Response to Comments

                    For the Notice of Proposed Rulemaking:

    Protection of Stratospheric Ozone: Adjustments to the Allowance System
              for Controlling HCFC Production, Import and Export

                         Docket: EPA-HQ-OAR-2013-0263

                                 October 2014

                     U.S. Environmental Protection Agency
                          Office of Air and Radiation
                       Stratospheric Protection Division
                         1200 Pennsylvania Avenue, NW
                             Washington, DC 20460

                        Prepared with assistance from:

                               ICF International
                              1725 Eye Street, NW
                             Washington, DC 20006

Table of Contents
1.	Summary of Comments	1
1.1.1.	Table 1. Public Comments Received by EPA on the Adjustments to the HCFC Allowance System	1
2.	Use and Sales Restriction in Section 605(a)	6
2.1.	Existing inventory of HCFC-225ca and HCFC-225cb	7
2.2.	Existing inventory of HCFC-124 for sterilant uses	9
2.3.	Recent changes to section 605(a) and plans to update regulations	9
3.	Determining Baselines for 2015-2019	10
4.	Developing Allocation Levels for Each HCFC	11
4.1.	HCFC-22 consumption allocation	15
4.1.1.	Comments in support of issuing zero allowances in 2015	15
4.1.2.	Methodology for issuing allowances	21
4.1.3.	Starting Allocation in 2015	25
4.1.4.	HCFC-22 Inventory Data	27
4.1.5.	Technical Projections and Estimated Servicing Need	33
4.1.6.	Prior Regulation	35
4.1.7.	Other Comments on HCFC-22 Consumption	36
4.2.	HCFC-22 production allocation	37
4.3.	HCFC-142b allocation	39
4.4.	HCFC-123 allocation	39
4.4.1.	Allocate 100 percent of HCFC-123 consumption baseline through 2019	40
4.4.2.	Allocate less than 100 percent of HCFC-123 consumption baseline	42
4.5.	HCFC-124 allocation	43
5.	Other Adjustments to the HCFC Allocation System	44
5.1.	Dry-shipped HCFC-22 condensing units	45
5.2.	Maximizing compliance with HCFC regulations	49
6.	Modifications to Section 608 Regulations	51
6.1.	Adopting AHRI 700-2012 standards	53
6.2.	Notifying EPA of a change in business, management, location, or contact information	55
6.3.	Reporting and recordkeeping requirements	56
6.4.	Technical and process information required in reclaimer certification application	58
6.5.	Expanded end product testing requirements	59
7.	Other Issues	60
7.1.	Timely completion of the rule	61
7.2.	Statutory and executive order reviews	63
7.3.	Labeling requirements	64
7.4.	Other issues	65

Summary of Comments
This document summarizes comments on the proposed rule, Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import and Export, which are found in EPA's docket, EPA-HQ-OAR-2013-0263. A total of 86 comments were submitted by 54 commenters and are listed in Table 1 by organization and Docket ID number. One of these comments has 10 signatories (listed individually in the table below), and is referred to throughout this document by the group name, "Group of EPA Certified ODS Reclaimers." Another comment was submitted by the United States Congress with signatures from 41 members, 17 of whom are from the Senate and 24 of whom are from the House. In the subsequent sections, the comment is referred to as "41 members of U.S. Congress." Fifteen comments were submitted in response to Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013. Please note that in some sections, comment totals may not necessarily meet the total cited in the preamble of the final rule due to the submission of late comments.

Table 1. Public Comments Received by EPA on the Adjustments to the HCFC Allowance System
                                     Count
Organization
 Docket ID
                                       1
A-Gas RemTec
EPA-HQ-OAR-2013-0263-0080
                                       2
A-Gas U.S. Holdings Inc.
EPA-HQ-OAR-2013-0263-0082
                                       3
AGC Chemicals Americas, Inc. (AGC)
EPA-HQ-OAR-2013-0263-0058
                                       4

EPA-HQ-OAR-2013-0263-0084[a]
                                       5
Air Conditioning Contractors of America (ACCA)
EPA-HQ-OAR-2013-0263-0075
                                       6

EPA-HQ-OAR-2013-0263-0086[b]
                                       7
Air-Conditioning, Heating and Refrigeration Institute (AHRI)
EPA-HQ-OAR-2013-0263-0078[c]
                                       8

EPA-HQ-OAR-2013-0263-120
                                       9
Airgas, Inc. (Airgas)
EPA-HQ-OAR-2013-0263-0064
                                      10
Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2013-0263-0049
                                      11

EPA-HQ-OAR-2013-0263-0076[d]
                                      12
American Pacific Corporation (AMPAC)
EPA-HQ-OAR-2013-0263-0042
                                      13

EPA-HQ-OAR-2013-0263-0089[e]
                                      14
American Refrigerants, Inc.
EPA-HQ-OAR-2013-0263-0106[f]
                                      15
Arkema Inc. (Arkema)
EPA-HQ-OAR-2013-0263-0045
                                      16
Combs Investment Property (CIP)
EPA-HQ-OAR-2013-0263-0061
                                      17

EPA-HQ-OAR-2013-0263-0066
                                      18

EPA-HQ-OAR-2013-0263-0104[g]
                                      19
Congress of the United States (41 Members of the U.S. Congress)
EPA-HQ-OAR-2013-0263-0063[h]
                                      20
Coolgas
None[i]
                                      21
Crane & Aerospace Electronics (ELDEC)
EPA-HQ-OAR-2013-0263-0072
                                      22
Daikin Applied
EPA-HQ-OAR-2013-0263-0034
                                      23
Department of Defense (DoD)
EPA-HQ-OAR-2013-0263-0057
                                      24
E. I. du Pont de Nemours and Company (DuPont)
EPA-HQ-OAR-2013-0263-0065
                                      25

EPA-HQ-OAR-2013-0263-0097[j]
                                      26
Environmental Investigation Agency (EIA)
EPA-HQ-OAR-2013-0263-0067
                                      27

EPA-HQ-OAR-2013-0263-0070[k]
                                      28

EPA-HQ-OAR-2013-0263-0119
                                      29
EOS Climate
EPA-HQ-OAR-2013-0263-0053
                                      30

EPA-HQ-OAR-2013-0263-0100[l]
                                      31

EPA-HQ-OAR-2013-0263-0108[m]
                                      32
Food Marketing Institute (FMI)
EPA-HQ-OAR-2013-0263-0112[n]
                                      33

EPA-HQ-OAR-2013-0263-0113[o]
                                      34
GC Refrigerant Supply, Inc
EPA-HQ-OAR-2013-0263-0047

                                      35
Golden Refrigerant
EPA-HQ-OAR-2013-0263-0029
                                      36
Goodman Global, Inc. (Goodman)
EPA-HQ-OAR-2013-0263-0060

                                      37

Group of EPA Certified ODS Reclaimers
EPA-HQ-OAR-2013-0263-0035[p]

Advanced Refrigerant Technologies LLC

A-GAS Americas (RemTec)

Certified Refrigerant Services, Inc.

Chill-Tek Inc.

Diversified Pure Chem

Golden Refrigerant

ICOR International - Refri-Claim

Perfect Cycle

Safe Disposal Systems

USA Refrigerants

                                      38
Heating, Air-Conditioning and Refrigeration Distributors International (HARDI)
EPA-HQ-OAR-2013-0263-0050
                                      39
Honeywell International, Inc.
EPA-HQ-OAR-2013-0263-0051
                                      40
Hudson Technologies (Hudson)
EPA-HQ-OAR-2013-0263-0081
                                      41

EPA-HQ-OAR-2013-0263-0109[q]
                                      42
ICOR International
EPA-HQ-OAR-2013-0263-0027
                                      43

EPA-HQ-OAR-2013-0263-0107[r]
                                      44
Mesa Labs
EPA-HQ-OAR-2013-0263-0115
                                      45
Ingersoll Rand
EPA-HQ-OAR-2013-0263-0083
                                      46
National Aeronautics and Space Administration (NASA)
EPA-HQ-OAR-2013-0263-0040
                                      47
National Association for the Advancement of Colored People (NAACP)
EPA-HQ-OAR-2013-0263-0038
                                      48
National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2013-0263-0071
                                      49
Natural Resources Defense Council (NRDC)
EPA-HQ-OAR-2013-0263-0055[s]
                                      50

EPA-HQ-OAR-2013-0263-0069[t]
                                      51

EPA-HQ-OAR-2013-0263-0085[u]
                                      52

EPA-HQ-OAR-2013-0263-0087[v]
                                      53

EPA-HQ-OAR-2013-0263-0103[w]
                                      54

EPA-HQ-OAR-2013-0263-0110[x]
                                      55
New Era Group, Inc.
EPA-HQ-OAR-2013-0263-0041
                                      56

EPA-HQ-OAR-2013-0263-0043
                                      57

EPA-HQ-OAR-2013-0263-0101[y]
                                      58

EPA-HQ-OAR-2013-0263-0114[z]
                                      59
North Lakes Distributing, Inc.
EPA-HQ-OAR-2013-0263-0077
                                      60

EPA-HQ-OAR-2013-0263-0099[aa]
                                      61
Patton Boggs LLP
EPA-HQ-OAR-2013-0263-0062[bb]
                                      62

EPA-HQ-OAR-2013-0263-0079[cc]
                                      63

EPA-HQ-OAR-2013-0263-0111[dd]
                                      64

EPA-HQ-OAR-2013-0263-0118
                                      65
Polar Technology
EPA-HQ-OAR-2013-0263-0059
                                      66

EPA-HQ-OAR-2013-0263-0068[ee]
                                      67
Private Citizen Comment
EPA-HQ-OAR-2013-0263-0032
                                      68

EPA-HQ-OAR-2013-0263-0033
                                      69

EPA-HQ-OAR-2013-0263-0036
                                      70

EPA-HQ-OAR-2013-0263-0039
                                      71

EPA-HQ-OAR-2013-0263-0094[ff]
                                      72

EPA-HQ-OAR-2013-0263-0095[gg]
                                      73

EPA-HQ-OAR-2013-0263-0096[hh]
                                      74

EPA-HQ-OAR-2013-0263-0105[ii]
                                      75
Rapid Recovery
EPA-HQ-OAR-2013-0263-0116
                                      76
RMS of Georgia, LLC (RMS)
EPA-HQ-OAR-2013-0263-0048
                                      77

EPA-HQ-OAR-2013-0263-0102[jj]
                                      78
STJ Chemical Corporation
EPA-HQ-OAR-2013-0263-0098[kk]
                                      79
Summit Refrigerants
EPA-HQ-OAR-2013-0263-0052
                                      80

EPA-HQ-OAR-2013-0263-0088[ll]
                                      81
The Charles Stark Draper Laboratory, Inc. (CSDL)
EPA-HQ-OAR-2013-0263-0037[mm]
                                      82
USA Refrigerants
EPA-HQ-OAR-2013-0263-0044
                                      83

EPA-HQ-OAR-2013-0263-0054
                                      84
UTC Building & Industrial Systems (Carrier)
EPA-HQ-OAR-2013-0263-0056
                                      85
Watsco, Inc.
EPA-HQ-OAR-2013-0263-0046
                                      86
January 23, 2014 Public Hearing on the 2015-2019 Proposed Rule
EPA-HQ-OAR-2013-0263-0030[nn]

Alliance for Responsible Atmospheric Policy
(Alliance)

Combs Investment Property (CIP)

E. I. du Pont de Nemours and Company (DuPont)

Environmental Investigation Agency (EIA)

Goodman Global, Inc. (Goodman)

        Heating, Air-Conditioning, and Refrigeration Distributors International (HARDI)

Honeywell International, Inc.

Hudson Technologies (Hudson)

Johnstone Supply

Natural Resources Defense Council (NRDC)

North Lakes Distributing, Inc.

        Patton Boggs LLP

Rapid Recovery

USA Refrigerants

a. Duplicate copy of EPA-HQ-OAR-2013-0263-0058. EPA-HQ-OAR-2013-0263-0084 is listed under EPA-HQ-OAR-2013-0263-0058 in the following sections.
b. Duplicate copy of EPA-HQ-OAR-2013-0263-0075. EPA-HQ-OAR-2013-0263-0086 is listed under EPA-HQ-OAR-2013-0263-0075 in the following sections.
c. Comment was submitted after the close of the comment period on March 10, 2014.
d. Duplicate copy of EPA-HQ-OAR-2013-0263-0049. EPA-HQ-OAR-2013-0263-0076 is listed under EPA-HQ-OAR-2013-0263-0049 in the following sections.
e. AMPAC submitted the paper, "The Case for New Production of HCFC-123 Beyond 2020 for use in Production of Halotron I and in Other Niche Fire Protection Applications" for informational purposes only. Therefore, EPA-HQ-OAR-2013-0263-0089 is not summarized in the following sections.
f. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
g. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
h. Comment contains signatures from 17 United States Senators and 24 Members of Congress. For the remainder of the document, the collective group of 41 signatories will be referred to as "41 members of the U.S. Congress."
i. Comment has not been posted to the docket at this time.
j. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
k. Duplicate copy of EPA-HQ-OAR-2013-0263-0067. EPA-HQ-OAR-2013-0263-0070 is listed under EPA-HQ-OAR-2013-0263-0067 in the following sections.
l. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
m. Duplicate copy of EPA-HQ-OAR-2013-0263-0100. EPA-HQ-OAR-2013-0263-0108 is listed under EPA-HQ-OAR-2013-0263-0100 in the following sections.
n. Comment submitted after the close of the comment period on March 10, 2014.
o. Duplicate copy of EPA-HQ-OAR-2013-0263-0112. EPA-HQ-OAR-2013-0263-0113 is listed under EPA-HQ-OAR-2013-0263-0112 in the following sections.
p. For the remainder of the document, the collective group of 10 reclaimer signatories will be referred to as "Group of EPA Certified ODS Reclaimers."
q. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
r. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
s. Duplicate copy of EPA-HQ-OAR-2013-0263-0085. EPA-HQ-OAR-2013-0263-0055 is listed under EPA-HQ-OAR-2013-0263-0085 in the following sections.
t. Duplicate copy of EPA-HQ-OAR-2013-0263-0085. EPA-HQ-OAR-2013-0263-0069 is listed under EPA-HQ-OAR-2013-0263-0085 in the following sections.
u. Comment was submitted after the close of the comment period on March 10, 2014.
v. Duplicate copy of EPA-HQ-OAR-2013-0263-0055. EPA-HQ-OAR-2013-0263-0087 is listed under EPA-HQ-OAR-2013-0263-0055 in the following sections.
w. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
x. Duplicate copy of EPA-HQ-OAR-2013-0263-0103. EPA-HQ-OAR-2013-0263-0110 is listed under EPA-HQ-OAR-2013-0263-0103 in the following sections.
y. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
z. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
aa. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
bb. Comment was submitted on behalf of New Era Group, Inc.
cc. Comment was submitted on behalf of several parties, including Altair Partners, LP; American Refrigerants, Inc.; Combs Investment Property (CIP); Consolidated Refrigerants Reclaim; Diversified Pure Chem; Dynatemp International; ICOR International; North Lakes Distributing, Inc.; Refrigerants Inc.; Refrigerants Salvage, Inc.; RMS of Georgia; Safe Disposal Systems, Inc.; Summit Refrigerants; and USA Refrigerants.
dd. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
ee. Duplicate copy of EPA-HQ-OAR-2013-0263-0059. EPA-HQ-OAR-2013-0263-0068 is listed under EPA-HQ-OAR-2013-0263-0059 in the following sections.
ff. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
gg. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
hh. Comment submitted after the close of the comment period on March 10, 2014.
ii. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
jj. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013.
kk. Comment on the EPA Notice: Protection of Stratospheric Ozone: Notice of Data Availability Regarding Aggregate HCFC - 22 Inventory Data From 2008-2013
ll. Duplicate copy of EPA-HQ-OAR-2013-0263-0052. EPA-HQ-OAR-2013-0263-0088 is listed under EPA-HQ-OAR-2013-0263-0052 in the following sections.
mm. Comment was submitted by Holland & Knight LLP on behalf of The Charles Stark Draper Laboratory, Inc. (CSDL).
nn. Verbal comments transcribed from the Public Hearing held January 23, 2014.

All comments have been reviewed, summarized and responded to; the comments and responses are organized within the remainder of this document to highlight major issues and clarification requests pertinent to the rule. Summaries are organized by the following main sections of the rule:
 Section 2  -  Use and Sales Restriction in Section 605(a)
 Section 3  -  Determining Baselines for 2015-2019
 Section 4  -  Developing Allocation Levels for Each HCFC
 Section 5  -  Other Adjustments to the HCFC Allocation System
 Section 6  -  Modifications to Section 608 Regulations
 Section 7  -  Other Issues
At the beginning of each section, an outline of categories is provided followed by a table detailing organizations that provided comment. Below each individual topic heading of a section, a bulleted summary of comments is provided. Generally, comments within each topic by frequency (i.e., comments supported by the largest number of commenters are placed first to highlight issues of common concern) followed by Docket ID number. Special attention was paid to ensure that comments were properly addressed with sufficient and relevant detail extracted from their submittal. Commenters are listed at the beginning and Docket ID numbers are provided in parentheses at the end of each comment.
Out of the 42 comments the agency received on the HCFC-22 consumption allocation, a majority were in support of a faster phaseout than any the options proposed. Some even supported a zero allocation starting in 2015. Twelve commenters were in support of EPA's proposed alternative five-year linear drawdown option beginning with 10,000 MT of HCFC-22 in 2015. Five commenters were in support of EPA's preferred option.
EPA also received a large amount of comments related to inventory, alternatives, market issues, and the environmental impact of HCFC-22. Several commenters requested that updated data on inventory amounts be made public. In response to the Notice of Data Availability, a number of commenters said that inventory is higher than previously estimated and that there is unaccounted inventory held by entities throughout the supply chain (i.e., distribution centers, warehouses, retailers, service shops, supermarkets, commercial sites, and housing complexes). Several commenters stated that there is an over-supply of HCFC-22 in the market, leading to falling prices of virgin HCFC-22, negatively impacting the reclamation industry and decreasing the incentive for alternatives. The majority of comments received pertaining to environmental impacts, described a correlation between a larger HCFC-22 allowance and a greater environmental impact.
Opinions were split on whether EPA should consider banning dry-shipped HCFC-22 condensing units, though EPA did not propose to take any action with regards to dry-shipped units in this rulemaking. Six commenters stated that there is no need for EPA to revisit this issue, citing decreasing sales of dry-shipped units and the ability for EPA to control HCFC-22 allocations to address this issue, while seven commenters maintained that EPA should ban the sale of dry-shipped HCFC-22 condensing equipment.
Comments were also received on several other issues, as described in more detail in the sections that follow.
Use and Sales Restriction in Section 605(a)
EPA received eleven comments on the use and sales restriction in section 605(a) of the CAA. Comments were in reference to the following topics:

      2.1 	Existing inventory of HCFC-225ca and HCFC-225cb
      2.2	Existing inventory of HCFC-124 for sterilant uses
      2.3	Recent changes to section 605(a) and plans to update regulations

Count
Commenter
Organization
Docket ID No
                                       1
Dr. Evan D. Laganis
AGC Chemicals Americas, Inc. (AGC)
EPA-HQ-OAR-2013-0263-0058
                                       2
Kevin Fay
Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2013-0263-0049
                                       3
Jeff Gibson
American Pacific Corporation (AMPAC)
EPA-HQ-OAR-2013-0263-0042
                                       4
Don Magid
Combs Investment Property (CIP)
EPA-HQ-OAR-2013-0263-0066
                                       5
Brian Anderson
Crane & Aerospace Electronics (ELDEC)
EPA-HQ-OAR-2013-0263-0072
                                       6
Donald R. Schregardus
Department of Defense (DoD)
EPA-HQ-OAR-2013-0263-0057
                                       7
Mack McFarland
E. I. du Pont de Nemours and Company (DuPont)
EPA-HQ-OAR-2013-0263-0065
                                       8
James S. Leatherwood
National Aeronautics and Space Administration (NASA)
EPA-HQ-OAR-2013-0263-0040
                                       9
David Doniger; Benjamin Longstreth; Emily Davis
Natural Resources Defense Council (NRDC)
EPA-HQ-OAR-2013-0263-0085
                                      10
Dianne R. Phillips
The Charles Stark Draper Laboratory, Inc. (CSDL)
EPA-HQ-OAR-2013-0263-0037
                                      11
Eric Gillitzer
Mesa Labs
EPA-HQ-OAR-2013-0263-0115

Two commenters, AMPAC and the Alliance, support EPA's proposed interpretation of section 605(a).
Existing inventory of HCFC-225ca and HCFC-225cb
EPA received submissions from nine commenters related to EPA's proposal for existing inventory of HCFC-225ca/cb. Six commenters support a de minimis exemption for any HCFC-225ca/cb that entered into inventory prior to January 1, 2015. One commenter, NRDC, does not support the exemption.

   >    NASA, DoD, and ELDEC support EPA's proposed de minimis exemption for HCFC-225ca/cb. Although the commenters are actively evaluating alternative materials that can satisfy their unique and stringent technical requirements, they anticipate a need for continued use of HCFC-225ca/cb until a substitute is identified and implemented. They state that the ability to store virgin HCFC-225ca/cb until needed would provide valuable flexibility for management of solvent entered into inventory prior to January 1, 2015. [0040, 0057, 0072]
   >    CSDL supports EPA's proposed de minimis exemption for HCFC-225ca/cb. The commenter agrees that the de minimis exemption comports with the statutory intent. Given that previously used HCFC-225ca/cb is already exempt, the commenter believes that continuing to allow end users to use virgin inventory that they hold prior to January 1, 2015 will obviate the need to take advantage of the exemption found in 42 U.S.C 761d(a)(1) and will also result in cost avoidance in disposing of the previously obtained HCFC-225ca/cb. CSDL's subcontractors currently use HCFC-225ca/cb as a solvent in the production of sensitive electronic instrumentation components. CSDL and their subcontractors are in the lengthy process of qualifying an alternative process to the use of HCFC-225ca/cb. [0037]
   >    AGC supports EPA's proposed de minimis exemption for HCFC-225ca/cb. AGC produces HCFC-225ca/cb for use as a solvent in several highly specialized applications. AGC has applied for approval of an HCFC-225ca/cb substitute under the SNAP program that has a significantly lower GWP and ODP. AGC is managing their own import and sales of HCFC-225ca/cb with the goal of having zero inventories by December 31, 2014. AGC is also informing customers wanting to purchase HCFC-225ca/cb before December 31, 2014 to place orders no later than July 15, 2014 to encourage end users to utilize their inventory in an effective manner as well as help apprise them of the upcoming phaseout deadline. AGC comments that EPA should otherwise clarify that "owners" of HCFC-225ca/cb can use the product in any of their affiliated organizations, allowing transfer among corporate facilities even if they are in different locations. While AGC believes this interpretation is consistent with the definition of a 'person" in 40 C.F.R. 82.3 and EPA's explanation of this matter in the proposed rule, it would be beneficial for EPA to explain this matter more fully in the final rule. [0058]
EPA Response: In response to the comments from NASA, DoD, ELDEC, CSDL and AGC, please see section IV.B.1 of the preamble to the final rule.

   >    CIP supports EPA's proposed de minimis exemption for HCFC-225ca/cb inventory prior to January 1, 2015, on the ground that at that point the inventory would be `products' and not `class II controlled substances.'" CIP believes that as other HCFCs are phased out, similar situations could also arise along with EPA's concern about end-users placing inventory into equipment before the phaseout date, so it would be considered recycled or used once prior to being recovered is valid. Thus, CIP agrees with EPA that the better option is to allow end users to continue to consume virgin inventory that is held prior to the phaseout (while recognizing that for HCFC-225ca/cb these quantities are extremely limited). [0066]
EPA Response: Please see section IV.B.1 of the preamble to the final rule. Additionally, as EPA clarifies in the preamble to the final rule, the exemption allowing for continued solvent uses of existing inventory of existing HCFC-225ca/cb does not re-define the class II controlled substance as a "product."

   >    AMPAC supports EPA's more formal interpretation of the meaning of the word "use" in section 605 and believes the legislative intent is clear. [0042]
EPA Response: Please see section IV.B.1 of the preamble to the final rule.

   >    The Alliance agrees with the conditions and exceptions, as stated, to the prohibition on use and introduction into interstate commerce of class II substances starting January 1, 2015. In its list of conditions and exceptions, the Alliance includes EPA's proposed exception for HCFC-225ca/cb if the material is in inventory prior to January 1, 2015 and is used as a solvent.  [0049]
EPA Response: See section IV.B.1 of the preamble to the final rule. In addition, the agency clarifies that the exemption allowing for continued use of existing HCFC-225ca/cb inventories for solvent uses applies only to the use of existing material, not the sale or introduction into interstate commerce.

   >    NRDC disagrees with EPA's proposed interpretation of "use" in section 605(a) as applied to HCFC-225ca/cb. NRDC believes that even if the quantities of this chemical are limited, a de minimis exemption is unjustified. NRDC states that Section 605(a), and Title VI itself, are intended to be interpreted strictly, and de minimis exceptions of the kind EPA has envisioned here are inappropriate, as Title VI is intended to entirely phase out the production, import, and consumption of HCFCs. NRDC believes that if the fact that small amounts of a chemical were available could justify its use for "as long as needed," then the goals of the Montreal Protocol and Title VI of the Clean Air Act (CAA) would never be met. NRDC claims that EPA's statutory interpretation has the potential to cause harm in future years of the phaseout, and they urge the agency not to adopt this de minimis exception. [0085]
EPA Response: NRDC did not provide other objections to EPA's interpretation of "use," so EPA believes NRDC is solely objecting to the de minimis exemption for use of existing inventory of HCFC-225ca/cb. Please see section IV.B.1 of the preamble to the final rule for EPA's response to NRDC's comments opposing the exemption for HCFC-225ca/cb.
Existing inventory of HCFC-124 for sterilant uses
EPA received one submission from a commenter supporting an equivalent exemption for continued use of existing HCFC-124 for specific sterilant needs.

   >    Mesa Labs requests continued use of HCFC-124 already held in inventory, for use as a sterilant in the manufacture and testing of biological indicators (BIs). BIs contain biological spores and are used in the pharmaceutical, medical device and healthcare markets to monitor sterilization cycles. Mesa Labs manufactures BIs for use in monitoring ethylene oxide sterilization cycles, and requests an exemption to the section 605(a) use prohibition for the following reasons: (1) BIs may need to be tested for up to two years after their production date to meet regulatory compliance requirements related to FDA and ISO 9001:2008 standards. Since the initial resistance assessment of the BIs was conducted using a blend of ethylene oxide and HCFC-124, Mesa Labs cannot obtain relevant comparison data if it uses pure ethylene oxide sterilant that does not contain HCFC-124; (2) According to the ISO 11138-2 standard, the minimum acceptable resistance for a BI used for monitoring ethylene oxide sterilization cycles is 2.5 minutes, which is not yet achievable with pure ethylene oxide, thus the need to continue using blends that contain HCFC-124 in order to comply with the ISO resistance requirements; (3) the manufacturer of the HCFC-124 and ethylene oxide blend has stopped manufacture and will no longer accept material for destruction; (4) the amount of HCFC-124 that Mesa Labs owns is small (300-400 pounds) and will last for up to two years. [0115]
EPA Response: See section IV.B.2 of the preamble for EPA's response to the comment from Mesa Labs and the agency's discussion of its reasons for adopting a narrow exemption for continued use of HCFC-124 for manufacturing and testing biological indicators.
Recent changes to section 605(a) and plans to update regulations
EPA received three comments on this subject. AMPAC, The Alliance and DuPont support the rationale and language that EPA proposes to add to 82.15(g)(4) regarding continued use of HCFCs as a fire suppression agent, though AMPAC comments that the word "streaming" should be deleted from the language.

   >    AMPAC believes the word "streaming" should be deleted from the first and third paragraph of page 78083. AMPAC states that the proposed implementation is narrower (i.e., limited to streaming agents only) than what is stated in Section 320 of the 2012 NDAA. AMPAC states that the actual language of the public law does not limit it to streaming and EPA should be consistent with legislative intent.
   AMPAC supports the following EPA statement that is made in the second paragraph of page 78083: "This change has minimal impact on the overall allocation since the primary HCFC used for fire suppression, HCFC-123, has a low ODP, and the quantities used for fire suppression are small relative to the other uses of HCFCs." AMPAC believes that a sound basis for this conclusion is found in the fact that HCFC-123 has an extraordinarily low environmental impact (ODP=0.0098, GWP=77). [0042]
   >    DuPont agrees with EPA that allowing for continued HCFC production and import for nonresidential fire suppression uses is a natural follow-on to the recent amendment to section 605(a) of CAA. DuPont supports the language that EPA proposes to add 82.15(g)(4) to implement that recent amendment and allow the continued use of HCFCs as a fire suppression streaming agent for certain nonresidential applications through 2019. [0065]
   >    The Alliance agrees with the conditions and exceptions, as stated, to the prohibition on use and introduction into interstate commerce of class II substances starting January 1, 2015. In its list of conditions and exceptions, the Alliance includes substances used in nonresidential streaming fire suppression applications that are listed in accordance with CAA section 612(c), which is EPA's SNAP program. [0049]
EPA Response: Please see section IV.B.3 for a response to the AMPAC, the Alliance and DuPont's comments, including a response to AMPAC's suggestion that EPA remove the word "streaming" from its proposed regulatory language.
Determining Baselines for 2015-2019
EPA received seven comments on how EPA will determine baselines for the 2015-2019 period.

Count
Commenter
Organization
Docket ID No
                                       1
Kevin Fay
Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2013-0263-0049
                                       2
Jeff Gibson
American Pacific Corporation (AMPAC)
EPA-HQ-OAR-2013-0263-0042
                                       3
William J. Hamel
Arkema Inc. (Arkema)
EPA-HQ-OAR-2013-0263-0045
                                       4
Don Magid
Combs Investment Property (CIP)
EPA-HQ-OAR-2013-0263-0066
                                       5
Dave Stirpe
Honeywell International, Inc.
EPA-HQ-OAR-2013-0263-0051
                                       6
Maureen Beatty
National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2013-0263-0071
                                       7
Jill Tronca
North Lakes Distributing, Inc.
EPA-HQ-OAR-2013-0263-0077

Five commenters support the proposal to maintain the existing baseline system, largely due to the certainty and consistency this system provides allowance holders. EPA received one comment, from AMPAC, proposing that baseline allowances be reallocated if any company receiving allowances is not actively consuming HCFCs. EPA received one comment opposed to the baseline system entirely.

   >    NRI and the Alliance support EPA's proposal to maintain the existing baseline system. The commenters agree that the industry is familiar with this system and believe it will provide certainty to allowance holders. They assert that changing the baseline system would lead to unnecessary confusion without any environmental benefit. [0071, 0049]
   >    CIP agrees with EPA's proposal to keep the post-Arkema historical baselines as reflected in the 2013 Final Rule and to not re-establish each company's baseline. CIP agrees that the alternative of re-establishing each company's baseline would not affect the total allocation and may detract from the certainty that allows stakeholders to plan for an orderly transition to alternatives. As noted in the communication from CIP to EPA dated June 17, 2013, CIP also agrees with EPA's proposal not to use a more recent set of years to establish company baselines, since there would be no environment benefit and would result in confusion. [0066]
   >    Arkema comments that EPA should maintain existing baselines. According to Arkema, CAA Section 601 directed EPA to select "a representative calendar year" as the baseline year, but did not authorize EPA to change the baseline years. Arkema adds that if the Agency replaced the baseline year, it would impact both the Agency's regulatory program and allowance holders' reactions to the program (including decisions to over-produce material for later sale in anticipation of the eventual HCFC phaseout or in an attempt to "buy" market-share from established suppliers like Arkema). Arkema believes that the Arkema v. EPA 618 F.3d 1 decision shows the inherent difficulty of keeping an existing allowance system, but trying to make changes that have the practical effect of benefitting some allowance holders while injuring others. According to Arkema, the current HCFC system obviated any need to update the baseline allowance allocations with the incorporation of a high degree of flexibility in allowance transfers, thereby allowing market adjustments. Arkema believes that maintaining the current established baselines, particularly for HCFC-22 and HCFC-142b, will provide market stability and allow for an orderly transition to alternatives since this will be the final allocation for those chemicals. Arkema comments that market participants benefit from a well-established, accepted system, and the certainty associated with using the same system will allow for informed business decisions through the program's end. Additionally, Arkema believes that there is no environmental benefit to changing the baseline allowance levels. [0045]
   >    Honeywell does not object to EPA's proposal to maintain the established company baselines as published in the April 3, 2013 Final Rule. [0051]
EPA's Response: While EPA does not necessarily agree with all of the commenter's reasons for maintaining the existing baselines, we have decided to maintain them for the reasons provided in section V of the preamble. In addition, the agency discusses its preference to maintain existing baselines in the proposed rule at 78 FR 78084.

   >    AMPAC supports establishing baselines for 2015-2019 in a way that ensures any company receiving such allowances is known to still actively be consuming. If any company receiving allowances is not actively consuming, then AMPAC supports reallocating these allowances proportionately amongst actively consuming companies. [0042]
EPA's Response: As discussed in section V of the preamble to the final rule, altering baselines would not provide environmental benefit. In addition, changing baselines for 2015-2019 could interfere with the agency's longstanding goal of an orderly transition out of HCFCs. Since allowances are tradable, there is flexibility within the current system to grow or shrink a company's activity in the market. EPA discusses its consideration of revised baselines and its reasons for not proposing to change baselines in the proposed rule at 78 FR 78084.

> North Lakes takes issue with the baseline allocation system itself. They claim that since its inception, the baseline allocation system has unfairly frozen the market in place; giving a few market players an unfair advantage, whilst creating barriers for smaller businesses to enter and survive in the market. [0077]
EPA's Response: EPA has decided to maintain the existing baseline system for the reasons provided in section V of the preamble. In addition, the agency discusses its preference to maintain existing baselines in the proposed rule at 78 FR 78084. EPA did not propose an alternative allocation system.
Developing Allocation Levels for Each HCFC
EPA received 66 comments on how EPA is developing allocation levels for each HCFC. Comments were in reference to the following topics:

      4.1	 HCFC-22 consumption allocation
      4.2	 HCFC-22 production allocation
      4.3	 HCFC-142b allocation
      4.4	HCFC-123 allocation
            4.4.1	Allocate 100 percent of HCFC-123 consumption baseline through 2019
            4.4.2	Allocate less than 100 percent of HCFC-123 consumption baseline
      4.5	 HCFC-124 allocation

Count
Commenter
Organization
Docket ID No
                                       1
Patricia A. Burns
A-Gas RemTec
EPA-HQ-OAR-2013-0263-0080
                                       2
Ken Logan
A-Gas U.S. Holdings Inc.
EPA-HQ-OAR-2013-0263-0082
                                       3
Charles McCrudden
Air Conditioning Contractors of America (ACCA)
EPA-HQ-OAR-2013-0263-0075
                                       4
Karim Amrane
Air-Conditioning, Heating and Refrigeration Institute (AHRI)
EPA-HQ-OAR-2013-0263-0078
                                       5

EPA-HQ-OAR-2013-0263-0120
                                       6
Michael Molinini
Airgas, Inc. (Airgas)
EPA-HQ-OAR-2013-0263-0064
                                       7
Kevin Fay
Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2013-0263-0049
                                       8
Jeff Gibson
American Pacific Corporation (AMPAC)
EPA-HQ-OAR-2013-0263-0042
                                       9
William J. Hamel
Arkema Inc. (Arkema)
EPA-HQ-OAR-2013-0263-0045
                                      10
Julie C. Look
American Refrigerants, Inc.
EPA-HQ-OAR-2013-0263-0106
                                      11
Don Magid
Combs Investment Property (CIP)
EPA-HQ-OAR-2013-0263-0066
                                      12

EPA-HQ-OAR-2013-0263-0061
                                      13

EPA-HQ-OAR-2013-0263-0104
                                      14
41 Members of U.S. Congress
Congress of the United States (41 Members of the U.S. Congress)
EPA-HQ-OAR-2013-0263-0063
                                      15
Jason Crawford
Coolgas
None
                                      16
Tom Johnson
Daikin Applied
EPA-HQ-OAR-2013-0263-0034
                                      17
Donald R. Schregardus
Department of Defense (DoD)
EPA-HQ-OAR-2013-0263-0057
                                      18
Mack McFarland
E. I. du Pont de Nemours and Company (DuPont)
EPA-HQ-OAR-2013-0263-0065
                                      19

EPA-HQ-OAR-2013-0263-0097
                                      20
Mark W. Roberts
Environmental Investigation Agency (EIA)
EPA-HQ-OAR-2013-0263-0067
                                      21

EPA-HQ-OAR-2013-0263-0119
                                      22
Jeff Cohen
EOS Climate
EPA-HQ-OAR-2013-0263-0053
                                      23

EPA-HQ-OAR-2013-0263-0100
                                      24
Erik R. Lieberman
Food Marketing Institute (FMI)
EPA-HQ-OAR-2013-0263-0112
                                      25
Greg Canniff
GC Refrigerant Supply, Inc
EPA-HQ-OAR-2013-0263-0047
                                      26
Carl Grolle
Golden Refrigerant
EPA-HQ-OAR-2013-0263-0029
                                      27
Gary Clark
Goodman Global, Inc. (Goodman)
EPA-HQ-OAR-2013-0263-0060
                                      28
Jonathan Melchi
Heating, Air-Conditioning and Refrigeration Distributors International (HARDI)
EPA-HQ-OAR-2013-0263-0050
                                      29
Dave Stirpe
Honeywell International, Inc.
EPA-HQ-OAR-2013-0263-0051
                                      30
Stephen P. Mandracchia
Hudson Technologies (Hudson)
EPA-HQ-OAR-2013-0263-0081
                                      31

EPA-HQ-OAR-2013-0263-0109
                                      32
Gordon McKinney
ICOR International
EPA-HQ-OAR-2013-0263-0027
                                      33

EPA-HQ-OAR-2013-0263-0107
                                      34
Nanette Lockwood
Ingersoll Rand
EPA-HQ-OAR-2013-0263-0083
                                      35
Maureen Beatty
National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2013-0263-0071
                                      36
David Doniger; Benjamin Longstreth; Emily Davis
Natural Resources Defense Council (NRDC)
EPA-HQ-OAR-2013-0263-0085
                                      37

EPA-HQ-OAR-2013-0263-0103
                                      38
Peter V. Williams; Linda T. Leak-Ransom
New Era Group, Inc.
EPA-HQ-OAR-2013-0263-0043
                                      39
Anonymous

EPA-HQ-OAR-2013-0263-0041
                                      40
Peter Williams

EPA-HQ-OAR-2013-0263-0101
                                      41

EPA-HQ-OAR-2013-0263-0114
                                      42
Jill Tronca
North Lakes Distributing, Inc.
EPA-HQ-OAR-2013-0263-0077
                                      43

EPA-HQ-OAR-2013-0263-0099
                                      44
W. Caffey Norman
Patton Boggs LLP
EPA-HQ-OAR-2013-0263-0079
                                      45

EPA-HQ-OAR-2013-0263-0062
                                      46
J. Gordon Arbuckle

EPA-HQ-OAR-2013-0263-0111
                                      47

EPA-HQ-OAR-2013-0263-0118
                                      48
Anonymous
Polar Technology
EPA-HQ-OAR-2013-0263-0059
                                      49
Daniel Renfrow
Private Citizen Comment
EPA-HQ-OAR-2013-0263-0032
                                      50
 Anonymous

EPA-HQ-OAR-2013-0263-0033
                                      51
Anonymous

EPA-HQ-OAR-2013-0263-0036
                                      52
L. Durr

EPA-HQ-OAR-2013-0263-0039
                                      53
Anonymous

EPA-HQ-OAR-2013-0263-0094
                                      54
G. H. Holliday

EPA-HQ-OAR-2013-0263-0095
                                      55
Anonymous

EPA-HQ-OAR-2013-0263-0096
                                      56
Anonymous

EPA-HQ-OAR-2013-0263-0105
                                      57

Rapid Recovery
EPA-HQ-OAR-2013-0263-0116
                                      58
Kenneth M. Ponder
RMS of Georgia, LLC (RMS)
EPA-HQ-OAR-2013-0263-0048
                                      59

EPA-HQ-OAR-2013-0263-0102
                                      60
Stephanie Dubow
STJ Chemical Corporation
EPA-HQ-OAR-2013-0263-0098
                                      61
Stephen Trevino
Summit Refrigerants
EPA-HQ-OAR-2013-0263-0052
                                      62
John Mandyck
UTC Building & Industrial Systems (Carrier)
EPA-HQ-OAR-2013-0263-0056
                                      63
Ted Broudy
USA Refrigerants
EPA-HQ-OAR-2013-0263-0044
                                      64

EPA-HQ-OAR-2013-0263-0054
                                      65
Carole Poindexter
Watsco, Inc.
EPA-HQ-OAR-2013-0263-0046
                                      66
January 23, 2014 Public Hearing on the 2015-2019 Proposed Rule:

EPA-HQ-OAR-2013-0263-0030

Stephen Van Maren; Kevin Faye
Alliance for Responsible Atmospheric Policy (Alliance)

Don Magid
Combs Investment Property (CIP)

Mack MacFarland; Michael Parr; James Bachman
E. I. du Pont de Nemours and Company (DuPont)

Alexander von Bismarck; Danielle Gagne; Marcus Lee
Environmental Investigation Agency (EIA)

Rusty Tharp; Dave Ransom
Goodman Global, Inc. (Goodman)

Jon Melchi
Heating, Air-Conditioning and Refrigeration Distributors International (HARDI)

Stephen P. Mandracchia
Hudson Technologies (Hudson)

Steve Porter
Johnstone Supply

Ben Longstreth
Natural Resources Defense Council (NRDC)

Jill Tronca
North Lakes Distributing, Inc.

W. Caffey Norman; Kristina Foehrkolb
Patton Boggs LLP

Jerry Dykstra
Rapid Recovery

James Burke
USA Refrigerants

EPA received two general comments on the HCFC phaseout: one related to EPA's proposal to remove the HCFC-141b exemption petition process from the regulatory text and the other stating support for the end of certain exemptions. Arkema also urges EPA to continue using the existing allocation system for the 2015-2019 regulatory period.

   >    Arkema urges EPA to continue using the existing allocation system for the 2015-2019 regulatory period because the system is straight-forward for the Agency to administer, needs little to no adjustment or retooling to accommodate the end of the program, meets environmental goals, and is known and accepted in the marketplace. Additionally, Arkema supports the approach of removing the HCFC-141b petition process from the regulations so that HCFC-141b exemption allowances would no longer be granted, while maintaining the existing HCFC-141b rules for transshipments, heels or used material, and exports to Article 5 countries. These proposals would eliminate unnecessary use of HCFC-141b and facilitate smooth transitions to alternative materials. [0045]
EPA Response: In section VI.F of the preamble, EPA explains its rationale for removing the HCFC-141b petition process from the regulations effective January 1, 2015. The agency did not propose to modify the existing regulations that allow for transshipments, heels or used material, and exports to Article 5 countries. In response to Arkema's support of continuing the existing allocation system, the agency did not propose, and is not making, any changes to the structure of the allocation system.

   >    A private citizen states that s/he supports EPA's efforts to "tie off loose ends with a number of HCFCs (HCFC-141b for example) that have been exempted in the past." [0036]
EPA Response:  The agency appreciates the citizen's support of the existing regulations in 40 CFR 82.15 and 82.16, which limit the production, import and use of specific HCFCs. Restrictions on certain HCFCs take effect, or have taken effect at different times.
 HCFC-22 consumption allocation
EPA received submissions from 42 commenters on the HCFC-22 consumption allocation. In the preamble to the final rule, EPA responds to many of these comments in its discussion of the final consumption allocation methodology and starting point in 2015. In this document, EPA follows a similar approach, responding first to comments suggesting that EPA issue zero allowances, or fewer allowances than proposed under any option. The agency then addresses comments on the consumption allocation methodology (i.e. estimation approach or a linear approach), followed by responses to comments on the starting point in 2015. The remaining comments are summarized and addressed in the sections on inventory, technical projections, prior regulation and a final "other" category.

Comments in support of issuing zero allowances in 2015
> 41 members of the U.S. Congress support a more aggressive phase-down of HCFC-22 than the preferred approach, and urge EPA to solicit a comment on a zero allocation. They believe a faster phase-down of HCFC-22 will help stimulate reclamation, support the development of low-GWP alternatives, foster better refrigerant management practices, and reap significant environmental benefits from both an ozone depletion and a greenhouse gas perspective; placing our nation on stronger footing as we continue international negotiations to phase down HFCs. The commenter believes that between the large stockpile, decreased demand, better leak control, use of reclaimed HCFC-22, and availability of alternative refrigerants, consumers can be assured of sufficient capacity to serve their existing systems without the granting of significant new HCFC-22 allowances. [0063]
EPA Response: The agency appreciates the letter from 41 members of U.S. Congress, and discusses the importance of reclamation, effective refrigerant management and industry development of low-GWP alternatives throughout section VI.A of the preamble. However, as EPA explains in section VI.A.3.i, the agency is not finalizing an allocation of zero allowances in 2015-2019. In that preamble discussion, EPA considers available market data, the Montreal Protocol cap, available non-HCFC alternatives by end use and potential effects on the marketplace if EPA were to issue zero allowances.

> ACCA does not support a zero allocation because it would cause tremendous volatility and uncertainty in the market, which would likely lead to upward price fluctuations. [0075]
EPA Response: See preamble section VI.A.3.i., where EPA recognizes that a majority of market participants, both small and large businesses, do not support issuing zero allowances in 2015, and where EPA notes that given the long-standing expectation that allowances would be available through 2019, issuing zero allowances in 2015 could cause chaotic and unanticipated market disruptions.

> Airgas supports an allocation of zero. According to Airgas, moving more aggressively to zero will deplete what they see as a surplus in stockpiled inventories earlier, drive dependence on reclaimed product sooner, incentivize a switch to alternatives, and benefit the environment through enhanced refrigerant management practices and reduced equipment leakage. [0064]
EPA Response: See preamble section VI.A.3.i for EPA's discussion of available HCFC-22 alternatives and the environmental implications of a zero allocation, and section VI.A.3.iii for the agency's discussion of how it considered the inventory data available and the importance of the allowance allocation's influence of reclamation and proper refrigerant management.

> American Refrigerants, Inc. requests zero allocations for the 2015-2019 control period in order to make the reclamation industry more financially feasible. They believe recent regulatory changes have affected the market, in particular their ability to make money and implement programs to help end users. They also state that customers have complained about fluctuations in pricing and have expressed distrust in the market. [0106]
EPA Response: See previous responses. In addition, see preamble section VI.A.4 discussion of the importance of a timely rulemaking in providing market stability for 2015-2019.

> AMPAC does not support reducing HCFC-22 consumption allowances to zero because it would cause an unsmooth transition. [0042]
EPA Response: See preamble section VI.A.3.i and previous response to ACCA.

> Arkema comments that the concept of a more rapid phasedown with zero allowances would not have any environmental benefit, especially when the Agency already has been moving to eliminate the use of HCFCs faster than the Montreal Protocol requires, and would result in unanticipated market disruptions with accompanying injury to consumers and many service and maintenance businesses. Currently, the reclamation industry is far from ready to be the sole source of refrigerant needed to service consumer demand. Arkema believes their suggested HCFC-22 allocations to be an effective compromise among the competing approaches. Allowance holders would receive additional allocations to complete their business plans, demand for reclamation services would be higher and increase over time, users would have an additional economic incentive to minimize leaks, and consumers would get additional protection from disruption. [0045]
EPA Response: See preamble section VI.A.3.i and previous response to ACCA.

> Due to perceived surpluses in existing HCFC-22 inventory levels, CIP asks the EPA to reconsider an HCFC-22 allocation of zero for the 2015-2019 control period. CIP believes that future demand can be meet by stockpiled inventory, reclaimed material, and non-ODS alternatives. They further claim that a zero allocation option will encourage a shift to reclamation and "drop-in" alternatives and will help the environment. [0030, 0066, 0104]
EPA Response: See preamble section VI.A.3.i and previous responses.

> EIA believes EPA should reduce the allocation of HCFC-22 to zero or to as few allowances as possible with the fastest phaseout schedule possible due to significant inventories in the marketplace, the ability of the reclamation industry to meet needs, the availability of alternatives, and the need to reduce intentional venting. EIA believes that the proposed rule over allocates HCFC-22, leading to the release of HCFC into the atmosphere, damaging the ozone and contributing to climate change. EIA believes overproduction of HCFC-22 directly conflicts with Congress' intent for the CAA, which is to "protect and enhance the quality of the Nation's air resources so as to promote public health and welfare and the productive capacity of its population," and is inconsistent with President Obama's Climate Action Plan and the agreement between U.S. President Obama and Chinese President Xi. [0067, 0119]
> EPA Response: See preamble section VI.A.3, where EPA considered inventory, reclamation capacity, alternatives, the environmental benefits of the rule and the commitments the agency has made under the Climate Action Plan. In addition, the agency notes that knowing venting is prohibited under section 608 and EPA's regulations for both ODS and ODS-substitute refrigerants, except for substitutes that EPA has determined do not pose a threat to the environment.

   EPA disagrees with EIA's assertion that allocating HCFC-22 allowances conflicts with Title I of the CAA. The overall phaseout of HCFCs is directly in line with original intent of the Clean Air Act. This rule is within the allowed amount of consumption and production authorized by both the Clean Air Act and the Montreal Protocol. In fact, the HCFC-22 consumption allocation, which limits the import and production for U.S. use, over the five-year period is only 25 percent of the total amount allowed under the Montreal Protocol -- significantly lower than the Clean Air Act originally envisioned. For a more detailed discussion on both consumption allowances and production allowances, see sections VI.A and VI.B of the preamble.

> Goodman believes that a zero allowances approach is unnecessary and would disrupt the market, with end users (i.e., consumers) bearing the brunt of higher costs for repairing existing HCFC-22 equipment. [0030, 0060]
EPA Response: See preamble section VI.A.3.i and previous response to ACCA.

> HARDI believes that the zero allocation approach would do significant harm to HVACR distributors who would not have time to plan accordingly and have been told for many years that 2019 would mark the end of production and importation of HCFC-22. [0030, 0050]
EPA Response: See preamble section VI.A.3.i and previous response to ACCA.

> Hudson believes zero HCFC-22 allowances should be issued after 2014. Hudson is disappointed EPA failed to take public comment on a zero option. The commenter believes existing stockpiles, supplemented by transition to new equipment and refrigerant options are sufficient to meet the aftermarket servicing needs. The commenter believes alternatives now represent approximately 25 percent of the market. The commenter also notes that elimination of HCFC-22 allowances is supported by EPA's confirmation that its previous estimates of the HCFC-22 stockpiles were too low and that, as the commenter believes, the reclamation industry is underutilized and could easily increase the number of reclaimed pounds produced threefold to in excess of 30 million pounds. The commenter believes excess allowances are in effect undermining the use of best practices during the service and maintenance of systems. Hudson also states that, while the Proposed Rule discusses the environmental risks of ozone depletion, it fails to even mention the dramatic global warming effects of the 90 million pounds of proposed additional production and the more than 100 million pounds already in the stockpile. The commenter believes that ending virgin HCFC-22 production in 2015 is one of the most significant actions the Administration could take in the short-term to help meet the carbon reduction targets outlined in the recent Climate Action Plan. Hudson also comments that the resulting decline in return of used HCFC-22 from the detrimental impacts of the April 2013 rule also resulted in greater illegal venting.

   Hudson states that elimination of HCFC-22 allowances is supported by the currently accelerated phaseout of HCFC-22, the success of programs like EPA's GreenChill that has resulted in a more rapid transition from HCFC-22 in the supermarket sector, and the proliferation of HFC alternatives to HCFC-22. The commenter believes that the use of reclaimed HCFC-22 is the best solution for HCFC-22 system owners and that reclamation will be more competitive and will decrease the need for HFC based alternatives. The commenter notes that HCFC-22 systems operate more efficiently using HCFC-22 as compared to HFC-based alternatives, and technicians will be more likely to promote the use of reclaimed gas when they receive a tangible economic benefit. [0030, 0081, 0109]
EPA Response: The agency discusses why it did not propose a zero allocation option in the preamble to the proposed rule (see 78 FR 78087), and also in section VI.A.3.i of the preamble to the final rule. The agency considers Hudson's statement about the increase in the market share of alternatives and the success of programs like GreenChill in the development of the rule. In the preamble EPA points out that the agency supports the uptake of new alternatives that offer improved environmental profiles. However, for some end uses many of the existing alternatives to HCFC-22 have GWPs comparable to or higher than HCFC-22. In a separate action, EPA has proposed to change the status of a number of substitutes that were previously listed as acceptable, based on information showing that other substitutes are available for the same uses that pose lower risk overall to human health and/or the environment under the Significant New Alternatives Policy (SNAP) program (see 79 FR 46126). In addition, EPA agrees with Hudson's statement that HCFC-22 equipment runs most efficiently on HCFC-22, and that proper refrigerant management and increased reclamation will help support a smooth transition out of HCFCs. EPA discusses inventory, alternatives and refrigerant management more in section VI.A.3.iii of the preamble as it explains its decision to issue 10,000 MT of HCFC-22 allowances in 2015, with a linear decrease to zero in 2020.

> ICOR favors an HCFC-22 allocation of zero for the 2015-2019 control period. They believe this option will correct a perceived over-supply of HCFC-22.  ICOR claims EPA knows definitively that the supply of stockpiled HCFC-22 is in excess of 148 million pounds, and is likely substantially higher. ICOR further claims that demand for HCFC-22 is substantially lower than forecasted.  They believe a zero allocation will help promote non-ODS alternatives, reduce venting, encourage responsible reclamation practices, and revive the "severely damaged reclamation industry." [0027]
EPA Response: As discussed in the preamble, EPA did not attempt to collect an exact measurement of inventory, nor is it the goal of the agency to eliminate inventory immediately. See section VI.A.2 of the preamble for more discussion on inventory, section VI.A.3 for an explanation of how EPA decided on the allocation, and the previous response to Hudson. In that section EPA explains how it was not the agency's goal to eliminate inventory immediately; however, EPA did take into consideration that total industry inventory is likely above 148 million pounds when the agency decided on its final allocation.

> Johnstone Supply supports an aggressive phaseout but not a zero allocation because they believe it would be too disruptive. [0062]
EPA Response: See preamble section VI.A.3 and previous responses.

> NRDC urges EPA to issue zero allowances for HCFC-22 in light of the excess supply currently in the market. NRDC believes zero allowances would support the availability of alternatives, opportunities for leak reduction, and opportunities for reclamation and reuse. NRDC states that accelerating the phaseout under section 606 of the Clean Air Act is both "necessary" to protect human health and the environment and "practicable" based on existing stockpiles, recycling and leak detection technologies, and the wide range of low-GWP alternatives. NRDC claims excess allowances will result in additional HCFC-22 released into the atmosphere, exacerbating ozone depletion and climate change.

   Regarding alternatives, NRDC states: that there are several non-ozone depleting alternatives that can be used to retrofit equipment. NRDC quotes the proposed rule, stating that"sales of HCFC-22 retrofit refrigerants (e.g., R-407C, R-421, R-422B, R422D, R-438A, and numerous other non-ODS alternatives) have increased dramatically since 2011." (78 FR 78087). NRDC points out that additional refrigerants are on the market as well  -  e.g., R-407f and R-407a  -  and these refrigerants can be used for retrofit in equipment using HCFC-22. NRDC believes that the existence of these alternatives makes it practicable to reduce HCFC-22 consumption allowances more rapidly than proposed, and thinks that EPA's proposed options should be adjusted accordingly. [0030, 0085]
EPA Response: Similar to previous responses, and as discussed in the preamble, EPA would also like to support the availability of alternatives, opportunities for leak reduction and opportunities for reclamation and reuse. The agency discusses why it did not propose and is not finalizing a zero option in section VI.A.3.i of the preamble. In addition, the agency points out that the total level of HCFC consumption allowances allocated from 2015-2019 is 75 percent below the maximum level of consumption authorized by the Montreal Protocol and EPA's regulations implementing sections 605 and 606 of the Clean Air Act.

EPA did not propose to accelerate the phaseout of HCFC-22. The current phaseout date under EPA's existing regulations at 40 CFR 82.16(e) is January 1, 2020. When EPA evaluates various possible allocations prior to the phaseout date, an important consideration is how to achieve a smooth transition to the ultimate phaseout. EPA believes the linear approach it has chosen for 2015-2019 best achieves this goal. For the reasons discussed in the preamble regarding the effects of a zero allocation, EPA does not believe that accelerating the HCFC-22 phaseout date would be appropriate.

NRDC suggests that an acceleration would be "practicable" within the meaning of section 606(a)(2), based on the availability of substitutes.  In determining whether a more stringent schedule is practicable, EPA is to take into account "technological achievability, safety, and other relevant factors." EPA discusses retrofit alternatives at section VI.A.3 of the preamble. As noted in the preamble, EPA believes retrofits are an important option for many consumers as HCFC-22 is phased out; however, the agency does not want to prematurely drive consumers away from the refrigerant their system was designed to run with. EPA is concerned that a zero allocation could unnecessarily push equipment owners to retrofits, potentially discouraging continued operation of HCFC-22 equipment with reclaimed refrigerant. In addition, HCFC-22 systems generally run most efficiently on HCFC-22, and to the extent NRDC is concerned about climate impacts, energy efficiency is also an important climate consideration. The preamble contains additional discussion of the climate impacts of retrofit alternatives. Retrofitting an existing system can also decrease capacity, meaning a system must run longer and use more electricity in order to generate the same cooling output. A decreased capacity may also result in the inability of equipment to meet the sensible (temperature) and latent (humidity) cooling needs required throughout the season. Given these factors, EPA did not propose, and is not finalizing, a determination that a more stringent phaseout schedule is practicable under section 606(a)(2). NRDC also cites other reasons why it believes an acceleration would be "practicable," but these reasons do not obviously relate to the availability of substitutes, which must form the basis of a determination under section 606(a)(2).

NRDC further suggests that an acceleration is "necessary to protect human health and the environment" against harmful effects on the stratospheric ozone layer (CAA section 606(a)(1). Yet NRDC does not cite any new scientific information to support this proposition. As discussed above and in preamble section VI.A.3, the allocation level in the final rule is well below the amount authorized by both the CAA and Montreal Protocol, and also encourages gradual transition to alternatives that are safer for human health and the environment.

> New Era Group, Inc. comments that EPA should require allowance holders to petition for allowances "based on facts that would justify further production or consumption of HCFC-22." [0043]
EPA Response: The concept of petitioning for new production or import allowances, instead of issuing allowances based on existing baselines, was beyond the scope of this rulemaking. For a full discussion of EPA's decision on the 2015-2019 HCFC-22 allocation, please see section VI.A.3 of the preamble.

> Patton Boggs, commenting on behalf of the New Era Group, Inc. coalition supports zero HCFC-22 allocations for the 2015-2019 control period. They claim that the large amount of existing inventory for HCFC-22, along with reclaimed and alternative gas, can meet future servicing needs. They further believe that an allocation of zero will boost struggling reclamation and alternative refrigerants industries, while providing benefits to the environment and human health. New Era Group, Inc. also believes that the proposed rule will guarantee that the excess HCFC-22 will be vented and that this outcome is not in accord with the White House's efforts to reduce GHG emissions in the United States. [0030, 0079]
EPA Response: In section VI.A.3.iii of the preamble, the agency discusses how it considered existing inventory, and the importance of reclamation and proper refrigerant management in deciding to issue 10,000 MT in 2015, which is the lowest proposed starting point of any of the HCFC-22 consumption options. The agency also discusses the environmental considerations that went into the final decision. The agency believes that a linear approach starting at 10,000 MT should meet the needs of the market, while promoting proper refrigerant handling and timely transition to well-chosen alternatives.

> North Lakes supports zero HCFC-22 allowances for the 2015-2019 control period. They believe that any allocations for the upcoming control period will perpetuate an unnecessary surplus of HCFC-22. North Lakes claims that such a surplus will make reclaimed material uneconomical in comparison to the price of virgin HCFC-22, thus further harming a reclamation industry that was damaged by the amount of allowances granted during 2013 and 2014. North Lakes further argues that issuing additional allowances will contradict EPA's goal of mitigating the environmental impacts of ozone-depleting substances. [0030, 0077, 0099]
EPA Response: See response to Patton Boggs above. EPA appreciates North Lakes' concern regarding the environmental impact of ozone depleting substances, and notes in the preamble and in the above response to NRDC, that the total level of HCFC consumption allowances allocated from 2015-2019 is 75 percent below the maximum level of consumption authorized by the Montreal Protocol and EPA's regulations implementing sections 605 and 606 of the Clean Air Act.

> A private citizen supports halting all future allocations due to the over-supply of HCFC material. The commenter states that EPA discontinued HCFC equipment in 2010 but at the same time allowed an increase in allocations. The private citizen states that, at a minimum, allocations for any additional gas should be halted until full queries of stockpiles are documented. A private citizen comments that EPA must remove all unwanted and unneeded ODSs so that a healthier environment can be restored. [0105]
EPA Response: See previous responses and section VI.A.3 of the preamble. Additionally, the agency would like to clarify that it did not increase HCFC-22 allowances in 2010. To the contrary, the 2010 allocation for HCFC-22 was nearly 60 percent lower than the 2009 HCFC-22 allocation.

> A private citizen comments that if the Agency allocates more than zero HCFC-22, then they are, in effect, venting. The commenter believes the market does not need any more HCFC-22 inventory, and all unneeded inventory ends up in the atmosphere because there is no economy that could afford to properly destroy this inventory. [0094]
EPA Response: See previous responses and section VI.A.3 of the preamble.

> RMS states that no more HCFC-22 should be produced or imported during the 2015-2019 allocation period if inventory reporting and the use of retrofitted alternatives prove that more HCFC-22 exists than is needed for servicing. RMS comments that decreasing R-22 in the market helps the environment by phasing out HCFCs and transitioning to more environmentally friendly refrigerants. [0048, 0102]
EPA Response: See previous responses and section VI.A.3 of the preamble, particularly section VI.A.3.i, which discusses the environmental profiles of available HCFC-22 alternatives.

> STJ strongly supports reducing the allocation to zero for the 2015-2019 control period. [0098]
EPA Response: See previous responses and section VI.A.3 of the preamble.

> Summit Refrigerants requests that allowances for the 2015-2019 period be reduced to zero, and does not support any of the proposed drawdown approaches. They believe that the 2013-2014 rule caused an over-supply of virgin HCFC-22, which has resulted in less recovery, more venting, and has had a material impact on refrigerants reclaimers. [0052]
EPA Response: See previous responses and section VI.A.3 of the preamble.

> USA Refrigerants supports an allocation of zero allowances for the 2015-2019 control period. They believe that the prior rule caused an oversupply of virgin HCFC-22, which harmed the once successful reclamation and alternatives industries, has caused a rough transition out of ozone depleting substances, and has led to venting. [0030, 0044, 0054]
EPA Response: See previous responses and section VI.A.3 of the preamble.

> Rapid Recovery requests that EPA reduce import and consumption allocations to zero effective immediately because of the large amount of inventory already in the market and because reducing allowances to zero will improve contractor compliance with the venting prohibition. [0030]
EPA Response: See previous responses and section VI.A.3 of the preamble.

Methodology for issuing allowances
> ACCA supports the 5-year linear drawdown (option 1) since it supports the smoothest transition.  The 3-year linear drawdown (option 2) does not provide enough time or fair warning to industry. While the estimation approach provides flexibility to EPA, ACCA is concerned the agency would adjust allowances in later years, which could lead to additional uncertainty. Recent uncertainty in the market lead to significant price fluctuation, so going forward ACCA believes it is in the best interests of the industry to avoid these circumstances. [0075]
EPA Response: In section VI.A.3.ii of the preamble, EPA explains its decision to use a five-year linear approach for 2015-2019. As explained, EPA also agrees with ACCA and other commenters that the 3-year approach has some of the same drawbacks as a zero allocation approach, given the longstanding expectation that the agency would issue allowances through 2019. Also in section VI.A.3.ii, EPA discusses its concerns with the estimation approach and the difficulties of precisely modeling servicing need towards the very end of a production and import phaseout.

> A-Gas RemTec supports a 5-year linear drawdown approach because it will provide certainty to the market. [0080]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble.

> A-Gas U.S. Holdings Inc. supports EPA's five-year linear drawdown approach, because they believe it would make the market more predictable, and allow businesses to plan more effectively. [0082]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble. In addition, EPA addresses the importance of a timely rulemaking for regulatory certainty and market stability in section VI.A.4 of the preamble.

> AHRI supports EPA's five-year linear drawdown. [0078]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble.

> Airgas believes that the accelerated five-year phaseout (starting at 22 million pounds in 2015) would still result in 66 million pounds of HCFC-22 being produced unnecessarily; and the accelerated three-year phaseout would result in almost 55 million pounds of new production over a shorter period of time. [0064]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble. In addition, EPA discusses its decision to allocate allowances (as opposed to a zero or lower than proposed allocation) in section VI.A.3.i.

> The Alliance encourages EPA to adopt the five-year linear drawdown approach. The Alliance believes that this option coupled with a 10,000 MT starting point would result in the lowest allocations of any of the proposals in the first two years of the 2015-2019 period, and believes an early signal is important for an orderly market transition. The Alliance does not believe that EPA's preferred HCFC-22 schedule best reflects the market dynamics and goal of an orderly transition, and will discourage reclamation, improved leak reduction, and product stewardship. [0030, 0049]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble. In section VI.A.3.iii, the agency explains its decision to start at 10,000 MT in 2015, including the importance of a low allocation in 2015 and 2016 in prompting thoughtful transition out of HCFC-22.

> AMPAC supports Option 1 with the starting allocation of 13,700 MT of HCFC consumption allowances in 2015, because of its consistency, predictability, and fairness through increased competition and market flexibility. AMPAC does not support Option 2 because it would form confusion and not facilitate a smooth transition to alternatives. If Option 1 is not employed AMPAC supports an alternative linear drawdown where the allocation starts at 16,700 MT in 2015. In regards to Option 3, the estimation approach, AMPAC asks that the agency review the logic applied here in terms of automatically equating the maximum volume resulting from allocations to the amount of material actually supplied into the market. [0042]
EPA Response: See previous responses to ACCA and the Alliance, as well as section VI.A.3.ii of the preamble. The agency is implementing a five-year approach (option 1) but with a starting point of 10,000 MT. In section VI.A.iii, EPA provides its rationale for starting at 10,000 MT in 2015, instead of 13,700 MT or 16,700 MT.

> Arkema supports the five-year linear drawdown. Arkema believes the linear drawdown will incentivize reclaim and alternatives, provide market stability, and give users time to become knowledgeable about the transition. Arkema believes this is important as EPA and the international community shift to regulation of HFCs. Because they believe HCFC-22 inventory levels are higher than previously estimated, Arkema thinks EPA should issue fewer allowances than in EPA's preferred option so reclaim rates will increase to satisfy the post-phaseout service demand. [0045]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble. EPA specifically addresses the importance of reclamation in the final years of the phaseout in section VI.A.3.iii.

> CIP requests that if a zero allowance approach is not followed, EPA use a three year linear drawdown approach. CIP states that this three year option would 1) still provide adequate time for stakeholders to plan for a smooth transition, and 2) enhance the development of the reclamation industry. Also, CIP believes using a three year drawdown will further incentivize the improvement of servicing practices, along with added reclamation and the expanded the adoption of non-ODS containing drop-in alternatives. CIP supports a linear drawdown model for its simplicity, and believes that the 3rd "estimation approach" option is not viable because it will disincentivize recovery and is based on unverifiable assumptions. CIP also feels very strongly that the detrimental environmental effects of issuing the 5,908 MT of add-on HCFC-22 recoupment allowances in 2013 and 2014 needs to be addressed in the 2015-2019 control period by ensuring the allocation of allowances in this period is sufficiently reduced to counteract the added emissions resulting from this action. [0030, 0060, 0061, 0104,]
EPA Response: See previous response to ACCA and section VI.A.3.ii of the preamble. In that section, the agency points out that a five-year approach sends a clear market signal and supports a smooth transition. The agency also discusses the environmental concerns associated with a three-year linear reduction to zero. With regard to the commenter's concern about recoupment allowances, in the proposed rule EPA based the starting point for the linear drawdown on the pre-recoupment allocation in 2014. Additionally, EPA notes that it is issuing 10,000 MT of allowances in 2015, far below the projected servicing need and more than 55 percent below the 2014 allocation of 23,100 MT.

> Coolgas encourages EPA to adopt a linear phasedown, such as the 5 year option, to provide clarity in the trajectory of the phase out, and because it would support alternatives and reclamation. [Coolgas]
EPA Response: See previous responses and section VI.A.3.ii of the preamble.

> DoD supports the proposed 5 year linear drawdown. They believe a more aggressive drawdown may result in refrigerant shortages and high prices, and a 5 year option offers the most balanced approach to drive market change while ensuring end users have  refrigerant available at reasonable cost to service existing equipment. DoD comments that commercial availability of equipment using low-GWP alternatives is limited in some sectors, so an accelerated HCFC-22 timetable may have the unintended consequences of forcing users to replace their equipment with new equipment using high-GWP refrigerants such as R-410A, prolonging the use of this refrigerant for 20 years or more. [0057]
EPA Response: See previous responses and section VI.A.ii of the preamble. In addition, EPA addresses DoD's concerns regarding the availability of low-GWP alternatives in section VI.A.3.i.

> DuPont supports the five-year linear approach option beginning with 10,000 MT in 2015. DuPont believes this allocation would provide the best opportunity for a smooth transition that will minimize HCFC-22 emissions. DuPont states that this option has the lowest allocation in both 2015 and 2016 of all options discussed in the proposed rule, which will encourage better refrigerant management practices, more recycling and reclamation, and allow for a smooth transition to zero allowances in 2020. DuPont believes that the three year linear approach would result in a chaotic market by beginning at an extremely high allocation level in 2015, curbing any motivation to begin transitioning, and then ending abruptly after three years. [0030, 0065, 0097]
EPA Response: See previous responses and section VI.A.3. ii and VI.A.3.ii of the preamble.

> If EPA does not consider zero consumption allocation, EIA suggests EPA choose a linear approach over three years starting at 10,000. EIA believes that a three-year approach will help spur near-term investment in the recycling industry. For the 2015 allocation. EIA believes a three-year linear approach starting at 10,000 is legally sufficient under the "logical outgrowth" test and notice requirements under the Administrative Procedure Act and therefore no further notice is required from EPA to adopt this rule in the final rulemaking. [0030, 0067]
EPA Response: See previous responses and section VI.A.3 of the preamble, respectively, where EPA discusses why it did not choose a 3-year approach and why it decided to issue 10,000 MT in 2015. EPA did not evaluate whether there was sufficient notice for this type of three-year approach and whether it would be a logical outgrowth of the proposal because EPA decided against a three-year approach for the reasons discussed in the preamble.

> EOS Climate supports a 3-year approach. EOS Climate argues that EPA's preferred approach would perpetuate an already oversupplied market, reducing incentives for leak detection and repair and discouraging recovery and recycling/reclamation. According to EOS Climate, this would result in unnecessary emissions of ozone-depleting GHGs, delay the transition to alternatives, and run counter to the Agency's climate action goals. EOS Climate suggests that at minimum, the Agency should adopt option 2 in the proposal, which partially accounts for existing stockpiles. EOS Climate comments that EPA's preferred approach in the proposed rulemaking is inconsistent with the climate goals laid out in the President's Climate Action Plan and by EPA in the 2014 Climate Action Report. [0053, 0100]
EPA Response: See previous responses and section VI.A.3 preamble.  In section VI.A.2, EPA explains how it collected and considered HCFC-22 inventory data. In section VI.A.3.i, the agency addresses comments related to the Climate Action Plan and the GWP of existing alternatives to HCFCs. In section VI.A.3.ii, EPA discusses its rationale for a 5-year approach, and finally, section VI.A.3.iii, considers the relationship between the HCFC-22 allocation and the importance of incentivizing leak reduction, recovery and reclamation and proper refrigerant management.

> FMI supports the five-year linear approach, but with an alternative phasedown beginning with 10% of the U.S. HCFC consumption baseline in 2015, 8.7% in 2016, 6.8% in 2017, 5.1% in 2018, and 1.9% in 2019. FMI believes that this approach would allow companies to make gradual reductions in 2015 and 2016 and help the food sales industry to adopt new refrigeration tools, reducing the likelihood of HCFC leaks, and encourage a transition to alternatives. FMI believes that their suggested allocation percentages will ultimately reach the same levels as in the EPA proposal. [0112]
EPA Response: See previous responses and section VI.A.3.ii of the preamble, where the agency discusses its rationale for using a five-year linear approach. In addition, FMI's suggestion of issuing 10 percent of the U.S. consumption baseline (1,524 ODP-MT or 27,709 MT of HCFC-22), would not leave room for any allocations of allowances for other types of HCFCs, since under the Montreal Protocol, the U.S. is limited to 10 percent of its HCFC baseline starting in 2015. Furthermore, the 2015 and 2016 allocations would be higher than the 2014 HCFC-22 allocation, which could decrease the incentives to recover and reclaim used refrigerant, as well as possibly hinder the transition to alternatives.

> In response to the late comment submitted by FMI, EIA reiterates its support for a lower allocation than that proposed by EPA and submits a rebuttal of many of the points raised by FMI. EIA contends that supermarkets have had enough time to prepare for the phaseout of HCFC-22 and that if they have issues with the transition it is the result of poor planning. They contend there is enough HCFC-22 available from reclamation and stockpiles to prevent the situation FMI describes in their comments: "the short time period available for companies to adapt to changes in the availability of R-22 will force companies to compete for limited R-22 supplies and for limited quantities of alternative refrigerants." [0119]
EPA Response: EPA is finalizing the lowest five-year consumption allocation option that it proposed, not a higher allocation in line with what FMI requested. For a more detailed discussion on EPA's rationale for the allowed level and timeline for consumption and production allowances, see sections VI.A and VI.B of the preamble.

> GC Refrigerant Supply, Inc wants faster action. They note that even large manufacturers (e.g., Honeywell and DuPont) have agreed that too many allowances were issued and as such, EPA should act to reduce the allowances. GC Refrigerant Supply, Inc states that the oversupply of HCFC-22 is hurting the reclamation industry and leading to venting. [0047]
EPA Response: See previous responses and section VI.A.3 of the preamble.

> Goodman supports EPA's five-year linear drawdown beginning with 10,000 MT in 2015. Goodman believes this five year phaseout period is essential to safely and properly address issues associated with HCFC substitutes or alternatives. The linear drawdown approach allows industry stakeholders to establish plans and develop the infrastructure to transition away from HCFC-22 without significant market disruption. Further, Goodman believes the linear drawdown is equitable to both manufacturers and consumers. [0030, 0060]
EPA Response: See previous responses and section VI.A.3.ii and VI.A.3.iii of the preamble.

> HARDI supports the most aggressive 5-year linear drawdown that begins at 10,000 MT in 2015. HARDI believes this approach will provide business owners the resources to meet servicing demand. [0030, 0050]
EPA Response: See previous responses and section VI.A.3.ii and VI.A.3.iii of the preamble.

Starting allocation in 2015
> ACCA supports starting at 13,700 MT since it supports the smoothest transition and provides market certainty. [0075]
EPA Response: See preamble section VI.A.3.iii, where EPA discusses its decision to use a 2015 starting point of 10,000 MT and explains why the agency believes such a starting point, combined with the predictability of a linear approach, will promote alternatives, reclamation and transition.

> A-Gas RemTec supports starting the allocation at 10,000 MT to aid in stimulating the reclaim industry earlier and ensure reclaim capability is retained in order to meet future demand. [0080]
EPA Response: See previous response to ACCA and preamble section VI.A.3.iii.

> A-Gas U.S. Holdings Inc. supports a starting point of 10,000 MT in 2015 to provide market certainty and support reclaim. A-Gas U.S. Holdings Inc. believes the preferred option would not send a strong enough market signal of tightening supply, especially in light of the increased HCFC-22 inventory. The commenter notes that the volatile market over the last two years for R-22 has had a profound effect on reclaim activities and without regulatory certainty and a clear tightening of supply, reclamation operations will continue to suffer. [0082]
EPA Response: See previous response to ACCA and preamble section VI.A.3.iii.

> AHRI supports a drawdown beginning with 10,000 MT in 2015 because they believe that the inventory of HCFC-22 is significantly larger than previously estimated by EPA. [0078]
EPA Response: See previous response to ACCA and preamble sections VI.A.2 and VI.A.3.

> The Alliance supports allowances starting at 10,000 MT in 2015. The Alliance comments that EPA's preferred HCFC-22 allocation level could lead to greater emissions than a lower allocation. [0030, 0049]
EPA Response: See previous response to ACCA and preamble section VI.A.3.iii.

> AMPAC supports a starting allocation of 13,700 MT in 2015 because of its consistency, predictability, and fairness. [0042]
EPA Response: See previous response to ACCA and preamble section VI.A.3.iii.

> Arkema supports beginning with 10,000 MT in 2015 to incentivize reclaim and alternatives. [0045]
EPA Response: See previous response to ACCA and preamble section VI.A.3.iii.

> CIP believes that the 2015 starting point should be as close as possible to zero without exceeding the proposed lower alternative of 10,000 MT in 2015. CIP believes that EPA has grossly overestimated demand for HCFC-22 and underestimated supply that exists in "hidden inventory." [0030, 0060, 0104]
EPA Response: See previous response to ACCA and preamble sections VI.A.2 and VI.A.3.iii. In those sections, EPA specifically addresses how it collected inventory information, how it considered existing inventory in proposing the starting points for the linear drawdowns, and in its decision to issue 10,000 MT in 2015 instead of its preferred proposed starting point of 13,700 MT.

> Coolgas favors starting in 2015 with an allocation of 10,000 MT. Coolgas believes that the preferred starting point would allow a perceived oversupply to persist, inhibiting reclamation and alternatives. [Coolgas]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> DoD supports starting at 13,700 MT to allow for a more gradual phasedown that will insure HCFC is available to service equipment. [0057]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> DuPont supports beginning with 10,000 MT in 2015. DuPont believes this allocation would provide the best opportunity for a smooth transition that will minimize HCFC-22 emissions. They also believe that the large and still growing inventories of HCFC-22 require a suitably low level to send a clear market signal and avoid over-allocating. [0030, 0065, 0097]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> If EPA does not consider a zero consumption allocation, EIA suggests taking the 10,000 MT 2015 allocation to support better practices and help the environment. [0030, 0067]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> EOS Climate suggests that at minimum, the Agency should start at 12,400 MT to promote better practices and protect the environment. [0053, 0100]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Golden Refrigerant supports the lowest allocation that EPA will consider for 2015. The commenter believes that if EPA lowers the HCFC-22 supply, then the reclaim industry can do its job of handling the used refrigerant. Golden Refrigerant believes that the industry has shown that it is ready to transition to alternatives based on the recent uptake of R-438a and other alternative blends. [0029]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Goodman supports EPA's beginning with 10,000 MT in 2015 to provide a smooth transition to alternatives. [0030, 0060]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> HARDI supports beginning at 10,000 MT in 2015 to provide a clear message that transition is underway. [0030, 0050]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Honeywell supports an option that falls between the Agency's alternative five-year linear drawdown option beginning with 10,000 MT and 13,700 MT. Honeywell believes that an allocation amount in this range would provide a sufficient signal to the industry to make a smooth transition to alternatives and would cause minimal market disruption. [0051]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Hudson urges EPA to adopt a more aggressive five-year schedule starting with no more than 22 million pounds in 2015 to avoid surplus inventory and support better practices. [0030, 0081, 0109]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Johnstone Supply supports a five-year phaseout similar to EPA's third proposal but with approximately two-thirds of the allocation cut. [0030]
EPA Response: See previous responses and preamble section VI.A.3.iii. In addition, EPA discusses the merits of a linear drawdown (options 1 and 2), as opposed to the estimation approach (option). The agency notes that the annual allocations under the chosen five year approach, starting at 10,000 MT in 2015, are fairly similar to the allocations that would result from taking the proposed estimation approach, starting at 23,100 MT in 2015, and reducing it by two-thirds.

> If EPA does allow for new production and consumption, NRDC urges EPA to adopt Option 2 with a starting point of 12,400 MT or lower. [0030, 0085, 0103]
EPA Response: See previous responses and preamble sections VI.A.3.ii and VI.A.3.iii. In those sections, EPA discusses the benefits of a five year approach, and also the benefit of starting at 10,000 MT in 2015, as opposed to a higher allocation (e.g. 12,400 MT).

> Patton Boggs, commenting on behalf of the New Era Group, Inc., comments that the 10,000 MT annual reductions proposed under the estimation approach to account for inventory is arbitrary and should be higher. [0030, 0079]
EPA Response: EPA notes that it is not finalizing the estimation approach. Additionally, see previous responses and preamble sections VI.A.3.ii and VI.A.3.iii. In those sections, EPA discusses the benefits of a five year linear approach, as compared to the estimation approach.  The agency also discusses how it considered inventory data and trends, noting that it was never EPA's intent to determine exactly how much inventory exists industry-wide. Finally, EPA also notes that the allocation starting point in 2015 and the methodology being finalized by EPA have support from a number of industry stakeholders, including trade organizations representing hundreds of member companies.

> NRI supports beginning with 10,000 MT of HCFC-22 in 2015 because it provides more environmental benefit than EPA's preferred option. [0071]
EPA Response: See previous responses and preamble section VI.A.3.iii. The agency also discusses the environmental considerations of issuing HCFC-22 allowances in section VI.A.3.i.

> Polar Technology encourages EPA to adopt the linear drawdown over five years starting at 13,700 MT in 2015. The commenter supports EPA's preferred allocation option, with a starting point of 13,700 MT. [0059]
EPA Response: See previous responses and preamble section VI.A.3.iii.

> Watsco, Inc. supports beginning with 10,000 MT in 2015 to signal transition and support better practices. [0046]
EPA Response: See previous responses and preamble section VI.A.3.iii.

HCFC-22 inventory data
> 41 members of the U.S. Congress are concerned that the proposed rule will be issued without the most current industry information regarding the impacts of further stockpiling and atmosphere releases, and because 2012 stockpile submissions remain publically unavailable the commenter believes it will be difficult for stakeholders to assess the appropriateness of Agency actions. [0063]
EPA Response: In April 2014, EPA released a Notice of Data Availability, announcing availability of the aggregate HCFC-22 inventory data it collected from nine entities for the years 2008-2013. EPA also posted these data on its website and contacted HCFC stakeholders. In section VI.A.2 of the preamble to the final rule, the agency explains the process for collecting, considering and releasing aggregate inventory data.

> The Alliance believes that it is important to come up with a specific figure on the amount of HCFC-22 inventory, and that EPA should use this figure in determining the allocation. The Alliance states that in light of the larger-than-anticipated inventory, EPA's preferred HCFC-22 schedule may create additional surplus. [0030, 0049]
EPA Response: See previous response. In addition, EPA is finalizing a linear five-year approach starting at 10,000 MT in 2015, instead of starting at 13,700 MT. As explained in section VI.A.3.iii of the preamble, part of the rationale for lowering the 2015 starting point was based on EPA's understanding of the scale and trends of HCFC-22 inventory in recent years.

> AMPAC thinks EPA should consider polling key users of HCFC-22 to get their viewpoints on the sufficiency of the supply and pricing for HCFC-22. [0042]
EPA Response: As stated in preamble section VI.A.2, in addition to asking nine entities for their year-end inventory data, EPA held over 60 stakeholder meetings and phone calls in development of the 2015-2019 rulemaking with large and small companies, including distributors, importers, refrigerant manufacturers, reclaimers, end users and contractors. The final list of these meetings is included in the docket for this rulemaking (available at www.regulations.gov/#!docketDetail;D=EPA-HQ-OAR-2013-0263). Among other topics, nearly all of the conversations included a discussion of inventory and that stakeholder's thoughts on industry-wide inventory scale and trends.

> CIP believes EPA's reported inventory amount is low because EPA's values do not capture a very large "hidden inventory" of HCFC-22 in a highly segmented supply chain (i.e., distribution centers, warehouses, retailers, service shops, supermarkets, commercial sites, and housing complexes) and that it is possible that inventory levels are several thousand tons higher than 67.4 MT (extrapolated from data in the Section 114 letters). [0066]
EPA Response: EPA responds to this comment in preamble section VI.A.3.iii.

> With regards to EPA's Notice of Data Availability, DuPont states that the inventory values confirmed their estimates and reinforces their support for the five-year linear drawdown option beginning with 10,000 MT in 2015. DuPont also states that their analysis indicates that the data from the 114 letters in all likelihood represents the vast majority of the total inventory throughout the HCFC-22 value chain. [0097]
EPA Response: In section VI.A.3.iii of the preamble, the agency discusses its decision to issue 10,000 MT in 2015 as well as its understanding that the inventory data from the 114 letters are representative of the trends and scale of inventory across the entire market, and that the aggregate held by these nine companies accounts for a large proportion of total inventory.

> EIA notes that recycling of R-22 increased by 13% from 2011 to 2012 and that EPA has not taken into account this material that is available to fulfill demand. EIA states that EPA underestimates stockpiles based on the nine company sample size, outdated data, and arbitrary quantities for inventory drawdown and recycling capabilities. EIA suggests the EPA should conduct an expanded and ongoing data collection from the entire industry. EIA also believes servicing needs are overestimated by 20% each year and that EPA does not take the decline of leak rates into account. EIA requests that EPA publicly disclose information on stockpiles of HCFC-22 inventory to further the transparency of the rule. [0030, 0067]
EPA Response: EPA has disclosed the aggregate HCFC-22 inventory data it collected from nine entities. See section VI.A.2 of the preamble. With regards to estimated servicing need, and the percentage of that need that can be met by recovered and reclaimed material, EPA points the commenter to the 2014 Servicing Tail Report, found in the docket. In this report, EPA considers various recovery scenarios, and the remaining servicing need for virgin material. In addition, the report contains sensitivity analyses conducted specifically to gauge how actual servicing need might differ depending on various parameters (e.g. leak rate, equipment lifetime, etc.). In the preamble, EPA explains its decision to issue 10,000 MT in 2015, with a 2,000 MT annual decreases each year. Part of the rationale for this approach is that 10,000 MT is well below projected servicing need, which should prompt an increase in reclamation and the drawdown of existing inventory.

> EOS Climate believes that the data released by EPA demonstrates that stockpiles of HCFC-22 are significantly larger than EPA's original estimates. They believe, owners/operators of large, pre-2010 HCFC-22 systems (e.g., supermarkets) have significant stockpiles, that are not all covered as part of EPA's information gathering. EOS Climate also believes EPA is not taking into account increasing sales of HCFC-22 retrofit refrigerants (e.g., R-407C, R-438A) which are lowering demand for R-22. EOS Climate encourages EPA to make the additional inventory data collected during the public comment period available for public review in a supplementary notice prior to finalizing the rule. In regards to EPA's Notice of Data Availability, EOS Climate believes the survey of nine companies under represents actual inventories. EOS Climate claims that they are aware of significant HCFC-22 inventories held by refrigerant reclaimers not surveyed, refrigerant distributors, large HVAC engineering/servicing firms, supermarkets, and other refrigerant-intensive organizations that are not allocation holders. EOS Climate also believes that the survey data confirms the oversupply of HCFC-22.EOS Climate provides a table that compares annual HCFC-22 supply to HCFC-22 quantities actually used over the past four years, along with comparable estimates of HCFC-22 supply for 2014. [0053, 0100]
EPA Response: The agency discusses inventory data in section VI.A.2 of the preamble. In section VI.A.3.iii, EPA addresses stocks of HCFC-22 held by operators of large systems and also explains the agency's intent in collecting inventory data from just nine entities. Finally, in section VI.A.3.i, EPA discusses the increase in retrofit refrigerants and its consideration of retrofits in determining the allocation levels for 2015-2019.

> FMI comments that the experience of their members contravene the statements in the preamble to the proposed rule that "the R-22 allocation for 2013 and 2014 may have been higher than was necessary and that `there appears to be a significant amount of HCFC-22 inventory.'" FMI states that "FMI members have been adversely affected by increases in the price of R-22 and by R-22 shortages. Previous regulatory uncertainty has led to doubling and even tripling of prices for R-22. Further, uncertainty about R-22's availability will increase operating costs for retailers and wholesalers." [0112]
EPA Response: See previous responses and section VI.A.2 and VI.A.3.iii of the preamble. Additionally, while uncertainty regarding the supply of HCFC-22 can have effects on price, this rule should remove uncertainty by establishing allocations for a 5-year period. With regard to the comment on supply shortages, the presence of at least 120 million lbs of HCFC-22 in inventory at the end of 2013, coupled with a continuing allocation and the ability to reclaim HCFC-22 that is recovered from decommissioned equipment, should prevent shortages. Also, the five-year allocation should minimize the possibility of spot shortages.

> Honeywell also notes that demand for HCFC-22 in the short term remains uncertain and subject to considerable variation due to changes in weather conditions. [0051]
EPA Response: The agency acknowledges the influence of certain real-time market factors, like weather, on the actual servicing need in a given year. Specifically, EPA explains in section VI.A.3.ii that one advantage of the linear approach is that it does not rely on EPA's ability to predict certain events, like the effects of a hot or cold summer, or the general state of the economy.

> In regards to EPA's Notice of Data Availability, Hudson comments that the inventory collected by EPA exceeds 112 million pounds, at least 12 million pounds higher than EPA's highest estimate for the industry. Hudson is not surprised the inventory held by these nine entities increased by more than 6 million in 2013 when the total consumption allowances were increased from 55 million pounds in 2012 to 63 million pounds in 2013. [0081, 0109]
EPA Response: See previous responses and section VI.A.2 of the preamble.

> In regards to EPA's Notice of Data Availability, ICOR International states that the stockpile of HCFC-22 is likely much higher than 148 million pounds when all allocation holders and hundreds of distributors, wholesalers, and contractors that were not surveyed are considered. [0107]
EPA Response: See previous responses and section VI.A.2 of the preamble. EPA also discusses HCFC-22 stocks held by end-users in section VI.A.3.iii.

> NRDC notes that data released by EPA in response to their FOIA request reveal that stockpiles were almost 51,000 MT [in 2012] and predicts they will have substantially increased as a result of excess allowances in 2013 and 2014. NRDC asks EPA to reexamine stockpile data and to make clear how stockpiles, leak rates, and leak prevention in the linear drawdown options were accounted for, as NRDC believes the numbers are underestimated. NRDC urges EPA to use its authority under Section 114 to request updated data on stockpiles. With regards to leak rates, NRDC draws on GreenChill's progress report estimations of average U.S. leak rates, GreenChill partner leak rates, average UK supermarket leak rates, and the settlement of EPA and DOJ with Safeway to support the argument that leak reductions need to be made and how over-allocation of HCFC-22 by this rule would undercut that progress. [0030, 0085]
EPA Response: See previous responses and section VI.A.2 of the preamble. In response to the commenter's assertion that inventory will have substantially increased in 2013 and 2014, the agency notes that the aggregate inventory from the nine entities at the end of 2013 was only 5.4 percent higher than at the end of 2012. EPA explains throughout section VI.A.3 of the preamble how it considered inventory and refrigerant management, among other factors, in setting the allocations for 2015-2019. The agency applauds the efforts of GreenChill partners and, because of their success in lowering leak rates, EPA considered what effect lower leak rates could have on estimated servicing need in the Servicing Tail Report (see Appendix D). These analyses indicate the allocation can be significantly lower than estimated servicing need, supporting EPA's decision to allocate 10,000 MT in 2015 with a 5-year linear drawdown. The allocation is about 20 percent of estimated servicing need. These lower allocations should encourage rather than undercut better refrigerant management practices in HCFC-22-containing equipment, while also fostering transition and reclamation.

> New Era Group, Inc. comments that there has been a constant failure to obtain and use data available to the EPA. New Era Group and Patton Boggs LLP believe that there is an unnecessarily high amount of HCFC-22 being allowed under the proposed rule because the amount already stockpiled is not fully taken into account.  New Era provided an attachment with information on stockpiled HCFC-22. The attachment that included a list of 19 companies that are potentially holders of stockpiled material; a list of companies with allowances for the control periods of 2014-2019; and a list of reclamation companies. New Era believes the question of crossed [or yet-to-be-reclaimed] gas must be considered, as some companies have large amounts of gas that might not be taken into the national reporting. New Era also suggests that EPA look into stockpiles held by large property management buildings, consider the ODS reserve of the Department of Defense, and gather stockpile information from EPA's GreenChill Partnership. New Era does not believe that the nine companies surveyed by the EPA represent 80% of the market, and suggests expanding data collection to wholesalers and distributors. New Era also states that in conjunction with a 1993 CFC phaseout rule, EPA showed a desire to "establish knowledge of the market through numerous data collection requests."  New Era further comments that production and consumption allowances have never been fully expended and that in 2009 only 48.7% of the allowances allocated by EPA were expended. New Era Group also believes that information they obtained from the California Air Resources Board (CARB) shows that EPA has severely underestimated stockpiles of HCFC-22. [0041, 0043, 0101, 0114]
EPA Response: The commenter believes EPA should have collected information on inventory levels at the Department of Defense's ODS Reserve. DOD did weigh in on the proposed rule, both in public comments, and through the interagency process. The commenter also urges EPA to collect inventory data from GreenChill partners, which is beyond the scope of current GreenChill reporting. See previous responses and sections VI.A.2 and VI.A.3 of the preamble. In these sections, EPA explains its intent behind collecting inventory data, its consideration of these data in proposing options for 2015-2019, why these data are sufficient given EPA's intent, and how inventory information and conversations with numerous stakeholders helped EPA reach its final decision for 2015-2019.

EPA did not make a definitive statement that the nine companies surveyed through the 114 request have 80 percent of all inventory, only that the it was reasonable to assume the agency had a significant majority, possibly on the order of 67 to 80% of total inventory. For more detail on how the agency collected and considered inventory information, please see previous responses and section VI.A.2 of the preamble.

Additionally, EPA notes that it did collect limited information on the quantities of recovered HCFC-22 that had yet to be reclaimed. While that information is not included the inventory number, and is significantly smaller that the inventory number, the agency did take it into consideration as it developed the proposed and final rules.

With respect to collection of data in 1993 for purposes of the CFC phaseout rule, the commenter may be referring to a section 114 information request published on July 27, 1993 (58 FR 40048).  In that action, EPA requested information on production, import, export, transformation, and destruction of certain ozone-depleting substances, including specified CFCs.  EPA did not request data on inventory.

The agency responds to the comment about large end-users in section VI.A.3.iii of the preamble. Information obtained from CARB is available in the docket, and the agency believes that the commenter's conclusion about what the data means is flawed. The email/data from CARB indicates that there is more than 100 million lbs of HCFC-22 that is in use in California. It does not mean that existing inventory or stockpiled quantities of HCFC-22 in California exceed 100 million lbs, as the commenter appears to be suggesting.

Finally, the agency has included U.S. consumption of HCFC-22 as reported to the United Nations compared to the allocation of HCFC-22 consumption allowances between 2003 and 2013. As the table in the docket titled, Historic HCFC-22 Consumption Allowance Allocation and Allowance Use, 2003-2013, shows, more than 100% of the initial allocation of allowances was used in 2012 and 2013. What this indicates is that allowance holders transferred other HCFC allowances into HCFC-22 in addition to using their initial allocation.

> Patton Boggs, on behalf of the New Era Group, Inc. coalition, asks that EPA publish the information from the California Air Resources Board (CARB), which they believe conclusively demonstrates that the existing inventory of HCFC-22 far exceeds the EPA estimates referenced in the proposed rule, and reissue the proposed rule or another Notice of Data Availability to allow for public input. It is the commenter's view that this critical new information radically alters the factual assumptions upon which the proposed rule was predicated and that EPA must allocate zero allowances or perhaps require buybacks of previously-sold refrigerant. [0030, 0062, 0079, 0111]
EPA Response: See previous response to New Era Group, Inc.

> In regards to a previous comment in this docket, North Lakes Distributing, Inc clarifies that they did not mean to imply that holding over 80% of allowances means that these companies represent 80% of the stockpile. North Lakes Distributing, Inc comments that EPA seems to be making the assumption that the ability to bring 80% of the allocations into the U.S. this year means that these companies somehow represent 80% of the stockpile. The commenter believes this assumption is one-dimensional and naïve because it does not consider the supply chain in the market (i.e., distributors, wholesalers, reclaimers, small allocation holders, and large mechanical contractors). [0099]
EPA Response: See previous responses and section VI.A.2 of the preamble. EPA does not assume that the size of a company's allowance allocation corresponds to their share of the total inventory.

> A private citizen comments that there are millions of pounds of oversupply of R-22, as demonstrated by the survey of nine companies. The commenter questions how much inventory the thousands of inventory holders might have that have not been counted.  The commenter suggests that EPA ask the allocation holders to table any additional import or manufacturing immediately and supply data accounting for the amount of product imported or manufactured in 2014 as well as any product in process that could not be halted without incurring expenses or breaking contracts. [0105]
EPA Response: See previous responses and section VI.A.2 of the preamble. In addition, allowance holders have the option of using their allowances, trading them or letting them expire at the end of the year. EPA has included HCFC-22 consumption totals through 2013 in the docket for this rulemaking in the document titled, Historic HCFC-22 Consumption Allowance Allocation and Allowance Use, 2003-2013.

> In regards to EPA's Notice of Data Availability, a private citizen states that the nine companies who received Section 114 letters are not representative of the entire market. The commenter states that there are many importers and reclaimers, hundreds of distributors, and more than 100,000 section 608 licensed contractors with HCFC-22 refrigerant. The commenter also notes that the following entities add to the stockpiled inventory, but are not considered in the inventory analysis: Large companies that service their own equipment and have stockpiled HCFC-22 to avoid future price increases or inventory shortages; Illegal imports of exceptional quality that are flooding the market; Those who have bought HCFC-22 as an investment to make a profit on the future shortages and price increases broadcasted by EPA and allowance holders;  The inventory held by manufacturers of HCFC-22 equipment that returned to the market after the 2009 Final Rule; and Replacement blends that are used as alternatives for HCFC-22. [0094]
EPA Response: See previous responses and section VI.A.2 of the preamble. Additionally, EPA discusses inventory held by equipment owners and other large entities in section VI.A.3.iii of the preamble.

> In response to EPA's request for more inventory data, RMS suggests the EPA should include in the Final Rule requirements for reporting similar to what the reclaiming industry has. They believe this will provide accurate accounting of refrigerants sold and avoid excess inventory caused by inaccurate data collection. [0048, 0102]
EPA Response: EPA did not propose to collect inventory data as a reporting requirement. The agency explains in section VI.A.2 and VI.A.3.iii why it collected data, how it considered those data and why it believes those data were sufficient for the purposes of this particular rulemaking.

> USA Refrigerants comments that there are 100 million pieces of HCFC-22 equipment and five pounds of gas per piece of equipment. Therefore, there is 500 million pounds of gas in the marketplace. [0030]
EPA Response: Throughout section VI.A.3 of the preamble to the final rule, the agency considers the needs of existing HCFC-22 equipment, specifically the need for HCFC-22 to continue to service and repair equipment that is still within its expected lifetime. As EPA notes, HCFC-22 equipment typically runs most efficiently on the refrigerant is was designed to use, which is one reason why EPA believes it is important to continue to provide HCFC-22 allowances, while issuing a sufficiently low allocation as to incentivize recovery, reclamation and reuse of refrigerant.

EPA agrees that there will be approximately 100 million pieces of refrigeration and air conditioning appliances in service in 2015 -- the Servicing Tail Report estimates almost 97 million units, excluding cold storage facilities. However, that total includes residential air conditioning equipment, which has an average charge under five pounds, as well as supermarket refrigeration, industrial process refrigeration and other systems which have significantly more charge than five pounds. EPA estimates that in 2015, there will be approximately 900 million pounds of HCFC-22 in use in the United States. As noted above, California estimates there is more than 100 million pounds being used in equipment in California alone. However, as noted in the response to New Era group, the amount of HCFC-22 that is in use in refrigeration and air conditioning equipment is distinct from the amount of existing inventory or stockpiled quantities of HCFC-22. The former would have to be recovered from the equipment before any possible recycling or reclamation leading to reuse. In addition, recycling and reuse by large equipment owners (e.g. supermarkets) is likely, and thus is not available to re-enter the supply chain. Also, some material may be too contaminated for subsequent use. In contrast, HCFC-22 that is held in inventory is generally either virgin material or material that has already been recovered from equipment and recycled or reclaimed,

> Watsco, Inc. states that there is a large existing inventory of HCFC-22 (i.e., almost 60,000 MT in 2012 and likely higher today). [0046]
EPA Response: See previous responses in this section, as well as section VI.A.2 and VI.A.3.iii of the preamble to the final rule.

> A private citizen requests that EPA reports on how the oversupply situation can be prevented in the future. The commenter states that the oversupply has led to a decline in reclamation and the use of alternatives, which negatively impacts reclaimers and leads to venting. [0033]
EPA Response: See previous responses in this section, as well as section VI.A.2 and VI.A.3.iii of the preamble to the final rule.

Technical projections and estimated servicing need
> Airgas believes that demand is far below EPA's Vintaging Model estimate of 100 million lbs in 2015. Airgas's estimate of the industry demand in 2013 was less than 50 million lbs. [0064]
EPA Response: EPA appreciates commenters suggesting that in recent years modeled servicing need is higher than actual servicing need. The agency points out that it is issuing 10,000 MT in 2015 (or about 22 million pounds), far below the agency's 100 million pound estimate and Airgas' estimate of 50 million lbs. See also section VI.A.3.ii of the preamble.

> The Alliance comments that the Vintaging Model should not be relied on as the sole basis of determining allocations. The Alliance believes that an update of the Vintaging Model should be conducted to include more current information on leak rates and charge size, in order to better determine actual need over the next five to 15 years for servicing the installed equipment base. Alliance members welcome the opportunity to work with EPA on this update. The Alliance does not believe, however, that work on the Vintaging Model should delay completion of the allocation rule. [0030, 0049]
EPA Response: EPA explains in section VI.A.3.ii of the preamble why it is using a linear approach, which does not rely solely on the Vintaging Model. In addition, the agency published the 2013 Servicing Tail Report with the December 2013 proposal, and took comment on all aspects of the report. The agency welcomes data or input on model parameters from the Alliance and its members, as well as other interested parties, that could help improve the agency's estimates.

> CIP states that while the Vintaging Model can be a helpful tool, more emphasis needs to be placed on market conditions and the effect of the 2012-2014 Final Rule in order to validate the data contained in the tool. CIP also believes that the forecasted quantities contain a high level of uncertainty. [0066, 0104]
EPA Response: See previous response and section VI.A.3.ii of the preamble.

> EOS Climate comments that the Vintaging Model: 1) assumes excessively high leak rates for commercial refrigeration that do not reflect progress in the supermarket industry as reported by GreenChill partners; 2) assumes growth rates in all categories of HCFC-22 equipment despite the fact that newly produced/imported HCFC-22 can only be used for pre-2010 equipment and that imports of "dry-shipped" condensing units are decreasing, as noted in the preamble; and 3) fails to account for the widespread availability of HFC alternative refrigerants which now account for more than 20% of aftermarket demand. [0053]
EPA Response: EPA welcomes comment and data supporting a change in modeled leak rates for any given end-use modeled in the Vintaging Model. Part of the reason that EPA issues a draft Servicing Tail Report is to take comment and incorporate it into the final version. The draft and final versions are available in the docket. Additionally, see the response to NRDC in the previous section on GreenChill and its effect on supermarket leak rates. As explained in the preamble, EPA does not model growth in any HCFC-22 equipment categories. In addition, EPA considers the effects of changing leak rates and the influence of dry-shipped components in the sensitivity analyses contained in the Servicing Tail Report. Finally, the agency discusses HFC alternatives in section VI.A.3.i and VI.A.3.iii of the preamble.

> NRDC states that demand for HCFC-22 has dropped sharply in recent years. NRDC comments that the demand for HCFC-22 was 40,000 MT in 2012 and 30,039 MT in 2013, while the Vintaging Model predicts a demand of 46,165 MT for 2015. [0085]
EPA Response: See previous responses. EPA is issuing only 10,000 MT of allowances in 2015, far below the projected servicing need and more than 55 percent below the 2014 allocation of 23,100 MT.