with Watt-hours for lithium
ion cells and batteries;
    (2) adopts separate shipping descriptions for lithium metal
batteries and lithium ion batteries;
    (3) revises provisions for the transport of small and medium
lithium cells and batteries including cells and batteries packed with,
or contained in, equipment;
    (4) revises the requirements for the transport of lithium batteries
for disposal or recycling;
    (5) harmonizes the provisions for the transport of low production
and prototype lithium cells and batteries with the ICAO Technical
Instructions and the IMDG Code; and
    (6) adopts new provisions for the transport of damaged, defective,
and recalled lithium batteries.
    PHMSA is not adopting proposals to: (1) Modify provisions for what
constitutes a change to a battery design in the UN Manual of Tests and
Criteria; (2) require lithium cells and batteries to be marked with an
indication that the cell or battery design passed each of the
appropriate tests outlined in the UN Manual of Tests and Criteria; or
(3) limit the locations on board aircraft where shipments of lithium
cells and batteries could be stowed.
    The provisions of this final rule are consistent with Section 828
of the ``FAA Modernization and Reform Act of 2012'' (Pub. L 112-98, 126
Stat.133 (Feb. 14, 2012)), which prohibits DOT from issuing or
enforcing any regulation or other requirement regarding the air
transportation of lithium cells or batteries if the requirement is more
stringent than the requirements of the ICAO Technical Instructions.
    PHMSA estimates that the costs of this rule would total $12.1
million over the next 10 years when applying a 3 percent discount rate,
and $10.8 million when applying a 7 percent rate. PHMSA also developed
high and low cost estimates to incorporate uncertainty in quantifying
costs--at a 7 percent discount rate the low estimate of costs is $7.4
million and the high estimate is $15.0 million. These figures
acknowledge that the HMR already authorize the use of the ICAO
Technical Instructions and the IMDG Code for most lithium battery
shipments. Further, shipments of lithium batteries transported to or
from the U.S. must conform to either the ICAO Technical Instructions by
air or the IMDG code by vessel. Domestic air and vessel transport of
lithium batteries is the final remaining segment likely to be impacted
by the amendments in this final rule. Commenters representing air
carriers indicated that international operators and most U.S. operators
conform to the provisions of the ICAO Technical Instructions because of
the desire to have a single set of operational practices and training
standards. PHMSA anticipates cost savings resulting from harmonization
of certain requirements, including those related to proper shipping
names and Watt-hour ratings. Separate entries for lithium metal and
lithium ion batteries have appeared in the ICAO Technical Instructions
and the IMDG code since 2009. PHMSA did not adopt those entries at that
time but noted that the then new entries could be used both
domestically and internationally, and for transportation by motor
vehicle and rail immediately before or after being transported by
aircraft. [74 FR 2207]. While the HMR permit the use of these shipping
descriptions because these entries do not appear in the Hazardous
Materials Table (HMT; Sec.  172.101) use of these descriptions
continues to frustrate shipments. Similarly, the ICAO Technical
Instructions and the IMDG code use the term ``Watt-hours'' to measure
the size of lithium ion batteries, while the HMR use the term
``equivalent lithium content.'' While both of these provide an
indication of the size of a lithium ion battery, they are not
interchangeable units and this difference frustrates shippers
attempting to determine the appropriate shipping requirements. PHMSA
anticipates some safety benefits resulting from risk reduction through
a combination of: Reliable packaging; hazard communication; inspection
and

acceptance checks prior to loading cargo aboard aircraft; pilot
notification; and employee training, many of which have already been
adopted into current practice.

II. Background

    PHMSA published a notice of proposed rulemaking (NPRM) in this
docket (75 FR 1302, Jan. 11, 2010) to enhance the transport of lithium
cells and batteries through elimination of regulatory exceptions,
increased battery design testing requirements, air cargo stowage
requirements, and clarification of certain other provisions. In that
NPRM, PHMSA discussed: (1) National Transportation Safety Board (NTSB)
Recommendations resulting from the February 7, 2006, cargo aircraft
accident at Philadelphia International Airport suspected to have been
caused by lithium batteries; (2) numerous minor incidents of smoke or
fire involving lithium cells and batteries in air transportation, which
may be ``precursors'' to a catastrophic accident; and (3) research
conducted by FAA William J. Hughes Technical Center (Technical Center),
which examined the characteristics of fires involving packages of
lithium batteries, the effectiveness of conventional fire suppression
systems at mitigating the impacts of these fires, and the ability of
packages to contain a fire involving lithium batteries. 75 FR at 1303-
07. Specifically, in the NPRM, PHMSA proposed to:
     Adopt or revise various definitions of: ``Lithium cell or
battery''; ``lithium content''; ``lithium ion cell or battery'';
``lithium metal cell or battery''; ``short circuit''; and ``Watt-
hour.''
     Adopt Watt-hour, in place of ``equivalent lithium
content'', as the measure of power (or size) of a lithium ion cell or
battery.
     Require a shipper, carrier, package owner, or person
reporting an incident provide reasonable assistance in an investigation
including access to the damaged package or article.
     Replace the single proper shipping name and UN
identification number for ``lithium batteries'' with separate proper
shipping names and UN identification numbers for lithium metal
batteries and lithium ion batteries and also adopt separate proper
shipping names and UN identification numbers for lithium metal and
lithium ion batteries packed with, or contained in, equipment.
     Consolidate requirements for shipping lithium cells and
batteries, and exceptions into Sec.  173.185, by:
    [cir] Requiring cells and batteries to be tested in accordance with
the latest revisions to the UN Manual of Tests and Criteria, and
require manufacturers to retain evidence of successful completion of UN
testing. PHMSA also indicated it was considering requiring the presence
of a ``quality mark'' to indicate successful testing.
    [cir] Eliminating the exceptions for small cells and batteries in
air transportation, except with respect to extremely small cells packed
with or contained in equipment.
    [cir] Providing certain relaxed requirements for (1) the shipment
of low production runs and prototype batteries, and (2) batteries being
shipped for recycling or disposal.
     Require lithium cells and batteries, when transported by
aircraft, to be stowed in a location accessible by a crew member or a
location equipped with an FAA-approved detection and fire suppression
system.
    PHMSA proposed an effective date for a final rule 75 days after
publication in the Federal Register and invited comments concerning the
additional costs that would result from such a compliance schedule,
practical difficulties associated with quickly coming into compliance
with the provisions of the January 11, 2010, NPRM, and any other issues
that PHMSA should consider in making a decision on the compliance
schedule. PHMSA also invited commenters to address the feasibility and
practicability of a phased compliance schedule, under which certain
provisions of the final rule would become effective on a faster
schedule than other provisions, for which immediate compliance would be
more difficult.
    A total of 125 persons submitted comments on the proposals in the
January 11, 2010, NPRM. Commenters included battery and electrical
device manufacturers, airlines, airline pilots, retailers, battery
recyclers, members of the U.S. House of Representatives, the U.S. Small
Business Administration (SBA), the U.S. Chamber of Commerce, and
foreign governments. PHMSA also received comments from industry trade
associations and other advocates representing the above named groups.
    Commenters expressed support for the overall goal of improving the
safe transport of lithium batteries by all modes, especially air. The
commenters also stressed the need for consistency between the HMR and
the ICAO Technical Instructions. Several commenters suggested that even
small deviations from the ICAO Technical Instructions in the transport
of lithium batteries would cause significant disruptions. These
commenters stated that differences between U.S. and international
requirements for lithium batteries detract from safety by creating
confusion and excessively complicating the detailed set of regulations
that already apply to lithium battery shipments. SBA recommended that
PHMSA consider the public comments to the proposed rule, assess the
impact of the proposed rule on small businesses, and consider feasible
alternatives that would meet the agency's safety objectives while
minimizing the economic impact on small business.
    The majority of commenters focused on the proposals for: (1)
Eliminating provisions for small lithium batteries currently found in
Sec.  172.102, special provision 188; (2) modifying the criteria under
which a lithium battery would be considered to be a new type; and (3)
prescribing aircraft stowage requirements. To review the NPRM, draft
regulatory evaluation, environmental assessment, comments, letters, and
other materials considered in this regulatory action go to http://www.regulations.gov, docket number PHMSA-2009-0095. To locate a
specific commenter by name simply use the search function provided by
regulations.gov.
    Since publication of the January 11, 2010 NPRM:
     PHMSA hosted a public meeting attended by 100 individuals
(outside of PHMSA and FAA) representing a total of 73 companies,
organizations and other entities, 16 of whom made presentations. A
transcript of this meeting is in the docket (at PHMSA-2009-0095-
0189).\1\
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    \1\ In addition, representatives of the Cargo Airline
Association met with officials of the FAA on September 8, 2010, to
present additional concerns with proposals in the NPRM, and a member
of the Airline Pilots Association provided information to PHMSA on
aircraft fire suppression systems, the notice to the pilot in
command, and current training of airline personnel in a telephone
conference on April 20, 2011. Memoranda of these contacts are in the
docket (at PHMSA-2009-0095-0220 and -0234, respectively).
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     The FAA Technical Center continued to study the risks
presented by lithium batteries in air transportation and ways to
address those risks and published reports on ``Fire Protection for the
Shipment of Lithium Batteries in Aircraft Cargo Compartments''
(November 2010) and, in conjunction with Transport Canada, on a
``Freighter Airplane Cargo Fire Risk Model'' (September 2011). Copies
of these reports are in the docket (at PHMSA-2009-0095-0235 and -0240,
respectively).
     PHMSA evaluated transportation incidents involving lithium
batteries and one cargo aircraft accident in which an aircraft
transporting lithium batteries

was destroyed and both pilots were killed.\2\
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    \2\ On September 3, 2010, in Dubai, United Arab Emirates, a 747-
400 cargo aircraft crashed while attempting to land at the Dubai
airport after a fire was discovered. Both pilots were killed, and
the aircraft and its cargo, which included lithium batteries, were
destroyed. The UAE preliminary report of the accident is in the
docket (at PHMSA-2009-0095-0238).
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     The ICAO Dangerous Goods Panel adopted revisions into the
2013-2014 ICAO Technical Instructions that narrow exceptions for
lithium metal and lithium ion cells and batteries not packed with, or
contained in, equipment when transported by aircraft. PHMSA
incorporated the 2013-2014 ICAO Technical Instructions by reference
into the HMR in docket number PHMSA2012-0027 (HM-215L), 78 FR 988
(January 7, 2013).\3\
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    \3\ This means that, for purposes of the HMR, a shipment of
lithium batteries to, from, or within the United States could be
offered and transported in accordance with the current edition of
the ICAO Technical Instructions even before PHMSA issued a final
rule in this proceeding.
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     In February 2012, Congress passed and the president signed
the ``FAA Modernization and Reform Act of 2012'' that specifically
prohibits DOT agencies from issuing or enforcing regulations regarding
the air transport of lithium cells or batteries, whether transported
separately or packed with, or contained in, equipment, if the
requirement is more stringent than the requirements of the ICAO
Technical Instructions.\4\
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    \4\ The legislation allows the continued prohibition on the
transport of lithium metal cells and batteries aboard passenger
aircraft. It also authorizes the issuance of more stringent
regulation based on credible reports that lithium batteries
substantially contributed to the initiation or propagation of a fire
aboard an aircraft, as long as the regulations address solely the
deficiencies referenced in the report(s) and are the least
disruptive and least expensive variation from existing requirements
while adequately addressing identified deficiencies.
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     In April 2012 and January 2013, PHMSA stated that it was
considering harmonizing requirements in the HMR on the transportation
of lithium batteries with changes adopted in the 2013-2014 ICAO
Technical Instructions and requested additional comments on (1) the
effect of those changes, (2) whether to require compliance with the
ICAO Technical Instructions for all shipments by air, both domestic and
international, and (3) the impacts if PHMSA failed to adopt specific
provisions in the ICAO Technical Instructions into the HMR. 77 FR 21714
(Apr. 11, 2012), 78 FR 1119 (Jan. 7, 2013).
    The changes adopted in the ICAO Technical Instructions require
additional shipper training, markings, labels, and pilot notification
for packages containing more than 8 lithium cells or 2 lithium
batteries, which were previously not subject these requirements.
Commenters to the April 11, 2012 and the January 7, 2013 notices
unanimously supported harmonization of the HMR with the 2013-2014 ICAO
Technical Instructions while acknowledging that the changes adopted by
the ICAO would result in increased costs in training, package markings
and revised procedures. Commenters also noted that, if PHMSA failed to
harmonize the HMR with the current ICAO Technical Instructions,
shippers and carriers would continue to struggle with the differences
between the two sets of regulations. Commenters further stated that
PHMSA should not adopt proposals in the NPRM that would be more
restrictive than the ICAO Technical Instructions because this would
place U.S. shippers and carriers at a disadvantage relative to their
international counterparts and be in violation of the FAA Modernization
and Reform Act of 2012. Commenters also opposed specifically
maintaining an option to use the current HMR, instead of the ICAO
Technical Instructions, and noted that permitting shippers and carriers
to choose compliance with alternative standards in domestic and
international commerce would undermine safety because the ICAO
provisions are more stringent than the current HMR.
    Several air carriers indicated that because the 2013-2014 ICAO
Technical Instructions would become effective January 1, 2013 they
would be in compliance with those standards by that date regardless of
whether (or when) PHMSA issued a final rule. Other commenters requested
a transition period between 6 and 18 months to permit companies to
conduct training and adjust their operations to adapt to these changes.
Outside of a delayed compliance date, commenters did not suggest any
other ways to reduce the compliance burden. The National Association of
Manufacturers (NAM) indicated that supply chains will have to adapt to
a final rule that adopts the provisions of the 2013-2014 ICAO Technical
Instructions, but the costs of implementing these provisions would vary
from one manufacturer to another. The Cargo Airline Association (CAA)
suggested that the revisions in the 2013-2014 ICAO Technical
Instructions might result in a shift in transport from the air mode to
other modes (such as ground) but did not attempt to quantify this as
shipping decisions would vary from company to company.
    Air carriers and international shippers stressed the desire for a
single system to eliminate errors and streamline training. Further, the
commenters asserted that any benefits associated with maintaining an
option would be minor, accrued by a small number of entities and that
these benefits would be more than offset by increased confusion
experienced by shippers and air carriers. Additionally, commenters
suggested that a failure by PHMSA to mandate the use of the ICAO
Technical Instructions would create an environment where the U.S.
permits a lesser standard than the rest of the world, placing air
carriers and pilots at increased risk and hampering enforcement of the
ICAO Technical Instructions.
    Based on all the comments received, and our analysis of the recent
changes to the ICAO Technical Instructions, we are adopting into the
HMR requirements consistent with 2013-2014 ICAO Technical Instructions,
the 17th revised edition of the UN Model Regulations, the 5th Revised
Edition of the UN Manual of Tests and Criteria Amendment 1, and
Amendment 36-12 of the IMDG Code. In the section-by-section review,
each of the proposals, with corresponding comments, and subsequent
revisions is discussed in more detail. For convenience, a list of
commenters is provided below:

3M Company
Airlines for America (A4A), formerly Air Transport Association (ATA)
ACCO Brands (ACCO)
Advanced Medical Technology Association (AdvaMed)
Airforwarders Association (Afa)
The Airline Pilots Association, International (ALPA)
Airtec GmbH & Co. KG (Airtec)
Alaska Airlines
The American Trucking Associations (Trucking)
Association of Hazmat Shippers, Inc. (AHS)
Association of International Automobile Manufacturers, Inc. (AIAM)
Asurion Corporation
AT&T Services Inc.
Batteries Plus LLC
Battery Association of Japan (BAJ)
Bayer HealthCare Diabetes Care
Berlin Heart Inc.
Best Buy Corporation
Biomet Incorporated
Black & Decker
Boat U.S. Foundation
Boston Power
Boston Scientific Corporation
Camera and Imaging Products Association (CIPA)
Cargo Airline Association (CAA)
Casio America (Casio)
Clean Harbors Environmental Services
Coalition of Airline Pilots Associations (CAPA)
Communications and Information Network Association of Japan (CIAJ)
CompuCom Systems, Inc.
Consumer Electronics Association (CEA)

Consumer Electronics Retail Coalition (CERC)
Control Technology Inc.
Corporate Radiation Safety and Dangerous Goods Transport (Siemens)
Council on Safe Transport of Hazardous Articles (COSTHA)
Covidien
CTIA--The Wireless Association
Dangerous Goods Advisory Council (DGAC)
Dangerous Goods Trainers Association (DGTA)
Delphi Automotive (Delphi)
Delta Airlines (Delta)
Deutsche Post DHL (DHL)
DGM USA
Digital Europe
Embassy of Israel
Embassy of the Republic of Korea
Energizer Battery Manufacturing, Inc. (Energizer)
EnteroMedics, Inc.
Environmental Technology Council
European Portable Battery Association (EPBA)
European Union
Express Association of America (EAA)
Fedco Electronics, Inc. (FedCo)
FedEX Express (FedEx)
Garmin International, Inc. (Garmin)
GE Corporation (GE)
GRC Wireless Recycling (GRC)
Greatbatch, Inc.
Hephner TV & Electronics
Hitachi Maxell, Ltd.
Horizon Air
International Air Transport Association (IATA)
Infinite Power Solutions, Inc.
Information Technology Industry Council (ITI)
Infotrac
International Federation of Airline Pilots Associations (IFALPA)
The Japan Electrical Manufacturer's Association (JEMA)
Japan Electronics & Information Technology Industries Association
(JEITA)
Japan Machinery Center for Trade and Investment (JMC)
Johnson Controls
Korea International Trade Association (KITA), the Korea Electronics
Association (KEA), and the Battery R&D Association of Korea (KORBA)
Learjet Inc.
Leroy Bennet
Lifescan, Inc. and Animas Corporation
Lithium Battery Industry Coalition
Medical Device Manufacturers Association (MDMA)
Medtronic, Inc.
Mercedes-Benz USA, LLC
MicroSun Technologies LLC
Motorola, Inc.
National Association of Manufacturers (NAM)
National Fire Protection Association (NFPA)
National Funeral Directors Association (NFDA)
The National Industrial Transportation League (NITL)
National Retail Federation (NRF)
National Transportation Safety Board (NTSB)
National Electrical Manufacturers Association (NEMA)
NetApp, Inc.
Nexergy
National Institute of Standards and Technology/US Department of
Commerce (on behalf of Japan and on behalf of Korea)
Nokia Inc.
The North American Automotive Hazmat Action Committee (NAAHAC)
Northern Air Cargo (NAC)
Olympus Corporation of the Americas (Olympus)
Organ Recovery Systems, Inc.
Palladium Energy
Panasonic Corporation of America (Panasonic)
Photo Marketing Association
Quallion LLC (Quallion)
RadioShack Corporation
Recharge
The Rechargeable Battery Association (PRBA)
Rechargeable Battery Recycling Corporation (RBRC)
Rep. Don Young
Rep. John Mica
Rep. Robert E. Latta
Retail Industry Leaders Association (RILA)
Rockwell Automation
Rose Electronics Distributing Company
Saft
Small Business Administration Office of Advocacy (SBA)
Security Industry Association
Southwest Airlines, Co. (Southwest)
Sprint Nextel Corporation (Sprint)
SRICI Testing Center
St. Jude Medical, Inc.
SureFire LLC
Techtronic Industries (TTi)
The International Air Cargo Association (TIACA)
TNR Technical, Inc.
Transportation Intermediaries Association (TIA)
Transportation Trades Department AFL-CIO (TDD)
Troy Rank
Tyco Electronics
Tyco International
United Parcel Service (UPS)
United Technologies Corporation (UTC)
URS Corporation (URS)
US Chamber of Commerce

III. Section-by-Section Review

A. Part 171

Section 171.8 Definitions
    In the NPRM, PHMSA proposed to remove, add and amend a number of
definitions applicable to lithium batteries, as follows:
    1. Remove the definition for ``equivalent lithium content'' and
replace that term with ``Watt-hour'' consistent with the UN Manual of
Tests and Criteria. Commenters supported the proposed addition of the
term ``Watt-hour'' in place of ``equivalent lithium content'' as a
method to measure the size of lithium ion cells and batteries.
    3. Provide separate definitions for ``lithium metal cell or
battery'' and ``lithium ion cell or battery'' in order to differentiate
between the different lithium battery chemistries, and a definition of
``Short circuit'' consistent with the 5th revised edition of the UN
Manual of Tests and Criteria, Amendment 1 and revise the definitions of
``Aggregate lithium content'' and ``Lithium content'' also consistent
with the 5th revised edition of the UN Manual of Tests and Criteria,
Amendment 1. PHMSA did not receive any negative comments regarding
these proposed changes.
    In this final rule, we are adding definitions for ``Lithium ion
cell or battery,'' ``Lithium metal cell or battery,'' ``Short circuit''
and ``Watt-hour'' as proposed. We are removing the present definitions
of ``aggregate lithium content,'' ``equivalent lithium content,'' and
``lithium content.'' The explanation of the size or energy of a cell or
battery is being incorporated into the definition of lithium metal cell
or battery and lithium ion cell or battery. The term ``Aggregate
lithium content'' is not used in the HMR.
Section 171.21 Assistance in Investigations
    In Sec.  171.21, PHMSA requires a shipper, carrier, package owner,
package manufacturer or certifier, repair facility, or person reporting
a hazardous materials transportation incident to provide assistance to
authorized representatives of the Department of Transportation
investigating the incident. In the NPRM, PHMSA proposed to specifically
require such persons to provide reasonable access to a damaged package
or article involved in a transportation incident. PHMSA proposed these
revisions in response to NTSB Recommendation A-07-107 that recommends
retaining failed lithium batteries or devices for further analysis.
After an incident, often the only evidence provided to PHMSA and the
FAA is a written incident report, and in some instances, pictures of
the involved package or article. In some cases, analysis of the damaged
article may reveal the cause of the incident.
    NEMA supported this proposal and suggested that, if this
requirement had been in place earlier, PHMSA and the FAA would possess
more information regarding the causes of many of the lithium battery
incidents cited in the NPRM. UPS and URS request clarification on the
phrases ``reasonable access'' and ``if available,'' noting that the
term ``reasonable'' is not defined. NAC raised environmental and safety
concerns associated with the storage of hazardous materials in the
workplace. NTSB stated that PHMSA could significantly improve the NPRM
if

retention and analysis of failed batteries and equipment were required.
    After reading the comments and reexamining the proposal, we
concluded that the regulations as currently written already meet the
intent of recommendation A-07-107. Specifically Sec. Sec.  109.3 and
109.9 permit a designated agent of the U.S. DOT to gather information
in support of an investigation and direct a package to be transported
to a facility for examination to evaluate whether the package conforms
to the appropriate requirements. Based on the particular circumstances
involved in an incident investigation PHMSA may decide to examine
failed batteries or devices. In the case of lithium batteries, the
decision about whether PHMSA will retain and examine the remains of a
lithium battery incident depend on the condition of the package or
article involved in the incident (e.g., where did the incident occur,
did the incident involve other packages, are there sufficient remains
to examine, can the cause be determined based on other evidence?) PHMSA
uses this information to conduct follow-up investigations as necessary.
Sections 171.12, 171.22, 171.23, 171.24, 171.25 Use of International
Standards and Regulations
    The HMR, ICAO Technical Instructions, IMDG Code, and the Transport
Canada TDG Regulations are based on the UN Recommendations, which are
model regulations issued by the UN Committee of Experts on the
Transport of Dangerous Goods. The HMR, with certain conditions and
limitations, permit both domestic and international shipments of
hazardous materials to be offered for transportation and transported
under provisions of, the ICAO Technical Instructions, the IMDG Code and
the TDG Regulations as appropriate. In most cases where we allow
compliance with an alternative standard such as the ICAO Technical
Instructions or the IMDG Code, the level of safety is at least equal to
the HMR. However, in a limited number of situations additional
conditions or limitations are necessary consistent with the public
interest or are required to comply with other federal law. Examples of
these condition or limitations include but are not limited to: Approval
of Class 1 (explosive) materials; identification of hazardous
substances and hazardous wastes; and the prohibition on the transport
of lithium metal batteries by passenger aircraft.
    In the NPRM, PHMSA proposed more stringent requirements than the
ICAO Technical Instructions and the IMDG Code that were effective at
the time the NPRM was published. Most commenters strongly recommended
that we adopt the standards set forth in the ICAO Technical
Instructions and the IMDG code, rather than the more stringent
requirements proposed in the NPRM. These commenters contended that the
proposed amendments would create confusion, decrease compliance, and
negatively impact safety throughout the supply chain. Since the NPRM
was published, the ICAO Technical Instructions have been revised
several times and provide additional protections not found in the
current HMR including a reduction in the number of batteries permitted
in a package, employee training and explicit hazard communication.
Accordingly, we would be continuing to allow a lower level of safety
for the domestic transportation of lithium cells and batteries if we do
not harmonize the HMR with the 2013-2014 ICAO Technical Instructions.
    DGAC noted the provisions in the proposed Sec.  171.12(a)(6)(i)
would effectively impose less stringent requirements for shipments
originating in Canada than PHMSA proposed for domestic shipments by
rail or highway. PHMSA intends all lithium batteries offered for
transport to, from, or through the United States in accordance with the
Canadian TDG regulations to also comply with the appropriate
requirements of the HMR.
    Based on those comments received, and our analysis of the
requirements of the 2013-2014 ICAO Technical Instructions, we are
adopting into the HMR requirements consistent with 2013-2014 ICAO
Technical Instructions, the 17th revised edition of the UN Model
Regulations, the 5th Revised Edition of the UN Manual of Tests and
Criteria Amendment 1, and Amendment 36-12 of the IMDG Code. In this
final rule, we are amending Sec. Sec.  171.12, 171.24 and 171.25 to
reflect the revised proper shipping names for lithium metal batteries,
already found in the ICAO Technical Instructions and the IMDG Code and
we will maintain the current prohibition on the transport of lithium
metal batteries aboard passenger aircraft.

B. Part 172

Section 172.101 Hazardous Materials Table
    At present, the Hazardous Materials Table (HMT) in Sec.  172.101
contains three entries for lithium batteries. (1) Lithium battery
(UN3090), (2) Lithium batteries, contained in equipment (UN3091), and
(3) Lithium batteries packed with equipment (UN3091). In the NPRM we
proposed to adopt separate entries for lithium metal and lithium ion
batteries (including lithium metal and lithium ion batteries packed
with, or contained in, equipment) to be consistent with the UN Model
Regulations, the ICAO Technical Instructions and the IMDG Code.
Commenters to the NPRM supported the clarification brought by the
separate shipping descriptions. In this final rule, PHMSA is adopting
the new HMT entries shown in the chart below:

Lithium ion batteries including lithium ion polymer   UN3480, 9, II
 batteries.
Lithium ion batteries contained in equipment          UN3481, 9, II
 including lithium ion polymer batteries.
Lithium ion batteries packed with equipment           UN3481, 9, II
 including lithium ion polymer batteries.
Lithium metal batteries including lithium alloy       UN3090, 9, II
 batteries.
Lithium metal batteries contained in equipment        UN3091, 9, II
 including lithium alloy batteries.
Lithium metal batteries packed with equipment         UN3091, 9, II
 including lithium alloy batteries.

    DGAC and IATA asked PHMSA to clarify the quantity limits for
lithium batteries packed with, or contained in, equipment. DGAC
recommended that PHMSA clarify that the mass limit applies to the mass
of batteries in or with equipment, excluding the weight of the
accompanying equipment and packaging. IATA requested that PHMSA align
the quantity limits shown in column 9 of the hazardous materials table
with respect to batteries contained in equipment with the ICAO
Technical Instructions. The aircraft quantity limits for lithium
batteries including lithium batteries packed with, or contained in,
equipment in this final rule are aligned with package limits described
in the 2013-2014 ICAO Technical Instructions.
Section 172.102 Special Provisions
    Section 172.102 contains special provisions applicable to the
transportation of specific hazardous materials. In this final rule,
PHMSA is

removing and revising several special provisions as follows:
Special Provision 29
    Special provision 29 outlines provisions for the transport of low
production runs of lithium batteries. As proposed in the NPRM, PHMSA is
deleting special provision 29 and combining the transport provisions
for low production runs with the transport provisions for prototype
lithium batteries into Sec.  173.185(e). See the detailed discussion of
the revisions to Sec.  173.185 below.
Special Provision 134
    Special provision 134 applies to vehicles powered by wet batteries,
sodium batteries, or lithium batteries and equipment powered by wet
batteries or sodium batteries that are transported with these batteries
installed. In this final rule, PHMSA is revising special provision 134
to reflect the adoption of separate shipping descriptions for lithium
ion batteries and lithium metal batteries.
Special Provisions 188, 189
    Special provisions 188 and 189 contain transport provisions for
``small'' and ``medium'' lithium cells and batteries. These provisions
are being revised and moved to Sec.  173.185(c). Consequently, in this
final rule, PHMSA is deleting special provisions 188 and 189. See the
detailed discussion of the revisions to Sec.  173.185 below.
Special Provision 190
    Special provision 190 contains transitional provisions enacted in a
previous rulemaking pertaining to lithium batteries published August 9,
2007 (72 FR 44930). The transition period shown in special provision
190 has expired and is it no longer effective. In this final rule,
PHMSA is deleting special provision 190.
Special Provision 328
    Special provision 328 applies to fuel cell systems that also
contain lithium batteries. In this final rule, PHMSA is revising this
special provision to reflect the adoption of separate shipping
descriptions for lithium ion batteries and lithium metal batteries.
Special Provision A51
    Special provision A51 applies to the air transport of aircraft
batteries, including lithium ion batteries. In this final rule, PHMSA
is revising this special provision to reflect the adoption of separate
shipping descriptions for lithium ion batteries and lithium metal
batteries.
Special Provision A54
    Special provision A54 requires a competent authority approval if
the mass of a lithium battery exceeds the quantity limit specified in
Column 9B for the HMT. In this final rule, PHMSA is revising this
provision slightly to maintain consistency with the ICAO Technical
Instructions.
Special Provision A55
    Special provision A55 outlines conditions for the air transport of
prototype lithium batteries. PHMSA is deleting special provision A55
and combining the transport provisions for low production runs with the
transport provisions for prototype lithium batteries into Sec.
173.185(e). See the detailed discussion of the revisions to Sec.
173.185, below.
Special Provision A100
    Special provision A100 prohibits the transport of lithium metal
batteries aboard passenger carrying aircraft and permits the transport
of up to 5kg of lithium ion batteries aboard passenger aircraft. In
this final rule, PHMSA is adopting separate HMT entries for lithium
metal batteries and lithium ion batteries. With the adoption of
separate HMT entries for lithium metal and lithium ion batteries, this
special provision is no longer necessary and is deleted.
Special Provision A101
    Special provision A101 outlines the conditions and limitations on
the air transport of lithium metal and lithium ion batteries packed
with or contained in equipment. In this final rule, PHMSA is revising
this special provision consistent with comparable provisions in the
ICAO Technical Instructions applicable to lithium metal batteries
packed with or contained in equipment.
Special Provision A103 And A104
    Special provisions A103 and A104 prescribe quantity limits for
lithium ion batteries packed with or contained in equipment. In this
final rule, PHMSA is adopting separate HMT entries for lithium metal
batteries and lithium ion batteries. With the adoption of separate HMT
entries for lithium metal and lithium ion batteries, these special
provisions are no longer necessary and are deleted.

C. Part 173

Section 173.185 Lithium Cells and Batteries
    In Sec.  173.185, PHMSA sets forth packaging requirements and
certain conditional exceptions for the transport of lithium batteries.
As discussed above, other conditions and exceptions are located in
special provisions in Sec.  172.102. In the NPRM, PHMSA proposed to
consolidate into a single section provisions for the packaging of
lithium batteries primarily by relocating relevant requirements
currently located in special provisions to Sec.  173.185. Unless
otherwise specified in this section, the hazard communication and
training requirements located in part 172 of this subchapter will
continue to apply to the transport of lithium cells and batteries.
    Most commenters, including AHS, BAJ, COSTHA, UPS, and NAC supported
the consolidation of lithium battery requirements into one section.
Other commenters, including Delphi and NEMA supported the efforts to
consolidate the lithium battery provisions into a single, easily
referenced section, but suggested that this can only work if PHMSA
harmonizes the HMR with international regulatory approaches.
    In this final rule, PHMSA is consolidating into Sec.  173.185 the
general requirements for lithium batteries including UN design testing
requirements, packaging requirements, and other transport conditions.
Based on the provisions outlined in the ICAO Technical Instructions,
the UN Model Regulation, and the IMDG Code, we are reorganizing this
section by:
     Keeping the design testing and general safety requirements
in paragraph (a) and adding a requirement to create and retain records
of successful testing.
     Consolidating in paragraph (b) the packaging requirements
for lithium cells and batteries, including cells or batteries packaged
with, or contained in, equipment, when these items are shipped as Class
9 materials, including the provision in current paragraph (h) for
shipping larger batteries (exceeding 12 kg (26.5 lbs in weight)).
     Placing exceptions for smaller lithium cells and batteries
in paragraph (c).
     Revising paragraph (d), covering cells and batteries
shipped for disposal or recycling, and consolidating in paragraph (e)
provisions covering shipments of both low production runs and prototype
cells or batteries.
     Adding provisions for shipping damaged, defective, or
recalled batteries in paragraph (f).
     Moving to paragraph (g) the provision in current paragraph
(f) for approval of transportation of a lithium cell or battery that
does not comply with requirements in the HMR.

(a) Classification
    In Sec.  173.185(a), the HMR describe the requirements for
transporting cells and batteries as a Class 9 material. These
requirements include UN battery design testing, general battery design
safety requirements, and packaging requirements. In the NPRM, we
proposed to incorporate by reference the 5th revised edition of the UN
Manual of Tests and Criteria and add (1) specific criteria for when
testing of a ``different design'' would be required, and (2) a
requirement for a manufacturer to maintain evidence of successful
completion of required tests. We also sought comments on the benefits
of requiring a quality mark, which would signify compliance with the UN
battery design tests, to appear on the outside of the battery case.
     Test requirements and exemption for existing designs.
    PHMSA adopted the fifth revised edition of the UN Manual of Tests
and Criteria in the January 19, 2011 final rule (HM-215K) and Amendment
1 thereto in the January 7, 2013 final rule (HM-215L). Commenters
including Saft and UPS supported adopting the updated testing standards
in the 5th revised edition, but expressed concern that absent any
exemption provision addressing cells and batteries qualified under
prior versions of the UN tests, it would appear that all cell and
battery designs would need to be retested.
    PHMSA agrees with Saft's recommendation to allow the continued
transport of lithium cells and batteries tested under the prior
versions of the UN tests. In this final rule, we are adding a reference
to the 5th revised edition Amendment 1 of the UN Manual of Tests and
Criteria and permit the continued transportation, without retesting, of
lithium cell and battery designs that were tested in accordance with
the version of the UN Manual of Tests and Criteria effective when the
cell/battery was first transported.
    In the 5th revised edition of the UN Manual of Tests and Criteria,
Amendment 1, the criteria for batteries different from a tested type
were revised to provide a non-exhaustive list of changes to a lithium
battery or cell design that could be expected to ``materially affect
the test results'' and require further testing. In the NPRM, PHMSA had
proposed a separate list of changes that might lead to a failure of any
of the tests would have constituted a design change requiring a
manufacturer to subject a lithium battery design to the appropriate
tests. The proposed changes would have been more conservative than
those provisions adopted in the 5th Revised edition of the UN Manual of
Tests and Criteria and would have included: any change to (1) the
anode, cathode, or electrolyte material; (2) protective devices
including hardware or software; (3) the safety design of the cells,
such as the safety vent; (4) the number of component cells; or (5) the
connecting mode of the component cells.
    PHMSA received mixed responses from commenters on this proposal.
Some commenters supported the proposed changes, suggesting the examples
provide useful clarification. Several comments from lithium battery and
equipment manufacturers and other groups representing the battery
industry and small business interests questioned the basis for proposed
modifications to the design change criteria and the benefit of the
specific criteria. They stated that changes that could influence safety
vary and are not limited to the provided examples; conversely, certain
changes on the proposed list may not always materially affect the test
results. These commenters asked PHMSA to retain the design change
requirements outlined in the UN Manual of Tests and Criteria.
    In this final rule, we are not adopting the text proposed in the
NPRM. The provisions outlined in the 5th Revised Amendment 1 of UN
Manual of Tests and Criteria provide sufficient guidance to make
testing determinations; PHMSA will continue to study this matter and
stresses the importance of testing after any material modifications in
the design or manufacturing.
     Test record requirements.
    The UN Model Regulations and the ICAO Technical Instructions
require lithium cells and batteries (including lithium cells and
batteries packed with, or contained in, equipment) offered for
transport to be manufactured under a quality management program (QMP)
that includes: (1) A description of the organizational structure and
responsibilities of personnel with regard to design and product
quality; (2) the relevant inspection and test, quality control, quality
assurance, and process operation instructions that will be used; (3)
process controls that should include relevant activities to prevent and
detect internal short circuit failure during manufacture of cells; (4)
quality records, such as inspection reports, test data, calibration
data, and certificates. Test data must be kept and made available to
the appropriate national authority upon request; (5) management reviews
to ensure the effective operation of the quality management program;
(6) a process for control of documents and their revision; (7) a means
for control of cells or batteries that are not conforming to the type
tested; (8) training programs and qualification procedures for relevant
personnel; and (9) procedures to ensure there is no damage to the final
product.
    We are not adopting the requirement for lithium batteries to be
manufactured in accordance with a quality management program in this
final rule. We have not fully assessed the impact of requiring each
cell and battery manufacturer to create and maintain such a program.
However, since quality control in manufacturing is an important
prerequisite to ensuring the safe transport of lithium batteries, we
intend to initiate a separate rulemaking project to consider adopting
additional portions of the QMP. Meanwhile, we encourage manufacturers
to use good practices for ensuring consistency in manufacturing such as
those found in the UN Model Regulations and the ICAO Technical
Instructions.
    At this time, we are adopting, as proposed and consistent with good
quality management practices, a requirement for manufacturers to retain
evidence of a successful completion of the UN design tests, for as long
as they offer that battery design for transportation, and for one year
thereafter. Manufacturers would be required to maintain this evidence
in a readily accessible location at the principal place of business,
for as long as the lithium batteries are offered for transportation in
commerce, and for one year thereafter. Each person required to maintain
this evidence must make it available at reasonable times and locations.
This requirement would apply to all new cells and batteries
manufactured after the effective date of this final rule. Commenters
were generally supportive of this change.
    UPS stated that a person could construe the proposed record-
retention requirement as conditioning the length of the record-
retention period upon the manufacturer's offering of the lithium cell
or battery for transportation, or such a transportation offering by any
other person. Accordingly, we are adopting the suggestion of UPS to
provide in Sec.  173.185(a)(2) that ``Each person who manufactures
lithium cells or batteries must create a record of satisfactory
completion of the testing prior to offering the lithium cell or battery
for transport and must: (1) maintain this record for as long as that
design is offered for transportation and for one year thereafter, and
(2) make this record available to an authorized representative of the
Federal, state or local government upon request.

    NEMA and PRBA questioned PHMSA's assumptions and analysis on
information collection costs for the creation of battery design testing
records. NEMA stated that a design drawing for a simple battery pack
adequate for use in any reasonable quality system takes 8-16 hours of a
skilled draftsman, along with a few hours of engineering support, and
both types of employees earn more than $25 per hour. The commenter
further stated that even the smallest assembler has more than 10
designs and major companies have hundreds of designs. However, this
final rule does not require a lithium battery manufacturer to generate
engineering drawings or extensive documentation. While the commenter
notes that a battery assembler may have various designs, the commenter
did not elaborate on whether each of these designs would require
separate testing and documentation in accordance with the requirements
for the UN Manual of Tests and Criteria.
    This final rule requires manufacturers to retain evidence of
successful completion of the required tests, for as long as they
manufacture that battery design and for one year thereafter. This
evidence must also be made available to an authorized representative of
the federal, State or local government, upon request. PHMSA is
adjusting its information collection burdens for the creation and
retention of records of completion of design testing requirements.
PHMSA estimates the burden of generating and retaining documentation
that certifies compliance with the UN Manual of Tests and Criteria
based upon an assumption that there are 110 active lithium battery
manufacturers, which produce an average of 10 designs each, and that
each design requires approximately 30 minutes of design records to be
generated and documented. This produces an industry total of 550 hours.
     General safety requirements.
    The HMR require lithium batteries to be equipped with certain
safety features such as safety venting devices and diodes or fuses if a
battery contains cells or series of cells that are connected in
parallel. These provisions (currently in Sec.  173.185(a)(2) and
(a)(3)) are being combined into a single sub-paragraph (a)(3).
     Marking of Watt-hour rating on lithium ion batteries.
    We are adding a requirement in paragraph (c)(1)(i) that each small
lithium ion battery manufactured after December 31, 2015, to be marked
with the Watt-hour rating on the outside case. This action is
consistent with requirements found in the UN Model Regulations, the
ICAO Technical Instructions and the IMDG Code since 2009. Incorporating
this provision into the HMR ensures greater consistency between the HMR
and the international regulatory standards. As previously mentioned,
this requirement has been in effect in the UN Model Regulations, the
ICAO Technical Instructions and the IMDG code for several years, we do
not anticipate substantial impact in complying with this requirement.
     Marking cells and batteries to indicate successful
testing.
    In the NPRM, PHMSA stated that it was considering requiring the
presence of a visible quality mark on the outside case of each cell or
battery to signify successful completion of the required lithium
battery design tests in a readily recognizable manner. The proposal was
intended to promote knowledge of the UN tests throughout the world and
provide downstream shippers with a straightforward means of identifying
lithium batteries that meet applicable UN testing standards.
    PHMSA received supportive comments from ALPA, TDD, and air carriers
stating this would provide useful information for shippers to determine
if cells and batteries were properly tested prior to offering them into
transport. Most commenters questioned the benefit of an additional mark
on batteries already marked in compliance with other bodies such as
Underwriters Laboratory. Several other commenters stated that the
presence of an additional symbol in no way affects the likelihood that
a particular battery complies with the UN testing provisions, and posed
problems since the mark could be counterfeited. Several air carriers
commented that carriers should not be expected to look inside packages
or devices to see if a mark is present. Until a universally recognized
quality mark is established, and the obstacles to implementing such a
system are overcome, PHMSA will not propose to require such a mark.
     Liquid cathode cells.
    PHMSA also proposed to retain the longstanding prohibition in
current Sec.  173.185(a)(6) forbidding the transport of certain liquid
cathode cells when discharged to less than 2 volts or 2/3 the voltage
of the fully charged cell, except when transported for disposal or
recycling. Saft states that this prohibition does not exist in the UN
Model Regulations or the IMDG Code. It states the ICAO Dangerous Goods
Panel (DGP) removed this provision from the ICAO Technical Instructions
effective January 1, 2011 based on improvements to lithium battery
manufacturing and the addition of a forced discharge test to the UN
design testing requirements that eliminate the need for this now
outdated provision. We agree that there is no longer any need for this
provision, and it is being removed.
(b) Packaging of Class 9 Materials
    The HMR currently require lithium cells and batteries to be packed
in inner packagings in such a manner as to prevent short circuits,
including movement which could lead to short circuits. These inner
packaging must be placed in an outer package conforming to the
requirements of part 178, subparts L and M, at the Packing Group II
performance level. The HMR also require that lithium cells or batteries
packed with equipment and lithium cells or batteries contained in
equipment must be: (1) Of a design that meets the UN tests; (2) packed
to prevent short circuits; and (3) packed in UN-performance packagings
and the equipment and the packaged cells or batteries contained in a
strong outer package.
    In the NPRM, PHMSA proposed to continue these requirements but
consolidate in paragraph (b) all the packaging requirements for lithium
cells and batteries shipped as a Class 9 material, including cells and
batteries packed with, or contained in, equipment. Three commenters,
DGAC, IATA, and COSTHA, appear to have interpreted the proposals in the
NPRM to except lithium batteries packed with equipment from the
specification packaging requirements not covered by an exception. This
was not our intent. Lithium batteries packed with equipment that
otherwise do not meet the criteria for an exception must be placed into
a suitable UN standard packaging that meets the Packing Group II
performance level consistent with the UN Model Regulations, the IMDG
Code, and ICAO Technical Instructions.
    The HMR also currently require lithium battery powered equipment to
be placed into a strong outer packaging that is waterproof or is made
waterproof by nature of its construction. NAM and Delphi suggested
removing this requirement. They state that waterproof packaging
requirements for equipment containing lithium ion or lithium metal
batteries regardless of mode of transportation (air, rail, highway, and
water) are onerous and inconsistent with the UN Model Regulations, the
ICAO Technical Instructions, and the IMDG Code. Covidien requests
clarification of the word ``waterproof'' and requests that PHMSA
acknowledge in its review that the concept of ``waterproof'' should be
a risk-based

determination tied to international approaches, rather than an absolute
concept. Since this requirement does not appear in the UN Model
Regulations, the ICAO Technical Instructions or the IMDG Code, and
there is no clear basis for this requirement in the HMR, PHMSA is
removing this requirement.
    Saft states the requirement that lithium batteries be packed in
combination packages that meet the packing group II performance
standards appears inconsistent with the provision in current Sec.
173.185(g) allowing batteries that exceed 12 kg gross weight and are
equipped with a strong, impact-resistant, outer casing currently to be
packaged in a strong outer packaging in a protective enclosure. For
clarity, PHMSA is moving this separate packaging provision to paragraph
(b)(5) under the Class 9 packaging requirements.
    In this final rule, PHMSA is harmonizing the packaging requirements
applicable to lithium batteries packed with equipment and lithium
batteries contained in equipment with the UN Model Regulations, the
ICAO Technical Instructions and the IMDG Code. When packed with
equipment, the lithium battery must be placed into an authorized
package that meets the Packing Group II performance level, or the
battery must be placed into a suitable inner packaging then placed with
the equipment into a suitable outer package that meets the Packing
Group II performance level. The packaging requirements for lithium
cells and batteries, including lithium cells and batteries packed with,
or contained in, equipment, are contained in a single paragraph (b).
Paragraph (b)(1) includes a reference to the general packaging
requirements in Sec. Sec.  173.24 and 173.24a applicable to all
hazardous materials, and a definition of the term ``equipment,'' as it
is used in this section. Paragraph (b)(2) includes provisions specific
to lithium batteries such as packaging to prevent short circuits,
sparks, or the generation of a dangerous amount of heat movement within
the package. Paragraph (b)(3) sets forth packaging requirements for
lithium cells and batteries not contained in equipment (i.e., packages
of batteries, and batteries packed with equipment). These are specific
requirements applicable to only these configurations including a
requirement that inner packaging completely enclose the cell or battery
and the authorized UN outer packagings. Paragraph (b)(4) includes the
unique additional requirements applicable to lithium batteries
contained in equipment, including a requirement that equipment be
protected from accidental activation and providing an exception from UN
packaging. Paragraph (b)(5) includes a provision for packaging lithium
batteries and assemblies of batteries with a gross weight greater than
12 kg (26.5 lbs) that employ a strong impact resistant outer casing
which was formerly located in Sec.  173.185(g).
(c) Exceptions
    As discussed above, special provisions 188 and 189 currently
provide provisions for ``small'' and (for rail or highway only)
``medium'' lithium metal and lithium ion cells and batteries,
respectively, provided they meet the design tests outlined in the UN
Manual of Tests and Criteria, and are packed in a strong outer package
in a manner that prevents short circuits and damage.\5\ Each package
containing more than 24 lithium cells or 12 lithium batteries must: (1)
Be marked to indicate that it contains lithium batteries and that
special procedures are to be followed if the package is known to be
damaged; (2) be accompanied by a document indicating that the package
contains lithium batteries and that special procedures are to be
followed if the package is known to be damaged; (3) weigh no more than
30 kilograms; and (4) be capable of withstanding a 1.2 meter drop test,
in any orientation, without shifting of the contents that would allow
short-circuiting or release of package contents.
---------------------------------------------------------------------------

    \5\ A ``small'' lithium cell or battery may not contain more
than 1 gram per lithium metal per cell, 2 grams lithium metal
battery or 1.5 grams ELC per lithium ion cell, 8 grams ELC per
lithium ion battery. A ``medium'' lithium cell or battery may only
metal lithium 1 gram and 5 grams per cell and between 5 grams and 25
grams per battery or, for a lithium ion cell or battery, ELC between
1.5 grams and 5 grams per lithium ion cell and ELC between 8 grams
and 25 grams.
---------------------------------------------------------------------------

    In the NPRM, PHMSA proposed to:
     Create a new exception for extremely small batteries with
very low energy (i.e. 0.3 grams lithium content for lithium metal or
3.7 Wh for lithium ion) when packed with or contained in equipment. We
additionally requested comment on an exception for lithium batteries
shipped at a reduced state of charge. PHMSA based the 0.3 gram or 3.7
Wh thresholds on the energy levels found in common coin or button
cells.
     Eliminate the current exceptions for the air transport of
small lithium cells and batteries, including small cells and batteries
packed with or contained in equipment. Thus when transported by air,
all lithium cells and batteries would be regulated in the same manner
regardless of their size;
     Restrict exceptions for surface transport consistent with
the UN Model Regulations and the IMDG Code.
    [cir] Highway, rail and vessel shipments of ``small'' cells/
batteries would be excepted from shipping paper, marking and labeling
requirements;
    [cir] Shipments of ``medium'' cells/batteries would be restricted
to highway and rail only;
    [cir] Packages containing more than 8 lithium cells or 2 lithium
batteries would be subject to package marks indicating presence of
lithium batteries and special procedures to follow if package damaged,
an accompanying shipping document, a 1.2 meter drop test and 30 kg per
package weight limit;
    Recent revisions to the ICAO Technical Instructions include
provisions for extremely small lithium metal cells and batteries
containing less than 0.3 grams of lithium metal, lithium ion cells and
batteries less than 2.7 Wh, and an exception from button cells
installed in equipment, such as circuit boards. We also expect that
implantable medical devices would be covered under this exception.
PHMSA is revising the HMR consistent with these exceptions.
    Other changes that became effective in the 2013-2014 ICAO Technical
Instructions concerned small lithium cells and batteries that by virtue
of their size, were previously afforded exceptions from most
requirements. The revisions now effective in the ICAO Technical
Instructions require: (1) Each package that contains more than 8 small
lithium cells or two small lithium batteries display a Class 9 hazard
warning label in addition to the lithium battery handling label; (2)
shipping papers accompany the shipment, unless the shipper provides
alternative written documentation describing the shipment; (3)
formalized employee training and testing; (4) carrier acceptance
checks; and (5) pilot notification.
    ACCO, PRBA, and BAJ stated that the very low threshold for
excepting batteries (0.3 g or 3.7 Wh) would provide little to no
assistance to shippers utilizing single cell batteries such as cellular
phones and other consumer electronic devices that generally fall in the
range of 4-6 Wh. Alaska Airlines, A4A, NAC and NEMA questioned the
basis for the proposed battery size limits and raised concern regarding
the effects of proposing additional requirements not contained in the
ICAO Technical Instructions. Other commenters stated that the exception
is unnecessarily restrictive. Garmin considers devices containing
lithium batteries such as cellular phones and MP3 players as posing no
danger of

accidental external short circuiting. The commenter stated that the
physical structure of these devices, the custom packaging for spare
batteries, and the recessed nature of battery terminals all effectively
mitigate short circuit hazards in transport. Digital Europe requests
PHMSA align with the ICAO Technical Instructions that except lithium
button cells installed in equipment from certain marking requirements.
    IFALPA, ALPA, NFPA, and NTSB supported PHMSA's original proposal to
otherwise eliminate regulatory exceptions for lithium batteries in air
transportation, including the introduction of requirements for hazard
labeling, packaging, training, and the inclusion of lithium battery
shipments on the notice to the pilot in command. These commenters
support subjecting all lithium batteries to the same requirements,
regardless of size. They stated that this will improve hazard
communication, reduce battery incidents through enhanced training, and
provide pilots with knowledge of the size, location, and the quantity
of lithium battery shipments that will assist flight crew decision
making during an in-flight emergency. NFPA stated that the proposed
measures included in the NPRM provide more complete information, in a
more consistent manner, for access by the transporter as well as the
emergency responders, when necessary. In their comments to the NPRM,
the NTSB stated that cargo shipments of small lithium batteries should
be subject to the same packaging and identification requirements that
apply to medium and large lithium batteries to alert package handlers
to exercise greater care when loading and unloading packages containing
them. ALPA stated that hazardous materials have been safely transported
for decades under the HMR, and bringing lithium batteries fully into
this regulatory scheme would provide significant safety benefits. ALPA
goes on to say that by eliminating the regulatory exception for lithium
battery shipments, handlers will separate packages containing lithium
batteries from general freight, reducing the possibility of inadvertent
damage. These shipments would also be subject to an acceptance check by
airline personnel prior to placement in air transportation, including
inspection of the package to detect damaged or improperly prepared
packages.
    Most other commenters opposed PHMSA's proposal to eliminate the
regulatory exceptions for the air transport of lithium batteries. AIAM,
COSTHA, DGM, EPBA, and IATA cited confusion and increased complexity
that would result from different requirements. ATA, Alaska Airlines,
CEA, Horizon Air, Korea, Panasonic, PRBA, and Saft did not accept
PHMSA's incident analysis as support for eliminating the regulatory
exceptions for lithium batteries. These commenters stated they are not
aware of any safety incidents involving the air transport of properly
packaged batteries, or batteries in compliance with existing
regulations. CIPA and Fedco added that new regulations will not enhance
compliance if shippers ignore them. TIACA stated that the incidents
cited for reasons of non-compliance raises calls for better
enforcement, rather than sweeping new regulations. The SBA recommended
that PHMSA conduct further outreach to the regulated community to
enhance dialogue, promote safety, and ensure harmonization.
    Saft, Southwest, and others stated that PHMSA's decision to propose
different requirements for lithium batteries and lithium batteries
packed with, or contained in, equipment than those applied
internationally would actually detract from safety, because these
differences would create confusion and excessively complicate an
already complex set of regulations that apply to lithium battery
shipments. SBA and PRBA stated that the proposed rules would create
conflicting standards and require significant supply chain redesigns.
Lifescan, NAM, UPS, and others cite multimodal difficulties when the
U.S. HMR conflict with the other published regulations. They stated
that the provisions in the NPRM will cause such packages and devices to
be non-compliant upon entering the United States.
    Other commenters stated that the imposition of more restrictive
U.S. requirements compared to the ICAO Technical Instructions would
have far-reaching adverse economic consequences. These commenters
stated that the elimination of the current exceptions would result in
burdensome administrative procedures, higher transportation costs, and
longer transportation time due to import and export barriers,
disruptions to air freight, and increased costs of packaging,
transport, and storage.
    Some commenters cited the impacts of this proposal on their
industry sectors medical equipment and information technology. At the
March 5, 2010, public meeting, as well as in written comments, they
suggested that various aspects of the NPRM would inappropriately
subject medical devices to the HMR and requested that PHMSA except
finished medical devices from the HMR. The commenters stated that the
NPRM requirements would create severe disruptions to current shipping
practices and could threaten patient access to life-saving and life-
enhancing medical devices. These commenters further stressed the
difference between implantable medical devices regulated by the U.S.
Food and Drug Administration (FDA) and typical consumer products. They
stated that medical devices are already subject to additional controls
including registration of the manufacturing facilities, quality system
requirements, and post market surveillance and reporting. Devices that
pose a higher risk to a patient such as implantable medical devices
undergo an extensive FDA pre-market approval process to establish
reasonable assurance of safety and effectiveness of the device.
    NAM stated that the NPRM is inconsistent with other national policy
goals because the rule would make the transport of large, advanced
batteries used for electric and hybrid vehicles and domestic energy
exploration more difficult and expensive. AT&T suggested that, if PHMSA
adopts the proposed rules, the wireless business would have to make a
dramatic shift to surface transport, which would not only delay the
delivery of products and services to enterprise business customers,
government agencies, and consumers, but also, more fundamentally, slow
the velocity of competition and innovation. Moreover, customer demands
would be met not only more slowly, but also unevenly. NetApp asserted
that PHMSA did not adequately assess the effects of the NPRM on U.S.
companies that manufacture and ship large equipment containing lithium
ion batteries. NetApp stated that the proposed regulation would
significantly impede their ability to meet customers' expedited
delivery requirements and place them at a disadvantage relative to
foreign manufacturers.
    NEMA strongly recommended that PHMSA and its regulatory partners
take sufficient time to recognize the additional protection from short
circuit or other malfunction that equipment and additional packaging
provide to lithium batteries. NEMA suggested that PHMSA should except
equipment and devices containing or packed with lithium batteries from
full regulation under Class 9. RBRC stated that the limit on the number
of batteries that can be shipped in a single package with a piece of
equipment powered by lithium ion batteries (proposed subsections
173.185 (b) and (c))--would preclude the collection of used cellular
phones in

the same boxes with used lithium ion batteries.
    In the NPRM, PHMSA proposed specific requirements for extremely
small batteries with very low energy (i.e. 0.3 grams lithium content
for lithium metal or 3.7 Wh for lithium ion) when packed with or
contained in equipment.
    Trucking, Saft, Energizer, and the RBRC strongly opposed the
proposed elimination of the exception from the requirements of subpart
H (``Training'') of part 172 of the HMR for both ``small'' and
``medium'' batteries, regardless of the mode of transport. The
commenters state that removal of these exceptions will result in a very
significant increase in the costs associated with the supply of lithium
cells and batteries for many important applications--including medical,
military, security equipment, personal phones, computers, and other
electronic devices. GE Corporation (GE) requested that, if PHMSA does
impose training requirements on hazmat employees transporting small
lithium cells and batteries by ground, they be similar to those
outlined in the ICAO Technical Instructions for batteries since, in
most instances, lithium batteries will be the only type of hazardous
material shipped by the employees subject to these requirements. In
this final rule, PHMSA is not imposing specific training requirements
on shippers offering lithium batteries and battery powered devices for
surface transport that meet all of the applicable conditions of Sec.
173.185(c).
    In this final rule, PHMSA will not eliminate provisions for the air
transport of small cells and batteries as originally proposed. Instead,
we will adopt the provisions outlined in the UN Model Regulations, the
ICAO Technical Instructions and the IMDG Code that permit the transport
of a up to 8 lithium cells or 2 small lithium batteries (less than 1
gram per lithium metal cell or 2 grams per lithium metal battery and 20
Wh per lithium ion cell or 100 Wh per lithium ion battery) including
small lithium batteries packed with, or contained in, equipment. We are
maintaining the current prohibition from transporting lithium metal
cells or batteries aboard passenger carrying aircraft (regardless of
size) when the cells and batteries are not packed with or contained in
equipment.
    We will also continue to provide exceptions from the shipping
paper, marking, labeling, emergency response information, and training
requirements for the transport of small and medium sized batteries by
highway and rail only. Packages containing lithium cells and batteries
that meet the conditions of this exception must be marked ``LITHIUM
BATTERIES--FORBIDDEN FOR TRANSPORT ABOARD AIRCRAFT AND VESSEL.'' UPS
suggests text markings on packages are variable and provide limited
effectiveness. The commenter suggests a clear graphic marking will
assist in overcoming any English-language barriers that may be faced by
personnel loading aircraft or aircraft containers, especially when the
shipments involved are known to move very commonly in international
commerce. KITA, KEA, KORBA suggested that the proposed mark would
create confusion and further suggested that PHMSA permit the air
transport of lithium batteries consistent with the ICAO Technical
Instructions. NEMA stated that the existing international labeling
requirements, combined with those being proposed, would cause confusion
in multi-modal transport as well as cross-border ground transport. The
commenter further states that since these products are transported
several times, by several different modes, and cross international
borders during their journey, consistent international regulatory
approaches ensure compatibility and that transportation risks are
properly managed.
    PHMSA does not expect the text mark required on packages as a
condition of this exception will cause confusion in multimodal or
international transport because this marking would apply only in
limited circumstances. The HMR would only require the additional text
marking for medium-sized lithium cells and batteries transported under
the exceptions permitted for highway and rail transport.
    In the preamble to the NPRM, PHMSA noted that the ICAO Technical
Instructions require certain packages to display a lithium battery
handling label.\6\ This label conveys certain information including:
The presence of lithium batteries; the fact that a flammability hazard
exists if damaged; instructions to package handlers in case a package
is damaged; and a telephone number for additional information. In the
NPRM, PHMSA noted that the ICAO lithium battery handling label conveys
this information, and, while the HMR currently do not require the use
of the lithium battery handling label we permit its display because it
conveys the information required to appear on packages containing
lithium batteries. PRBA states that PHMSA's permission for shippers to
utilize the lithium battery handling label is misguided and would cause
greater confusion. PRBA states the lithium battery handling label was
adopted by ICAO to distinguish between shipments of fully-regulated
lithium batteries and shipments of lithium batteries offered under the
exceptions found in Packing Instructions 965-970 of the ICAO Technical
Instructions. PRBA contends that if PHMSA includes a provision in the
HMR that ``authorizes'' the use of the lithium battery handling label,
it would only further confuse shippers of these products and result in
greater non-compliance.
---------------------------------------------------------------------------

    \6\ The 2013-2014 ICAO Technical Instructions refer to a
``lithium battery handling label.'' In this final rule, we use the
phrase ``lithium battery handling marking'' to distinguish it from
hazard warning labels described in Part 172, Subpart E.
---------------------------------------------------------------------------

    The HMR require certain information to appear on packages
containing lithium batteries offered for transportation under the
various exceptions. This required information includes an indication of
the presence of lithium batteries and the special procedures that
should be followed if the package is damaged. PHMSA requires the
display of the lithium battery handling label for shipments transported
by aircraft, but still permits voluntary use of this label by all modes
on the basis that this label conveys the information required by the
HMR.
    We note that the ICAO Technical Instructions and the IMDG code
differ in the quantity limits for small lithium batteries.
Specifically, the ICAO Technical Instructions limits a package to 8
small lithium cells or 2 small lithium batteries, but does not impose a
package mass limit. Conversely, the UN Model Regulations and the IMDG
code do not limit the number of cells or batteries that can be
contained in the package, but limits each package to 30 kg gross
weight. We do not expect this difference between in quantity limits
will pose significant difficulties because the cell and battery size
and quantity limit in the ICAO Technical Instructions effectively limit
the package weight in line with the surface modes (i.e. a package of
lithium cells or batteries properly packaged in accordance with the
packing instruction 965 or 968 of the ICAO Technical Instructions will
also meet the provisions of the IMDG Code special provision 188
including the 30 kg gross weight limit).
    In the NPRM, PHMSA requested comment on whether it should adopt an
exception for batteries shipped at a reduced state of charge. ALPA
recognizes that the energy in a lithium ion battery and the intensity
of a fire involving that battery directly relates to its state of
charge and a lower state of charge reduces the risk posed by a battery
in transportation. However, ALPA expressed concern that incorporating
state of charge

requirements in the HMR will be nearly impossible to verify or enforce.
CERC stated that an exception for a reduced state of charge could not
feasibly work for retailers and the millions of annual shipments of
products to and from service centers. Additional commenters stated that
it would be impossible for used battery collection programs to know the
state of charge of each battery placed in collection boxes used at
schools, libraries, and federal and state buildings throughout the U.S.
Conversely, Quallion supported a limitation on state of charge for some
lithium ion cells and batteries shipped by air stating that shipping at
a lower state of charge further reduces the already-low risk of a fire
in the event of significant damage to properly packaged products. PRBA
states that such a limitation should not apply to batteries and
batteries packed with, or contained in, equipment shipped for military
or medical applications or batteries collected and shipped for
recycling. When batteries are packed with, or contained in equipment,
the limited additional benefit of mandatory reduced charge is overcome
by the need for these products to work immediately when they reach
their final destination. Due to its limited applicability and
difficulty to verify, PHMSA will not adopt an exception based on a
limited state of charge. However, when practical, PHMSA encourages
shippers and manufacturers to utilize all appropriate methods,
including shipping batteries at a reduced state of charge to help
mitigate the hazards associated with transporting lithium batteries.
    PHMSA received several comments requesting exceptions from the HMR
based on battery chemistry or end use. For example, SureFire
recommended that PHMSA include exceptions for purposes of military,
first responder, medical, and other critical applications. Control
Technology Inc. stated that certain chemistries such as lithium iron
phosphate (LiFePO4) are much safer than competing technologies, which
pose far greater fire risks. Energizer requested that PHMSA except
lithium iron disulfide (LiFeS2) batteries from the HMR when
the batteries meet the existing requirements. This commenter cites a
lack of incidents and recognition of overall safety and quality.
Panasonic suggested that PHMSA except lithium manganese dioxide CR
cells and lithium carbon monofluoride BR cells from the Class 9
shipping requirements when the cells contain less than 1 gram lithium
metal and are proven to have satisfactorily completed the UN tests and
are properly packaged. The commenter added that these batteries are
produced on automated lines in the U.S., Japan, and Indonesia and
incorporate numerous safety features to ensure they are safe under
abuse conditions. The same commenter further stated that these
batteries are used in hundreds of applications ranging from acting as
the primary power source to providing power for memory back-up. While
PHMSA appreciates the extensive work already completed to create safer
batteries, the fact remains that lithium batteries still pose chemical
and electrical hazards. While certain chemistries may possess a greater
resistance to abuse, we do not agree that it is appropriate to create
exceptions based on specific chemistries or applications.
(d) Lithium Cells and Batteries Shipped for Disposal or Recycling
    In the NPRM PHMSA proposed to continue the exception currently in
Sec.  173.185(d) from the UN design testing requirements and the UN
specification packaging requirements when lithium cells or batteries
are transported by motor vehicle for disposal or recycling. Shipments
of lithium batteries would continue to be subject to all other
applicable provisions of the HMR.
    GRC expressed concern that the proposed revisions do not exclude
the responsibility for hazardous materials training for their
suppliers. GRC stated that training in accordance with part 172,
subpart H would be virtually impossible, given the nature of their
participating organizations and the number of collection sites that
include non-profits, schools, retailers, community groups, and
businesses. CEA contended that the proposals in the NPRM will
ultimately act as a disincentive for consumers to recycle responsibly.
RBRC stated that, for this rule to be successful there must be a
specific provision dealing with collection for recycling programs that
recognizes the simple fact that most used batteries collected are, by
their very nature, in a low state of charge.
    PHMSA agrees with the commenters that the nature of the battery
recycling and disposal process very often make compliance with all HMR
requirements, including hazmat employee training, difficult and, in
many cases, unnecessary. However, PHMSA remains concerned that uneven
compliance with basic safety requirements, such as short circuit and
damage protection of lithium batteries, can lead to transportation
incidents as an increasing number of lithium and other high energy
batteries enter the waste and recycling stream. At the same time, PHMSA
recognizes the role that battery recycling and disposal industries play
in environmental stewardship.
    In this final rule, PHMSA continues to provide exceptions from the
UN design testing requirements and the UN packaging requirements when
lithium cells and batteries (including lithium cells or batteries
contained in equipment) are transported by motor vehicle for disposal
or recycling. Further, we are excepting offerors and carriers from the
requirements for part 172, subparts C through H (shipping papers,
marking, labeling, placarding, emergency response information and
training) for appropriately packaged small and medium-sized lithium
batteries when such batteries are offered for transport by motor
vehicle to a permitted storage facility or for the purposes of
recycling.
(e) Low Production Runs and Prototypes
    The HMR have separate but similar provisions for low production
runs and prototype lithium batteries in Sec.  172.102(c), special
provision 29, and Sec.  173.185(e), respectively. Both of these
provisions except lithium batteries from the UN battery design testing
requirements under certain conditions. As proposed in the NPRM, PHMSA
is combining in Sec.  173.185(e) the conditions for the transport of
low production runs and prototype lithium batteries that have not been
subjected to the appropriate UN design tests, consistent with the UN
Model Regulations.
    Johnson Controls and Saft supported the exceptions for transporting
``prototype'' or ``low production runs'' of lithium cells or batteries.
In particular, Saft welcomed the proposed expansion of the current
text--which covers only prototypes--to also address the transport of
cells and batteries produced in low production runs as such action is
consistent with UN special provision 310. However, Saft asked PHMSA to
authorize transport by vessel consistent with the provisions of IMDG
Code special provision 310. PHMSA agrees with the commenter. Special
provision 310 of the IMDG code authorizes the vessel transport of low
production runs consisting of not more than 100 cells or batteries, or
to prototypes.
    Saft also proposed adding a new paragraph to authorize non-
specification packaging for batteries employing a strong, impact-
resistant outer casing and exceeding a gross weight of 12 kg (26.5
pounds), and assemblies of such batteries when transported by highway
and rail. It stated that many of the newer prototype or low production
lithium

batteries are of such a size that use of UN standard packagings as
would otherwise be required would be impractical for the same reasons
that use of such packaging is impracticable for UN-tested batteries of
similar size.
    PHMSA agrees such a provision would facilitate the transport of
large, robust lithium batteries without sacrificing safety. In this
final rule, we are adding a provision to authorize non-specification
packaging for low production and prototype lithium metal and lithium
ion batteries employing a strong, impact-resistant outer casing and
exceeding a gross weight of 12 kg (26.5 pounds), and assemblies of such
batteries. In this final rule PHMSA authorizes such packaging for
transport by highway, rail and vessel consistent with special provision
310 of the IMDG Code. PHMSA continues to forbid transport of lithium
batteries in these non-specification packages by passenger-carrying
aircraft and only permits transport by cargo air when approved by the
Associate Administrator prior to transport.
(f) Damaged Defective or Recalled Batteries
    Lithium batteries and devices are returned to manufacturers and
retail outlets for a variety of reasons including product returns,
warranty fulfillment, repair, failure during field testing, or a
manufacturer recall. The HMR do not currently contain provisions for
transporting batteries subject to a manufacturer's recall or that are
damaged and potentially dangerous. Based on previously developed
guidance material and competent authority approvals, PHMSA will require
lithium batteries that have been damaged, identified as being
defective, or are otherwise being returned to the manufacturer for
safety reasons, to be packaged in combination packages, surrounded by
non-conductive cushioning material, and transported by highway or rail
only. PHMSA and the FAA would address situations requiring air
transport on a case-by-case basis by Approval.
    Most commenters generally supported these proposals. However, they
expressed concern that the words ``damaged'' or ``defective'' may be
subject to misinterpretation. For example, scratches or other cosmetic
damage to a battery casing, or, for large batteries, damage to external
structural features such as bolt-down lugs, would not constitute damage
that affects the safety of the battery in transport. PRBA suggested
clarifying language stating that damaged, defective, or recalled
batteries which do not have the potential of producing a dangerous
evolution of heat, fire or short circuit are not subject to the
paragraph. PRBA stated that this would allow companies to ship
batteries by air that simply are not working to specification, but
which pose no additional safety risk in transport. PRBA states this
option is necessary for many reasons, but is most important for
batteries designed for use in medical and military applications. For
example, if a battery is not working to specifications in such
lifesaving applications as defibrillators, it is critically important
for the battery to be quickly returned to the manufacturer for
analysis. Special provision A154 in the ICAO Technical Instructions
states that batteries are prohibited from transport by aircraft only to
the extent that any damage or defect causes the battery to ``have the
potential of producing a dangerous evolution of heat, fire or short
circuit.''
    UPS also supported PHMSA's proposal, but noted that the provision
does not appear to provide a viable means of transport for residents of
Alaska, Hawaii, Puerto Rico and others not accessible by the highway
and rail system. Horizon Air and Rep. Don Young request exceptions for
communities such as those in Alaska not accessible by surface
transportation. These commenters suggested that PHMSA add a provision
stating that damaged defective or recalled batteries are not permitted
for transportation by passenger-carrying aircraft and may be
transported by cargo aircraft only if approved by the Associate
Administrator prior to transportation. NITL, NEMA and others stated
that an option to transport these batteries by cargo vessel is
necessary to enable returns from overseas if the air mode is not
available. Several other commenters stated that failure to allow a mode
that will enable returns from overseas will be counterproductive, since
it will prevent battery companies from fully investigating and
analyzing product defects or failures.
    In response to these comments, PHMSA is authorizing the transport
of damaged, defective or recalled cells or batteries by highway, rail,
or vessel when the batteries are packaged in specification packagings
and each battery is individually placed into inner packagings
surrounded by cushioning material that is non-combustible, and non-
conductive. PHMSA is adopting language consistent with the ICAO
Technical Instructions that prohibit the air transport of lithium cells
or batteries that are subject to a safety recall or batteries that have
been damaged and have the potential of producing a dangerous amount of
heat or fire. PHMSA will evaluate the need to transport such cells or
batteries by aircraft on a case-by-case basis by Approval.
Section 173.219 Life-Saving Appliances
    Section 173.219 requires life-saving appliances containing lithium
batteries to be transported in accordance with Sec.  173.185 of the HMR
and special provisions 188, 189, A101, A103 and A104 as applicable.
PHMSA did not receive comments specific to the transport of life-saving
appliances. In this final rule, PHMSA is revising this section
consistent with other changes in this final rule. Lithium batteries
packed with, or contained in, life-saving appliances must meet the
applicable requirements of Sec.  173.185 and special provisions A54 and
A101.
Section 173.220 Vehicles
    Section 173.220 contains conditions and exceptions applicable to
the transport of vehicles and machinery, including those powered by
lithium batteries. In the NPRM, PHMSA proposed to except prototype
lithium batteries from the UN design testing requirements when these
vehicles are transported by highway for product testing. The batteries
would be required to be securely installed in the vehicle. Commenters
supported this proposal and no objections were raised. PHMSA is
adopting this exception as proposed.

D. Part 175

Section 175.8 Exceptions for Operator Equipment and Items of
Replacement
    In Sec.  175.8, PHMSA provides exceptions for operator equipment
and items of replacement. In the NPRM, PHMSA proposed to modify Sec.
175.8 to permit airlines to carry additional items approved by the FAA
Administrator for use aboard the aircraft. This proposal was in
response to the December 15, 2008, petition for rulemaking (P-1533)
from A4A and the RAA. The petition requested that PHMSA amend the HMR
to permit airlines to carry a limited number of small lithium batteries
in the aircraft cabin in a constant state of readiness with adequate
backup power for the duration of the flight. PHMSA agreed with
airlines' need to maintain and use various types of equipment in the
cabin, which are increasingly powered by lithium batteries.
    Commenters generally supported the proposals to permit airlines to
carry lithium batteries in the cabin to power devices such as
electronic flight bags, onboard medical monitoring devices,

and credit card readers. Southwest supported the proposed revision of
Sec.  175.8 for operator equipment and items of replacement, but
suggested that the regulation should clearly identify which branch of
the FAA will act on a request for an approval (Certificate Management
Office, Flight Standards, Hazmat Branch Managers, etc.), and that the
approval process should provide for review and feedback in a timely and
consistent manner. Three commenters requested that PHMSA clarify the
wording ``Items containing hazardous material'' and suggested that this
wording would preclude spare lithium batteries for required devices. On
September 23, 2009, the FAA published a document Information for
Operators (InFO) that discusses the appropriate regulations applicable
to the operation of portable electronic devices aboard aircraft. This
InFo is available through the FAA at the following URL: http://www.faa.gov/other_visit/aviation_industry/airline_operators/airline_safety.
    In response to the commenters' PHMSA is revising the proposed Sec.
175.8(a)(4) to read ``hazardous materials used by the operator aboard
the aircraft when approved by the Administrator of the Federal Aviation
Administration.'' This will permit operators to carry hazardous
material used by the flight crew as appropriate, subject to approval by
the Administrator of the FAA.
Section 175.10 Exceptions for Passengers
    In Sec.  175.10, the HMR provide conditions and exceptions for the
transport of certain hazardous materials when carried by aircraft
passengers or crewmembers in checked and carry-on baggage. In the NPRM,
PHMSA proposed to require lithium batteries carried by a passenger or a
crewmember in checked or carry-on baggage to be of a type proven to
meet each of the appropriate tests outlined in the UN Manual of Tests
and Criteria.
    PRBA supported PHMSA's proposal. DGAC stated that, while it would
expect cells and batteries would meet the UN testing requirements, it
wonders how passengers would actually know whether their batteries were
tested. In addition, it questions how such a requirement would apply to
passengers arriving from outside the United States. The 2013-2014 ICAO
Technical Instructions already include the requirement for the
manufacturer to test lithium cells and batteries, and all lithium
batteries must already be of a design that meets each test in the UN
Manual of Tests and Criteria prior to being offered for transportation.
Accordingly, we do not anticipate any adverse impact to harmonizing the
provisions of the HMR with the provisions of the ICAO Technical
Instructions at this point.
    NFDA asked PHMSA to insert the words ``living or deceased'' before
the word ``humans'' in Sec.  175.10(a)(3), in order to clarify that
implanted medical devices in a deceased human body being transported by
an air carrier falls under the exception currently available for living
humans. The provisions in Sec.  175.10(a)(3) applicable to implanted
medical devices in humans or animals does not specify the condition of
the human or animal. Thus this provision already permits implanted
medical devices regardless of whether the human or animal is alive or
deceased.
    PRBA and others note the HMR currently authorize a passenger to
carry lithium ion batteries up to 300 Watt-hours, but the ICAO
Technical Instructions limit a passenger to carry lithium ion batteries
up to 160 Watt-hours and requires authorization of the airline if the
battery is over 100 Watt-hours. The commenters state this should be
changed to harmonize with the ICAO Technical Instructions. We agree and
in this final rule we are revising Sec.  175.10 to state, when approved
by the air operator, up to two individually protected spare lithium ion
batteries per person having a Watt-hour rating greater than 100 Wh, but
not greater than 160 Wh, may be carried in (a) carry-on baggage, or (b)
equipment in either checked or carry-on baggage.
    PRBA and NEMA also noted that PHMSA also has included a provision
that appears to prohibit spare ``dry cells and batteries'' (e.g.,
alkaline, nickel cadmium, nickel metal hydride) from placement in
checked baggage. NEMA opposed any such prohibition and states that non-
lithium dry cell batteries, even when new and deliberately shorted in
large quantities cannot produce dangerous levels of heat. PRBA asked
PHMSA to clarify whether we intended to prohibit dry cell batteries
from checked baggage. They state this would be an impossible provision
to enforce considering the millions of alkaline batteries purchased by
consumers every year in the U.S. and is unnecessary in light of the
battery's low voltage. PHMSA did not intend to limit the ability of
passengers to carry spare non-lithium dry cell batteries to carry-on
baggage. In this final rule, PHMSA is revising Sec.  175.10(a)(18) to
specify each spare lithium battery must be carried in carry-on baggage
only.
Section 175.30 Inspecting Shipments
    Section 175.30 establishes requirements for acceptance and carriage
of hazardous materials by aircraft. We are adding a new paragraph
(a)(5) to this section to specify that the air carrier must not accept
a lithium battery shipment described on alternative written
documentation unless it is in compliance with Sec.
173.185(c)(4)(v)(B).
Section 175.33 Shipping Paper and Notification of the Pilot-in-Command
    Section 175.33 establishes requirements for a shipping paper to
accompany an air shipment of hazardous materials and for the aircraft
operator to notify the pilot-in-command of the specific information
about the hazardous materials to be transported on the aircraft. We are
adding a new paragraph (a)(12) to this section to specify that the air
carrier must notify the pilot-in-command of the UN number, the hazard
class, the number of packages, and the gross mass of every package for
each shipment of lithium batteries containing more than 2 small lithium
batteries or 8 small lithium cells in any package that otherwise meet
the requirements of Sec.  173.185(c). We are also adding a new
paragraph (c)(5) to this section to specify that when alternative
written documentation is supplied by the shipper in accordance with
Sec.  173.185(c)(4)(v)(B), the operator must retain this documentation
for 90 days.
Section 175.75 Quantity Limitations and Cargo Location
    In Sec.  175.75, the HMR prescribe quantity limits and stowage
locations for various hazardous materials aboard an aircraft. In the
NPRM, PHMSA proposed to modify Sec.  175.75 to prohibit the stowage of
lithium batteries in an inaccessible manner, unless the inaccessible
cargo compartment or freight container was equipped with an FAA-
approved fire suppression system or the lithium batteries were packaged
in an FAA-approved fire resistant container. We also invited comments
on whether limiting the number of lithium batteries in a single
aircraft, compartment, or unit load device would further enhance
safety.
     Stowage Location.
    Our proposal to restrict locations for stowage of lithium batteries
onboard an aircraft was based on NTSB recommendations A-07-104 and A-
07-105 and FAA testing that demonstrated that lithium batteries are a
potential fire source and can also enhance the severity of a fire from
an outside source.

While the cargo compartments of passenger aircraft are required to be
equipped with fire suppression systems, and some cargo-only aircraft
are equipped with FAA-approved fire suppression systems, the specific
number of such cargo-only aircraft remains unknown. The NTSB stated
that it believes this leaves flight crews on cargo-only aircraft at
risk from in-flight fires involving both primary and secondary lithium
batteries.
    PHMSA received many comments on these proposals from a variety of
sources including passenger airlines, express air carriers, medical
device manufacturers, retailers, airline pilot organizations, the NTSB,
members of the U.S. House of Representatives, battery and electronic
equipment manufacturers, and others who ship lithium batteries and
lithium battery powered equipment. While some welcomed the proposed
requirements, most commenters opposed additional loading and
segregation requirements. These commenters stated that the proposed
additional requirements are unnecessary, and would impose significant
cost and logistical hurdles on air carriers resulting in delays,
frustrated shipments, and other adverse distributional effects.
    The NTSB, ALPA, TDD and IFALPA support additional controls on the
stowage of lithium batteries aboard aircraft. These commenters stated
that the quantity of lithium batteries in any single location, or in a
single cargo compartment, must be restricted to mitigate the
consequences of an incident by controlling the number of batteries in
close proximity to each other. ALPA stated that it is vitally important
to limit the quantity of lithium ion batteries stored in a single
location as well as in a single cargo compartment. ALPA supported this
statement by saying that, since a fire may be the result of an internal
short circuit, defective design, or counterfeit battery, no amount of
packaging or training will prevent every incident; however, the
severity of an incident may be effectively managed by controlling the
number of batteries in close proximity to each other.
    ALPA and TDD do not support any proposal that permits the placement
of lithium ion batteries in an accessible cargo position as an
alternative to stowing the batteries in a Class C cargo compartment.
ALPA stated that, if a Class C compartment does not exist on an
aircraft, PHMSA should not permit shipments of these batteries on board
the aircraft unless additional testing determines that they can be
safely transported in a Class E cargo compartment. ALPA and TDD stated
that, if a fire were to occur in an accessible location, it is unlikely
that a crewmember would attempt to extinguish the fire using a hand-
held halon fire extinguisher.
    NTSB noted in its comments that halon fire suppression is
ineffective on fires involving lithium metal batteries and suggested
that PHMSA could improve the NPRM by explicitly requiring shipments of
lithium metal batteries to be loaded in FAA-approved fire resistant
containers. Several commenters, including AfA, TIA, AHS, A4A, NAC, and
TIACA, questioned the proposal to permit an FAA-approved container for
the purposes of transporting lithium batteries. These commenters
suggest that unless PHMSA identifies a suitable container or criteria
for such a container, this option does not offer any relief.
    More commenters opposed additional loading and segregation
requirements. These commenters stated that the proposed additional
requirements are unnecessary, and would impose significant cost and
logistical hurdles on air carriers resulting in delays, frustrated
shipments, and other adverse distributional effects. A number of them,
including airlines, express air carriers, retailers, medical and other
equipment manufacturers, expressed concerns about the impact of stowage
restrictions on aircraft cargo capacity. Saft and IATA stated that,
unlike passenger-carrying aircraft, many existing cargo aircraft do not
have, and are not required to be fitted with, Class C cargo
compartments. Therefore, if the stowage requirements outlined in the
NPRM were finalized, such cargo-only aircraft could only carry lithium
batteries in an accessible location. FedEx and others stated that a
requirement for lithium ion batteries to be accessible would place them
together with other highly regulated and flammable substances,
increasing the potential for igniting or increasing the severity of an
onboard fire. Similarly, UPS stated that the proposed stowage
requirements would have the practical effect of making crew accessible
positions the most common method of handling lithium batteries and
devices shipped with them. Currently, very few positions on UPS
aircraft are accessible, and typically UPS reserves such positions for
high-hazard materials currently subject to accessibility requirements.
UPS further stated that such consolidation may present commercial
issues to air carriers whose customers may, for sanitation and other
reasons, seek to forbid locating their lithium battery-powered products
near traditional cargo aircraft-only shipments. These commenters stated
that such restrictions will likely result in aircraft operators
electing to simply ban the transport of such materials or load these
products on passenger-carrying aircraft rather than run the risk of
non-compliance with the HMR.
    Digital Europe asked PHMSA to consider that only bulk shipments of
lithium batteries should potentially require additional stowage and
segregation. It asserts that, by volume, lithium batteries contained in
equipment will put the most demand on crew accessible stowage. Casio
stated that lithium ion batteries packed with, or contained in,
products constitute a small volume of the overall package and a
restriction that includes batteries packed with or contained within
products may have a significant impact on the availability of cargo
space. NetApp illustrated this fact with their experience shipping
large equipment that also contains several small lithium batteries.
    CIPA and Olympus stated that if one cell or battery causes a fire
within a package complying with the ICAO Technical Instructions, the
fire will self-terminate without spreading to other batteries or the
contents of the same package. Accordingly, there is no need for
additional restrictions. Air carriers, including UPS, FedEx, Delta and
Southwest, stated that the proposed restrictions would further
complicate the loading process and require an overhaul of training and
operational procedures. Delta and others commented that the HMR
currently impose compartment limits at the hazard class or division
level, but not to specific UN numbers. They stated that, since the HMR
do not impose loading restrictions on Class 9 material, PHMSA must
establish loading limits for lithium batteries specific to those UN
numbers. Subsequently, each carrier would then be required to develop a
process to ensure compliance with this regulation. These commenters
stated that managing such accessibility limitations at the UN number
level would impose great difficulties on air carriers.
    UPS stated that its loaders would be required to scrutinize the UN
number and proper shipping names marked on all Class 9 shipments in
order to identify those packages subject to new accessibility
requirements. In addition, UPS stated that it will need to reprogram
electronic systems developed to support the loading of aircraft unit
load devices (ULDs) and aircraft, as well as generate a notice to the
pilot, specifically to address the lithium battery specific
requirements. Alaska Airlines, Horizon Air, and NAC

proposed creating an additional hazard class for lithium batteries if
loading limits are needed, thereby reducing the complications
associated with segregating packages based on the UN number. While a
separate hazard class for lithium batteries would assist in
identification, and subsequent segregation, of such packages for
transport, PHMSA does not believe creating a new hazard class for a
single commodity is appropriate.
    VFS stated that it is developing a ULD that has a means to alert a
pilot or flight crewmember of the presence of smoke and control or
extinguish a fire inside of a ULD without requiring a crewmember to
enter the compartment. PHMSA and FAA applaud these efforts and welcome
such innovations.
     Quantity Limits.
    In response to PHMSA's invitation for comments on limiting the
number of lithium batteries in a single aircraft, compartment, ULD,
pallet, or similar overpack, IATA and TTi stated that the guiding
principle established in the ICAO Technical Instructions is that
packaging requirements and the package limits for hazardous materials
reduce the hazard in air transport to an acceptable level. On that
basis, there is no limit on the number of individual packages of
hazardous materials that may be transported in a single aircraft,
single cargo compartment, or ULD unless there is a need to separate or
segregate packages containing incompatible hazardous materials.
    PRBA stated that there is no reasonable basis to limit the number
of lithium ion or metal battery packages in a single aircraft cargo
compartment, ULD, or overpack. PRBA expanded on this by stating that
the HMR already contain: (1) Strict weight restrictions on these
packages; (2) quantity limits for batteries packed with, or contained
in, equipment; and (3) a prohibition against shipping lithium metal
batteries on passenger-carrying aircraft. These restrictions adequately
address what PRBA understands to be PHMSA's justification for this
proposal, i.e., to mitigate the consequences of a fire involving
lithium ion and lithium metal batteries. NEMA echoed these statements
by commenting that, if a package is properly packaged and labeled in
compliance with the current regulations, it should be allowed to ship
without any further restrictions. Delta questioned the basis upon which
PHMSA and FAA would formulate a compartment limit.
    PHMSA and FAA continue to study these issues and will take into
consideration new suppression systems and agents as they become
available in the future. We are not adopting stowage restrictions or
limits on the number of for lithium batteries in a single aircraft,
aircraft compartment, ULD, pallet or overpack.

E. Compliance Date

    PHMSA's January 11, 2010, NPRM proposed a 75-day period for
affected entities to come into compliance with the provisions of the
NPRM. ALPA favored expedited compliance with the safety regulations,
stating that the provisions, once enacted, would have a significant
positive impact on safety and may preclude the need to prohibit the
transport of lithium batteries aboard aircraft. However, nearly all
other commenters opposed the 75-day period for compliance with the
requirements outlined in the NPRM. These commenters stated that a 12-18
month compliance period would be required if PHMSA adopted the
provisions of the NPRM. The commenters noted various barriers to
immediate compliance including training hazmat employees, certifying
packaging, obtaining various approvals, and modifying their logistical
operations.
    The provisions of this final rule harmonize the HMR with the UN
Model Regulations, the ICAO Technical Instructions, and the IMDG Code,
so we do not anticipate significant barriers to compliance. In the
April 2012 notice, we requested comments on ways to reduce the
compliance burden should PHMSA adopt in a final rule the ICAO
revisions. Outside of a delayed effective date, commenters did not
provide any comment on ways that PHMSA could reduce the burden or costs
of implementation of a final rule. Most commenters supported a January
1, 2013, effective date since the 2013-2014 ICAO Technical Instructions
also become effective on January 1, 2013. Commenters suggested that
PHMSA provide a suitable grace period to allow shipments that were
initiated prior to January 1st to reach their destination. Others
suggest longer grace periods between one month and 18 months. The
delayed effective date would permit the incorporation of new
requirements into standard operating procedures and for the training of
affected personnel.
    In order to facilitate harmonization, and permit the acceptance of
lithium battery shipments made in accordance with the 2013-2014 ICAO
Technical Instructions, PHMSA permits immediate voluntary compliance
with all of the provisions in this final rule. PHMSA will not require
compliance with the requirements of this final rule until six months
after publication in the Federal Register.

IV. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the following statutory
authorities:
    1. 49 U.S.C. 5103(b) authorizes the Secretary of Transportation to
prescribe regulations for the safe transportation, including security,
of hazardous material in intrastate, interstate, and foreign commerce.
    2. 49 U.S.C. 44701 authorizes the Administrator of the Federal
Aviation Administration to promote the safe flight of civil aircraft in
air commerce by prescribing regulations and minimum standards for
practices, methods, and procedures that the Administrator finds
necessary for safety in air commerce and national security. Under 49
U.S.C. 40113, the Secretary of Transportation has the same authority to
regulate the transportation of hazardous materials by air, in carrying
out Sec.  44701, that he has under 49 U.S.C. 5103.
    3. 49 U.S.C. 5120(b) authorizes the Secretary of Transportation to
ensure that, to the extent practicable, regulations governing the
transportation of hazardous materials in commerce are consistent with
standards adopted by international authorities. This rule amends the
HMR to maintain alignment with international regulatory approaches by
incorporating various amendments to facilitate the transport of
hazardous material in international commerce. To this end, as discussed
in detail above, the rule incorporates changes into the HMR found in
the 5th revised edition of the UN Manual of Tests and Criteria, the
seventeenth revised edition of the UN Recommendations, Amendment 36-12
to the IMDG Code, and the 2013-2014 ICAO Technical Instructions, which
became effective January 1, 2013.
    4. Section 828 ``FAA Modernization and Reform Act'' (Pub. L 112-95;
126 Stat. 133 (Feb 14, 2012)) prohibits DOT agencies from issuing or
enforcing regulations regarding the air transport of lithium cells or
batteries, whether transported separately or packed with, or contained
in, equipment, if the requirement is more stringent than the
requirements of the ICAO Technical Instructions. However, the
legislation authorizes the continued prohibition on the transport of
lithium metal cells and batteries aboard passenger aircraft and
authorizes the issuance of more stringent regulation based on credible
reports that lithium batteries substantially contributed to the
initiation or propagation of a fire aboard an aircraft. Such
regulations must address solely the deficiencies

referenced in the report and must be the least disruptive and least
expensive variation from existing requirements while adequately
addressing identified deficiencies.

B. Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures

    This final rule is considered a significant regulatory action under
Executive Order 12866 and the Regulatory Policies and Procedures of the
Department of Transportation (44 FR 11034) because of significant
public interest. A regulatory impact assessment is available for review
in the public docket for this rulemaking.
    Executive Orders 12866 and 13563 require agencies to regulate in
the ``most cost-effective manner,'' to make a ``reasoned determination
that the benefits of the intended regulation justify its costs,'' and
to develop regulations that ``impose the least burden on society.'' In
this final rule, PHMSA is amending the HMR to harmonize requirements
for the transport of lithium batteries with requirements in the UN
Model Regulations, 2013-2014 ICAO Technical Instructions, and the IMDG
Code by: (1) Adopting separate shipping names for (i) lithium metal
batteries, lithium metal batteries contained in equipment, and lithium
metal batteries packed with equipment; and (ii) lithium ion batteries,
lithium ion batteries contained in equipment, and lithium ion batteries
packed with equipment; (2) adopting ``Watt-hours'' as the measure of
the size of a lithium ion battery to replace the current use of
``equivalent lithium content;'' (3) revising various definitions
consistent with the UN Model Regulations; (4) adopting into the HMR the
ICAO exception for packages containing up to 2 small lithium batteries
or 8 small lithium cells; (5) for lithium ion batteries that meet the
conditions in the exception, requiring each package to bear a lithium
battery handling label; and (6) revising package weight limits
applicable to different lithium battery types and configurations.\7\
PHMSA is retaining its prohibition on the transport of lithium metal
batteries aboard passenger aircraft. PHMSA considered three potential
regulatory options.
---------------------------------------------------------------------------

    \7\ In this document, ``configurations'' refers to the relevance
of differences between batteries-only shipments, batteries packed
with equipment, and batteries contained in equipment.
---------------------------------------------------------------------------

     Option 1 is a no-action option. This would retain the
current provisions applicable to lithium batteries. All costs and
benefits are relative to this option.
     Option 2 would amend the HMR applicable to the transport
of lithium cells and batteries consistent with the UN Model
Regulations, the ICAO Technical Instructions and the IMDG Code. This
option would provide an exception for shipments of a limited number of
small lithium batteries and battery powered equipment, but retains the
current prohibition on the transport of lithium metal batteries aboard
passenger aircraft.
     Option 3 would eliminate the regulatory exceptions for
small lithium batteries--including batteries packed with, or contained
in, equipment--and require their shipment as fully regulated Class 9
materials. This option would additionally (1) modify the design change
criteria in the UN Manual of Tests and Criteria; (2) require lithium
cells and batteries to be marked with an indication that the cell or
battery design that passed each of the appropriate tests outlined in
the UN Manual of Tests and Criteria and (3) limit the locations on
board aircraft where shipments of lithium cells and batteries could be
stowed.
    PHMSA has chosen the Option 2--harmonization with UN Model
Regulations, the ICAO Technical Instructions and the IMDG Code. This
option was constructed with the input of stakeholders representing the
aviation, manufacturing, and shipping industries, as well as
international governments and safety agencies. It is the result of
compromise directed at producing a strong yet flexible regulation and
reflects Congressional intent and stakeholders' need for a global
standard.
    To evaluate the impact of the rule, PHMSA used market research and
information provided by commenters to the April 11, 2012, notice to
project the total numbers of packages and shipments that the regulation
would affect. PHMSA first quantified the number of lithium batteries
transported to or from the U.S., and then estimated the number of
shipments potentially affected by this rule. Trade data from 2011 were
inflated assuming a constant 10% growth rate, with an expected 2.8
billion batteries, packed in nearly 1.1 million shipments, moving to or
through the U.S. for the decade spanning 2014 to 2023. The following
table shows the 10-year projected number of lithium battery shipments
potentially affected by this rule.

------------------------------------------------------------------------
                                             Batteries
                2014-2023                   (millions)       Shipments
------------------------------------------------------------------------
Imports.................................         2,836.1         710,626
Domestic origin.........................             2.6         436,814
                                         -------------------------------
    Total...............................         2,838.8       1,147,440
------------------------------------------------------------------------

    Lithium batteries imported into the U.S. over the next 10 years are
considered to be consolidated into shipments holding an average of
4,000 batteries each (based on historical data), whereas anecdotal
evidence from commenters engaged in domestic custom battery production
indicated that their shipments were mostly small runs of specialized
batteries, with an average of a half dozen batteries per package.
    Due to uncertainty inherent in much of the data collected for this
analysis, we have used a probabilistic method observing the overall
distribution of possible costs to observe the range of potential
outcomes resulting from adoption of the provisions in the final rule.
Figures listed here are mean (average) costs.
    Costs resulting from the regulatory changes are the sum of: Hazard
communication costs, including labeling, documentation, and package
inspection; training and employment costs; and cost associated with the
generation and retention cell/battery design testing records
information. Hazard communication broadly refers to package markings,
labels, documentation, and acceptance checks. The hazard communication
cost increases, as a result of adopting the provisions of the new rule,
would be calculated by multiplying the number of shipments required to
comply with enhanced hazard communication

requirements by the increased cost per shipment. Training costs would
be limited to a one-time expenditure by shippers to familiarize staff
with the new regulations, while carriers would be presumed to undergo
supplemental training on the revised ICAO Technical Instructions,
regardless of U.S. action in a final rule. Cost associated with battery
design testing would be a nominal sum resulting from the generation of
battery design testing records. Using both 3% and 7% annual discounting
for future costs, the total present value mean cost of the regulation
from 2014 to 2023 is expected to be between $10.1 million (at 7%
discount) and $11.2 million (at 3% annual discount), with a possible
range of $6.9 million to $15.3 million in 2013 dollars.
    Benefits for this rulemaking are based on the potential to avert
consequences from catastrophic incidents that would otherwise occur
without the provisions of the rule. However, due to the inherent
uncertainty of potential and averted consequences, quantification of
the benefits is so imprecise that PHMSA elected not to estimate them.
PHMSA has instead elected to engage in a break-even analysis to
determine the threshold safety benefit that would make this rule cost
beneficial. This estimation still requires PHMSA to estimate the