[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Proposed Rules]
[Pages 41510-41553]
[FR Doc No: 2019-17018]

Vol. 84

Wednesday,

No. 157

August 14, 2019

Part IV

 Environmental Protection Agency

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40 CFR Part 82

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Protection of Stratospheric Ozone: Adjustments to the Allowance System
for Controlling HCFC Production and Import, 2020-2029; and Other
Updates; Proposed Rule

Federal Register / Vol. 84 , No. 157 / Wednesday, August 14, 2019 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2016-0271; FRL-9997-57-OAR]
RIN 2060-AU26

Protection of Stratospheric Ozone: Adjustments to the Allowance
System for Controlling HCFC Production and Import, 2020-2029; and Other
Updates

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to allocate production and consumption
allowances for specific hydrochlorofluorocarbons, a type of ozone-
depleting substance, for the years 2020 through 2029. These
hydrochlorofluorocarbons may be used to service certain equipment
manufactured before 2020. The EPA is also proposing to update other
requirements under the program for controlling production and
consumption of ozone-depleting substances, as well as proposing edits
to the regulatory text for improved readability and clarity. These
updates include revising the labeling requirements for containers of
specific hydrochlorofluorocarbons; prohibiting the conversion of
hydrochlorofluorocarbon allowances allocated through this rulemaking
into allowances for hydrochlorofluorocarbons that have already been
phased out; requiring the use of an electronic reporting system for
producers, importers, exporters, transformers, and destroyers of class
I and class II ozone-depleting substances; revising and removing
recordkeeping and reporting requirements; improving the process for
petitioning to import used substances for reuse; creating a
certification process for importing used and virgin substances for
destruction; and restricting the sale of known illegally imported
substances. This notice further includes proposed clarifications to the
certification requirements for methyl bromide quarantine and
preshipment uses. The EPA is also proposing to add polyurethane foam
systems containing ozone-depleting chlorofluorocarbons to the list of
nonessential products. Lastly, the agency is proposing to update the
definition of ``destruction'' as used in the context of the production
and consumption phaseout and remove obsolete provisions.

DATES: Comments on this notice of proposed rulemaking must be received
on or before September 30, 2019. Any party requesting a public hearing
must notify the contact listed below under FOR FURTHER INFORMATION
CONTACT by 5 p.m. Eastern Daylight Time on August 19, 2019. If a public
hearing is requested, the hearing will be held on August 29, 2019. The
hearing will be held in Washington, DC. More details concerning the
hearing, including whether a hearing has been requested, will be
available at https://www.epa.gov/ods-phaseout/phaseout-class-ii-ozone-depleting-substances.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0271, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or withdrawn. The
EPA may publish any comment received to its public docket. Do not
submit electronically any information you consider to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Multimedia submissions (audio, video, etc.) must
be accompanied by a written comment. The written comment is considered
the official comment and should include discussion of all points you
wish to make. The EPA will generally not consider comments or comment
contents located outside of the primary submission (e.g., on the web,
cloud, or other file sharing system). For additional submission
methods, the full EPA public comment policy, information about CBI or
multimedia submissions, and general guidance on making effective
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Katherine Sleasman, Stratospheric
Protection Division, Office of Atmospheric Programs, Mail Code 6205T,
1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number
(202) 564-7716; email address<EMAIL_ADDRESS>You may also
visit the Ozone Protection website of the EPA's Stratospheric
Protection Division at https://www.epa.gov/ods-phaseout for further
information about reporting and recordkeeping, other Stratospheric
Ozone Protection regulations, the science of ozone layer depletion, and
related topics.

SUPPLEMENTARY INFORMATION:

    Acronyms and Abbreviations. The following acronyms and
abbreviations are used in this document.

ACE/ITDS--Automated Commercial Environment/International Trade Data
System
ARFF--Aircraft Rescue and Fire Fighting
CAA--Clean Air Act
CBP--Customs and Border Protection
CDC--Centers for Disease Control and Prevention
CDX--Central Data Exchange
CFC--Chlorofluorocarbon
CFR--Code of Federal Regulations
CROMERR--Cross-Media Electronic Reporting Regulation
DOT--Department of Transportation
EPA--Environmental Protection Agency
FAA--Federal Aviation Administration
FR--Federal Register
GPEA--Government Paperwork Elimination Act
HCFC--Hydrochlorofluorocarbon
HTSA--Harmonized Tariff Schedule of the United States Annotated
MMWR--Morbidity and Mortality Weekly Report
Montreal Protocol--Montreal Protocol on Substances that Deplete the
Ozone Layer
MOP--Meeting of the Parties
MT--Metric Ton
NFPA--National Fire Protection Association
ODP--Ozone Depletion Potential
ODS--Ozone-Depleting Substance
Parties to the Montreal Protocol or Party--Nations and regional
economic integration organizations that have consented to be bound
by the Montreal Protocol on Substances that Deplete the Ozone Layer
RACA--Request for Additional Consumption Allowances
SNAP--Significant New Alternatives Policy
TEAP--Technology and Economic Assessment Panel
UNEP--United Nations Environment Programme

Table of Contents

I. General Information
    A. Does this Proposed Action apply to me?
    B. What action is the Agency proposing?
    C. What is the Agency's authority for this Proposed Action?
    D. What are the incremental costs and benefits of this Proposed
Action?
II. Background
III. Allocation of HCFC Allowances for the Years 2020 Through 2029
    A. Allocation of HCFC-123 Production and Consumption Allowances
    B. De minimis Exemption
    C. Addition of Fire Suppression Servicing Uses to the HCFC
Phaseout Schedule
    D. Revisions to Labeling Requirements
    E. Allocation of HCFC-124 Production and Consumption Allowances
    F. Changes to Transfer of Allowance Provisions in Sec.  82.23
IV. Updates to Other Provisions of the Production and Consumption
Control Program
    A. Electronic Reporting
    B. Changes to Reporting Requirements in Sec. Sec.  82.13, 82.23,
and 82.24
    C. Changes to Methyl Bromide Provisions in Sec. Sec.  82.4 and
82.13
    D. Changes to Provisions for the Import of ODS in Sec.  82.3,
82.4, 82.13, 82.15, and 82.24

    E. Prohibiting the Sale of Illegally Imported Controlled
Substances
V. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Product Ban
VI. Updates to Sec. Sec.  82.3, 82.104, and 82.270 Related to
Destruction
VII. Removing Obsolete Provisions in Sec. Sec.  82.3, 82.4, 82.9,
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24
VIII. Economic Analysis
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations

I. General Information

A. Does this Proposed Action apply to me?

    You may be potentially affected by any final action on this
proposal if you manufacture, process, import, or distribute into
commerce certain ozone-depleting substances (ODS) and mixtures.
Potentially affected entities may include but are not limited to:

     Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing
entities (NAICS 333415)
     Air-Conditioning Equipment and Supplies Merchant
Wholesalers (NAICS 423620)
     Basic Chemical Manufacturing (NAICS 3251)
     Chlorofluorocarbon Gas Manufacturing and Import (NAICS
325120)
     Farm Product Warehousing and Storage (NAICS 493130)
     Farm Supplies and Merchant Wholesalers (NAICS 424910)
     Flour Milling (NAICS 311211)
     Fire Extinguisher Chemical Preparations Manufacturing
(NAICS 325998)
     Fruit and Nut Tree Farming (NAICS 1113)
     General Warehousing and Storage (NAICS 493130)
     Greenhouse, Nursery, and Floriculture Production (NAICS
1114)
     Hazardous Waste Treatment and Disposal, Cement
Manufacturing, Clinker (NAICS 327310)
     Hazardous Waste Treatment and Disposal, Incinerator,
Hazardous Waste (NAICS 562211)
     Industrial Gas Manufacturing (NAICS 325120)
     Materials Recovery Facilities (NAICS 562920)
     Other Aircraft Parts and Auxiliary Equipment
Manufacturing (NAICS 336413)
     Other Chemical and Allied Production Merchant
Wholesalers (NAICS 424690)
     Other Crop Farming (NAICS 1119)
     Pesticide and Other Agricultural Chemical Manufacturing
(NAICS 325320)
     Plumbing, Heating, and Air-Conditioning Contractors
(NAICS 238220)
     Portable Fire Extinguishers Manufacturing (NAICS
339999)
     Postharvest Crop Activities (except Cotton Ginning)
(NAICS 115114)
     Research and Development in Physical, Engineering, and
Life Sciences (NAICS 541710)
     Rice Milling (NAICS 311212)
     Soil Preparation, Planting, and Cultivating (NAICS
115112)
     Vegetable and Melon Farming (NAICS 1112)

    This list is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this section could also
be affected. The North American Industrial Classification System
(NAICS) codes have been provided to assist you and others in
determining whether this action might apply to certain entities. If you
have any questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.

B. What action is the Agency proposing?

    The EPA is proposing a number of revisions to the production and
consumption control program for ODS \1\ in 40 CFR part 82, subpart A,
which are divided into ``class I'' and ``class II'' substances. Section
602 of the Clean Air Act (CAA) contains initial lists of class I and
class II substances and addresses additions to those lists. The current
lists appear in appendices A and B in subpart A. The list of class I
substances includes chlorofluorocarbons (CFCs), halons, carbon
tetrachloride, methyl chloroform, and methyl bromide. The list of class
II substances consists entirely of hydrochlorofluorocarbons (HCFCs).
This action proposes specific revisions to the production and
consumption control program including:
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    \1\ Generally speaking, when the EPA refers to ODS in this
preamble, it is referring to class I and/or class II controlled
substances. The terms ``controlled substance'' and ``ODS'' are used
interchangeably, as are the terms ``HCFC'' and ``class II
substance.''
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     The allocation of production and consumption allowances
for HCFC-123 and HCFC-124 to service certain equipment manufactured
before January 1, 2020;
     Requiring the use of an electronic reporting system for
producers, importers, exporters, transformers, and destroyers of ODS;
     Revisions and removal of certain recordkeeping and
reporting requirements;
     Clarifications to the certification requirements for
methyl bromide quarantine and preshipment uses;
     Improvements to the process for petitioning to import used
substances for reuse;
     Creation of a certification process for importing used and
virgin substances for destruction; and
     Restrictions on the sale of known illegally imported ODS.
    In addition, this action proposes changes to other subparts
supporting the ODS phaseout, specifically:
     Changes to the subpart E requirements for labeling of
products containing HCFC-123 to clarify permitted uses;
     Adding to the subpart C ban on sale and distribution or
offer for sale and distribution in interstate commerce of certain
products that contain class I ODS; and
     Changes to subpart H for reducing halon emissions.
    As summarized below, the proposed changes outlined are grouped by
relevance and thus may not be grouped by subparts as described above.
The EPA is proposing to allocate annual production and consumption
allowances for HCFC-123 and HCFC-124 for the years 2020 through 2029 to
be used for servicing certain equipment manufactured before January 1,
2020. Section 605 of the CAA addresses the production, consumption,
use, and introduction into interstate commerce of class II substances
(listed HCFCs) within the United States. Sections 605 and 606 taken
together constitute the primary source of authority for the domestic
implementation of United States' obligations to phase out HCFCs under
the Montreal Protocol on Substances that Deplete the Ozone Layer
(Montreal Protocol). The EPA regulations issued under sections 605 and
606 appear at 40 CFR part 82, subpart A. Those regulations reflect the
agreed Montreal Protocol HCFC phaseout schedule. An element of that
schedule is to phase out HCFC production and consumption by January 1,
2020, other than production and consumption for certain narrowly

defined uses in an amount up to 0.5% of baseline annually. Under a
previous adjustment to the Montreal Protocol in 1995, production and
consumption during the years 2020 through 2029 was restricted to the
servicing of refrigeration and air-conditioning equipment existing on
January 1, 2020.\2\ In November 2018, the Parties to the Montreal
Protocol adopted another adjustment that, among other things, added
``the servicing of fire suppression and fire protection equipment''
existing on January 1, 2020 as a permissible use.\3\ Consistent with
this adjustment and a continuing servicing demand in fire suppression
equipment using HCFCs in the United States, the EPA is proposing to
revise subpart A to add servicing of existing ``fire suppression
equipment'' to the authorized uses of newly produced or imported
quantities of HCFC-123 and HCFC-124 during the years 2020 through 2029.
To facilitate compliance, the EPA is proposing to revise labeling
requirements for containers of fire suppression agent containing HCFC-
123 that is imported during the years 2020 through 2029 in subpart E.
To align with existing regulations that prohibit the production and
import of phased out HCFCs, in particular HCFC-22, the agency is
proposing to modify the inter-pollutant allowance transfer provisions
authorized by CAA section 607 to prohibit transfers into ODS that are
already phased out.
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    \2\ Section 605(a)(3) of the CAA refers to equipment
``manufactured'' prior to January 1, 2020. The EPA interprets this
to mean that an appliance ``existing on'' January 1, 2020 is one
that is ``manufactured'' by that date. The definition of
``manufactured'' can be found at 40 CFR 82.3. See also 74 FR 66439.
    \3\ Decision XXX/2 and Annex I of the ``Compilation of decisions
adopted by the parties,'' adjust Article 2F of the Montreal
Protocol.
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    In addition, the EPA is proposing to update the requirements under
other provisions of 40 CFR part 82, subpart A. To increase the accuracy
of reported data and to reduce burden associated with reporting ODS
data, the EPA is proposing to require that certain reports, import
petitions, and certifications of intent to import for destruction be
submitted electronically through the agency's Central Data Exchange
(CDX). Each entity must establish an account in CDX in order to
prepare, transmit, certify, and submit reports and submissions. The EPA
is also proposing to amend the recordkeeping and reporting requirements
by harmonizing requirements for class I and class II substances and
removing reporting elements that would be made unnecessary by moving to
electronic reporting. Required electronic reporting and reducing the
number of reporting elements reduce the reporting burden.
    The EPA is proposing two changes to provisions related to the sale
of quarantine and preshipment (QPS) methyl bromide, a fumigant used to
control pests in agriculture and shipping, in response to the
misapplication of this ODS in Puerto Rico and the U.S. Virgin Islands.
First, the EPA is proposing to extend to all distributors of QPS methyl
bromide a certification requirement that currently applies only to
certain distributors and end users. This proposed change would help
ensure that all distributors and applicators are aware of the
restrictions on the use and sale of QPS methyl bromide. Second, the EPA
is proposing to explicitly prohibit the use of methyl bromide produced
under the QPS exemption for any use other than a quarantine use or a
preshipment use. Additionally, the EPA is proposing revisions in
Sec. Sec.  82.4, 82.8, and 82.13 for readability, including changes to
the naming convention for methyl bromide.
    The EPA is also proposing to revise provisions related to the
import of ODS. The agency is proposing to modify the import petition
process by clarifying that failure to provide additional information
requested by the EPA during the process is grounds for objection, and
by allowing for information from the government of the exporting
country to be submitted in lieu of certain currently required
information for petitions to import recovered class I ODS held in ODS
banks. The agency would modify the petition process to import used
class I substances for reuse and provide a new certification process
for the import of ODS (used and virgin) for destruction in the United
States. Additionally, the EPA is proposing to exempt halon 1211, a
potent ODS used as a fire suppression streaming agent, in extinguishers
used onboard aircraft from the import petition process to make it
easier for companies to service fire suppression equipment, promoting
proper maintenance of these bottles and preventing the emission of
halon 1211.
    The EPA is also proposing two changes to reduce the likelihood that
phased out ODS will be sold and distributed in the United States, and
thus reduce the potential for emissions of those substances in this
country. First, the agency is proposing to prohibit the sale or offer
for sale or distribution of any ODS that the seller knows, or has
reason to know, has been imported into the United States without
consumption allowances or is otherwise not subject to an exemption.
Second, the EPA is proposing to add polyurethane foam systems
containing CFCs to the list of class I nonessential products under 40
CFR part 82, subpart C to prohibit them from being sold or distributed
in the United States.
    The agency is proposing to revise the definition of ``destruction''
to include additional technologies such as chemical conversion
processes, all of which have been approved in decisions of the Parties
to the Montreal Protocol which is found or otherwise discussed in
subparts A, E, and H. Lastly, the EPA proposes to remove outdated
provisions related to the allocation and transfer of class I ODS
credits and allowances that are no longer in use in subpart A.

C. What is the Agency's authority for this Proposed Action?

    Several sections of the CAA \4\ provide authority for the actions
proposed by the EPA in this notice of proposed rulemaking. Section 603
provides authority to establish monitoring and reporting requirements
for ODS. Sections 604 and 605 provide authority to phase out production
and consumption of class I and class II substances, respectively, and
to restrict the use of class II ODS. Section 606 provides the EPA
authority to establish a more stringent phaseout schedule \5\ than that
set out in sections 604 and 605 based on: (1) Current scientific
information that a more stringent schedule may be necessary to protect
human health and the environment, (2) the availability of substitutes,
or (3) to conform to any acceleration under the Montreal Protocol.
Section 607 provides the EPA with authority to issue production and
consumption allowances and to authorize allowance transfers, including
inter-pollutant and inter-company transfers. Section 610, in relevant
part, directs the EPA to issue regulations that identify nonessential
products that release class I substances into the environment
(including any release during manufacture, use, storage, or disposal)
and prohibit any person from selling or distributing any such product,
or offering any such products for sale or distribution, in interstate
commerce. Section 611 requires the EPA to establish and implement
labeling requirements for containers of, and products containing or
manufactured with, class I or class II ODS.
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    \4\ The Clean Air Act provisions addressing stratospheric ozone
protection are codified at 42 U.S.C. 7671-7671q.
    \5\ The following documents are available in the docket: ``EPA.
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010,''
and ``EPA. 2018. Overview of CFC and HCFC Phaseout.''

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    The EPA's authority for this rulemaking is supplemented by section
114, which authorizes the EPA Administrator to require recordkeeping
and reporting in carrying out any provision of the CAA (with certain
exceptions that do not apply here). Section 301 further provides
authority for the EPA to ``prescribe such regulations as are necessary
to carry out [the EPA Administrator's] functions'' under the CAA.
Additional authority for electronic reporting comes from the Government
Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which provides ``(1)
for the option of the electronic maintenance, submission, or disclosure
of information, when practicable as a substitute for paper; and (2) for
the use and acceptance of electronic signatures, when practicable.''
    Additional information on the EPA's authority to establish and
manage an allocation system for the phaseout of class I and class II
substances can be found at 58 FR 65018 (December 10, 1993) and 68 FR
2820 (January 21, 2003) respectively.
D. What are the incremental costs and benefits of this Proposed Action?
    The EPA considered the incremental costs and benefits associated
with this rulemaking which stem from proposed changes to reporting and
recordkeeping requirements. The revisions proposed here would require
electronic submissions through CDX, create a streamlined Certification
of Intent to Import ODS for Destruction, exempt halon 1211 in aircraft
bottles from the import petitions process, and add recordkeeping
certification requirement for methyl bromide QPS. The agency has
analyzed the impact on the regulated community associated with the
proposed regulatory changes, and the EPA estimates changes to reporting
and recordkeeping would result in a cost of approximately $5,000 per
year. However, the EPA estimates the annual costs savings to reporters
as a result of reductions in reporting elements, streamlining forms,
and added efficiencies to be approximately $13,000 per year. The one-
time redesign labeling costs for containers of fire suppression agents
are estimated to cost between $1,000 to $3,000. In addition, the EPA
analyzed the impact on small businesses and found there would be no
additional costs imposed on small business, see the docket for the
screening analysis on small businesses. A description of the results of
the analysis and the methods used can be found in Section VIII of this
notice.

II. Background

    The United States was one of the original signatories to the 1987
Montreal Protocol and ratified it on April 12, 1988. After
ratification, Congress enacted, and President George H.W. Bush signed
into law, the CAA Amendments of 1990, which included Title VI on
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85,
Subchapter VI, to ensure that the United States could satisfy its
obligations under the Montreal Protocol, in addition to establishing
complementary measures such as the national recycling and emission
reduction programs under section 608 and the labeling requirements
under section 611.
    The 1992 Copenhagen Amendment \6\ to the Montreal Protocol created
the stepwise reduction schedule, subsequently revised, and the eventual
phaseout of HCFC consumption.\7\ The next milestone is a commitment to
reduce HCFC consumption by 99.5% below the baseline by January 1, 2020,
with consumption for the years 2020 through 2029 restricted to the
servicing of refrigeration, air-conditioning, and fire suppression
equipment existing on January 1, 2020.\8\ This is referred to as the
``servicing tail.'' In November 2018, the Parties to the Montreal
Protocol agreed to add fire suppression equipment existing on January
1, 2020 to the list of permissible servicing tail uses.
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    \6\ Further information on the Copenhagen Amendment is available
at https://ozone.unep.org/en/handbook-montreal-protocol-substances-deplete-ozone-layer/2199.
    \7\ Consumption is defined in Sec.  82.3 as production plus
imports minus exports of a controlled substance (other than
transshipments or used controlled substances). Production is defined
in Sec.  82.3 as the manufacture of a controlled substance from any
raw material or feedstock chemical, but does not include: (1) The
manufacture of a controlled substance that is subsequently
transformed; (2) the reuse or recycling of a controlled substance;
(3) amounts that are destroyed by the approved technologies; or (4)
amounts that are spilled or vented unintentionally.
    \8\ See Montreal Protocol Article 2F, paragraph 6.
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    The United States has chosen to implement the Montreal Protocol
phaseout schedule of HCFCs on a chemical-by-chemical basis that employs
a ``worst-first'' approach focusing on the phaseout of certain
chemicals with higher ozone depletion potential (ODP) earlier than
others. In 1993, the EPA established a phaseout schedule to eliminate
HCFC-141b first, to greatly restrict HCFC-142b and HCFC-22 next, and to
subsequently place restrictions on all other HCFCs ultimately leading
to a complete phaseout of all HCFCs by 2030 (58 FR 15014, March 18,
1993; 58 FR 65018, December 10, 1993).
    The EPA designed the allowance program to implement the production
and consumption controls of the CAA and to facilitate an orderly
phaseout. To control production, the EPA allocated baseline production
allowances to producers of specific ODS. To control consumption,\9\ the
EPA allocated baseline consumption allowances to producers and
importers of specific ODS. In the allowance program, the EPA allocates
``calendar-year'' or ``annual'' allowances to companies who expend them
when they produce or import ODS. The allowances can be traded among
companies both domestically and internationally (between countries that
are Parties to the Protocol), with certain restrictions. Allocation of
production and consumption allowances for most class I substances
(CFCs, methyl chloroform, carbon tetrachloride, and halons) ended in
1996, and in 2005 for methyl bromide. Production and consumption
allowances for class II substances (HCFCs) will be reduced to zero in
2030.\10\
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    \9\ See CAA section 601(6), 42 U.S.C. 7671(6); 40 CFR 82.3.
    \10\ See CAA section 605 (b)(2), 42 U.S.C. 7671(d) and Montreal
Protocol Article 2F, paragraph 6.
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    Since the EPA is implementing the HCFC phaseout on a chemical-by-
chemical basis, it allocates and tracks production and consumption
allowances on an absolute kilogram basis for each chemical. An
allowance is the unit of measure that controls production and
consumption of ODS. The EPA allocates allowances for specific years;
they are valid between January 1 and December 31 of a given control
period (i.e., calendar year). In previous rulemakings, the EPA has
allocated calendar-year allowances equal to a percentage of the
baseline for specified control periods. A calendar-year allowance
represents the privilege granted to a company to produce or import one
kilogram (not ODP-weighted) of the specific substance. The EPA
allocates two types of calendar-year allowances--production allowances
and consumption allowances. To produce an HCFC, an allowance holder
must expend both production and consumption allowances. To import an
HCFC, an allowance holder must expend only consumption allowances. An
allowance holder exporting HCFCs for which it has expended consumption
allowances may obtain a refund of those consumption allowances upon
submittal of proper documentation to the EPA. Production and import of

virgin HCFCs without allowances are prohibited except for
transformation, destruction, transshipments, or heels (Sec.  82.15(a)
and (b)).
    Under the chemical-by-chemical phaseout schedule for HCFCs, the EPA
stopped allocating production and consumption allowances for HCFC-141b
as of 2003; there will be no more production and consumption allowances
for HCFC-22 and HCFC-142b as of 2020; and beginning in 2020 the use of
newly produced or imported quantities of the remaining HCFCs will be
limited to servicing refrigeration, air-conditioning, and fire
suppression equipment existing at that date.
    The EPA notes that absent specific use restrictions, HCFCs can
continue to be used after their production and import has ceased, for
example, to service existing equipment such as refrigeration and air-
conditioning systems. The EPA's intent has always been to facilitate a
smooth transition to alternatives, which means avoiding stranding
equipment that has not yet reached the end of its useful life. For
example, used HCFC-22 that is recovered and reclaimed, or virgin
material produced before the 2020 phaseout may continue to be used for
as long as it is available to service existing HCFC-22 systems.
    The allowance system for production and import that reduces the
number of allowances over time is a central component of the ODS
phaseout in the United States. The EPA limits how much ODS enters the
market to meet the CAA and Montreal Protocol phaseout milestones. To
smooth the phaseout steps, the EPA also takes complementary actions
that reduce the demand for ODS, encourage recovery and recycling or
reclamation of used ODS, allow for continued servicing to avoid
stranding existing equipment, and encourage transition to alternatives
that ``reduce overall risks to human health and the environment.'' \11\
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    \11\ CAA section 612, 42 U.S.C. 7671(k).
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    The EPA's most recent action related to the phaseout of HCFCs was a
2014 rule that allocated production and consumption allowances for
HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 for 2015-2019 (79 FR 64254,
October 28, 2014). In that action, the EPA also implemented the
provisions in CAA section 605(a) that limit production and consumption
to servicing refrigeration and air-conditioning appliances and for use
in fire suppression applications. That notice provides additional
discussion of the history of the phaseout of HCFCs.

III. Allocation of HCFC Allowances for the Years 2020 Through 2029

    This section presents the EPA's proposed approach for issuing HCFC
allowances for the next regulatory period that extends from 2020
through 2029, as well as complementary changes to implement a recent
adjustment to the Montreal Protocol. The EPA is proposing to issue
consumption allowances for HCFC-123 and consumption and production
allowances for HCFC-124 consistent with the CAA, EPA regulations, and
obligations of the United States under the Montreal Protocol. These are
the two HCFCs not already slated for phaseout in the United States by
2020 under existing regulations. These HCFCs are currently used in the
refrigeration, air-conditioning, and fire suppression sectors. The EPA
is also proposing to add servicing of fire suppression equipment to the
authorized uses of newly produced or imported quantities of these HCFCs
during the years 2020 through 2029. In addition, the EPA is proposing
changes to the current labeling requirements for containers of fire
suppression agent using HCFC-123.
    In this proposed action, the EPA is relying on its authority under
CAA section 605(c) to promulgate regulations phasing out the production
and restricting the use of class II substances in accordance with
section 605, subject to previous accelerations under section 606 (See
58 FR 65018, December 19, 1993 and 74 FR 66411, December 15, 2009). The
EPA is proposing limited changes to the existing regulations on
production, consumption, and use of class II ODS to provide flexibility
for the years 2020 through 2029 consistent with the requirements of
section 605 and obligations of the United States under the Montreal
Protocol.
    In developing the proposed allocations for HCFC-123 and HCFC-124
for the years 2020 through 2029, the EPA considered a number of
factors, including existing company-specific consumption baselines
listed in Sec.  82.19; the uses of HCFCs that are permissible for the
years 2020 through 2029 under CAA section 605(a) and the availability
of alternatives for those uses; the types of HCFCs that may be produced
and consumed consistent with existing obligations and regulations; the
quantity needed to meet the estimated demand for each permissible use;
the estimated quantity of HCFCs that will be available from recycling
and reclamation, as well as from the potential stockpiling of virgin
HCFCs in advance of the 2020 phaseout step; \12\ and the transition
that must occur by 2030 when HCFC production and consumption will be
phased out completely. For each HCFC that will be allocated, the EPA
identifies a total number of allowances to be allocated and then sets
calendar-year allowances equal to a percentage of each company's
baseline.\13\ The following discussion describes how the EPA considered
each of these factors broadly in developing the proposed allocations.
---------------------------------------------------------------------------

    \12\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030).
    \13\ The percentage of baseline allowances to be allocated for
each HCFC is determined as follows: First, all the company-specific
consumption baselines (listed in the table at Sec.  82.19) are added
to determine the aggregate amount of consumption baseline. The total
number of allowances to be allocated in a given year are then
divided by the aggregate amount of baseline allowances.
---------------------------------------------------------------------------

    The first factor the EPA considered when developing this proposal
was the existing limitation on permissible uses of HCFCs and the
availability of alternatives for those uses. Section 605(a) of the CAA
limited the use of newly-produced (i.e., virgin) HCFCs beginning
January 1, 2015. The statute provides that starting on that date, it
shall be unlawful for any person to introduce into interstate commerce
or use any class II substance unless such substance: (1) Has been used,
recovered, and recycled; (2) is used and entirely consumed (except for
trace quantities) in the production of other chemicals; (3) is used as
a refrigerant in appliances manufactured before January 1, 2020; or (4)
is listed as acceptable under the Significant New Alternatives Policy
(SNAP) program for use as a fire suppression agent for nonresidential
applications. As detailed in the draft report in the docket titled The
U.S. Phaseout of HCFCs: Projected Servicing Demands in the U.S. Air
Conditioning, Refrigeration, and Fire Suppression Sector (2020-2030),
hereafter referred to as the Draft Servicing Tail Report, the EPA
considered the availability of alternatives for the latter two uses,
with the understanding that it is typically best to service equipment
with the same refrigerant or fire suppression agent it was designed to
use. The SNAP program continues to review and list alternatives for
applications that use HCFCs, including refrigeration and air
conditioning and fire suppression applications that use HCFC-123.
Substitutes are listed under that regulatory program as acceptable,
unacceptable, or acceptable subject to use restrictions for specific
uses. Any future use of substitutes listed as acceptable subject to use
restrictions

must comport with any conditions of the SNAP program, if applicable.
Currently, the SNAP program lists a number of acceptable substitutes
for HCFCs for use as a fire suppression agent for nonresidential
applications, making a variety of allocation options practicable for
the years 2020 through 2029.
    In addition to the statutory provisions in CAA section 605, the EPA
established a ``worst-first approach'' in 1993 which addressed which
HCFCs may be produced and consumed and prioritized the phaseout of
HCFCs based on their ODPs (58 FR 15014 and 58 FR 65018). These
regulations can be found in Sec.  82.16. HCFC-141b was phased out in
2003, except for certain exempted uses. HCFC-22 and HCFC-142b will be
fully phased out of production and consumption starting in 2020, with
exceptions for destruction and transformation. Consistent with that
approach, the EPA is proposing to issue allowances for production and
consumption of only HCFC-123 and HCFC-124, as these are the remaining
HCFCs that have not been phased out domestically.
    Under the Montreal Protocol, the United States has committed to
phase out HCFC production and consumption by January 1, 2020, other
than production and consumption for certain narrowly defined uses in an
amount up to 0.5% of baseline annually. Under a previous Montreal
Protocol adjustment in 1995, production and consumption during the
years 2020 through 2029 were restricted to the servicing of
refrigeration and air-conditioning equipment existing on January 1,
2020. In the spring of 2018, the United States proposed adjusting the
Montreal Protocol to allow for new production and import of HCFCs
within the 0.5% cap for servicing fire suppression equipment existing
on January 1, 2020. This proposal was based on extensive stakeholder
consultation on HCFC needs during the years 2020 through 2029 and the
EPA's analysis of available information, including the 2018 Draft
Servicing Tail Report. In November 2018, the Parties to the Montreal
Protocol decided to adopt an adjustment that, among other things,\14\
added to Article 2F ``the servicing of fire suppression and fire
protection equipment'' existing on January 1, 2020 as a permissible use
for newly produced or imported HCFCs.\15\ While the term ``fire
protection'' can be understood in some contexts to refer broadly to all
measures taken to protect persons or property from harm, the terms
``fire protection'' and ``fire suppression'' have been used
interchangeably in the Montreal Protocol context to refer to
suppressing or putting out fires through the use of chemical
substances. Section 605(a) of the Clean Air Act uses the term ``fire
suppression.'' In addition, the EPA views this term as the more precise
term in the context of regulating ozone-depleting substances.
Therefore, the EPA is proposing to add servicing of ``fire suppression
equipment'' to the authorized uses of newly produced or imported
quantities of these HCFCs during the years 2020 through 2029. The
adjustment adopted in November 2018 will enter into force on June 21,
2019. The final meeting report from the 30th Meeting of the Parties and
Decision XXX/2 adopting the adjustment are included in the docket for
this rulemaking.
---------------------------------------------------------------------------

    \14\ The adjustment adopted at the Meeting of the Parties in
November 2018 included an essential use provision as well as the
addition of two niche applications under the 0.5% cap. In this
proposed rule, the EPA is only proposing to address the addition of
fire suppression. We are not proposing to take any action with
regard to other elements of the adjustment at this time.
    \15\ Decision XXX/2 and Annex I of the ``Compilation of
decisions adopted by the parties,'' adjust Article 2F of the
Montreal Protocol.
---------------------------------------------------------------------------

    In developing the proposed allocations, the EPA considered the
quantities needed to satisfy estimated demand for HCFC-123 and HCFC-124
to service certain equipment manufactured before 2020. These estimates
are discussed in more detail in an updated 2019 Draft Servicing Tail
Report, which is available in the docket. This report and the proposed
allocation are based on demand projections contained in the EPA's
Vintaging Model,\16\ recent market research, discussions with industry
on current HCFC uses and trends, and the expected availability of
recovered, recycled/reclaimed, and reused material. The agency made the
April 2018 draft report available on its website and in the docket
along with a Notice of Data Availability published in the Federal
Register on May 4, 2018 (83 FR 19757) and requested comment on the data
and assumptions in the report. The EPA did not receive any substantive
comments on the report but continues to welcome further input on all
aspects of the revised report, including but not limited to the
underlying assumptions and sensitivity analyses. As a result of the
adjustment to Article 2F of the Montreal Protocol, the EPA has since
revised the 2018 Draft Servicing Tail Report to reflect the demand for
servicing fire suppression equipment manufactured before January 1,
2020. The EPA seeks comment on the 2019 Draft Servicing Tail Report
specifically related to the fire suppression sector. Since the EPA will
use the report to support the final rule, the agency requests any
relevant data and market information that would improve the accuracy of
the agency's projections. These data may be used in determining the
final allocation.
---------------------------------------------------------------------------

    \16\ The EPA's Vintaging Model estimates the annual chemical
emissions from industry sectors that historically used ODS,
including Ref/AC and fire suppression. The model uses information on
the market size and growth for each end-use, as well as a history
and projections of the market transition from ODS to alternatives.
The model tracks emissions of annual ``vintages'' of new equipment
that enter into operation by incorporating information on estimates
of the quantity of equipment or products sold, serviced, and retired
or converted each year, and the quantity of the compound required to
manufacture, charge, and/or maintain the equipment.
---------------------------------------------------------------------------

    The last overarching factor the EPA considered is the 2030 phaseout
date for HCFC production and import, with limited exceptions, under CAA
section 605(b)(2) and (c). As for prior HCFC phaseout steps, the
agency's intent is to accomplish the 2030 phaseout step in a manner
that achieves a smooth transition to alternatives without stranding
equipment. The goal is to allow equipment owners to continue servicing
their HCFC-123 and HCFC-124 equipment that is still within its expected
lifetime. Experience with prior HCFC-22 phaseout steps indicates that
gradually decreasing allocation levels is better than an abrupt
increase or decrease to foster recovery, recycling, and reclamation of
HCFCs and an orderly transition to approved alternatives.

A. Allocation of HCFC-123 Production and Consumption Allowances

    This section presents the EPA's proposed approach for determining
the amount of HCFC-123 production and consumption allowances to be
issued and takes comment on two alternatives.
    The agency is proposing to not provide any HCFC-123 production
allowances for the years 2020 through 2029. In 2009, the EPA issued
zero production baseline allowances for HCFC-123 because no companies
produced HCFC-123 production in the baseline years of 2005 through
2007. As such, the EPA has not issued production allowances for HCFC-
123 in subsequent years (74 FR 66431). Under section 605(b)(1) of the
CAA, it is unlawful for any person to produce any class II substance in
an annual quantity greater than the quantity of such substance produced
by such person during the baseline year. The EPA does not propose to
issue any production allowances for HCFC-123 for the years 2020 through
2029.

    In 2020, the consumption baseline of the United States for all
HCFCs will be 0.5% which equates to 76.2 ODP-weighted metric tons that
could be available for servicing.\17\ Under section 605(c) of the CAA,
the consumption of HCFCs by any person is also to be limited to the
quantity consumed by that person during the baseline year. The EPA has
implemented this requirement by limiting the number of annual
allowances allocated for each chemical in Sec.  82.16. Consumption of
HCFC-123 during the baseline year equates to 2,014 MT (40 ODP-weighted
MT).
---------------------------------------------------------------------------

    \17\ 76.2 ODP-weighted metric tons is the equivalent of 3,810 MT
of HCFC-123.
---------------------------------------------------------------------------

    Table 1 shows the number of HCFC-123 consumption allowances that
would be allocated each year from 2020 to 2030 under the EPA's proposed
approach and under the two alternatives on which the EPA is also taking
comment. The proposed and alternative approaches are discussed in
greater detail below.

                                               Table 1--Comparison of HCFC-123 Consumption Allowance Allocation Approaches Between 2020-2030 (MT)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 2020       2021       2022       2023       2024       2025       2026       2027       2028       2029       2030      Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal....................................................        650        650        650        570        490        410        330        250        170         90          0      4,260
Alternative 1...............................................        520        480        450        420        380        350        310        280        250        210          0      3,650
Alternative 2...............................................      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014          0     20,140
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(1) Proposal
    The agency proposes to issue consumption allowances equal to the
2020 estimated HCFC-123 demand for servicing existing refrigeration and
air-conditioning and fire suppression equipment for years 2020 through
2022 and to then decrease the number of allowances issued in each
subsequent year by an equal amount each year such that there are zero
allowances issued in 2030. In effect, this proposal would meet the
estimated, full servicing demand in 2020 with newly imported HCFC-123
and the estimated, full servicing demand in 2030 with reclaimed HCFC-
123. Under this proposal, the EPA would allocate 650 MT \18\ for the
years 2020 through 2022 to ensure adequate supply for servicing both
existing air-conditioning and fire suppression equipment. Currently the
reclamation market primarily services the refrigeration and air
conditioning sector. The EPA believes that initially providing three
years of flat allocations would allow time for the reclamation market
to enter the fire suppression sector. This is the maximum estimated
HCFC-123 demand for servicing refrigeration, air-conditioning, and fire
suppression equipment in 2020 as discussed in the 2019 Draft Servicing
Tail Report.
---------------------------------------------------------------------------

    \18\ 13 ODP-weighted MT.
---------------------------------------------------------------------------

    The EPA could use an equal yearly decrease approach beginning in
2023 but start at a higher or lower allocation. Specifically, the EPA
could use a starting allocation in the years 2020 through 2022 of up to
1,200 MT (24 ODP-weighted MT), which is the current average annual
consumption of HCFC-123 in 2012 through 2017 (83 FR 19757). The agency
could also use a lower starting allocation for years 2020 through 2022
of between 650 MT (the proposed starting allocation) and 520 MT (the
starting allocation in the first alternative discussed below). The
agency requests comment on the full range of possible starting
allocations for this option.
    The EPA proposes to reduce the allocation annually beginning in
2023 by an equal amount each year to bring allocations down to zero by
2030. This approach balances the various near and longer term needs by
fostering a stable supply of HCFCs to be used for servicing throughout
the allocation period and past the phaseout date. Gradually reducing
HCFC allowances fosters transition and recycling/reclamation and is
consistent with the EPA's approach in previous HCFC allocation rules
(see 74 FR 66412, December 15, 2009; 76 FR 47451, August 5, 2011; 78 FR
20004, April 3, 2013; and 79 FR 64254, October 28, 2014). During
previous ODS phaseouts, decreasing the allocation has provided
equipment owners with the proper market signal to foster transition to
alternatives and to increase the incentive for recovery and
reclamation.
    Consistent with our obligations as a party to the Montreal
Protocol, and the use limitation in CAA section 605(a) regarding
refrigeration and air-conditioning equipment, the EPA is not proposing
to issue HCFC-123 allowances for use in fire suppression or
refrigeration and air-conditioning equipment manufactured on or after
January 1, 2020. The EPA notes that new fire suppression and
refrigeration and air-conditioning equipment may be manufactured with
recovered and recycled/reclaimed HCFCs in 2020 and beyond. Section
605(a) of the CAA does not restrict the use of recycled/reclaimed HCFC-
123. For instance, as explained in the 2019 Draft Servicing Tail Report
available in the docket, the fire suppression sector has a long history
of using recovered and recycled/reclaimed ODS for both servicing and
new equipment. For example, there has been continuing demand for halons
in newly-manufactured fire suppression equipment since the 1994 halon
phaseout in the United States. This demand for halons has been
satisfied with recycled/reclaimed halons. Any demand for HCFC-123 for
charging and servicing fire suppression equipment manufactured on or
after January 1, 2020 must also be met by recycled/reclaimed HCFC-123
or HCFC-123 that was stockpiled prior to 2020.
    Following the November 2018 Montreal Protocol adjustment, the EPA
revised the 2018 Draft Servicing Tail Report to disaggregate estimated
demand for fire suppression to show estimated demand for servicing
compared to demand for new equipment. The EPA consulted with industry
on the estimate of future market demand for HCFC-123 fire suppression
applications. Over the past several years, total demand (the
manufacture of new equipment and the servicing of existing equipment)
has varied, but the average has been approximately 260 MT per year. The
EPA expects the servicing demand for fire suppression servicing to be
between 35 to 90 MT based on projections \19\ from the Vintaging Model
and feedback from industry.
---------------------------------------------------------------------------

    \19\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030), Table 5.
---------------------------------------------------------------------------

    Starting the allocation levels below the estimated demand for
servicing both fire suppression and refrigeration and air-conditioning
equipment, even though the amount reclaimed is expected to be
significant, could lead to insufficient quantities of recycled/

reclaimed HCFC-123 to meet fire suppression demand, as indicated in the
2019 Draft Servicing Tail Report. As such, the EPA does not think it
would be prudent to reduce the allocation further to account for the
complete amount of expected reclamation in the early years. Conversely,
if the EPA allocated a higher amount than demand, more virgin HCFC-123
may be imported, reducing the need for recovered and reclaimed HCFC-
123. As a point of comparison, the EPA allocated 100% of the HCFC-123
baseline (2,014 MT, Alternative 2 in Table 1) for the years 2015
through 2019. In those years HCFC-123 could be used to manufacture new
equipment as well as service existing equipment. Allowance holders did
not use their full allocation for HCFC-123 during those years and often
used the inter-pollutant transfer mechanism to convert their HCFC-123
allowances into HCFC-22 allowances. After January 1, 2020, there is no
other market for transfers.
    The EPA seeks comment on all aspects of this proposed allocation
including the proposed number of allowances to be issued for 2020. The
agency requests comment on the rationale explained above for its
proposal to allocate 650 MT HCFC-123 consumption allowances for 2020
through 2022; whether the starting allocation in 2020 should be higher
or lower; the proposal to decrease this allocation by a constant amount
each year after 2022; and whether this proposal would meet demand for
HCFC-123 during the years 2020 through 2029. The EPA also requests
comment on the expected servicing demand for fire suppression
equipment, which is based on projections from the Vintaging Model and
feedback from industry. The EPA is taking comment on whether the
proposed allocation would strand any equipment in 2020 through 2029,
and what the potential cost impacts may be for any stranded equipment.
The agency also requests comment on whether there is a significant cost
difference to users between reclaimed and virgin HCFC-123. Commenters
should provide as much detail, with as much quantitative reasoning
(e.g., benefits, market effects, etc.), as possible. When developing a
final rule, the EPA will consider any comments received on the starting
allocation number and the proposal to decrease the allocation by a
constant amount each year.
(2) Alternatives
    The EPA is also seeking comment on two alternative approaches the
EPA considered for determining how many HCFC-123 consumption allowances
to issue. The first alternative approach would be to issue allowances
equal to the total modeled demand each year from 2020 through 2029
(which includes servicing of existing equipment and the manufacture of
new equipment using reclaimed HCFC-123) minus the low end of the
projection for reclamation each year from 2020 through 2029. This
contrasts with the proposed approach which, as explained above, would
neither consider demand for the manufacture of new equipment using
reclaimed HCFC-123 nor directly decrease allocations based on
projections for reclamation. The EPA's low-end estimate for reclamation
is 300 MT in 2020, rising by 10 MT per year to 390 MT in 2029. See
Table 8 of the 2019 Draft Servicing Tail Report for more discussion of
estimated reclaim. In Table 1, above, the first alternative presents
the allocations that would result from applying this approach.
    Setting the initial allocation at total estimated demand in 2020
minus the low-end projections for reclamation would reflect current
total HCFC-123 market conditions and allow companies to continue
consuming HCFC-123 at a rate consistent with demand to ensure adequate
supply. Decreasing the allocations gradually over time would
potentially guard against consumption levels that are significantly
higher than demand. This approach would also account for continued
manufacture of fire suppression equipment using HCFC-based fire
suppression agent to the extent recycled/reclaimed HCFC-123 is
available. While this approach would start at a lower allocation in
2020 than the proposed approach and would allocate less HCFC-123
overall in 2020 through 2029, it would give more time for industry to
transition given the slower decrease in the allocation level over time,
it would also result in a larger drop between 2029 and 2030 compared to
the proposed approach. This could result in a situation where HCFC-123
equipment owners wait until the end of the regulatory period to
transition or are unprepared for the 2030 phaseout.
    While the EPA estimates that the level of reclaimed HCFC-123, at
300 MT per year, will be higher than the estimated demand for new fire
suppression equipment, the agency expects that much of this reclaimed
material will be sold into the refrigeration and air-conditioning
market given current business relationships. Based on industry
feedback, the EPA has tentatively concluded that reclaimed HCFC-123 is
currently sold exclusively into the refrigeration and air-conditioning
market. Thus, it might not be immediately available for fire
suppression. More availability of virgin HCFC-123 would allow time for
the market for recycled/reclaimed HCFC-123 to shift towards new fire
suppression equipment, as consumption of HCFC-123 under the Montreal
Protocol is only for servicing equipment.
    The EPA seeks comment on this first alternate approach. The EPA
requests comment on accounting for the anticipated continued
manufacture of fire suppression equipment using reclaimed HCFC-123. The
EPA also requests comment on using the low end or the high end of the
estimate for reclamation, or a point in between. Using the current high
end of the expected reclamation estimate would equate to an allocation
of approximately 470 MT in 2020, 220 MT in 2025, and 20 MT in 2029. The
EPA also seeks comment on whether it should start at a higher amount in
2020 (up to 1,200 MT) consistent with current average consumption of
HCFC-123, or a lower amount consistent with the high end of the
expected reclamation estimate provided in Table 9 of the 2019 Draft
Servicing Tail Report. Commenters should provide as much detail, with
as much quantitative reasoning (e.g., benefits, market effects, etc.),
as possible.
    Lastly, the EPA is seeking comment on a second alternative approach
under which, as shown in Table 1 above, the EPA would issue 2,014 MT of
HCFC-123 consumption allowances for each year for the years 2020
through 2029. This is equal to 100 percent of the aggregate consumption
baseline allowances for HCFC-123 and is the maximum allocation allowed
under section 605(c) of the CAA. This approach would allocate
approximately half of the annual consumption cap allowed under the
Montreal Protocol. Specifically, this allocation would equal 40.3 ODP-
weighted MT compared to 76.2 ODP-weighted MT allowed during each year
between 2020 through 2029. This approach could be warranted given the
relatively low ODP of HCFC-123 (0.02) and the long lifetime of
equipment using HCFC-123.
    The agency believes this approach would provide significantly more
allowances than are needed to meet demand for HCFC-123. The existing
regulatory prohibition on producing or importing HCFC-123 for most
uses, including in the manufacture of refrigeration and air-
conditioning and fire suppression equipment as of January 1, 2020 will
significantly reduce the demand for HCFC-123. However, this approach
would be consistent with

the EPA's past approach of issuing the maximum allocation for HCFC-123
during the 2015-2019 control periods. This option does not account for
recycling or reclamation and might lead to higher consumption than
demand for HCFC-123. This situation risks decreased incentive to
reclaim refrigerant at the end of life and during servicing,
potentially resulting in higher emissions. It also would not
incorporate specific reductions to foster reclamation and recycling or
the transition to alternatives. The EPA anticipates it may also
significantly curtail the existing market in the refrigeration and air-
conditioning sector, since the only remaining market for reclaimed
HCFC-123 would be for the manufacture of new fire suppression
equipment. This approach would also result in an abrupt decrease in
allowances in 2030 when the allocation would decrease from 2,014 MT to
zero, which is inconsistent with past practice of fostering a smooth
transition to alternatives. The EPA welcomes comment on this
alternative approach of issuing 2,014 MT in each year. Commenters
should provide as much detail, with as much quantitative reasoning
(e.g., benefits, market effects, etc.), as possible.

B. De Minimis Exemption

    The EPA is proposing to create a de minimis exemption from the use
prohibition in CAA section 605(a) to allow virgin HCFC-123 to be used
for the manufacture of chillers that meet specific criteria through
December 31, 2020. This proposal aims to address a unique situation
that has arisen because certain construction projects that ordered
HCFC-123 chillers for installation in 2019 are behind schedule and the
chillers may not be installed by the end of 2019. The EPA understands
that many of the chillers and the virgin HCFC-123 to charge them are
already on site at these construction projects and that companies
purchased virgin HCFC-123 for charging these chillers given the
expectation that they would be installed in 2019. However, due to
construction delays, the final steps in the manufacture of these
chillers (including charging with refrigerant) may not occur until
after January 1, 2020. CAA section 605(a) prohibits the introduction
into interstate commerce or use of any class II substance as a
refrigerant unless such substance is used as a refrigerant in
appliances manufactured before January 1, 2020. To address this unique
circumstance, the EPA is proposing to create a de minimis exemption to
allow virgin HCFC-123 to be used for the manufacture of chillers that
meet specific criteria through December 31, 2020. This exemption would
only apply if the HCFC-123 chiller unit and other components were ready
for shipment to a construction location and the components were
specified for installation under a building permit or contract dated on
or before the date of signature of the proposed rule, the HCFC-123 was
imported prior to 2020 and is in the possession of the entity that will
complete the manufacture of the appliance, and all refrigerant added to
that appliance after December 31, 2020 is used, recovered, or recycled/
reclaimed. This proposal is based on the information currently
available to the agency. We will consider all comments on the merits of
this proposal and its potential impacts before deciding whether to take
final action to create such a de minimis exemption.
(1) Background
    As described in Section III of this notice, the CAA restricts
introduction into interstate commerce and use of HCFCs over time with
limited exceptions. The CAA prohibits the use of HCFCs to manufacture
new appliances effective January 1, 2020, unless the HCFCs are used,
recovered, and recycled. The CAA also phases out production and
consumption of HCFCs, with an interim milestone in 2015 and the full
phaseout in 2030. Additionally, the Montreal Protocol phases out the
production and consumption of HCFCs as of January 1, 2020, while
allowing a limited amount of new production and consumption for
servicing existing refrigeration and air-conditioning appliances, as
well as other uses described in Section III. The EPA codified the CAA
use and interstate commerce restrictions related to refrigeration and
air-conditioning appliances at 40 CFR part 82, subpart A in prior
rulemakings.
    As defined in the regulations, the term manufactured \20\ ``for an
appliance, means the date upon which the appliance's refrigerant
circuit is complete, the appliance can function, the appliance holds a
full refrigerant charge, and the appliance is ready for use for its
intended purposes; . . .'' Appliances used in commercial refrigeration,
such as large chillers, and industrial process refrigeration typically
involve more complex installation processes, which may require custom-
built parts, and typically are manufactured on-site. Appliances, such
as these, that are field charged or have the refrigerant circuit
completed on-site, regardless of whether additional refrigerant is
added or not, are manufactured at the point when installation of all
the components and other parts are completed, and the appliance is
fully charged with refrigerant and able to operate.
---------------------------------------------------------------------------

    \20\ The definition of ``manufactured'' can be found at Sec.
82.3. See also 74 FR 66439.
---------------------------------------------------------------------------

    Recently, the EPA learned that a limited number of HCFC-123
chillers specified for installation in 2019 may not be fully
manufactured prior to January 1, 2020. The key uncharged components, in
particular the chiller units themselves, were ready for shipment to the
construction location in the first half of 2019. The agency understands
that chiller manufacturers ceased factory operations for making new
HCFC-123 chiller units at the end of April 2019. However, for some
delayed projects, even though the units and refrigerant may already be
on-site, the final steps to manufacture the appliance, in particular
charging the chiller with refrigerant, may not occur until 2020. Thus,
if no regulatory relief is provided, the virgin HCFC-123 could not be
used to charge these chillers even if it has already been purchased and
is on site.
(2) Proposed De Minimis Exemption
    To provide flexibility to complete the manufacture of HCFC-123
chillers from components that are ready for shipment to a construction
location, the EPA is proposing to create a de minimis exemption to the
use prohibition in 605(a). This exemption would allow HCFC-123 to be
used for the initial charging of certain chillers manufactured between
January 1, 2020 and December 31, 2020 provided they meet specific
conditions. The proposed exemption would only apply if the HCFC-123
chiller unit and components are ready for shipment to a construction
location and the components were specified for installation under a
building permit or contract dated on or before the date of signature of
the proposed rule, the HCFC-123 was imported prior to 2020 and is in
the possession of an entity involved in the manufacture of the
appliance, and all refrigerant added to that appliance after December
31, 2020 is used, recovered, or recycled/reclaimed.
    The EPA has implied authority to propose a de minimis exemption
from the section 605(a) use restriction. The United States Court of
Appeals for the District of Columbia Circuit has recognized that
``[u]nless Congress has been extraordinarily rigid, there is likely a
basis for an implication of de minimis authority to provide exemption
when the burdens of regulation yield a gain of trivial or no value.''
Alabama Power Co.

v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1980).
    In Alabama Power, the Court held that ``[c]ategorical exemptions
from statutory commands may . . . be permissible as an exercise of
agency power, inherent in most statutory schemes, to overlook
circumstances that in context may fairly be considered de minimis. It
is commonplace, of course, that the law does not concern itself with
trifling matters, and this principle has often found application in the
administrative context. Courts should be reluctant to apply the literal
terms of a statute to mandate pointless expenditures of effort.'' Id.
(internal citations omitted). In an earlier case cited by the court in
Alabama Power, the court described the doctrine as follows: ``The `de
minimis' doctrine that was developed to prevent trivial items from
draining the time of the courts has room for sound application to
administration by the Government of its regulatory programs . . . The
ability, which we describe here, to exempt de minimis situations from a
statutory command is not an ability to depart from the statute, but
rather a tool to be used in implementing the legislative design.''
District of Columbia v. Orleans, 406 F.2d 957, 959 (1968).
    In this respect, the Alabama Power opinion observed in a footnote
that the de minimis principle ``is a cousin of the doctrine that,
notwithstanding the `plain meaning' of a statute, a court must look
beyond the words to the purpose of the act where its literal terms lead
to `absurd or futile' results.'' Alabama Power at 360 n. 89 (citations
omitted). To apply an exclusion based on the de minimis doctrine, ``the
agency will bear the burden of making the required showing'' that a
matter is truly de minimis which naturally will turn on the assessment
of particular circumstances. Id. The Alabama Power opinion concluded
that ``most regulatory statutes, including the CAA, permit such agency
showings in appropriate cases.'' Id.
    A notable limitation on the de minimis doctrine is that it does not
authorize the agency to exclude something based on a cost-benefit
analysis. As the court explained, this ``implied authority is not
available for a situation where the regulatory function does provide
benefits, in the sense of furthering the regulatory objectives, but the
agency concludes that the acknowledged benefits are exceeded by the
costs.'' Id. The court held that any ``implied authority to make cost-
benefit decisions must be based not on a general doctrine but on a fair
reading of the specific statute, its aims and legislative history.''
Id.
    Courts have continued to recognize that authority to create de
minimis exemptions may be implied where ``the burdens of regulation
yield a gain of trivial or no value.'' Envtl. Def. Fund Inc. v. EPA, 82
F.3d 451, 455 (D.C. Cir. 1996) (internal quotation marks omitted) see
also e.g., Ass'n of Admin Law Judges v. FLRA, 397 F.3d 957, 961-62
(D.C. Cir. 2005).
    The EPA believes it has authority to provide flexibility by
creating a de minimis exemption to the 605(a) use prohibition. Section
605(a) is not extraordinarily rigid and is ambiguous as it does not
speak directly to the circumstance presented here. In addition,
providing flexibility is consistent with the statutory intent.
    The EPA does not view section 605(a) as ``extraordinarily rigid.''
Title VI of the CAA can generally be summarized into three principal
areas: The phaseout of the production and import of ODS (section 602-
607); the reduction of emissions of ODS via various means such as
required servicing practices, restrictions on sale and distribution of
products, and consumer education (section 608-611); and the transition
to alternatives that reduce overall risk to human health and the
environment (section 612). Section 605 specifically addresses the
phase-out of production and consumption of class II substances. For
class II substances, section 605 established specific restrictions
beginning in 2015 on use, introduction into interstate commerce and
production, while establishing a complete phaseout of HCFCs in 2030.
Congress' overall approach to the class II phaseout was generally less
rigid than its approach to the class I phaseout, given the longer
timeframes and the presence of only one intermediate reduction step
(see section 605(b)). Given this context, the EPA does not view section
605(a) as ``extraordinarily rigid.''
    The EPA finds that section 605(a) is ambiguous as it does not speak
directly to the circumstance presented here. Section 605(a) does not
explicitly address whether virgin HCFC-123 may be used in a chiller
where all the chiller components were ready for shipment to a
construction site before January 1, 2020 but where the initial charge
is not completed until after January 1, 2020. Because the statute does
not specify when manufacture is complete, it does not unambiguously
prohibit the use of virgin HCFC-123 for the initial charge of chillers
where all the chiller components were ready for shipment before January
1. 2020. Thus, the EPA has authority to resolve the ambiguity through
regulation and determine whether the use prohibition should apply in
this circumstance.
    The EPA views the proposed de minimis exemption as consistent with
statutory intent. The proposed flexibility would ensure the orderly
phaseout of ODS and be consistent with the past practice of preventing
the stranding of existing appliances without being counter to the three
principle areas of Title VI described previously. First, it would not
contribute to additional production and consumption of HCFCs and thus
would not inhibit the United States from reaching the CAA phaseout date
of 2030 or complying with the Montreal Protocol. Second, these chillers
would continue to be subject to the servicing practices and labeling
requirements applicable to all ODS appliances. Third, it would not slow
the transition to alternatives. As discussed below, the components to
assemble these chillers have already been made ready for shipment and
they have been purchased for installation. While these chillers may one
day be retrofitted to an alternative, such as R-514A, Title VI does not
require the retrofitting of existing equipment.
    In addition, rigid application of CAA section 605(a) in the unique
circumstances presented here would ``yield a gain of trivial or no
value.'' Envtl. Def. Fund Inc. v. EPA, 82 F.3d 451, 455 (D.C. Cir.
1996) (internal quotation marks omitted). The EPA believes that there
would be no environmental benefit associated with rigidly applying
605(a). First, because the HCFC-123 used to initially charge these
chillers must have been imported prior to 2020, existing allowances
would have to have been expended. There would therefore not be any
increase in U.S. consumption compared to the current allowed level of
consumption for 2019. Second, this exemption would not encourage the
manufacture of additional HCFC-123 chiller units because factory
operations for making them have already ceased and the exemption would
not permit such operations for additional units.
    The number of chillers is also anticipated to be small. Based on
consultations with industry, the EPA understands that the manufacture
of up to five percent of the chillers expected to be installed in 2019
could be delayed beyond January 1, 2020. The EPA expects the number of
HCFC-123 chillers to be affected is 33. As detailed in the 2019 Draft
Servicing Tail Report, the EPA assumes an average charge size for an
HCFC-123 commercial chiller is approximately 445 kg. Thus, the EPA

estimates about 15 MT of HCFC-123 could be needed to complete the
manufacture of chillers in 2020 if the proposed exemption is finalized.
This would equate to about 0.4 percent of all HCFCs allocated in 2019.
    Because the EPA has implemented the HCFC phaseout under the CAA
using a ``worst first'' approach, this final step in the phaseout means
that the HCFCs that remain, like HCFC-123, have the lowest ozone-
depleting potential of all HCFCs. Specifically, the ODP of HCFC-123 is
0.02. Thus, the 15 MT of HCFC-123 anticipated to be used to initially
charge these chillers equates to only 0.3 ODP-weighted metric tons.
Comparing again to the consumption allowances allocated for 2019, this
time on an ODP-weighted basis, this use would be only 0.02 percent of
what was allocated in 2019.
    Beyond the HCFC-123 needed for the initial charge, the EPA has also
analyzed whether this proposed exemption could increase the servicing
demand for HCFC-123 in the years 2020 through 2029 compared to not
providing this proposed flexibility. As an initial matter, the modeled
servicing demand described in the 2019 Draft Servicing Tail Report
includes the demand from the appliances affected by this exemption. The
report assumes that chillers expected to be manufactured in 2019 are
manufactured in that year. Because the chillers that would be affected
by this proposed exemption were anticipated to be manufactured in 2019,
they would not increase expected demand. This exemption would not alter
the requirement that used, recovered, or recycled/reclaimed HCFC-123 be
used for all subsequent servicing events on these chillers. Further,
HCFC-123 chillers have very low leak rates, and thus the amount of
replacement refrigerant would be low. Therefore, the EPA does not
anticipate that future servicing demand will affect the market for
reclaimed HCFC-123 in a manner that the EPA has not already considered
when proposing allowance allocation amounts for 2020-2029.
    The proposed exemption also contains numerous constraints that
limit its potential impact. The proposed exemption from the 605(a)
prohibition on use in appliances manufactured before January 1, 2020
would apply only for one year and only in a limited set of
circumstances. It would apply only if the refrigerant used to
manufacture the appliance was in the possession of an entity involved
in the manufacture of the appliance and imported prior to January 1,
2020. In addition, any servicing of the equipment after December 31,
2020 would need to be done with HCFC-123 that is used, recovered, or
recycled/reclaimed. Further, the exemption would not allow for the
manufacture of additional chillers beyond those for which the
components had already been made ready for shipment to a construction
location and the components were specified for installation under a
building permit or contract dated on or before the date of signature of
the proposed rule.
    The proposed de minimis exemption is also consistent with past EPA
practice in this program. The EPA, on past occasions, has provided
limited flexibility around use restrictions and phaseout dates.
Existing regulations have typically prevented the stranding of
appliances and past investments while phasing out controlled
substances. For example, a concern similar to the one at issue here
came to the EPA's attention in 2009 when commenters requested a limited
waiver from a regulatory prohibition on manufacturing HCFC-22
appliances that was to begin in 2010 (74 FR 66412, 66440-41, December
15, 2009). Commenters identified scenarios in which HCFC-22 appliances
had been scheduled for use in projects, such as construction projects,
prior to January 1, 2010 but for a variety of reasons their manufacture
could not be completed prior to January 1, 2010. The EPA agreed to
grant flexibility by providing an exemption from the regulatory
deadline to allow HCFC-22 to be used as refrigerant in appliances
manufactured between January 1, 2010 and December 31, 2011 if their
components were manufactured prior to January 1, 2010 and were
specified in a building permit or contract dated before January 1, 2010
for use on a project. The EPA explained that providing flexibility
would not result in additional consumption of HCFCs, because companies
had previously produced or imported the HCFCs for use in the
manufacture of appliances, and it did not affect long-term projections
on servicing needs because this equipment was already planned to be
installed in the previous year (74 FR 66441).
    The EPA also previously created a de minimis exemption from the
statutory prohibition on the use of previously-imported virgin HCFCs.
In a 2014 rule, the EPA created an exemption from the 605(a) use
prohibition to provide limited flexibility regarding the use of HCFCs
for sectors other than refrigeration and air-conditioning and fire
suppression. For example, the EPA allowed continued use of a small
amount of material that was previously produced and/or imported using
the appropriate allowances and in inventory prior to the CAA's 2015 use
restriction for solvents. The EPA determined that the continued use of
previously produced/imported material was consistent with past
practices, that production and consumption would not be higher than
that already allowed for and that the environmental effect would be
limited. (79 FR 64254, October 28, 2014).
    The EPA also recognizes that in the circumstances presented here,
there could be negative impacts if the agency did not provide
flexibility. Without the proposed flexibility, chiller manufacturers
would not be able to use virgin HCFC-123 to initially charge and
install new equipment even though that virgin HCFC-123 may already be
on-site. Granting flexibility would allow the installation to continue
using the HCFC-123 available and prevent further delay of the
installation.
    For the reasons described above, the EPA is proposing to create a
de minimis exemption to the 605(a) use restriction and to revise 40 CFR
82.15(g)(5)(iii) to allow virgin HCFC-123 to be used for the initial
charging of certain chillers manufactured between January 1, 2020 and
December 31, 2020 provided they meet specific conditions. The proposed
exemption would only apply if the HCFC-123 chiller unit was ready for
shipment to a construction location and the components were specified
for installation under a building permit or contract dated on or before
the date of signature of the proposed rule, the HCFC-123 was imported
prior to 2020 and is in the possession of an entity that will complete
the manufacture of the appliance, and any service on the appliance
after December 31, 2020 is done using refrigerant that is used,
recovered, or recycled/reclaimed. In sum, the proposed exemption would
apply only in limited instances where projects have begun but due to
delays have not yet been completed prior to January 1, 2020. The EPA
believes this would address concerns that were expressed by
stakeholders, would not result in an environmental effect, and is
consistent with statutory intent.
    The EPA is taking comment on this proposal to establish an
exemption to allow limited flexibility for the manufacture of chillers
with HCFCs past January 1, 2020. Specifically, the EPA is requesting
comment on several aspects of the proposal, including:
     Whether there is enough availability of reclaimed material
for the initial charge of chillers whose manufacture is delayed until
2020 and whether rushed installations would

result in unintended emissions of HCFCs;
     Whether the EPA has appropriately assessed the
environmental effects of providing or not providing flexibility, such
as whether up to five percent of chiller installations may be delayed;
     Whether factory operations for making uncharged HCFC-123
chiller equipment have ceased in the United States as of May 1, 2019;
     Whether HCFC-123 chillers will in fact be stranded in the
absence of this proposed exemption;
     Whether any additional conditions would be appropriate to
further narrow the scope of the exemption; and
     Whether the agency has authority to establish a de minimis
exemption in this situation.

C. Addition of Fire Suppression Servicing Uses to the HCFC Phaseout
Schedule

    The EPA is proposing to modify the regulations in 40 CFR part 82
consistent with CAA section 605 and the November 2018 adjustment to
Article 2F of the Montreal Protocol that allows for the continued
production and consumption of HCFCs for servicing fire suppression
equipment manufactured before January 1, 2020. Specifically, the EPA is
proposing to modify Sec. Sec.  82.16(e) and 82.15(g) to allow for HCFC-
123 to be produced and imported, as well as introduced into interstate
commerce and used, during the years 2020 through 2029, to service fire
suppression equipment existing on January 1, 2020,\21\ so long as it is
being used as a streaming agent listed as acceptable for use or
acceptable subject to narrowed use limits for nonresidential
applications in accordance with the SNAP regulations.
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    \21\ This proposal would expand the permitted uses under
Sec. Sec.  82.15 and 82.16 which also allow for use and introduction
into interstate commerce, as well as production and consumption, of
HCFCs for use as a refrigerant in equipment manufactured before
January 1, 2020.
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    The EPA is proposing to modify Sec.  82.16(e)(2) to permit the
production and import of HCFC-123 for servicing fire suppression
equipment manufactured before January 1, 2020. While the agency is
proposing to include the term ``production'' in this regulatory change,
as stated above, this action does not propose to allocate production
allowances for HCFC-123 given the lack of production in the United
States. Section 82.16(e) establishes limits on the production and
import of HCFC-123 starting on January 1, 2020. It provides that HCFC-
123 may not be produced or imported for any purposes other than the
listed permissible uses. The proposed revision would add to the list of
permissible uses the following: Use as a fire suppression streaming
agent listed under the SNAP program as acceptable for use or acceptable
subject to narrowed use limits for nonresidential applications. This
revision would allow for this additional use in the years 2020 through
2029.
    The EPA is also proposing to add a new paragraph after Sec.
82.15(g)(4) to ensure consistency with the proposed change to Sec.
82.16(e)(2). Section 82.15(g) establishes limits on the introduction
into interstate commerce and use of certain HCFCs at certain dates in
accordance with the worst-first approach discussed previously. Section
82.15(g)(4)(i) establishes limits that apply to many HCFCs including
HCFC-123 and HCFC-124, effective January 1, 2015.\22\ The EPA is
proposing a new paragraph after Sec.  82.15(g)(4) that repeats the
limits in Sec.  82.15(g)(4)(i) but may be helpful in clarifying the
permissible uses of HCFC-123 and HCFC-124 produced or imported after
January 1, 2020. Consistent with the restrictions on production and
import in the Montreal Protocol (as modified through the adjustment
adopted in 2018) and Sec.  82.16, with regard to fire suppression,
HCFC-123 produced or imported after January 1, 2020, may only be used
for servicing fire suppression equipment manufactured before January 1,
2020. Existing inventories of HCFC-123 produced or imported prior to
January 1, 2020, may continue to be used to manufacture and service new
fire suppression equipment after January 1, 2020. This change would
ensure that the regulations are clear and consistent between Sec. Sec.
82.15 and 82.16, and, as a practical matter, would add no additional
limitations to those in Sec.  82.16.
---------------------------------------------------------------------------

    \22\ Section 82.15(g)(4)(i) applies to all HCFCs not governed by
paragraphs Sec.  82.15(g)(1) through (g)(3).
---------------------------------------------------------------------------

    These proposed revisions, if finalized, would provide flexibility
consistent with the November 2018 adjustment to the phaseout schedule
for HCFCs in the Montreal Protocol. The United States was a proponent
of adjusting the phaseout schedule to allow for the continued
production and consumption of HCFCs to service existing fire
suppression equipment for years 2020 through 2029. The EPA's analysis
indicates that in theory, the United States could meet its own domestic
fire suppression needs with alternatives and recycled/reclaimed HCFC-
123, absent competing demands from other sectors. Past phase-outs, such
as the halon phaseout, demonstrated that the availability of recycled/
reclaimed and stockpiled material provides flexibility for users of ODS
long after the phaseout date. However, recycled/reclaimed HCFC-123,
which is currently being sold predominately into the refrigeration and
air-conditioning market,\23\ may not be immediately available to the
fire suppression sector. The EPA is concerned that reclaimers and
distributors would need to adjust current distribution and sales
practices to ensure that reclaimed material is available for fire
suppression. At least in the near term this could affect the
availability and price of HCFC-123. Given that a lack of HCFC-123 based
fire suppression agents could present a safety issue, especially for
applications where there is not an approved alternative clean agent,
such as for Aircraft Rescue and Fire Fighting (ARFF) vehicles, allowing
continued consumption of HCFC-123 for the years 2020 through 2029 for
servicing existing fire suppression equipment is prudent. This is also
consistent with the EPA's long-standing policy of working to avoid the
premature retirement of existing ODS-based equipment while fostering
the transition to alternatives.
---------------------------------------------------------------------------

    \23\ Based on conversation with industry.
---------------------------------------------------------------------------

    The EPA notes that the November 2018 adjustment adopted by the
Parties to the Montreal Protocol also contains an essential use
provision and adds other uses under the Article 2F cap, namely solvent
applications in rocket engine manufacturing and topical medical aerosol
applications for the specialized treatment of burns. The EPA is only
proposing regulatory changes that would allow production and
consumption for the servicing of fire suppression equipment
manufactured before 2020. The EPA does not currently have any
information indicating a need in the United States for the additional
flexibilities added to Article 2F; for that reason, the EPA has not
assessed their practicality or its authority to implement them under
the CAA, and we are not proposing any action on them at this time.

D. Revisions to Labeling Requirements

    This section presents the EPA's proposal to adjust the current
labeling requirements to reflect the proposed change to 40 CFR part 82,
subpart A, which would allow the use of newly-imported HCFC-123 for
servicing fire suppression equipment manufactured before January 1,
2020. The proposed changes to Sec. Sec.  82.15 and 82.16 in subpart A
are discussed in Section III.B of this notice. Revising the existing
labeling requirements in 40 CFR part 82, subpart

E to reflect the limited ability to use HCFC-123 for fire suppression
servicing would increase awareness of individuals servicing fire
suppression equipment about the restriction on HCFC-123 use and support
compliance with the proposed revisions to subpart A. In proposing to
revise the current labeling requirements, the EPA is relying on
authority under section 605(c) to issue regulations phasing out the
production and consumption and restricting the use of class II
substances that may be needed for compliance. To further support
awareness of these new requirements, the EPA intends to conduct
outreach initiatives for technicians, distributors, and service
providers.
    If the proposed change to subpart A is finalized, HCFC-123 imported
on or after January 1, 2020 could be used to make Halotron[supreg] I, a
fire suppression agent produced with HCFC-123, and could be used to
service fire suppression equipment manufactured before January 1, 2020.
It could not, however, be used in the manufacture of new equipment on
or after January 1, 2020 or to service equipment manufactured after
January 1, 2020. Only Halotron[supreg] I produced with HCFC-123 that is
reclaimed or was imported prior to 2020 may be used for those purposes.
Labeling of products manufactured with or containing HCFCs has been
required under CAA Section 611 since 2015, and the EPA has not seen a
movement away from these fire suppression agents due to current
labeling requirements. Similarly, the EPA does not expect a proposed
addition to the existing labeling requirement would cause a movement
away from Halotron[supreg] I. The EPA identified this addition as the
lowest cost option to ensure the United States meets its international
obligation that newly-produced HCFC-123 only be used to service
existing equipment, since this would only modify the text of the
existing label to provide more information to technicians. Thus, in
addition to adding a labeling requirement, users will need to be able
to know the date of manufacture of fire suppression equipment. They
will also need to be able to distinguish fire suppression agents that
may be used only for servicing equipment manufactured before January 1,
2020 from fire suppression agents that may be used for manufacturing
new equipment or servicing equipment regardless of the date of
manufacture.
    The EPA believes that users will be able to identify the date of
equipment manufacture using existing methods as is the case with
refrigeration and air-conditioning equipment. However, without
additional labeling of containers of fire suppression agents that
contain HCFC-123, namely Halotron[supreg] I, it may not be possible for
users to distinguish containers that may only be used to service fire
suppression equipment manufactured before January 1, 2020 from other
containers. Therefore, the EPA is proposing to modify the current
labeling requirements codified at 40 CFR part 82 subpart E for such
containers. The EPA is proposing to conclude that such modified
labeling is necessary to ensure that users will have enough information
to determine which containers of fire suppression agent may be used in
which equipment, in order to comply with the proposed revisions to the
HCFC phaseout regulations. The existing CAA section 611 label is on
reclaimed and virgin product. This proposal would modify only labels of
product containing virgin HCFC. The EPA is also taking comment on
whether to modify the current labeling requirements for containers of
fire suppression agents that contain HCFC-123 that is either reclaimed
or was imported before 2020, and if there are any other low-cost ways
to distinguish containers for servicing fire suppression equipment.
    To the EPA's knowledge, the only HCFC used in a fire suppression
agent is HCFC-123, and it is only used in an agent sold under the name
Halotron[supreg] I. Clean agents like Halotron[supreg] I do not leave a
residue, and are commonly used in applications such as data centers,
clean rooms, and aircraft where high-value or life-saving equipment
will not be damaged by its use, thereby minimizing economic damages
from a fire (e.g., shorter equipment downtime or lower costs to
repair). There are three main fire suppression streaming end uses where
clean agents are used in the United States: (1) Hand-held portables;
(2) 150-pound wheeled units; and (3) ARFF vehicles.
    As per the National Fire Protection Association (NFPA) and DOT
regulations at 49 CFR 180.250, all portable fire extinguishers must be
maintained in a fully charged operable condition and undergo
hydrostatic testing. NFPA is a codes and standards organization
accredited by the American National Standards Institute established to
minimize the risk and effects of fire by establishing criteria for
building, processing, design, service, and installation around the
world. Fire extinguishers, which include portable hand-held devices and
wheeled units, are recommended to undergo maintenance to ensure that an
extinguisher will operate effectively and safely in the event of
fire.\24\ Equipment should be recharged after being used to extinguish
a fire for it to be usable again. Technicians who conduct hydrostatic
testing, perform inspections, or recharge fire suppression equipment
after a discharge may need additional information to aid in
distinguishing between the permissible uses of specific containers of
Halotron[supreg] I.
---------------------------------------------------------------------------

    \24\ National Fire Protection Association. (2018) ``Standards
for Portable Fire Extinguishers'' available at: https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=10.
---------------------------------------------------------------------------

    The EPA is proposing to modify the existing label required by
section 611 of the CAA for certain containers of fire suppression
agent. Section 611 requires containers of ODS to have a label and
demonstrates that Congress recognized that labeling requirements may be
needed to effectively implement the phaseout. In 1993, the EPA
established the labeling requirements for both class I and class II
substances in 40 CFR part 82, subpart E (58 FR 8136, February 1, 1993).
Containers in which ODS are stored or transported must bear a clearly
legible and conspicuous warning label that can be read by consumers
before they can be introduced into interstate commerce. Section 611
provides specific language for the label: ``Warning: Contains [insert
name of substance], a substance that harms public health and
environment by destroying ozone in the upper atmosphere.'' This is
reflected in the implementing regulations at Sec.  82.106. According to
CAA section 611, the label must be ``clearly legible and conspicuous.''
Labels generally should be within the principal display panel, the
warning statement should be in sharp contrast to any background upon
which it appears, and if there is any outer package for the container
(e.g., cylinder, isotank, or other container), labels should be on the
outside packaging. Specific requirements on the size, text, and
location of the label are provided in Sec. Sec.  82.106-82.110.
    The EPA is proposing to modify the required labeling of all
containers of fire suppression agent made with HCFCs imported on or
after January 1, 2020. The EPA believes that Halotron[supreg] I is the
only fire suppression agent that uses HCFCs that would be manufactured
after 2020. Containers of Halotron[supreg] I must currently be labeled
per Sec.  82.102(a) because they contain a class II substance. The EPA
is proposing to modify the current required label for all containers of
Halotron[supreg] I made with HCFC-123, imported on or after January 1,
2020, by adding the following sentence: ``Do not use to service

equipment manufactured on or after January 1, 2020.'' The EPA believes
that this information may be necessary for technicians to determine
which containers of Halotron[supreg] I may or may not be used to
service new fire suppression equipment after 2020, thereby aiding
compliance with applicable regulations. Technicians would still need to
locate the manufacture date on all fire extinguishers or ARFF vehicles
to determine which container of Halotron[supreg] I may be used to
service the equipment. The EPA is requesting comment on this proposal.
    The EPA is also requesting comment on whether it should also
require a modified label for containers of Halotron[supreg] I made with
recycled/reclaimed HCFC-123 or HCFC-123 imported before 2020. While
there would be limited additional cost, this could help technicians
distinguish between specific containers of Halotron[supreg] I. A second
sentence could therefore be added to the existing label for containers
of Halotron[supreg] I made with recycled/reclaimed HCFC-123 or HCFC-123
imported before 2020 that reads ``Not restricted to use in servicing
pre-2020 equipment.'' Additionally, the EPA is requesting comment on
whether there is another low-cost way to distinguish containers for
servicing fire suppression equipment, such as having all containers
labeled ``Virgin material may not be used to service equipment
manufactured on or after January 1, 2020,'' and then include additional
labeling on containers that distinguish ``virgin'' vs. ``reclaimed''
material. This may result in a cost of about $3,000 to the industry.
    The agency intends to develop outreach materials in concert with
the final rule and distribute them to appropriate stakeholders to
ensure industry awareness of the servicing requirements. The EPA
believes that there are existing methods to determine the date of
manufacture of fire suppression equipment, as follows.
    DOT fire extinguisher regulations at 49 CFR 173.309 require that
each fire extinguisher be tested before initial shipment and marked to
indicate the year of the test. Technicians could use this date as a
guide for determining servicing with Halotron[supreg] I. The agency
recommends that technicians inspect the date on hand-held and wheeled
fire extinguishers to determine if they were manufactured before or
after January 1, 2020.
    For servicing ARFF vehicles, the EPA recommends that technicians
inspect the manufactured date on the vehicle. For class I-III all-wheel
drive commercial vehicles, vehicle identification numbers (VINs) are
required by DOT per 49 CFR 565. VINs are located on the lower right-
hand corner of the windshield. For smaller class IV and V vehicles, a
Vehicle Information Data Plate must be in the cab of the vehicle and
contain all the information in the ``Aircraft Rescue and Fire-Fighting
Vehicle Tilt Table Certification'' per NFPA 414, including the make and
model year.\25\ Locating the year the vehicle was manufactured would
aid the technician in determining whether a container of
Halotron[supreg] I can be used for servicing.
---------------------------------------------------------------------------

    \25\ National Fire Protection Association. (2018) ``Standards
for Aircraft Rescue and Fire-fighting Services at Airports''
available at: http://arco-hvac.ir/wp-content/uploads/2018/04/NFPA-403-Std-Aircrft-Rscu-Fire-Ftg-Srvs-at-Airprts-2018.pdf.
---------------------------------------------------------------------------

    The EPA requests comment on whether individuals servicing fire
suppression equipment can readily identify the date the equipment was
manufactured and whether the EPA's understanding of the location of
this information is accurate. The EPA also takes comment on ways
technicians can identify the manufacture date of fire suppression
equipment and whether manufacturers and service technicians typically
reuse Halotron[supreg] I cylinders to hold recovered fire suppression
agent or imported HCFC-123. The EPA is taking comment on whether the
manufacture of Halotron[supreg] I can designate cylinders for use in
servicing existing equipment.

E. Allocation of HCFC-124 Production and Consumption Allowances

    This section presents the EPA's proposed approach for determining
the amount of HCFC-124 production and consumption allowances to be
issued for the years 2020 through 2029. HCFC-124 is minimally used as a
refrigerant. It is a component in refrigerant blends such as R-401A,
which is used in industrial process and transport refrigeration
equipment. It is also used as a stand-alone refrigerant in some niche
applications that reach high condensing temperatures. It is not
currently used for fire suppression.
    As previously noted, under section 605(b)(1) and (c) of the CAA, it
is unlawful for any person to produce or consume any class II substance
in an annual quantity greater than the quantity of such substance
produced or consumed by such person during the baseline year. This
would equate to a maximum production amount of 4,029 MT (89 ODP-
weighted MT) and a maximum consumption amount of 2,396 MT (53 ODP-
weighted MT). Over the past five years, consumption has been
approximately 250 MT per year and reclamation has been minimal. Based
on recent sales data from the California Air Resources Board, the EPA
estimates that annual demand for HCFC-124 is between 100 to 200 MT for
servicing refrigeration and air-conditioning equipment nationally. More
information on anticipated demand for HCFC-124 is in the 2018 Draft
Servicing Tail Report.
    Given the small projected need for HCFC-124 beyond 2019 and the
continued use of certain refrigerant blends containing HCFC-124, the
agency is proposing to issue HCFC-124 production and consumption
allowances in the years 2020 through 2029 consistent with the level of
demand in the 2018 Draft Servicing Tail Report. Based on Vintaging
Model estimates, along with industry feedback on anticipated demand,
uses of HCFC-124, and the use of HCFC-124 allowances in recent years,
the EPA is proposing to allocate 200 MT for the first three years and
then gradually decrease over the next seven years by an equal amount
each year, as shown in Table 2. The EPA's goal is to ensure that
servicing needs can be met, while also encouraging recovery and reuse
and transition to alternatives. The EPA believes providing consistent
allocations for the first three years would assist in establishing an
inventory of HCFC-124 to be used for servicing throughout the
allocation period and past the phaseout date for the expected lifetimes
of all existing equipment. The EPA does not want to strand existing
equipment because of an inadequate supply of HCFC-124. This proposed
allocation supports this goal because it accounts for allowed end uses
of HCFC-124 that may not be captured by the Vintaging Model (e.g., use
of niche refrigerant blends containing HCFC-124 to service equipment
manufactured before 2020). The EPA is taking comment on this approach.
    The EPA is also taking comment on whether, to ensure adequate
supply, the agency should issue 200 MT annually beginning in 2020
without any decrease (Alternative in Table 2). Without significant
reclamation of HCFC-124, it may be preferable to err toward a higher
allocation. This is a small quantity in the broader context and would
not have significant environmental effects given the low ODP (0.022) of
HCFC-124.

                        Table 2--Comparison of HCFC-124 Production and Consumption Allowance Allocation Options Between 2020-2030
                                                                          [MT]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              2020   2021   2022   2023   2024   2025   2026   2027   2028   2029   2030    Cumulative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal...................................................    200    200    200    175    150    125    100     75     50     25      0           1,300
Alternative: No Annual Decrease............................    200    200    200    200    200    200    200    200    200    200      0           2,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA is requesting comment on all aspects of this proposal, as
well as whether to issue 200 MT or some other number of allowances per
year without any decline or waiting until 2023 before starting to
decrease allowances. Commenters should provide as much detail, with as
much quantitative reasoning (e.g., benefits, market effects, etc.), as
possible.

F. Changes To Transfer of Allowance Provisions in Section 82.23

    This section presents the EPA's proposal to prohibit the transfer
of allowances for phased out HCFCs to allowances for HCFC-123 and HCFC-
124. The proposal would prohibit calendar-year inter-pollutant
transfers into ODS that are already phased out of production and
consumption. This proposal responds to stakeholder inquiries about
inter-pollutant transfers to phased out HCFCs. HCFC-123 and HCFC-124
are the only remaining HCFCs that can be produced or imported in the
years 2020 through 2029, with limited exceptions. As such, the EPA is
proposing to issue allowances for only these two substances. Production
and import of HCFC-141b, HCFC-225ca, and HCFC-225cb have already been
phased out and production and import of HCFC-22 and HCFC-142b are
phased out starting in 2020. Demand for some of these HCFCs,
particularly HCFC-22, will continue beyond 2020. This could create an
incentive for HCFC-123 and HCFC-124 allowance holders to attempt to
convert their allowances into allowances for phased out HCFCs, such as
HCFC-22.
    Under CAA section 607, the EPA has issued regulations at Sec.
82.23 which provide for both inter-pollutant and inter-company
transfers of allowances for class II ODS under certain conditions. In
an inter-pollutant transfer, an allowance holder converts allowances
for one class II ODS into allowances for another class II ODS (Sec.
82.23(b)). The EPA is concerned about the potential for allowance
holders to attempt inter-pollutant transfers that would be inconsistent
with the established chemical-by-chemical phaseout.
    The EPA views Sec.  82.16 as effectively prohibiting this practice
by prohibiting production and import of HCFCs that have already been
phased out. Section 82.16(b)-(e) prohibits individuals from producing
or importing certain HCFCs that have been phased out, with limited
exceptions. For example, production and import of HCFC-22 and HCFC-142b
are prohibited in 2020, with limited exceptions that are not considered
to be United States consumption under the CAA or Montreal Protocol.
These provisions do not explicitly prohibit the transfer of HCFC-123 or
HCFC-124 allowances into allowances for a phased out ODS even though
the entity would be violating Sec.  82.16(e)(1) if it produced or
imported that phased out ODS for any purpose other than the few listed
exceptions, such as for use in a process resulting in its
transformation.
    Given the EPA has already received several inquiries about whether
inter-pollutant transfers from HCFC-123 or HCFC-124 to HCFC-22 will be
allowed after the phaseout of HCFC-22, the EPA is proposing to
explicitly prohibit calendar-year inter-pollutant transfers of HCFC-123
and HCFC-124 to phased out HCFCs in Sec.  82.23(b) to ensure clarity
for the regulated community. Section 82.23(d) already prohibits
permanent inter-pollutant transfers of baseline allowances, so there is
no additional change needed in that paragraph. The proposed change to
Sec.  82.23(b) would not have a practical effect on the ability of
allowance holders to legally produce or import phased out ODS given the
prohibition in Sec.  82.16. However, the proposed change would minimize
confusion and reduce the likelihood that an allowance holder attempts
to request an inter-pollutant transfer of HCFC-123 or HCFC-124
allowances to phased out HCFCs. Inter-pollutant transfers between HCFC-
123 and HCFC-124 may continue so long as the newly produced or imported
HCFC-123 and HCFC-124 are for an allowed use, such as for servicing
refrigeration and air-conditioning appliances manufactured before
January 1, 2020.
    The EPA is soliciting comments on the proposed prohibition on
calendar-year inter-pollutant transfers into ODS that are already
phased out of production and consumption to improve the clarity of the
regulations at Sec.  82.23.

IV. Updates to Other Provisions of the Production and Consumption
Control Program

    This section presents the EPA's proposal to update several other
provisions in 40 CFR part 82, subpart A--Production and Consumption
Controls. To decrease the burden of ODS reporting and increase the
accuracy of reports, the EPA is proposing to require that certain
reports, import petitions, and certifications of intent to import ODS
for destruction be submitted electronically through CDX. To reduce the
reporting burden, the EPA is proposing to update the reporting
regulations, consolidate reporting elements, and harmonize reporting
requirements for class I and class II substances. The EPA is also
proposing changes to the recordkeeping provisions for QPS uses of
methyl bromide to increase awareness of the existing use restrictions
and to amend the regulatory text for readability. In addition, to
better monitor imports into the United States and to facilitate imports
of ODS for destruction, the EPA is proposing changes to provisions
related to imports of ODS.

A. Electronic Reporting

    The EPA began allowing electronic reporting as an option for most
types of reported information under this program in 2008 (73 FR 15520).
The EPA provided electronic reporting forms and instructions to assist
entities in fulfilling reporting requirements in Sec. Sec.  82.13,
82.20, and 82.24 but did not require their use and allowed the
submission of hard-copy forms. Upon receipt of the reports, the EPA
either enters the data manually or imports it electronically via CDX
into the ODS Tracking System. Manual entry of data provided in hard
copy is time consuming for the agency as well as a potential source of
error. On July 1, 2018 the EPA launched a new electronic platform for
the ODS Tracking System along with revised and streamlined electronic
forms. The EPA is proposing to require the use of the agency's CDX to
submit reports electronically and is proposing a compliance date for
this

requirement that is 30 days after the effective date of the final rule,
to ensure that stakeholders have adequate time to register in CDX. To
achieve this, the EPA would update the definition of ``Administrator''
in Sec.  82.3, define ``Central Data Exchange'' in Sec.  82.3, add a
new section at Sec.  82.14 with instructions on the process for
electronic reporting, and revise provisions at Sec. Sec.  82.13(c) and
82.24(a)(1) to indicate that reporters must comply with the requirement
to report electronically through CDX 30 days after the effective date
of the final rule.
    Currently, the definition of ``Administrator'' instructs submitters
to mail all reports and petitions to import ODS. The EPA is proposing
to amend the definition of ``Administrator'' to require electronic
reporting for the reports and petitions that are available in CDX,
which includes the majority of reports under subpart A, as well as the
import petitions and the Certification of Intent to Import ODS for
Destruction, a new process which the EPA is proposing to create, as
discussed further in Section IV.D of this notice. The EPA is also
proposing to revise Sec. Sec.  82.13, 82.23, and 82.24 to clarify that
where a form is electronically available in CDX it must be submitted
electronically through that tool. The EPA is also proposing to add the
definition of ``Central Data Exchange'' and provide instructions on how
to register in CDX and submit information electronically in a new
section at Sec.  82.14. Each entity must establish an account in CDX in
order to prepare, transmit, certify, and submit reports and
submissions.
    CDX is the EPA's electronic system for environmental data exchange
and serves as the EPA's main mechanism for receiving and exchanging
electronic information reported via the internet. CDX provides the
capability for submitters to access their data using web services. CDX
enables the EPA to work with stakeholders to enable streamlined
electronic submission of data via the internet. All information sent
via CDX is transmitted securely to protect CBI. A reporting entity may
register for a CDX account or gain access to an existing CDX account at
https://cdx.epa.gov, as discussed further below.
    The ODS Tracking System is a secure database that serves as the
primary vehicle for tracking the production and consumption of ODS in
the United States. The ODS Tracking System allows producers, importers,
and exporters of class I (excluding methyl bromide) and class II
substances to submit quarterly and annual reports electronically. The
ODS Tracking System maintains the data submitted to the EPA and helps
the agency to: (1) Maintain oversight over total production and
consumption of ODS in the United States; (2) monitor compliance of
individual companies with domestic limits and restrictions on
production, imports, and transfers and with specific exemptions from
the phaseout; (3) enforce against entities illegally importing without
allowances; and (4) assess and report on compliance with the United
States production and consumption caps established under the Montreal
Protocol, as implemented through the CAA.
    Providing a system to facilitate electronic reporting is consistent
with the EPA's E-Enterprise initiative to reduce transaction costs and
burdens for the regulated community by leveraging technologies.
Eliminating paper-based submissions in favor of electronic reporting,
including use of the revised Microsoft Excel reporting forms, and CDX,
is part of broader government efforts to move to modern electronic
methods of information gathering. One of the objectives of E-Enterprise
is to reduce paperwork burden for the regulated community by offering
electronic reporting, optimized operations, and advanced real-time
monitoring tools. For more information on the EPA's E-Enterprise
efforts please visit: https://www.epa.gov/e-enterprise.
    Section 603 of the CAA grants the EPA the authority to issue
certain regulations on the monitoring and reporting of ODS. The EPA may
also use the information gathering authority under CAA section 114(a)
to carry out the provisions of Title VI, including the production and
consumption controls, and may require anyone who is subject to Title
VI, or who may have information necessary to carry out Title VI, to
make such reports as may reasonably be required. It is reasonable to
require electronic reporting for the reasons set forth in this notice.
Using electronic reporting enables more efficient data transmittal and
reduces errors through built-in validation procedures. It reduces the
reporting burden for submitters by reducing the cost and time required
to review, edit, and transmit data to the agency. It also promotes
efficiency in communications and cost savings in submissions and
correspondence. Additional support for electronic reporting comes from
the Government Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which
states that Executive agencies are to provide ``(1) for the option of
the electronic maintenance, submission, or disclosure of information,
when practicable as a substitute for paper; and (2) for the use and
acceptance of electronic signatures, when practicable.'' The EPA's
Cross-Media Electronic Reporting Regulation (CROMERR) (40 CFR part 3),
published in the Federal Register on October 13, 2005 (70 FR 59848),
provides that any requirement in title 40 of the CFR to submit a report
directly to the EPA can be satisfied with an electronic submission that
meets certain conditions once the agency has published a notice in the
Federal Register announcing that the EPA is prepared to receive certain
documents in electronic form. See 40 CFR 3.2(a). For more information
about CROMERR, go to https://www.epa.gov/cromerr.
    The EPA designed the electronic reporting forms with input from
stakeholders to reduce effort and allow submitters to paste
transaction-level data into the form from other spreadsheets. They
contain built-in validations, drop-down lists, and auto-populated cells
to reduce errors from data entry. Once the form is complete, users
generate a comma separated value (CSV) file and submit the Microsoft
Excel report, CSV file, and any required supporting attachments via
CDX. Refer to the EPA's website for additional information on
electronic form submission: https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting. The web-based tool, as appropriate, also
allows the user to choose ``Print,'' ``Save,'' or ``Transmit through
CDX.'' The reporting tool encrypts the file and electronically submits
it through CDX. The user can also check the status of their submissions
at any time via CDX. Upon successful receipt of the submission by the
EPA, the status of the submissions will be flagged as completed. The
CDX inbox is currently used to notify the users of any correspondence
related to user registration.
    Under this proposal, entities generally would be required to submit
the first quarter reports for the 2020 reporting year, due April 1,
2020, through CDX. Other reports that are available for submission
through CDX, including import petitions and certifications of intent to
import ODS for destruction, also would be required to be submitted
electronically through CDX starting April 1, 2020. The EPA believes
this would give the regulated community enough time to register in CDX
and familiarize themselves with the revised electronic reporting forms
and format. If this rule is finalized as proposed, reporting entities
would be required to register and electronically submit most reports
and petitions through CDX. Specifically, for production, import,
export, destruction, transformation, transfers, and trades of ODS
entities must use specified forms to allow for

submission through CDX. Some reports are not required to be submitted
through CDX and would continue to be submitted to the EPA in hardcopy.
These are low-volume reports for which the EPA has not released an
electronic form, and include the laboratory use certifications and
applications for critical use exemptions for methyl bromide. The OMB
control number for this information collection request (ICR) and these
forms is 2060-0170. The following electronic forms were released on
July 1, 2018 and are available at https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting and through CDX:

--Class I Producer Quarterly Report (EPA Form 5900-151);
--Class I Importer Quarterly Report (EPA Form 5900-150);
--Class I Exporter Annual Report (EPA Form 5900-149);
--Class I Laboratory Supplier Quarterly Report (EPA Form 5900-153);
--Second-Party Transformation Annual Report (EPA Form 5900-147);
--Second-Party Destruction Annual Report (EPA Form 5900-148);
--Class II Producer Quarterly Report (EPA Form 5900-202);
--Class II Importer Quarterly Report (EPA Form 5900-200);
--Class II Exporter Quarterly Report (EPA Form 5900-199);
--Class II Trades (EPA Form 5900-205);
--Class II Request for Additional Consumption Allowances (EPA Form
5900-201).
--Methyl Bromide Producer Quarterly Report (EPA Form 5900-141);
--Methyl Bromide Importer Quarterly Report (EPA Form 5900-144);
--Methyl Bromide Exporter Quarterly Report (EPA 5900-140);
--Distributor of QPS Methyl Bromide Quarterly Report (EPA Form 5900-
155); and
--Methyl Bromide Pre-2005 Stocks Annual Report (EPA Form 5900-142).

    Petitioners currently have the option of using CDX to submit
petitions. The current CDX process guides users through a series of
drop downs, fillable fields, and uploads of PDF attachments using an
electronic webform. The EPA is proposing to require reporting entities
importing ODS for reuse or destruction to submit their reports through
CDX because it would enable more efficient data transmittal and would
reduce errors, as it has built-in validation procedures. For instance,
missing information in a required field would prevent the petitioner
from submitting the petition until all fields are completed. Thus, the
EPA and entities would expect to benefit from electronic reporting by
receiving complete submissions in a system that allows for secure
electronic communication.
    The EPA estimates that entities submitting ODS reports who have not
yet registered in CDX would incur a one-time burden associated with
registration. Most entities have already registered with CDX to
voluntarily submit electronic ODS Tracking System forms or for other
agency regulatory programs. The EPA estimates 20 respondents would need
to incur the one-time CDX registration burden. Based on the EPA's
CROMERR (ICR number 2002.07; OMB Control No. 2025-0003), the EPA
assumes that entities would spend fifteen minutes per employee to
register with CDX and complete LexisNexis identity proofing.
Furthermore, the EPA assumes that an average of two technical staff
members would need to register for each company, resulting in 20
minutes of burden per entity.
    The EPA estimates that only those entities who have not yet
registered in CDX would incur a one-time burden for this change. Based
on the number of entities that are already reporting through CDX, the