Response to Comments

For the Final Rulemaking:

Protection of the Stratospheric Ozone: Ban on the Sale and Distribution
of Pre-Charged Appliances

Docket: EPA-HQ-OAR-2007-0163

November 6, 2009

Prepared for

U.S. Environmental Protection Agency

Office of Air and Radiation

Stratospheric Protection Division

1200 Pennsylvania Avenue, NW

Washington, DC 20460

Prepared by

ICF International

1725 Eye Street, NW

Washington, DC 20006

Forward

This document provides EPA’s responses to public comments on EPA’s
Notice of Proposed Rulemaking, Protection of the Stratospheric Ozone:
Ban on the Sale and Distribution of Pre-Charged Appliances. EPA received
comments on this proposed rule via mail, e-mail, facsimile, and at a
public hearing held in Washington, DC on January 7, 2009. Comments,
letters. and transcripts of the public hearings are available
electronically through   HYPERLINK "http://www.regulations.gov"
http://www.regulations.gov  by searching Docket ID EPA-HQ-OAR-2007-0163.

All comments have been reviewed, summarized, and organized by main
topics within the remainder of this document to highlight major issues
and clarification requests pertinent to the rule. Summaries are
organized by the following main topics of stakeholder concern:

Section 2 – Defining and clarifying the term “manufactured”

Section 3 – The use of CAA Section 615 as authority

Section 4 – Cost analysis and small business economic impacts

Section 5 – HCFC-22 and HCFC-142b designed appliances and components
manufactured after 2010

Section 6 – Exemption for manufacture of components with de minimis
charge after January 1, 2010

Section 7 – The import of pre-charged appliances

Section 8 – The export of pre-charged appliances

Section 9 – Exemption for residential and commercial projects begun
prior to January 1, 2010

Section 10 – The timely completion of the rule

For the purpose of this Response to Comments document, section
organization does not follow the outline established in the Notice of
Proposed Rulemaking document, but follows a logical order of discussion;
the selection and organization of these section topics are based on
topic frequency and relative importance.

EPA’s responses to comments are provided immediately following each
comment excerpt.  However, in instances where several commenters raised
similar or related issues, EPA provided a single response after the
first comment excerpt in the group and referenced this response in the
other comment excerpts of the grouping.  In some cases, EPA provided
responses to specific comments or groups of similar comments in the
preamble to the final rulemaking.  Rather than repeating those responses
in this document, EPA has referenced the preamble.

At the beginning of each section, an outline of topics is provided
followed by a table detailing commenters that contributed comments,
which is organized by document ID.  Below each individual topic heading
of a section, a bulleted list of comments is provided. Comments are
organized 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 number is provided in parentheses at the end
of each comment.

The majority of comments submitted to EPA express support for EPA in its
commitment to the Montreal Protocol and reduction of ozone-depleting
substances for public and environmental health interests. Several
commenters still express concern over being allowed to sell stockpiled
inventory of pre-charged appliances and components after the January 1,
2010 cut-off date. Several commenters have expressed concern that, while
EPA’s January 14, 2009 fact sheet clarified that stockpiled inventory
manufactured before January 1, 2010 could be sold after the effective
ban date, they would like EPA to incorporate clarifications into the
final rulemaking.  Several commenters also express concern regarding the
timing of the final rule’s release and request swift and clear
direction from EPA.

Contents

  TOC \o "1-4" \h \z \u    HYPERLINK \l "_Toc245098962"  1.	GENERAL
SUMMARY OF COMMENTS	  PAGEREF _Toc245098962 \h  6

  HYPERLINK \l "_Toc245098963"  2.	DEFINING AND CLARIFYING THE TERM
“MANUFACTURED”	  PAGEREF _Toc245098963 \h  8

  HYPERLINK \l "_Toc245098964"  2.1.	Clarify the ban with respect to the
sale of pre-charged appliances manufactured before 2010.	  PAGEREF
_Toc245098964 \h  9

  HYPERLINK \l "_Toc245098965"  2.2.	Include a revised definition of
manufacture.	  PAGEREF _Toc245098965 \h  15

  HYPERLINK \l "_Toc245098966"  3.	THE USE OF CAA SECTION 615 AS
AUTHORITY	  PAGEREF _Toc245098966 \h  21

  HYPERLINK \l "_Toc245098967"  3.1.	EPA Section 615 Authority	  PAGEREF
_Toc245098967 \h  21

  HYPERLINK \l "_Toc245098968"  4.	COSTS ANALYSIS AND SMALL BUSINESS
ECONOMIC IMPACTS	  PAGEREF _Toc245098968 \h  22

  HYPERLINK \l "_Toc245098969"  4.1.	Costs associated with pre-charged
appliances charged with HCFC substitutions.	  PAGEREF _Toc245098969 \h
22

  HYPERLINK \l "_Toc245098970"  4.2.	Costs associated with public
impacts.	  PAGEREF _Toc245098970 \h  25

  HYPERLINK \l "_Toc245098971"  4.3.	Costs associated with
recycled/reclaimed refrigerant market.	  PAGEREF _Toc245098971 \h  26

  HYPERLINK \l "_Toc245098972"  4.4.	Economic losses to small
businesses, distributors, contractors and consumers.	  PAGEREF
_Toc245098972 \h  26

  HYPERLINK \l "_Toc245098973"  5.	HCFC-22 AND HCFC-142b DESIGNED
APPLIANCES AND COMPONENTS MANUFACTURED AFTER 2010	  PAGEREF
_Toc245098973 \h  31

  HYPERLINK \l "_Toc245098974"  5.1.	Clarify the ban with respect to
un-charged components manufactured after January 1, 2010.	  PAGEREF
_Toc245098974 \h  31

  HYPERLINK \l "_Toc245098975"  5.2.	Extend the ban to newly
manufactured appliances charged with reclaimed refrigerant.	  PAGEREF
_Toc245098975 \h  34

  HYPERLINK \l "_Toc245098976"  6.	EXEMPTION FOR MANUFACTURE OF
COMPONENTS WITH DE MINIMIS CHARGE AFTER JANUARY 1, 2010	  PAGEREF
_Toc245098976 \h  37

  HYPERLINK \l "_Toc245098977"  6.1.	Rule should exempt the manufacture
of TXV bulbs.	  PAGEREF _Toc245098977 \h  37

  HYPERLINK \l "_Toc245098978"  7.	THE IMPORT OF PRE-CHARGED APPLIANCES
 PAGEREF _Toc245098978 \h  39

  HYPERLINK \l "_Toc245098979"  7.1.	Clarifying the ban on imports of
pre-charged appliances beginning January 1, 2010.	  PAGEREF
_Toc245098979 \h  39

  HYPERLINK \l "_Toc245098980"  7.2.	Date of import versus date of
manufacture.	  PAGEREF _Toc245098980 \h  41

  HYPERLINK \l "_Toc245098981"  7.3.	Allowing for a limited importation
window after January 1, 2010.	  PAGEREF _Toc245098981 \h  41

  HYPERLINK \l "_Toc245098982"  7.4.	Petition process for the
importation of reclaimed HCFC-22.	  PAGEREF _Toc245098982 \h  42

  HYPERLINK \l "_Toc245098983"  8.	THE EXPORT OF PRE-CHARGED APPLIANCES
 PAGEREF _Toc245098983 \h  43

  HYPERLINK \l "_Toc245098984"  8.1.	Allowing export of pre-charged
appliances manufactured after January 1, 2010 to Article 5 countries.
PAGEREF _Toc245098984 \h  43

  HYPERLINK \l "_Toc245098985"  8.2.	Allowing transshipments of
pre-charged appliances manufactured after January 1, 2010.	  PAGEREF
_Toc245098985 \h  46

  HYPERLINK \l "_Toc245098986"  9.	EXEMPTION FOR RESIDENTIAL AND
COMMERCIAL PROJECTS BEGUN PRIOR TO JANUARY 1, 2010	  PAGEREF
_Toc245098986 \h  48

  HYPERLINK \l "_Toc245098987"  9.1.	Exempt pre-charged appliances
associated with the purchase of equipment prior to January 1, 2010.
PAGEREF _Toc245098987 \h  48

  HYPERLINK \l "_Toc245098988"  10.	THE TIMELY COMPLETION OF THE RULE
PAGEREF _Toc245098988 \h  51

  HYPERLINK \l "_Toc245098989"  10.1.	Rule should be finalized in a
timely manner.	  PAGEREF _Toc245098989 \h  51

GENERAL SUMMARY OF COMMENTS

This document summarizes comments on the proposed rule, Ban on the Sale
and Distribution of Pre-Charged Appliances, which are found in EPA’s
docket, EPA-HQ-OAR-2007-0163.  A total of 46 comments were submitted and
are listed in   REF _Ref232398576 \h  \* MERGEFORMAT  Table 1  by
document ID and organization.  Fifty commenters are represented by these
comments, including five commenters who spoke at the January 7, 2009
public hearing but did not submit a written comment.  Commenters
represent a variety of industry stakeholders.

Table   SEQ Table \* ARABIC  1 . Public Comments Received by EPA on the
Ban on the Sale and Distribution of Pre-Charged Appliances

Count	Document ID	Organization

1	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648081f733" \o "View Document details"
EPA-HQ-OAR-2007-0163-0022 	Anonymous

2	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648081f733" \o "View Document details"
EPA-HQ-OAR-2007-0163-0024 	Wolfgang's Cooling and Heating Corporation

3	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648081f733" \o "View Document details"
EPA-HQ-OAR-2007-0163-0025.1 	Holliday Environmental Services, Inc.

4	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648081f733" \o "View Document details"
EPA-HQ-OAR-2007-0163-0026.1 	Employee in distribution of HVAC supplies
and equipment

5	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648081f733" \o "View Document details"
EPA-HQ-OAR-2007-0163-0027.2 	Goodman Global, Inc.

6	EPA-HQ-OAR-2007-0163-0029	EPA Public Hearing Transcripta

7	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648082ab9d" \o "View Document details"
EPA-HQ-OAR-2007-0163-0031.1 	Danfoss Inc. (Danfoss)

8	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=09000064808295f9" \o "View Document details"
EPA-HQ-OAR-2007-0163-0032.1 	National Marine Manufacturers Association
(NMMA)

9	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648082c123" \o "View Document details"
EPA-HQ-OAR-2007-0163-0033 	Anonymous Public Comment

10	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480844679" \o "View Document details"
EPA-HQ-OAR-2007-0163-0034 	Anonymous Public Comment

11	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084585f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0035 	Anonymous Public Comment

12	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084585f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0036.1 	Dometic Corporation (Dometic)

13	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084585f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0037 	Anonymous Public Comment

14	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480845eb1" \o "View Document details"
EPA-HQ-OAR-2007-0163-0038.2 	Honeywell International (Honeywell)

15	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480845eb1" \o "View Document details"
EPA-HQ-OAR-2007-0163-0039 	Johnson Controls, Inc

16	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480845eb1" \o "View Document details"
EPA-HQ-OAR-2007-0163-0040.1 	Goodman Global, Inc.

17	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480845eb1" \o "View Document details"
EPA-HQ-OAR-2007-0163-0041.1 	Trane/Ingersoll-Rand

18	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084943e" \o "View Document details"
EPA-HQ-OAR-2007-0163-0042 	Friedrich Air Conditioning Company

19	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084943e" \o "View Document details"
EPA-HQ-OAR-2007-0163-0043 	Anonymous

21	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=09000064808494eb" \o "View Document details"
EPA-HQ-OAR-2007-0163-0044.1 	National Refrigerants, Inc. (NRI)

22	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=09000064808494ff" \o "View Document details"
EPA-HQ-OAR-2007-0163-0045.1 	United Refrigeration, Inc. (URI)

23	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084954f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0046.1 	Eubank National Coil Company (NCC)

24	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084d8c0" \o "View Document details"
EPA-HQ-OAR-2007-0163-0047.1 	Airxcel, Inc.

25	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=09000064808493f2" \o "View Document details"
EPA-HQ-OAR-2007-0163-0048.1 	Aireco Supply, Inc (Aireco)

26	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480849607" \o "View Document details"
EPA-HQ-OAR-2007-0163-0049 	Association of Home Appliance Manufacturers
(AHAM)

27	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480849b5f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0050.1 	Recreation Vehicle Industry Association
(RVIA)

28	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084a07f" \o "View Document details"
EPA-HQ-OAR-2007-0163-0051.1 	National Association of Home Builders
(NAHB)

29	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084a30d" \o "View Document details"
EPA-HQ-OAR-2007-0163-0052.1 	Air Conditioning Contractors of America
(ACCA)

30	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084d9f7" \o "View Document details"
EPA-HQ-OAR-2007-0163-0053.1 	Rheem Manufacturing Company (Rheem)

31	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084da9c" \o "View Document details"
EPA-HQ-OAR-2007-0163-0054.1 	Refrigeration Service Engineers Society
(RSES)

32	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084940b" \o "View Document details"
EPA-HQ-OAR-2007-0163-0055.1 	Bally Refrigerated Boxes, Inc. (Bally)

33	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=0900006480849435" \o "View Document details"
EPA-HQ-OAR-2007-0163-0056.1 	National Refrigeration and Air
Conditioning, Inc. (NRAC)

34	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084db53" \o "View Document details"
EPA-HQ-OAR-2007-0163-0057.1 	U.S. Small Business Administration (SBA)

35	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084db89" \o "View Document details"
EPA-HQ-OAR-2007-0163-0058.1 	Alliance for Responsible Atmospheric Policy
(Alliance)b

36	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084dee6" \o "View Document details"
EPA-HQ-OAR-2007-0163-0059 	Innovair Corporation (Innovair)

37	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084df32" \o "View Document details"
EPA-HQ-OAR-2007-0163-0060.1 	Mitsubishi Electric HVAC Advanced Products
Division (MEUS HVAC)

38	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084df94" \o "View Document details"
EPA-HQ-OAR-2007-0163-0061.1 	Nordyne

39	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084dd2a" \o "View Document details"
EPA-HQ-OAR-2007-0163-0062.1 	Air Conditioning, Heating and Refrigeration
Institute (AHRI)

40	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084dd77" \o "View Document details"
EPA-HQ-OAR-2007-0163-0063.1 	Carrier Corporation (Carrier)

41	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f0a5" \o "View Document details"
EPA-HQ-OAR-2007-0163-0064.1 	Hudson Technologies (Hudson)

42	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f0f6" \o "View Document details"
EPA-HQ-OAR-2007-0163-0065.1 	Lennox International Inc. (Lennox)

43	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f190" \o "View Document details"
EPA-HQ-OAR-2007-0163-0066.1 	McQuay International (McQuay)

44	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f2c7" \o "View Document details"
EPA-HQ-OAR-2007-0163-0067.1 	Heating, Air Conditioning, & Refrigeration
Distributors International (HARDI)

45	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f1f5" \o "View Document details"
EPA-HQ-OAR-2007-0163-0068.1 	Electrolux Home Products, Inc. (Electrolux)

46	  HYPERLINK
"http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetai
l&o=090000648084f27b" \o "View Document details"
EPA-HQ-OAR-2007-0163-0069.1 	General Electric Consumer and Industrial
Division (General Electric C&I)

a. EPA’s Public Transcript, “Ban on the Sale or Distribution of
Pre-charged Appliances,” on January 7, 2009, reports comments by AHRI,
James Burke, Trane/Ingersoll-Rand, Johnson Controls, HARDI, LG
Electronics, General Electric C&I, Electrolux, ACCA, Friedrich Air
Conditioning Company, CFM Distributors, AHAM, Danfoss, and Luce, Schwab
& Kase. Of these commenters, AHRI, Trane/Ingersoll-Rand, Johnson
Controls, HARDI, General Electric C&I, Electrolux, ACCA, Friedrich Air
Conditioning Company, and Danfoss also submitted written comments by the
same commenter.  In the following sections, commenters are listed
individually, including those that submitted written comments.

b. The Alliance for Responsible Atmospheric Policy represents 47
members. Members are listed in their comment.  As the Alliance is an
established organization, when summing the number commenters per
comment, the Alliance will be summed as a single entity rather than by
individual commenters.

DEFINING AND CLARIFYING THE TERM “MANUFACTURED”

Thirty-six commenters submitted 39 comments requesting clarification of
EPA’s definition of “manufactured” as it applies to appliances and
components built before January 1, 2010. Comments were in reference to
two main topics:

Clarify the ban with respect to the sale of pre-charged appliances
manufactured before 2010

Include a revised definition of manufacture

Count	Commenter	Organization	Document ID No

1	Tim Graves	Wolfgang's Cooling and Heating Corporation
EPA-HQ-OAR-2007-0163-0024

2	Thomas J. Quinn Sr.	Employee in distribution of HVAC supplies and
equipment	EPA-HQ-OAR-2007-0163-0026.1

3	David L. Swift	Goodman Global, Inc.	EPA-HQ-OAR-2007-0163-0027.2

4	Karim Amrane	Air Conditioning, Heating and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0029

5	Tom Roberts	CFM Distributors	EPA-HQ-OAR-2007-0163-0029

6	April Langford	Electrolux Home Products, Inc. (Electrolux)
EPA-HQ-OAR-2007-0163-0029

7	Kelley A. Kline	General Electric Consumer and Industrial Division
(General Electric C&I)	EPA-HQ-OAR-2007-0163-0029

8	Christopher Johnson	LG Electronics	EPA-HQ-OAR-2007-0163-0029

9	Jim Luce	Luce, Schwab & Kase	EPA-HQ-OAR-2007-0163-0029

10	Robert Wilkins	Danfoss	EPA-HQ-OAR-2007-0163-0031.1

11	John McKnight	National Marine Manufacturers Association (NMMA)
EPA-HQ-OAR-2007-0163-0032.1

12	Charlie Barefoot	Dometic Corporation (Dometic)
EPA-HQ-OAR-2007-0163-0036.1

13	Steve Bernhardt	Honeywell International (Honeywell)
EPA-HQ-OAR-2007-0163-0038.2

14	Jim Crawford	Trane/Ingersoll-Rand	EPA-HQ-OAR-2007-0163-0041.1

15	Maureen Beatty	National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2007-0163-0044.1

16	John Reilly III	United Refrigerants, Inc. (URI)
EPA-HQ-OAR-2007-0163-0045.1

17	Frank Xu	Eubank National Coil Company (NCC)
EPA-HQ-OAR-2007-0163-0046.1

18	Melvin Adams	Airxcel, Inc. 	EPA-HQ-OAR-2007-0163-0047.1

19	Dan Hinchman	Aireco Supply, Inc. (Aireco)	EPA-HQ-OAR-2007-0163-0048.1

21	Kevin Messner	Association of Home Appliance Manufacturers (AHAM)
EPA-HQ-OAR-2007-0163-0049

22	Christine Siksa	Recreation Vehicle Industry Association (RVIA)
EPA-HQ-OAR-2007-0163-0050.1

23	Susan Asmus	National Association of Home Builders (NAHB)
EPA-HQ-OAR-2007-0163-0051.1

24	Charlie McCrudden	Air Conditioning Contractors of America (ACCA)
EPA-HQ-OAR-2007-0163-0052.1

25	Karen Myers	Rheem Manufacturing Company (Rheem)
EPA-HQ-OAR-2007-0163-0053.1

26	Mark Lowry	Refrigeration Service Engineers Society (RSES)
EPA-HQ-OAR-2007-0163-0054.1

27	Mike Coyle	Bally Refrigerated Boxes, Inc. (Bally)
EPA-HQ-OAR-2007-0163-0055.1

28	Vince Mucciola	National Refrigeration and Air Conditioning, Inc.
(NRAC)	EPA-HQ-OAR-2007-0163-0056.1

30	Shawne McGibbons, Kevin Bromberg, Anna Rittgers	US Small Business
Administration Office of Advocacy (SBA)	EPA-HQ-OAR-2007-0163-0057.1

29	Dave Stirpe	Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2007-0163-0058.1

30	Paul L. Doppel	Mitsubishi Electric HVAC Advanced Products Division
(MEUS HVAC)	EPA-HQ-OAR-2007-0163-0060.1

31	Daniel J. Arnold	Nordyne	EPA-HQ-OAR-2007-0163-0061.1

32	Karim Amrane	Air Conditioning, Heating and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0062.1

33	John M. Mandyck	Carrier Corporation (Carrier)
EPA-HQ-OAR-2007-0163-0063.1

34	Stephen P. Mandracchia	Hudson Technologies (Hudson)
EPA-HQ-OAR-2007-0163-0064.1

35	Kyle Gilley	Lennox International Inc. (Lennox)
EPA-HQ-OAR-2007-0163-0065.1

36	Julian R. de Bullet	McQuay International (McQuay)
EPA-HQ-OAR-2007-0163-0066.1

37	Talbot Gee	Heating, Air Conditioning, & Refrigeration Distributors
International (HARDI)	EPA-HQ-OAR-2007-0163-0067.1

38	John A. Heer	Electrolux Home Products, Inc.(Electrolux)
EPA-HQ-OAR-2007-0163-0068.1

39	Kelley A. Kline	General Electric Consumer and Industrial Division
(General Electric C&I)	EPA-HQ-OAR-2007-0163-0069.1

Clarify the ban with respect to the sale of pre-charged appliances
manufactured before 2010.

Twenty-nine commenters believe that EPA should use clear language that
indicates that equipment manufactured prior to January 1, 2010 is not
subject to the ban on pre-charged products and that EPA will allow for
the sell-through of this equipment, as indicated in EPA’s January
14th, 2009 three-page Fact Sheet. Noteworthy comments are bulleted in
the section below.

Goodman Global Inc., General Electric C&I, Honeywell, and SBA state that
business and manufacturing plans for the 2009 season have already been
made.  Additionally, as air conditioners are seasonal products that
often have large carryover from year to year, there is risk of
potentially large carryover of products if provisions for a sell-through
of in-stock inventories do not exist.  NRI, URI, NCC, Aireco, Bally, and
NRAC state that in the final rule, EPA should clarify that the
manufacture date represents a bright-line test for products that are, or
are not, subject to the proposed rule.  It should be clear that
pre-charged appliances manufactured before January 1, 2010 can be
sold-through after January 1, 2010.  If such clarification is made,
there should be no need for a “sell-through” or “grandfathering”
provision. [0029, 0038.2, 0044.1, 0045.1, 0046.1, 0048.1, 0055.1,
0056.1, 0057.1]

EPA Response: EPA recognizes the importance of having time for industry
to adopt the regulations and has sought to finalize this rule as quickly
as practicable.  EPA also recognizes that air–conditioning and
refrigeration appliances containing HCFC-22 or HCFC-142b could be
manufactured prior to January 1, 2010, but may not have reached the
ultimate consumer by January 1, 2010. The final rule prohibits the sale
or distribution, and the offer for sale or distribution, in interstate
commerce of air-conditioning and refrigeration appliances and their
components containing HCFC-22 or HCFC-142b (or blends containing one or
both of these HCFCs) beginning January 1, 2010.

Section 601 of the CAA defines the term “Appliance” to mean
“…any device which contains and uses a class I or class II substance
as a refrigerant and which is used for household or commercial purposes,
including any air conditioner, refrigerator, chiller, or freezer.”
For purposes of Subpart I, EPA is promulgating a definition of
“appliance” which is identical to the statutory definition.   EPA
notes that an appliance is not equivalent to a component of an
appliance.  An appliance is made up of its components.  Therefore, it is
possible that a component of an appliance is manufactured on a different
date than the final assembly or “manufacture” of an appliance.

The ban applies to appliances and components manufactured on or after
January 1, 2010, but does not apply to appliances or components
manufactured before that date.  Regarding a sell-through provision, EPA
contemplated mechanisms for either a “sell-through” or a
“grandfathering” of appliances that were previously manufactured and
placed into an initial inventory – similar to the approaches in 40 CFR
part 82 subpart C, under the Nonessential Products Ban for class I and
class II controlled substances.  However, because the final ban is not
prohibiting the sale or distribution of any appliance or appliance
component manufactured before January 1, 2010 (i.e., inventoried
equipment), a “sell-through” provision is unnecessary.

NRI, URI, NCC, Aireco, Bally, and NRAC recommend that EPA not restrict
the sales of pre-charged appliances and components manufactured before
January 1, 2010 arbitrarily to a limited time period. [0044.1, 0045.1,
0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: The final rule does not apply the prohibition against the
sale and distribution in interstate commerce to pre-charged components
that were manufactured prior to January 1, 2010.  Hence, manufacturers
and distributors are allowed to sell or distribute pre-charged HCFC-22
or HCFC-142b (or blends containing one or both of these HCFCs)
appliances and components that are in inventory as of January 1, 2010.
There is no time limit for the sale or distribution of such pre-charged
appliances or components.

Honeywell, ACCA, Rheem, Carrier, and HARDI urge EPA to clearly state, as
was done in the fact sheet, that pre-charged appliance component parts,
such as condensing units, line sets, and thermal expansion valves that
are manufactured before January 1, 2010, may be stockpiled and be
available for servicing existing appliances. HARDI further recommends
that “condensing units” be specifically added to the listed examples
of pre-charged appliance components. Additionally, HARDI recommends an
item (e) be added to § 82.306 stating, “This prohibition shall not
apply to pre-charged components in inventory prior to January 1, 2010
for use in servicing existing systems after January 1, 2010 including
condensing units, compressors, thermal expansion valves, and line sets.
Further, this prohibition does not limit the sale or distribution of
components such as condensing units, compressors, thermal expansion
valves, and line sets that are not pre-charged, regardless of date of
manufacture, for use in servicing of appliances in operation prior to
January 1, 2010.” [0038.2, 0052.1, 0053.1, 0063.1, 0067.1]

EPA Response: EPA is clarifying that pre-charged appliance components,
such as condensing units, line sets, evaporators, and compressors that
were manufactured before January 1, 2010, may be sold for purposes of
servicing appliances manufactured before that date.

Additionally, stockpiled pre-charged appliance component parts that are
manufactured before January 1, 2010 may be used to service existing
appliances after that date.  However, due to the use prohibitions in the
companion HCFC allocation rule, such pre-charged components may not be
configured to “manufacture” a new appliance, such as a new
residential split system, if the “manufacture” involves any use of
virgin HCFC-22 or HCFC-142b as a refrigerant.  Such use would include
the addition of virgin HCFC-22 or HCFC-142b (or blends containing these
HCFCs) to complete the initial charge of the appliance and the use of
virgin HCFC-22 or HCFC-142b (or blends containing these HCFCs) in the
components that are being assembled to create the appliance.

In response to the recommendation that “condensing units” be
specifically added to the listed examples of pre-charged appliance
components, EPA has changed the proposed definition of pre-charged
appliance component to add compressors, condensing units, and coils to
the list of examples of appliance components that may be pre-charged
with refrigerant as a part of the manufacturing process prior to the
component’s sale or distribution or offer for sale or distribution in
interstate commerce.  EPA has also changed the proposed definition to
make clear that the definition is not limited to pre-charged appliance
components found solely in pre-charged appliances.  EPA intends the
definition to include any appliance component that may be pre-charged
prior to sale or distribution.  Therefore, EPA is defining pre-charged
appliance component to mean any portion of an appliance including but
not limited to condensers, compressors, line sets, and coils, that is
charged with refrigerant prior to sale or distribution or offer for sale
or distribution in interstate commerce.

Danfoss, AHAM, Alliance, McQuay, and General Electric C&I state that the
final regulatory text should state the ban does not apply to appliances
or components manufactured before January 1, 2010, as stated in the
January 14th Fact Sheet. General Electric C&I further states that the
date of manufacture provides a straightforward methodology for the
determination of the applicability of the rule, and this date can be
found on the nameplate of the product. [0031.1, 0049, 0058.1, 0066.1,
0069.1]

EPA Response: Please refer to the second portion of the response in
Section 2.1a.

MEUS HVAC, AHRI, and Hudson thank EPA for its prompt action regarding
industry’s concern over the definition of “manufacture” and
recommends that clarifications from the Fact Sheet be incorporated in
the Final Rule. [0060.1, 0062.1, 0064.1]

EPA Response: Please refer to the response in Section 2.1a.

Thomas J. Quinn Sr. notes that EPA has shown favor towards larger
companies, such as Carrier and DuPont, and for years has been bullied
into allowing the continued use of high-pressure refrigerants that can
be dangerous, and whose effects are still unproven.  The commenter
suggests that insisting on the recovery and reclamation of CFCs and
HCFCs, and policing these activities to ensure they are done properly
would have been enough to sufficiently control emissions from the
industry.  The commenter also suggests that EPA leaves the rules as they
stand now, not implement new rules, and allow machinery produced and
stocked with refrigerant by 2010 to be sold to depletion. [0026.1]

EPA Response: EPA notes that regulations promulgated under Section 608
and 609 of the Clean Air Act (40 CFR part 82, subpart F and subpart B,
respectively) require refrigerant recovery and recycling during the
service, maintenance, repair, and disposal of air-conditioning and
refrigeration appliances.  This rulemaking does not address the Subpart
B or F regulations. In addition, the Subpart B and F regulations do not
address the introduction into interstate commerce of components and
appliances that are pre-charged with HCFC-22 or HCFC-142b.

For information on allowing sell-through of pre-charged and appliances
and components manufactured before January 1, 2010, please refer to the
response in Section 2.1a.

LG Electronics supports the rule, as proposed, so long as there is an
allowance for sell-through of inventory after January 1, 2010. [0029]

EPA Response: Please refer to the response in Section 2.1a.

Electrolux states that the date of manufacturing is a legitimate
touchstone for the applicability of the proposed rule, but that
clarifying the term, “manufactured” would be helpful to the
regulated community. Electrolux believes that limiting the sell-through
period would impact manufacturers, retailers large and small, who
typically end the season with a large percentage of unsold product,
carried over one year to the next.  Electrolux also states that if
purchasers were to wind up with an excess inventory of product that
could not be legally sold, there would be incentive for illegal disposal
of the products. [0029]

EPA Response: Please refer to the response in Sections 2.1a.

Luce, Schwab & Kase states that it would be almost impossible for them
to sell all of their R-22 equipment in inventory if a sell-through
provision were not allowed after 2009. [0029]

EPA Response: Please refer to the response in Section 2.1a.

Dometic requests that EPA should eliminate the ban entirely on the sale
of equipment manufactured before January 1, 2010 no matter the use of
the equipment.  The commenter believes EPA’s limitation would create a
great deal of stagnate inventory, creating potentially large economic
losses for manufacturers of this equipment beyond those already felt due
to the current economic climate. [0036.1]

EPA Response: EPA recognizes the current economic situation and it is
not the intention of EPA to damage businesses with the implementation of
the ban.  The ban applies to appliances and their components containing
HCFC-22 or HCFC-142b manufactured on or after January 1, 2010, but does
not apply to appliances or components manufactured before that date.
Further discussion can be found in the response in Section 2.1a.

Airxcel respectfully requests that the final rule on Pre-Charged
Appliances fully comply with the position taken by EPA in the January
14, 2009 “Rules Overview”. The industries in which Airxcel
participates (recreation vehicle and marine industries) have been
planning on the non-availability of HCFC R-22 on January 1, 2010 and
that goal can be met. Any goal which tries to restrict the sale of
pre-charged appliances manufactured prior to January 1, 2010 cannot be
reasonably met and any such restriction will only further damage many
businesses which are already weakened by the current economic situation.
[0047.1]

EPA Response: Please refer to responses in Section 2.1j.

NAHB urges EPA to include additional clarifying guidance in the final
rule for construction firms who install pre-charged appliances in
“new” construction. [0051.1]

EPA Response: EPA recognizes that contractual arrangements exist for
construction projects that involve air-conditioning systems for which
“manufacture” (including completion of the refrigerant loop) will
not occur until after December 31, 2009.  The accompanying allocation
rule establishes a grandfathering provision which allows HCFC-22
appliances to be “manufactured” onsite during calendar year 2010, if
the components are manufactured prior to January 1, 2010, and are
specified in a contract dated before January 1, 2010, for use on a
particular project. EPA does not see a need to grant further flexibility
in the pre-charged final rule.

Rheem states that for purposes of the pre-charged appliances rule,
“manufactured” should be defined by or alternatively EPA must codify
the interpretations included in its January 2009 fact sheet. [0053.1]

EPA Response: Please refer to the response in Section 2.1a.

RSES strongly supports clarifying language used in the January 14th Fact
Sheet, and states that anything less than clear and unmistakable
direction will result in widely varied interpretations by industry
personnel, particularly service technicians whose last formal education
regarding refrigerants may have been in the early 1990s. [0054.1]

EPA Response: Please refer to the response in Section 2.1a.

SBA encourages EPA to incorporate its clarifications in the final rule,
clarifying: (1) that uncharged components manufactured after 2010 that
can be field charged with recycled refrigerant can continue to be
manufactured after the deadline, and (2) that the rule will allow
charged component parts manufactured prior to the deadline to be used in
servicing existing equipment. [0057.1]

EPA Response: EPA’s prohibition does not apply to appliance components
manufactured on or after January 1, 2010 that are sold, distributed, or
otherwise introduced into interstate commerce uncharged or with a
holding charge of an inert gas, such as nitrogen.  Such uncharged
components could be used as replacement components for pre-2010
appliances in need of service and charged with either virgin or
reclaimed HCFC-22 or HCFC-142b.

For information on sell-through of existing equipment, please refer to
the response in Section 2.1a.

The Alliance requests that EPA allow for the sale and installation of
components, whether charged or uncharged, that have been placed into
initial inventory prior to January 1, 2010, for both replacement and
certain split-system new installations. Alliance requests exemptions
for: (1) binding contracts for purchase of equipment manufactured prior
to January 1, 2010, but for economic or other reasons cannot be
delivered until after January 1, 2010; and (2) construction projects
that have received building code approval for plans that include
equipment manufactured prior to January 1, 2010, but will not be
completed until after January 1, 2010. [0058.1]

EPA Response: Please refer to the responses in Section 2.1a and Section
9.

AHRI states that not allowing the sale of products placed in inventory
prior to January 1, 2010, will have a devastating impact on the industry
and is contrary to the provisions of the Clean Air Act, as it will
effectively accelerate the phaseout date of R-22 by six months to a
year.  AHRI also states that given that over two million R-22 condensing
units are expected to be manufactured in 2009 alone, the stranded
inventory costs could well be in excess of $500 million, enough to
bankrupt several manufacturers and distributors. [0029, 0062.1]

EPA Response: Please refer to the response in Section 2.1a and 2.1j.

Lennox states the ban should allow for grandfathering of components,
specifically allowing pre-charged components in initial inventory before
Jan. 1 to be used after Jan. 1 in order to (a) service existing
equipment, and (b) complete the installation of certain split-systems
where installation has commenced but not been completed before January
1. Lennox states they prefer a grandfathering provision to a
sell-through approach, as a sell-through approach is not feasible
because it cannot be reasonably predicted when existing inventory will
be sold. This inability is exacerbated by the economic recession.
[0065.1]

EPA Response: Please refer to the responses in Sections 2.1a, Section
2.1b and Section 9.

Lennox notes that EPA should limit permissible servicing whereby
components are replaced in existing equipment, to “like-for-like”
replacements with pre-charged components manufactured prior to January
1, 2010.  The commenter notes that allowing such pre-charged component
replacements is necessary to allow existing equipment to be properly
serviced, and holds to existing warranty obligations. [0065.1]

EPA Response: Please refer to the response in Section 2.1c.

Four commenters support a ban based on the date of manufacture over a
ban based on the date of sale of existing inventory.

Wolfgang’s Cooling and Heating Corp. states that banning the
“sale” of existing inventories is an error, and that a reasonable
course of action is to limit “true” manufacturing and allow the sale
and installation of existing inventories. [0024]

EPA Response: Please refer to the responses in Section 2.1a.

ACCA recommends EPA utilize a manufacturing ban for the HCFC equipment
because it has less impact on the entire supply chain, including
contractors that ultimately sell the equipment to the end user. [0029]

EPA Response: Please refer to the responses in Section 2.1a and Section
2.1c.

NMMA proposes that EPA not prohibit the sale in interstate commerce of
the units, but rather prohibit the manufacture of “individual finished
A/C units and refrigerators” that contain HCFC-22, HCFC-142b, or a
blend starting January 1, 2010.  Such an approach allows for stocks of
component products already entered into commerce and on the shelves of
manufacturers, dealers and repair facilities to be exhausted. [0032.1]

EPA Response: Please refer to the responses in Section 2.1a and Section
2.1c.

RVIA notes that using the date of manufacture, in the case of the
pre-charged equipment, instead of the date of sale, in requiring
compliance with a new standard is the common approach used by the U.S.
Department of Transportation when regulating vehicles under the National
Highway Transportation Safety Administration. Date of manufacture is a
finite date controlled by the manufacturer and is not dependent on the
dealer network, purchase by a consumer, or, as is the case today,
economic conditions that are outside the manufacturer’s control.
[0050.1]

EPA Response: EPA is using the date of manufacture of pre-charged
appliances and the date of manufacture of pre-charged components as the
criteria for the sales and distribution into interstate commerce ban.
For a further discussion, please refer to Section 2.1a and Section 2.1c.

Include a revised definition of manufacture.

Seventeen commenters believe that the current EPA definition of
manufacture should be revised as it is not consistent with previous
conventional definitions.

Goodman Global, Inc., NRI, URI, NCC, Aireco, Bally, NRAC, SBA, MEUS
HVAC, Nordyne, and AHRI suggest that the manufacture date be the date
upon which fabrication of a pre-charged appliance or component is
completed at the factory and the product is ready for sale and
distribution, or placed into initial inventory. Two commenters further
request that EPA amend 40 CFR Part 82 to include the above definition
under section 82.302. [0027.2, 0044.1, 0045.1, 0046.1, 0048.1, 0055.1,
0056.1, 0057.1, 0060.1, 0061.1, 0062.1]

EPA Response:  EPA is defining “manufactured”, for an appliance as
the date upon which that the appliance meets four criteria: 1) the
appliance’s refrigerant circuit is complete, 2) the appliance can
function, 3) the appliance is charged with refrigerant, and 4) the
appliance is ready for use for its intended purpose.

The commenters’ concern arises with how the two terms “appliance”
and “manufacture” are applied together.  Small appliances, i.e.,
devices that have a completed refrigerant circuit, are fully charged,
and are functional and ready for use at the time they leave the factory
are “manufactured” at the time they are placed into initial
inventory at the factory and are shipped as complete “appliances”
rather than as a set of components.  In contrast, appliances used in
commercial refrigeration and industrial process refrigeration are not
placed in inventory or shipped as complete “appliances.”  In such
cases, OEMs are manufacturing components, not appliances.  The point of
manufacture of the commercial or industrial process refrigeration
appliance occurs after the components have left the factory.  EPA has
consistently stated its interpretation that individual components such
as condensers, evaporators, compressors, line sets, and valves in
themselves do not constitute an appliance.  In an earlier rulemaking
addressing the sales of pre-charged appliance components, the Agency
stated that pre-charged components are parts of but “are clearly not
appliances” (November 9, 1994; 59 FR 55912).

NRI, URI, NCC, Aireco, Bally, and NRAC state that using field charging
as the date of manufacture will: 1) cause tremendous confusion in the
field as to what refrigerant may be legally used; 2) create enforcement
issues over which entity manufactured the product; and 3) terminate the
split system market for any unit actually manufactured prior to January
1, 2010 at a tremendous cost to companies with existing inventories.
[0044.1, 0045.1, 0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule as well as
the preamble and response to comments document in the HCFC allocation
companion rule.

NRI, URI, NCC, Aireco, Bally, and NRAC support the use of a
certification program requiring the date of manufacture on appliances
and components as well as the submission of appropriate documentation to
EPA regarding such equipment. [0044.1, 0045.1, 0046.1, 0048.1, 0055.1,
0056.1]

EPA Response: Under this rule a certification program requiring the date
of manufacture on appliances and components is not being implemented.
As explained in the preamble, the date of manufacture may be determined
by invoices, contracts, or service records indicating the date that the
appliance manufacture was completed.

SBA and Rheem Manufacturing Company specifically state that under a
definition of “manufactured,” a split system would be considered
manufactured when all required component parts are placed into initial
inventory, not when field installed. [0057.1, 0053.1]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

Wolfgang’s Cooling and Heating Corp. states that manufacturing occurs
at the manufacturer where engineering, design, testing, certification,
and production are accomplished. Installation is part of the sales
process that takes place at the consumer level. [0024]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

LG Electronics believes the interpretation of 605(e) is incorrect as
installing a device in the field and connecting it to the indoor unit
and charging it to the proper level is more of a servicing function
rather than manufacturing.  LG Electronics also does not think anybody
would purchase a central air conditioning unit if it was illegal to
install it. [0029]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

CFM Distributors states that the definition of “manufactured” needs
to be changed where “manufactured” means the date the unit is
produced. [0029]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

Trane-Ingersoll/Rand recommends that EPA define the date of manufacture
in terms of the normal manufacturer's date of manufacture used for
name-plate marking and record-keeping, subject to the following
constraints: 1) Not earlier than the date on which the assembly and
end-of-line testing of the equipment item in question are substantially
complete, and 2) Not later than the date on which the equipment is
shipped from the factory or put in inventory, whichever occurs first.
[0041.1]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

Trane-Ingersoll/Rand recommends that EPA not only reconsider the
definition of the date of manufacture in the discussion section of the
proposed rule under companion Docket ID No. EPA-HQ-OAR-2008-0496 but
also move the definition from the proposed rule under that docket to the
proposed rule under Docket ID No. EPA-HQ-OAR-2007-0163. [0041.1]

EPA Response:  EPA did not propose a definition of “manufactured” in
the NPRM.  However, the term manufactured as it relates to the sale or
distribution of pre-charged appliances and appliance components was
discussed in detail in the preamble to the NPRM adjusting the allowance
system for HCFC production, import, and export (73 FR 78680), which was
published on the same day (December 23, 2008) as the NPRM for this final
pre-charged appliance rule.  Due to the volume of comments concerning
manufacture and date of manufacture, the preamble to the final rule
provides a full discussion and the final rule includes EPA’s
definition.

NCC notes that EPA needs to define a consistent policy for the date of
manufacture across all three parts of equipment: the refrigerant, the
components, and the appliances. [0046.1]

EPA Response: EPA has clarified the definition of “manufactured” in
this final rule as discussed in the response for Section 2.2a.  Further
information can be found in the preamble to the final rule and the
preamble and response to comments document in the HCFC allocation
companion rule.

SBA asks EPA to use the same language adopted in the 2001
Reconsideration of the 610 Nonessential Products Ban  for class I
refrigerants so that the items are considered “manufactured” once
they enter the initial inventory at the manufacturing site. [0057.1]

EPA Response: In the final rule, Reconsideration of the 610 Nonessential
Products Ban (66 FR 57511; November 15, 2001), EPA permitted the sale
and distribution of air-conditioning and refrigeration appliances
containing class I controlled substances that were placed into initial
inventory by January 14, 2002. It is explained in the definition of
initial inventory that the original product has completed all of its
manufacturing processes and is ready for sale by the manufacturer.
Additionally, the manufacturer or distributor must be able to show, upon
request by EPA, that the product was in fact manufactured, and thus
placed into initial inventory prior to the effective date of the
provisions of that rule.  While this language may be feasible for
pre-charged components and some pre-charged appliances such as window
air conditioners that are placed into initial inventory fully assembled,
it would not be feasible for pre-charged appliances that complete their
manufacture during field assembly.  Therefore, as explained in the
preamble, EPA is using the definition of “manufactured” as discussed
in the response for Section 2.1a and provided in the final rule.

SBA notes that EPA has previously used shipping forms, lot numbers,
manufacturer date stamps or codes, invoices, or the like to determine
proof of the date of manufacture for other products, and they would urge
a similar objective approach for all appliances subject to the
pre-charged ban. [0057.1]

EPA Response:  For small appliances, such as refrigerators and window
air conditioners, and for pre-charged components that are, by
definition, “manufactured” while the appliance is at a manufacturing
facility, EPA intends to treat the date identified on the pre-charged
appliance or pre-charged component by the OEM as the proof of date of
manufacture.

For appliances that are field charged or have the refrigerant circuit
completed on-site (for example, residential split systems), regardless
of whether additional refrigerant is added on-site, that are, by
definition, “manufactured” upon installation of all of the
components and other parts is completed and the appliance is charged
with refrigerant, the proof of date of manufacture may be determined by
invoices, contracts, or service records.

Nordyne states that if EPA does not amend the definition of
“manufacture” to be when the unit was placed in initial inventory,
then EPA should consider the appliance to be manufactured as defined as
the time the furnace of the air mover is installed with respect to R-22
HVAC construction equipment. This is to avoid stranding equipment for
use by new construction sites and for the built, modular, and
manufactured housing industry. [0061.1]

EPA Response: EPA does not agree with the commenter’s recommendation.
EPA has clarified the definition of “manufactured” in this final
rule as discussed in the response for Section 2.2a.  Further information
can be found in the preamble to the final rule and the preamble and
response to comments document in the HCFC allocation companion rule.

EPA recognizes that contractual arrangements exist for construction
projects that involve air-conditioning systems that will not be
“manufactured” (e.g., completion of the refrigerant circuit) until
after December 31, 2009.  In response to comments expressing the concern
regarding contractual arrangements for construction projects that
involve air-conditioning systems that will not be “manufactured”
(e.g., completion of the refrigerant circuit) until after December 31,
2009, please refer to the response in Section 2.1a.

AHRI recommends that for imported products, the term “manufacture”
be defined to mean when the product enters the customs territory of the
United States. [0029, 0062.1]

EPA Response: EPA believes that a prohibition against the sale or
distribution of pre-charged components and appliances “manufactured”
after January 1, 2010 has the same impact and makes compliance easier.
EPA is promulgating a prohibition that bans the sale or distribution in
interstate commerce of pre-charged appliances and appliance components
that are manufactured on or after January 1, 2010.  EPA is stating that
an appliance is “manufactured” on the date that the appliance meets
four criteria: 1) the appliance’s refrigerant circuit is complete, 2)
the appliance can function, 3) the appliance is charged with
refrigerant, and 4) the appliance is ready for use for its intended
purpose.  Small appliances, such as refrigerators and window
air-conditioners, thus are “manufactured” while the appliance is at
a manufacturing facility.  EPA considers such manufactured pre-charged
appliances and appliance components to be sold or distributed into
interstate commerce upon their import or attempt to import into the
United States.

Lennox notes that in both the Allocation Rule and the Clarifying
Guidance, the interpretation of the definition of manufacture applies to
appliances and not to components. The commenter expresses that with
EPA’s unconventional definition of manufacture, grandfathering the
sale of components after January 1, 2010 will be limited, and could have
severe consequences for component manufacturers. [0065.1]

EPA Response: EPA believes that the concern expressed in many of the
comments arises from a commingling of the definitions of the terms
“appliance” and “pre-charged appliance component.”  There are
several reasons why EPA does not equate the date of component
manufacture to the date of appliance manufacture.  As previously stated,
components in themselves do not satisfy the previously promulgated
definition of appliance, which is identical to the statutory definition.
 Components likely have distinct individual manufacture dates and may be
field installed months or even years after their manufacture.  EPA’s
reliance on the date of a particular component’s manufacture, as a
means of determining when an appliance was manufactured, would lead to a
patchwork approach that could create confusion.  In addition, because
components may have differing manufacture dates, such an approach would
require the Agency to provide makeshift determinations as to which major
component’s manufacture date would determine the date of appliance
manufacture.

EPA is defining “manufactured” both in the context of an appliance
and for a pre-charged appliance component.  EPA has clarified the
definition of “manufactured” in this final rule as discussed in the
response for Section 2.2a.  Further information can be found in the
preamble to the final rule and the preamble and response to comments
document in the HCFC allocation companion rule.

Lennox notes that the definition of manufacture should be consistent for
imported components and domestically-manufactured components. [0065.1]

EPA Response: EPA is not attempting to regulate foreign commerce through
this action.  EPA is solely regulating U.S. interstate commerce, which
includes both the domestic sale and distribution of any appliance
imported into the United States, and the domestic sale or distribution
of any appliance intended for ultimate export from the United States.
The prohibition on sale and distribution applies to imported products
and products destined for export to the same extent that it applies to
products manufactured and distributed solely within the United States.

THE USE OF CAA SECTION 615 AS AUTHORITY

Five commenters submitted comments in response to EPA’s request for
comments regarding EPA’s authority under Section 615 to ban the sale
or distribution, or offer for sale and distribution, of specific types
of appliances.

Count	Commenter	Organization	Document ID No

1	Steve Bernhardt	Honeywell International (Honeywell)
EPA-HQ-OAR-2007-0163-0038.2

2	Maureen Beatty	National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2007-0163-0044.1

3	John Reilly III	United Refrigerants, Inc. (URI)
EPA-HQ-OAR-2007-0163-0045.1

4	Dan Hinchman	Aireco Supply, Inc	EPA-HQ-OAR-2007-0163-0048.1

5	John A. Heer	Electrolux Home Products, Inc. (Electrolux)
EPA-HQ-OAR-2007-0163-0068.1

EPA Section 615 Authority

NRI, URI, and Aireco Supply, Inc. note that EPA must ensure that its
findings regarding public health are well supported, documented in the
record and clearly meet the statutory criteria for an endangerment
finding under Section 615.  Currently these commenters do not believe
EPA’s finding to be well supported as they are based on general
assumptions, incomplete analyses and extrapolations of calculations made
by one consultant in one brief analysis. In general these companies
believe that EPA should provide a more robust basis for the endangerment
determination. [0044.1, 0045.1, 0048.1]

EPA Response:   The preamble discusses this issue in full.

Electrolux notes that the rule as written is an appropriate exercise of
Section 615 authority as it would fill a regulatory gap, and EPA has a
sound endangerment finding. [0068.1]

EPA Response: EPA agrees and, in the preamble, provides a response on
its endangerment findings in full.

Honeywell states they agree with the EPA judgment that Section 615 of
the Clean Air Act provides for an appropriate legal basis for EPA action
on import of products containing HCFCs. [0038.2]

EPA Response: EPA agrees and, in the preamble, provides a response on
its endangerment findings in full.

COSTS ANALYSIS AND SMALL BUSINESS ECONOMIC IMPACTS

Twenty-one commenters submitted comments requesting EPA expand its
consideration of cost and health impacts to a larger variety of
stakeholders namely small businesses and consumers. Comments were in
reference to four main topics:

4.1    Costs associated with pre-charged appliances charged with HCFC
substitutions.

4.2    Costs associated with public impacts.

4.3	   Costs associated with recycled/reclaimed refrigerant market.

4.4   Economic losses to small businesses, distributors, contractors and
consumers.

Count	Commenter	Organization	Document ID No

1	G.H. Holliday	Holliday Environmental Services, Inc.
EPA-HQ-OAR-2007-0163-0025.1

2	Talbot Gee	Heating, Air Conditioning, & Refrigeration Distributors
International (HARDI)	EPA-HQ-OAR-2007-0163-0029

3	Charlie McCrudden	Air Conditioning Contractors of America (ACCA)
EPA-HQ-OAR-2007-0163-0029

4	John McKnight	National Marine Manufacturers Association (NMMA)
EPA-HQ-OAR-2007-0163-0032.1

5	Anonymous Public Comment	N/A	EPA-HQ-OAR-2007-0163-0033

6	Anonymous Public Comment	N/A	EPA-HQ-OAR-2007-0163-0034

7	Anonymous Public Comment	N/A	EPA-HQ-OAR-2007-0163-0035

8	Anonymous Public Comment	N/A	EPA-HQ-OAR-2007-0163-0037

9	Peter Pachikara	Friedrich Air Conditioning Company
EPA-HQ-OAR-2007-0163-0042

10	Maureen Beatty	National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2007-0163-0044.1

11	John Reilly III	United Refrigerants, Inc. (URI)
EPA-HQ-OAR-2007-0163-0045.1

12	Frank Xu	Eubank National Coil Company (NCC)
EPA-HQ-OAR-2007-0163-0046.1

13	Dan Hinchman	Aireco Supply, Inc (Aireco)	EPA-HQ-OAR-2007-0163-0048.1

14	Kevin Messner	Association of Home Appliance Manufacturers (AHAM)
EPA-HQ-OAR-2007-0163-0049

15	Mark Lowry	Refrigeration Service Engineers Society (RSES)
EPA-HQ-OAR-2007-0163-0054.1

16	Mike Coyle	Bally Refrigerated Boxes, Inc.(Bally)
EPA-HQ-OAR-2007-0163-0055.1

17	Vince Mucciola	National Refrigeration and Air Conditioning, Inc.
(NRAC)	EPA-HQ-OAR-2007-0163-0056.1

18	Shawne McGibbons, Kevin Bromberg, Anna Rittgers	US Small Business
Administration Office of Advocacy (SBA)	EPA-HQ-OAR-2007-0163-0057.1

19	Maria A. Gomez	Innovair Corporation (Innovair)
EPA-HQ-OAR-2007-0163-0059

20	John A. Heer	Electrolux Home Products, Inc. (Electrolux)
EPA-HQ-OAR-2007-0163-0068.1

21	Kelley A. Kline	General Electric Consumer and Industrial Division
(General Electric C&I)	EPA-HQ-OAR-2007-0163-0069.1

Costs associated with pre-charged appliances charged with HCFC
substitutions.

Nine commenters state that EPA’s proposed rule does not effectively
address the cost implications of moving to HCFC substitutes.

NRI, URI, NCC, Aireco, Bally, and NRAC state that EPA should provide a
more detailed assessment of availability and costs of alternative
refrigerants and factor those findings and costs into its overall
estimates on the impacts of the proposed rule on prices and the
industry. [00441, 0045.1, 0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: EPA does not agree that a more detailed assessment of the
availability and costs of alternative refrigerants is necessary Because
EPA believes that the transitional costs of moving away from pre-charged
HCFC-22 appliances and components are short-term and will dissipate as
economies of scale increase for four main reasons:

First, the primary alternative for pre-charged appliances using HCFC-22
or HCFC-142b is hydrofluorocarbon (HFC) blend R-410A. Appliances
containing R-410A have been commercially available since 1995. As such,
the fixed costs, such as the engineering redesign of certain components
of equipment or the costs associated with converting facility
manufacturing lines in those countries producing this equipment are not
a major consideration. Second, EPA believes that the price of the
refrigerant is a comparatively small fraction of the total price of the
air-conditioning and refrigeration appliances affected by this rule,
ranging from 1 to 3 percent of total cost.  EPA also believes that only
a limited number of appliance components will be replaced to accommodate
an alternative refrigerant.  Third, after U.S. production and import of
bulk HCFC-22 for use in new equipment is banned on January 1 2010, the
supply of virgin HCFC-22 in the United States will decrease and the
demand for reclaimed HCFC-22 and alternatives is expected to increase.
Fourth, international markets for refrigerants may similarly follow U.S.
market trends given the decision made by the Parties to the Montreal
Protocol in September 2007 to adjust the phasedown of HCFC production
and import for both Article 2 and Article 5 countries.  With this
change, developing countries (including China, a predominant exporter of
HCFC-22 pre-charged appliances to the United States) are now subject to
a freeze on HCFC consumption in 2013 based on the average of 2009 and
2010 consumption levels with subsequent step downs in HCFC consumption
from 2015 to 2040.  As such, it can be reasonably expected that similar
shifts in refrigerant pricing and overall transitions are likely to
occur in developing countries with an increase in the price of HCFC-22
and a drop in the price of some ODS alternatives.

Friedrich Air Conditioning Company notes that they are finding from the
R-410a development process that R-410a units cost considerably more to
manufacture than R-22 units due to the higher component cost. [0042]

EPA Response: Please refer to the response in Section 4.1a.

AHAM states that EPA’s cost analysis between the use of HCFCs and
non-HCFCs to charge pre-charged appliances should take into account
variables including the cost of new compressors, the impact of new
compressors, the impact of energy efficiency, the effect on
transportation, and the creation of obsolete products. The fact that
non-HCFC products are sold in Europe is not applicable to this
commenter’s products, i.e., room air conditioners. AHAM estimates that
the increased cost impact of this rule related to just imported room
air-conditioners, portable air-conditioners, and dehumidifiers is
several million dollars per manufacturer, including upfront costs such
as redesigning of products and retooling of factories, as well as
ongoing costs of higher cost components and refrigerant. The components
of an R-410a unit can cost more than an equivalent R-22 unit. [0049]

EPA Response: EPA recognizes that in addition to future changes in
refrigerant pricing structures, changes in costs may also result from
changes in equipment design.  In most cases, appliances charged with
common ODS alternatives will require different components than equipment
charged with HCFC-22, such as thicker walled copper tubing, newly
developed compressors, and other components capable of withstanding high
pressures, all of which may cost slightly more than the components used
in older HCFC-22.  EPA factored these variables into their analysis.
EPA also notes that this rule only regulates U.S. interstate commerce
and did not consider the costs of retooling foreign manufacturing
plants.  EPA also did not quantify the cost of the impact of energy
efficiency because the analysis, which examines the use of R-410A in
place of R-22 in appliances generally results in greater
energy-efficiency for a variety of applications relative to their
HCFC-22 counterparts, and thus would result in a net savings.  EPA did
not examine the effects of transportation because the range in such a
variable would be difficult to accurately quantify.  Regarding the
commenter’s concern of the creation of obsolete products, EPA is
allowing for sell-through of pre-charged appliances and appliance
components manufactured before January 1, 2010. For more information,
please refer to the response available in Section 2.1a as well as the
preamble.

RSES states that EPA’s statement that R-410 appliances are more
energy-efficient than their HCFC-22 counterpart is true for AC
applications but not necessarily true for refrigeration applications.
This commenter urges EPA to factor into the cost assessment the costs of
replacement refrigerants R-404A and R-507, both of which are recognized
and accepted replacements for R-22 in low- and medium-temperature
refrigeration appliances. [0054.1]

EPA Response: While EPA agrees with these commenter’s statements,
because the price of the refrigerant is a comparatively small fraction
of the total price of the air-conditioning and refrigeration appliances
affected by this rule, ranging from 1 to 3 percent of total cost, EPA
did not believe conducting further analysis was necessary.    EPA
believes that any further analysis that would examine R-507 would lead
to similar results.

However, one commenter, Electrolux, states that proposed rule does
address the cost implications of moving to HCFC substitutes adequately.

In general, Electrolux believes that EPA has accurately characterized
the proposed rule’s incentives, and submits that many of the negative
economic consequences that could arise from EPA’s effort to force a
shift in demand will be substantially mitigated by the proposed rule’s
sell-through feature. Additionally, Electrolux has observed that the
price difference between HCFC-22 and HCFC-142b and non-ODS substitute
refrigerants is shrinking and, based upon its market-share, expects this
price trend to be true across the pre-charged appliance industry. Thus,
with respect to effects on the timing of the transition to non-ODS
refrigerants, Electrolux supports the proposed rule as written. [0068.1]

EPA Response: EPA agrees with this commenter. For more information on
EPA’s sell-through provision and EPA’s analysis of what factors will
influence costs of pre-charged appliances charged with substitutes,
please refer to responses in Section 2.1a, Section 4.1a and Section
4.1c, respectively.

Costs associated with public impacts.

Four anonymous public commenters state that EPA should consider public
safety and human health interests over business interests. [0033, 0034,
0035, 0037]

EPA Response: In developing this rule, EPA considered the health of
children, minority and low-income populations per Executive Order 13045
and Executive Order 12898, respectively. The Agency has reason to
believe that the environmental health or safety risk addressed by this
action may have a disproportionate effect on children. Depletion of
stratospheric ozone results in greater transmission of the sun’s
ultraviolet (UV) radiation to the Earth’s surface, and multiple
studies concerning the effects on children of excessive exposure to UV
radiation were taken into account in the development of this rule. This
action is one of the most significant remaining actions that the United
States can take to complete the overall phaseout of ODS and further
decrease impacts on children’s health from stratospheric ozone
depletion.  EPA has also determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it increases the
level of environmental protection for all affected populations without
having any disproportionately high and adverse human health or
environmental effects on any population.  Health effects related to
increased UV radiation exposure and EPA’s endangerment determination
are discussed further in Section 3.1a above.

Holliday Environmental Services Inc. is concerned that the
implementation of this rule could deprive underprivileged persons of low
cost food refrigeration and habitat cooling, resulting in food poisoning
and loss of life. Holliday Environmental Services Inc. also suggests
that there is a lack of physical data to support the need to further
reduce Freon as Holliday Environmental Services Inc. cannot find
information demonstrating the presence of Freon near the ozone hole, and
does not support this rule. [0025.1]

EPA Response: Per Executive Order 12898, EPA has determined that the
final rule will not have disproportionately high and adverse human
health or environmental effects on minority or low-income populations
because it increases the level of environmental protection for all
affected populations without having any disproportionately high and
adverse human health or environmental effects on any population,
including any minority or low-income population.  By restricting the
sale and distribution of appliances charged with HCFC-22 and HCFC-142b,
emissions of these ozone-depleting substances will be avoided lessening
the adverse human health effects for the entire population.

Costs associated with recycled/reclaimed refrigerant market.

NRI, URI, NCC, Aireco, Bally, and NRAC strongly urge EPA to provide a
more detailed assessment of the state and future of the used, recovered,
and reclaimed market, and factor those findings and costs into its
overall estimates of the impacts of the proposed rule on prices and the
industry. [00441, 0045.1, 0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: In the accompanying HCFC allocation rulemaking, EPA has
achieved the 2010 step-down in production and consumption in large part
by considering the HCFC servicing demand for 2010-2014.  In that related
rulemaking, EPA has projected the HCFC appliance servicing demand for
2010-2014 and assumed that the total demand will be met in part through
virgin HCFCs and in part through use of reclaimed and recycled HCFCs.
As noted in the comments, adding new HCFC appliances to the installed
base would cause the servicing demand to grow, potentially resulting in
increases in the amounts of HCFC needed to service existing appliances,
and likely hinder the growth of alternative refrigerants that do not
directly contribute to the depletion of the ozone layer.

After U.S. production and import of bulk HCFC-22 for use in new
equipment is banned on January 1 2010, the supply of virgin HCFC-22 in
the United States will decrease and the demand for reclaimed HCFC-22 and
alternatives is expected to increase.  Recent industry information
indicates these market shifts have been underway for some time, as
evident by the introduction of HFC alternatives (e.g., R-410A.), and the
recent increases in the amounts of HCFC-22 being reclaimed.  The
accompanying HCFC allocation rule will also have the effect of
restricting the supply of virgin HCFC-22 based on the projected
servicing demand in 2010-2014, taking into account the amount of that
demand that can be met through recycling and reclamation.

Economic losses to small businesses, distributors, contractors and
consumers.

AHRI, NRI, URI, NCC, Aireco, RSES, Bally, NRAC, and SBA note that EPA
has not identified or discussed the impacts of the rule on distributors
and contractors, or small businesses and consumers.  Additionally, they
note that EPA fails to analyze consumer behaviors that may be impacted
by costs, and also did not conduct a regulatory flexibility analysis.
As a result, these commenters note that EPA’s certification cannot be
viewed with confidence, and a more comprehensive analysis of economic
costs on the entire refrigerant industry, small businesses, and the
consuming public should be conducted. SBA further notes that if the
final rule achieves EPA’s intent of eliminating inventory related
costs, then EPA could properly certify the rule as having no significant
cost on affected small businesses of all types.  EPA should revise its
factual foundation for the certification in the final rule. [0029,
0044.1, 0045.1, 0046.1, 0048.1, 0054.1, 0055.1, 0056.1, 0057.1]

EPA Response: 	EPA has expanded the list of potentially affected
entities to include the following:

Category	NAICS code	SIC code	Examples of regulated entities

Contractors and Servicing	238220	1711, 7623	Plumbing, Heating, and
Air-Conditioning Contractors

Manufacturers of air conditioners and refrigerators	333415	3585
Air-Conditioning Equipment and Commercial and Industrial Refrigeration
Equipment Manufacturing

Air-Conditioning Equipment and Supplies Merchant Wholesalers	423730	5075
Air-conditioning (condensing unit, compressors)  merchant wholesalers

Electrical and Electronic Appliance, Television, and Radio Set Merchant
Wholesalers	423620	5064	Air-conditioning (room units) merchant
wholesalers

Importers of air conditioners and refrigerators	333415	3585
Air-Conditioning Equipment and Commercial and Industrial Refrigeration
Equipment Manufacturing

Although this final rule will not have a significant economic impact on
a substantial number of small entities, EPA nonetheless has tried to
reduce the impact of this rule on small entities.  Small entities may
continue to sell and distribute pre-charged appliances and appliance
components that were manufactured prior to January 1, 2010.  Therefore,
small entities will not be burdened with the loss of stranded
inventories.  Such inventories may be sold indefinitely for the service
of existing appliances.  Please refer to the preamble for a full
discussion of this issue.

NRI, URI, NCC, Aireco, Bally, and NRAC express concern that EPA did not
conduct an RFA and merely concluded that any impact would not have a
significant economic impact on a substantial number of small businesses.
These commenters state EPA should conduct a more robust and
comprehensive analysis of economic costs arising from the proposed ban
on the entire refrigerant industry, small businesses, and the consuming
public. [0044.1, 0045.1, 0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: Please refer to the response in Section 4.4a.

NRI, URI, NCC, Aireco, Bally, and NRAC state that EPA should consider
the following cost impacts: 1) effect of the timing of the ban and how
the lack of lead time may impact the various affected market
participants; 2) unsupported assumptions that manufacturers already
service the European market with non-ODS substances so that a ban would
not be costly; 3) use of the prices of HCFC-22 and HCFC-410A in
“developing” and “non-industrialized” countries to predict the
impacts of the proposed rule on costs in the United States; 4) the
amount of existing inventories of pre-charged appliances and how these
inventories are managed; and 5) the impact of potentially un-sellable
existing inventory. [0044.1, 0045.1, 0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: EPA recognizes the importance of having time for industry
to adopt the regulations and has sought to finalize this rule as quickly
as practicable.

Regarding servicing the European market, the global HCFC phaseout is
already underway, and restrictions on production, import, and sale and
distribution of specific types of HCFC products are already in place in
the United States and in international markets.  The United States
banned the sale and distribution of aerosols, pressurized dispensers,
and foam products containing HCFCs in 1994, and the European Union has
banned HCFCs for refrigerant use in new equipment since 2001 (Regulation
EC No 2037/2000 of the European Parliament).  Many manufacturers of
pre-charged appliances already service the European market and other
markets with non-HCFC pre-charged appliances and components.  EPA
believes this should ease the implementation of a ban on sale and
distribution in interstate commerce.  Given that retooling and other
design changes have either already occurred to meet the European and
other markets, or will occur as a result of the global phaseout of
HCFCs,  EPA believes costs associated directly with this rulemaking are
limited.

For more information on costs associated with the transition to HCFC
substitutes, please refer to response 4.1a.

Regarding a sell-through period, EPA does not intend to strand existing
inventories, and notes that the ban will not prohibit the sale or
distribution of any appliance or appliance component manufactured before
January 1, 2010.

HARDI states that should the industry be prevented from servicing
legally installed R-22 systems after January 1, 2010, the cost to
American home and small business owners, alone, will exceed, in
HARDI’s estimation, over $100 million in 2010. Further, the simple
economic impossibility for many customers to replace existing 22 systems
that they may have installed in just the last few years, has the
potential to create a massive black market for R-22 components, which
runs contrary to the best interests of the industry, the EPA, and the
environment. [0029]

EPA Response: Please refer to the responses in Section 4.1a and Section
4.4a.

ACCA states that the omission of air conditioning and refrigeration
contractors from the list of regulated entities in Section 1 of the
Proposed Rule notice greatly concerns the membership.  [0029]

EPA Response: Please refer to the response in Section 4.4a.

The NMMA requests that EPA consider the economic impact this rule will
have on thousands of small boat builders, marine product distributors,
and boat dealers and repair facilities. In addition, EPA must recognize
and be responsive to the extreme difficulty of getting the word out on
the proposed EPA rule to all boat manufacturers, marine product
distributors, boat dealers and boat repair facilities that may have A/C
and refrigeration units in inventory before the proposed January 1, 2010
date. [0032.1]

EPA Response: Please refer to the response in Section 4.4a.

RSES expresses concern over the omission of the hundreds of thousands of
contractors, business owners, facility managers, and installation and
service professionals from the list of affected entities. [0054.1]

EPA Response: Please refer to the response in Section 4.4a.

Innovair, which is a small distribution business in South Florida with
the majority of their revenues coming from the importation of HCFC-22
air conditioners which are then 100% exported to countries where it is
legal to use these refrigerant, comments that many small businesses such
as theirs would be forced to shut down if EPA extends the ban on HCFC-22
products intended solely for export from the United States.  The
proposed ban would in effect eliminate many small export businesses
giving free reign to non-US distributors and manufacturers to bypass the
US economy and sell these significantly less expensive products directly
to our overseas clients. This ban therefore would not produce the
intended result of diminishing overseas use and would only result in a
fatal blow to businesses such as Innovair in an already ailing economy.
[0059]

EPA Response:   For purposes of this final rule, EPA is not considering
transshipment, as defined at §82.3, of pre-charged appliances or
components as “sale or distribution in interstate commerce”.  Sale
and distribution in interstate commerce, rather than import or export,
are the prohibited acts. Please refer to the preamble for a complete
discussion.

Additionally, the global HCFC phaseout is already underway, and
restrictions on production, import, and sale and distribution of
specific types of HCFC products are already in place in the United
States and in international markets.  International markets for
refrigerants may similarly follow U.S. market trends to adjust the
phasedown of HCFC production and import for both Article 2 and Article 5
countries.  As such, it can be reasonably expected that developing
countries will soon be transitioning away from HCFC-22 products to
products using ODS alternatives. This in turn provides incentives for
companies to transition to non-ODS alternatives sooner to benefit from
investing in alternatives early.

Electrolux comments that the proposed rule as written, though, avoids
imposing potentially devastating burdens on small businesses by allowing
sell-through. Thus, the proposed rule would not be likely to have a
significant economic impact on a substantial number of small entities,
and Electrolux supports it as written. [0068.1]

EPA Response: EPA notes that this commenter understands the intent of
the proposed rule.  For further discussion, please refer to the response
in Section 2.1a.

General Electric C&I states that given air conditioners are seasonal
products that often have large carryover from year to year, and that
there is also an undeterminable but significant number of units
currently stocked at dealers, stores, and warehouses, there is a real
risk of a potentially large carryover of product if the approach
outlined by EPA’s proposed approach and subsequent clarification is
not adopted. The costs of making obsolete this significant volume of
product would be huge. During this financial crisis, and since the final
rule will only be published a few months before the ban is proposed to
occur (January 1, 2010), this would be particularly unjustified.
[0069.1]

EPA Response: Please refer to the response in Section 2.1a.

HCFC-22 AND HCFC-142b DESIGNED APPLIANCES AND COMPONENTS MANUFACTURED
AFTER 2010

Seventeen commenters submitted comments requesting clarification
regarding HCFC-22 and HCFC-142b designed appliances and components
manufactured after 2010. Comments were in reference to two main topics:

5.1   Clarify the ban with respect to un-charged components manufactured
after January 1, 2010.

5.2   Extend the ban to newly manufactured appliances charged with
reclaimed refrigerant.

Count	Commenter	Organization	Document ID No

1	David L. Swift	Goodman Global, Inc.	EPA-HQ-OAR-2007-0163-0027.2

2	Jim Crawford	Trane/Ingersoll-Rand	EPA-HQ-OAR-2007-0163-0029

3	Robert WIlkins	Danfoss Inc. (Danfoss)	EPA-HQ-OAR-2007-0163-0031.1

4	Steve Bernhardt	Honeywell International (Honeywell)
EPA-HQ-OAR-2007-0163-0038.2

5	Tony Digmanese	Johnson Controls, Inc.	EPA-HQ-OAR-2007-0163-0039

6	Maureen Beatty	National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2007-0163-0044.1

7	John Reilly III	United Refrigerants, Inc. (URI)
EPA-HQ-OAR-2007-0163-0045.1

8	Frank Xu	Eubank National Coil Company (NCC)
EPA-HQ-OAR-2007-0163-0046.1

9	Dan Hinchman	Aireco Supply, Inc (Aireco)	EPA-HQ-OAR-2007-0163-0048.1

10	Mike Coyle	Bally Refrigerated Boxes, Inc. (Bally)
EPA-HQ-OAR-2007-0163-0055.1

11	Vince Mucciola	National Refrigeration and Air Conditioning, Inc.
(NRAC)	EPA-HQ-OAR-2007-0163-0056.1

12	Shawne McGibbons, Kevin Bromberg, Anna Rittgers	US Small Business
Administration Office of Advocacy (SBA)	EPA-HQ-OAR-2007-0163-0057.1

13	Paul L. Doppel	Mitsubishi Electric HVAC Advanced Products Division
(MEUS HVAC)	EPA-HQ-OAR-2007-0163-0060.1

14	Karim Amrane	Air Conditioning, Heating and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0062.1

15	John M. Mandyck	Carrier Corporation (Carrier)
EPA-HQ-OAR-2007-0163-0063.1

16	Kyle Gilley	Lennox International Inc. (Lennox)
EPA-HQ-OAR-2007-0163-0065.1

17	Talbot Gee	Heating, Air Conditioning, & Refrigeration Distributors
International (HARDI)	EPA-HQ-OAR-2007-0163-0067.1

Clarify the ban with respect to un-charged components manufactured after
January 1, 2010.

Eleven commenters specifically request that the final rule include clear
language that states un-charged components can continue to be
manufactured after January 1, 2010 and field charged with refrigerant.

In response to EPA’s comment request regarding the universe of
appliances listed on p. 78712, NRI, URI, NCC, Aireco, Bally, and NRAC
note that they do not believe every AC and refrigeration system
regardless of size, use, application, complexity, etc. such as an
industrial process refrigeration system, should be subject to the
proposed rule in the same manner as, for example, a window AC unit.
These six commenters suggest that EPA exclude residential, commercial
and industrial products that are designed to use HCFC-22, HCFC-142b or
blends of one or both of these substances, but are not actually
pre-charged with such substances. At the very least, EPA should clarify
that “any device which contains and uses a refrigerant” would not
include systems that can use refrigerants, but are not pre-charged.
[0044.1, 0045.1, 0046, 0048.1, 0055.1, 0056.1]

EPA Response:  EPA responds to this concern in Section 2.1a.

NRI, URI, NCC, Aireco, Bally, and NRAC state that the manufacture and
sale of, and market for commercial and industrial systems are very
different than those of the truly pre-charged appliances, such as
refrigerators. These systems are costly and systems must be ordered in
advance. These commenters suggest that the regulations of such systems
is better placed under existing regulations and the general drawdown of
HCFCs under the proposed Allocation Rule, because the rule is designed
by the Agency to move the market more gradually away from reliance on
HCFCs than an outright ban on their use. [0044.1, 0045.1, 0046.1,
0048.1, 0055.1, 0056.1]

EPA Response: Under the definition of appliance used in the final rule,
an appliance is any device which contains and uses a refrigerant and
which is used for household or commercial purposes, including any air
conditioner, refrigerator, chiller, or freezer.  Under the final rule,
appliances, regardless of size, use or application are subject to the
same prohibitions.  Please refer to the preamble for a further
discussion.

NRI, URI, NCC, Aireco, Bally, and NRAC states that regulations of
un-charged residential, commercial, and industrial AC or refrigeration
systems should be placed under the proposed allocation rule. These
commenters state that EPA should exclude the definition of appliances in
proposed 40 CFR Sec 82.302 commercial and industrial products that are
designed to use HCFC-22, HCFC-142b, or blends of one or both substances,
but are not actually precharged with such substances. At the very least
EPA should clarify that “any device which contains and uses a
refrigerant” would not include systems that can use the refrigerants,
but are not pre-charged. [0044.1, 0045.1, 0046.1, 0048.1, 0055.1,
0056.1]

EPA Response: To provide regulatory clarity, the final rule applies the
same definition of appliance that is found at CAA section 601 and
promulgated at 40 CFR part 82, subpart F.   Per this definition,
appliance means any device which contains and uses a refrigerant and
which is used for household or commercial purposes, including any air
conditioner, refrigerator, chiller, or freezer.  For further
clarification, EPA considers the following equipment as appliances, some
of which are typically pre-charged with refrigerants consisting of
HCFC-22 and/or HCFC-142b:

Air-to-air heat pumps;

Chest or upright freezers;

Ductless air conditioners;

Dehumidifiers;

Ground-source heat pumps;

Packaged air conditioners and heat pumps;

Unitary air conditioners; and

Window air-conditioning units.

This listing is not intended to be exhaustive, but includes appliances
that may be manufactured and shipped pre-charged with refrigerant.

Goodman Global Inc. strongly recommends that EPA include an explicit
statement in the Rule to the effect that the ban applies to the sale or
distribution of un-charged appliances, as well as pre-charged appliances
manufactured after January 1, 2010. [0027.2]

EPA Response:  The ban on sale and distribution into interstate commerce
of pre-charged appliances and appliance components applies only to
appliance and appliance components that are pre-charged with HCFC-22 or
HCFC-142b (or blends containing one or both of these HCFCs).  The ban
applies regardless of whether the HCFCs are virgin or reclaimed.
Therefore, manufacturers, distributors, and sellers are prohibited from
selling or distributing appliance and appliance components (such as but
not limited to condensers and line sets) that were manufactured on or
after January 1, 2010 and pre-charged with either virgin or reclaimed
HCFC-22 or HCFC-142b.

This prohibition does not apply to appliance components manufactured on
or after January 1, 2010 that are sold, distributed, or otherwise
introduced into interstate commerce uncharged or with a holding charge
of an inert gas, such as nitrogen.  Such uncharged components could be
used as replacement components for pre-2010 appliances in need of
service and charged with either virgin or reclaimed HCFC-22 or
HCFC-142b.

Danfoss states that uncharged replacement refrigeration parts such as
condensing units designed for the use with existing, reclaimed, or
recycled HCFC-22 should remain available as replacement parts as long as
needed, and not be affected by the 2010 cut-off date.  Danfoss believes
currently proposed rules make this possible, but this should be
explicitly stated to reduce ambiguity and avoid confusion in the
marketplace.  Danfoss further explains that the entire condensing unit
for commercial refrigeration equipment containing perishable or frozen
food is often replaced when a major component such as a compressor
fails.  If these un-charged parts become prohibited, it will have the
undesirable effect of 1) stranded inventory requiring write-offs at
wholesalers distributors and manufacturers; 2) more costly repairs for
equipment owners. [0031.1]

EPA Response: Please see the response in Section 5.1d.

SBA requests that EPA clarify that uncharged components manufactured
after 2010 that can be field-charged with recycled refrigerant can
continue to be manufactured after the deadline.[0057.1]

EPA Response: EPA responds to this concern in Section 5.1d.

AHRI asks EPA to clarify whether uncharged condensing units manufactured
prior to or after January 1, 2010 can be installed in commercial
refrigeration system and charged with virgin HCFC-22 in the field as a
replacement for an existing unit. [0062.1]

EPA Response: EPA responds to this concern in Section 5.1d.

Lennox notes that dry components in inventory as of January 1, 2010
should be allowed to be used in servicing and field-charged with virgin
HCFCs, due to possible HCFC shortages, and since other EPA policy allows
for the servicing of existing equipment with virgin HCFCs. [0065.1]

EPA Response: EPA responds to this concern in Section 5.1d.

Extend the ban to newly manufactured appliances charged with reclaimed
refrigerant.

Eight commenters believe it would be impossible for EPA to determine if
a system is charged with virgin, recycled or reclaimed refrigerant, and
therefore, the proposed ban should be extended to also cover newly
manufactured equipment using recycled and reclaimed, as well as virgin
HCFC-22, HCFC-142b and their blends. There is no logical basis for
distinguishing between virgin HCFC-22 and recycled or reclaimed HCFC-22
because both are ozone-depleting substances.

Honeywell, MEUS HVAC, AHRI, and Carrier are concerned with EPA’s
decision to exempt newly manufactured equipment charged with
recycled/reclaimed refrigerant. MEUS HVAC and AHRI believes this cannot
be enforced as it would be impossible for EPA to determine if a system
is charged with virgin, recycled or reclaimed refrigerant. MEUS HVAC
encourages EPA to extend the ban to newly manufactured equipment to
create a level playing field among manufacturers. [0038.2, 0060.1,
0062.1, 0063.1]

EPA Response: EPA recognizes the difficulty in determining whether
pre-charged appliances and components, especially those being imported
into the United States, have been charged with virgin or reclaimed
HCFC-22 or HCFC-142b.  EPA has decided to extend the January 1, 2010
prohibition to appliances that are pre-charged with reclaimed
refrigerant.  The final rule thus does not include the proposed text at
§82.306(d), which stated that the prohibition would not apply where the
refrigerant was “used, recovered and reclaimed.”  Therefore, EPA is
prohibiting, at §82.304, the sale or distribution, and the offer for
sale or distribution in interstate commerce of all appliances and
components that are pre-charged with HCFC-22 or HCFC-142b(or blends
containing one or both of these HCFCs), regardless of whether the
refrigerant is virgin or reclaimed. This finding does not prohibit
manufacturers from producing replacement components needed to service
existing appliances, as long as the components are not pre-charged with
HCFC-22or HCFC-142b(or blends containing one or both of these HCFCs),
regardless if the HCFC is reclaimed or virgin.

Carrier and Lennox are concerned that the continued proliferation of new
HCFC-22 systems after 2010 that will be allowed to use reclaimed
refrigerant will only exacerbate shortages for HCFC-22 service
quantities.  One commenter adds that the only exceptions to this ban
should be for components in initial inventory prior to January 1, 2010,
and for equipment used to complete installations started prior to
January 1, 2010. [0063.1, 0065.1]

EPA Response: EPA responds to this concern in Section 5.2a  and Section
2.

Trane/Ingersoll-Rand endorses extending the ban to newly manufactured
appliances charged with recycled refrigerants. [0029]

EPA Response: EPA responds to this concern in Section 5.2a.

Danfoss states that an exemption allowing newly manufactured equipment
to be charged with recovered and reclaimed refrigerant would perpetuate
the introduction of new HCFC-22 systems into the marketplace, delaying
conversion to non-ODP systems, and would also lead to abuse of the
ability to manufacture new systems. [0031.1]

EPA Response: EPA responds to this concern in Section 5.2a.

Carrier also states that the ability to manufacture new systems with
used HCFC-22 is a large loophole subject to abuse. New or used HCFC-22
can be freely interchanged in the manufacture of a new system. There is
no mechanism to distinguish the difference within a product. Products
intended to be charged with used refrigerant could in fact be charged in
the field, or even in a factory, with new HCFC-22. There is little or no
monitoring or enforcement mechanism to prevent this abuse, other than
the ban on all new HCFC-22 charged products and systems for domestic use
regardless of its refrigerant status. Carrier urges EPA to adopt this
approach to maintain a level playing field. [0063.1]

EPA Response: EPA responds to this concern in Section 5.2a.

Carrier states that to prevent further environmental and human health
damage from ozone depletion, EPA should be removing incentives and
loopholes that allow for the continued production of new products or
systems charged with ozone depleting refrigerants. Such loopholes will
delay the transition to non-ozone depleting alternatives and the
recovery of our ozone layer. [0063.1]

EPA Response: EPA responds to this concern in Section 5.2a.

HARDI believes this is an unenforceable ban on the use of virgin
refrigerant and provides a potential loophole for the growth of the
ODS-using installed base. There is no simple way to determine whether a
refrigerant meeting ARI 700 standards is reclaimed or virgin. Even if
there were, distributors would not be able to control how a contractor
customer uses the refrigerant they purchase. Eliminating this loophole
will accelerate the smooth phaseout of HCFCs by ensuring a shrinking
installed base of ODS-using air-conditioning and refrigeration systems
and easing compliance for distributors and contactors. The demand for
reclaimed refrigerant will not suffer because this demand will be driven
by the limited supply of virgin refrigerant and price advantages
reclaimed refrigerant should achieve. [0067.1]

EPA Response: EPA responds to this concern in Section 5.2a.

Conversely, one commenter believes that extending the proposed ban to
newly manufactured equipment using recycled and reclaimed, as well as
virgin HCFC-22, HCFC-142b and their blends will be perceived as a
negative message in the US market.

Johnson Controls Inc. supports EPA in promoting and encouraging the use
of reclaimed R-22 refrigerants, especially with EPA's intent to have
reclaimed R-22 reach 20% of the total allocation to fill the shortfall
in 2015. This commenter believes any ban on reclaimed R-22 use for new
or old products will be perceived as a negative message in the market
that the US is heading towards the same direction as Europe (which will
eventually ban the use of all reclaimed R-22 for service). This message
will have a negative impact on any pending investment on reclamation
facilities. [0039]

EPA Response: EPA understands the concern that banning the use of
reclaimed R-22 in new or old products might be perceived as a negative
message; however, it is not EPA’s intent to discourage reclamation.
EPA has decided to extend the January 1, 2010 prohibition to appliances
that are pre-charged with reclaimed refrigerant because of the
difficulty in determining whether pre-charged appliances and components
have been charged with virgin or reclaimed HCFC-22 or HCFC-142b.
Therefore, EPA is prohibiting, at §82.304, the sale or distribution,
and the offer for sale or distribution in interstate commerce of all
appliances and components that are pre-charged with HCFC-22 or
HCFC-142b, regardless of whether the refrigerant is virgin or reclaimed.
This finding does not prohibit manufacturers from producing replacement
components needed to service existing appliances, as long as the
components are not pre-charged with HCFC-22or HCFC-142b, regardless if
the HCFC is reclaimed or virgin.

EXEMPTION FOR MANUFACTURE OF COMPONENTS WITH DE MINIMIS CHARGE AFTER
JANUARY 1, 2010

Six commenters submitted seven comments requesting exemption for the
manufacture of components containing a de minimis charge amount of HCFC
after January 1, 2010. Comments were in reference to the topic:

6.1 Rule should exempt the manufacture of TXV bulbs.

Count	Commenter	Organization	Document ID No

1	Karim Amrane	Air Conditioning, Heating, and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0029

2	Steve Bernhardt	Honeywell International (Honeywell)
EPA-HQ-OAR-2007-0163-0038.2

3	Jim Crawford	Trane/Ingersoll-Rand	EPA-HQ-OAR-2007-0163-0041.1

4	Shawne McGibbons, Kevin Bromberg, Anna Rittgers	US Small Business
Administration Office of Advocacy (SBA)	EPA-HQ-OAR-2007-0163-0057.1

5	Dave Stirpe	Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2007-0163-0058.1

6	Karim Amrane	Air Conditioning, Heating, and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0062.1

7	Kyle Gilley	Lennox International Inc. (Lennox)
EPA-HQ-OAR-2007-0163-0065.1

Rule should exempt the manufacture of TXV bulbs.

Honeywell, Trane/Ingersoll-Rand, SBA, Alliance, AHRI, and Lennox require
clarification on whether EPA’s definition of “refrigerant” shall
not apply to pre-charged components such as TXV bulbs that have a de
minimis charge amount of HCFC.  Commenters also ask that EPA allow
exemptions for components pre-charged with HCFCs, such as TXVs, in order
to ensure an adequate inventory of component parts available to service
equipment manufactured prior to January 1, 2010. [0029, 0038.2, 0041.1,
0057.1, 0058.1, 0062.1, 0065.1]

EPA Response: EPA does not believe that it is necessary to consider
establishing a de minimis exemption because there are independent
reasons why TXVs are not subject to the ban. EPA has previously stated
that the Agency does not consider TXVs to be pre-charged appliance
parts.    EPA considers a part to be "pre-charged" if it contains a
class I or class II substance that will become part of the operating
charge of an appliance.  Parts that contain CFCs or HCFCs that will not
become part of the operating charge, such as TXVs with bulbs containing
CFCs or HCFCs, are not considered "pre-charged" with refrigerant.  In
this rule, EPA is finalizing a definition of “pre-charged appliance
component” that includes the phrase “charged with refrigerant.” As
defined in section 605(a) and §82.302, refrigerant means “any
substance consisting in part or whole of a class I or class II
ozone-depleting substance that is used for heat transfer purposes and
provides a cooling effect.”  Because HCFCs used in TXV bulbs are not
involved in the heat transfer cycle of the appliance, it is not a
refrigerant, and thus the TXV is not a pre-charged appliance component.
As such, the sale and distribution in interstate commerce of TXVs is not
governed by this rulemaking.

.

THE IMPORT OF PRE-CHARGED APPLIANCES

Fourteen commenters submitted comments requesting clarification for the
importation of pre-charged appliances. Comments were in reference to
four main topics:

7.1  Clarifying the ban on imports of pre-charged appliances beginning
January 1, 2010.

7.2  Date of import versus date of manufacture.

7.3  Allowing for a limited importation window after January 1, 2010.

7.4  Petition process for the importation of reclaimed HCFC-22.

Count	Commenter	Organization	Document ID No

1	Steven Bernhardt	Honeywell	EPA-HQ-OAR-2007-0163-0038.2

2	Tony Digmanese	Johnson Controls, Inc.	EPA-HQ-OAR-2007-0163-0039

3	David Swift	Goodman Global, Inc.	EPA-HQ-OAR-2007-0163-0040.1

4	Peter Pachikara	Friedrich Air Conditioning Company
EPA-HQ-OAR-2007-0163-0042

5	Frank Xu	Eubank National Coil Company (NCC)
EPA-HQ-OAR-2007-0163-0046.1

6

	7	Kevin Messner	Association of Home Appliance Manufacturers (AHAM)
EPA-HQ-OAR-2007-0163-0049

8	Dave Stirpe	Alliance for Responsible Atmospheric Policy
EPA-HQ-OAR-2007-0163-0058.1

9	Paul L. Doppel	Mitsubishi Electric HVAC Advanced Products Division
(MEUS HVAC)	EPA-HQ-OAR-2007-0163-0060.1

10	Karim Amrane	Air Conditioning, Heating, and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0062.1

11	John M. Mandyck	Carrier Corporation (Carrier)
EPA-HQ-OAR-2007-0163-0063.1

12	Stephen P. Mandracchia	Hudson Technologies (Hudson)
EPA-HQ-OAR-2007-0163-0064.1

13	Kyle Gilley	Lennox International Inc. (Lennox)
EPA-HQ-OAR-2007-0163-0065.1

14	Talbot Gee	Heating, Air Conditioning, & Refrigeration Distributors
International (HARDI)	EPA-HQ-OAR-2007-0163-0067.1

Clarifying the ban on imports of pre-charged appliances beginning
January 1, 2010.

Four commenters request clarifying language be added to the rule
regarding the ban on the import of pre-charged products into the United
States beginning January 1, 2010.

Honeywell states that if implementation of restriction on import of
equipment is not done, HCFC production and dependence will be
encouraged, more of these ozone depleting refrigerants will be made
outside the country and dependence on an increased HCFC-22 supply would
be needed to service this additional equipment. [0038.2]

EPA Response: EPA agrees with the commenter.

The Alliance states that it is very important that EPA’s regulation
provide clear notice to foreign manufacturers that the US import of
these products will be cut off beginning January 1, 2010. [0058.1]

EPA Response: EPA agrees with this commenter and states clearly in the
final rule that the prohibition applies to the sale and distribution or
offer for sale or distribution in interstate commerce of all
air-conditioning and refrigeration appliances and appliance components
containing HCFC-22, HCFC-142b, or blends containing one or both of these
controlled substances, beginning January 1, 2010.  EPA further explains
in the preamble, that “the prohibition on sale and distribution
applies to imported products and products destined for export to the
same extent that it applies to products manufactured and distributed
solely within the United States.” EPA believes this provides
sufficient guidance for foreign manufacturers in the regulation.

HARDI states that the import of pre-charged components could encourage
the stockpiling of foreign made pre-charged components that could be
introduced into US interstate commerce well after domestic manufacturers
cease their production of these components prior to January 1, 2010.
HARDI adds that by including a new item after (a) in § 82.306 stating
“Any air-conditioning or refrigeration appliance clearing US Customs
on or after January 1, 2010” would adequately address this problem and
level the playing field for the distributors of US-made components.
[0067.1]

EPA Response: EPA is clearly stating in the final rule the prohibition
as it relates to imports as explained in the response to comment 7.1b,
and believes that clear language on the nature of the ban adequately
addresses the commenter’s concern.  Additionally, the final ban is not
prohibiting the sale or distribution of any appliance or appliance
component manufactured before January 1, 2010; the language proposed by
the commenter conflicts with this sell-through mechanism.

Hudson states that EPA should clarify in the final rule that the ban on
the import of pre-charged equipment applies to all pre-charged HCFC-22
equipment without exception. [0064.1]

EPA Response: The prohibition on sale and distribution applies to
imported products and products destined for export to the same extent
that it applies to products manufactured and distributed solely within
the United States.  EPA previously discussed this interpretation of
interstate commerce in the regulations implementing the ban on
nonessential products containing or manufactured with a class II
substance (58 FR 69638). The sale or distribution, or offer for sale or
distribution, of imported products or products destined for export
within the scope of this final rule would be subject to the same
restrictions as the sale or distribution, or offer of sale or
distribution, of products within the scope of that nonessential products
ban.

Date of import versus date of manufacture.

Carrier, AHAM, MEUS HVAC, and Lennox believe that the import ban of
pre-charged equipment should be based on the date of manufacture and not
on date of import. These commenters recommend that the term
“manufacture” be defined as indicated in this EPA proposed
rulemaking. [0063.1, 0060.1, 0049, 0065.1]

EPA Response: EPA agrees with these commenters and states that the ban
on sale and distribution applies to appliances and components
manufactured on or after January 1, 2010, but not to appliances or
components manufactured before that date. This ban applies to imported
appliances and appliances destined for export as well as those
appliances manufactured domestically. For more information, please see
the preamble.

Johnson Controls Inc., AHRI, and Goodman Global, Inc. believe that the
import ban of pre-charged equipment should be based on the date of
import, rather than the date of manufacture, and that basing the ban on
the date of import will facilitate enforcement for EPA and customs.
Goodman notes this approach is more straightforward since EPA has
neither the authority nor the resources to scrutinize the authenticity
of the date of manufacture of foreign-manufactured appliances.  EPA
should notify the US Customs and Border Protection to not permit any
pre-charged appliances into the country beginning January 1, 2010.
[0039, 0062.1, 0040]

EPA Response: Under the final rule, the ban on sale and distribution is
based on the date of manufacture because the ban does not relate solely
to imports.  Similar to imports of other restricted products and
chemicals, EPA has coordinated with U.S. Customs and Border Protection
to screen imports of appliances and appliance components that may be
pre-charged with HCFC-22 or HCFC-142b.  Such coordination is not novel
as evident by numerous enforcement actions involving the illegal import
of ozone-depleting substances (see www.epa.gov/ozone/enforce/index.html)

AHRI states that definition of manufacture should be the same for
imported components as for domestically-manufactured components.
Specifically, the definition of manufacture should not be differently
defined for imports as the date of import. [0062.1]

EPA Response: EPA agrees with this commenter.  EPA defines
“manufacture” the same for imported appliance components as it does
for domestically-manufactured appliance components. EPA is not relying
on the date of import in defining the date of manufacture for appliance
components.  For more information please refer to the preamble.

Allowing for a limited importation window after January 1, 2010.

Friedrich Air Conditioning Company would like to see a limited
importation window after the January 1, 2010 cut off date similar to the
Seer 10 to Seer 13 change over. Friedrich Air Conditioning Company has
found from the R410A developmental process that R410A units costs
considerably more to manufacture than R-22 units due to the higher
component cost. Therefore they strongly support/recommend a limited
importation window after the cut off date. Otherwise, it would be
possible for overseas companies with no or minimal regulations to build
and stockpile or continue building R-22 products and producing erroneous
‘Date of Manufacture’ tags throughout 2010 or beyond, for the U.S.A
market. Such actions can be detrimental to all domestic manufacturers
including Friedrich Air Conditioning Company.  [0042]

EPA Response: EPA believes that prolonging U.S. demand for imported
pre-charged appliances would discourage global efforts to transition to
non-ODS technologies in manufactured air-conditioning and refrigeration
appliances. Given the commitments of the United States and its trading
partners to ultimately phase out HCFCs, investment in alternative
refrigerant product lines is occurring and will continue to occur
globally.  Production capacity requires a long-term capital investment
and the choice of refrigerant dictates some of that investment in the
form of factory tooling, design, and a network of suppliers for
components.

Without the ban contained in this rulemaking, investment decisions
influenced by demand could foster continued investment in HCFC-based
manufacturing rather than investment in alternatives and would run
counter to the United States’ domestic approach to promote smooth
transitions rather than a rush to transition at the end of the global
phaseout.  EPA has initiated the phaseout of HCFCs.  However, the
phaseout regulations do not address the sale and distribution of
products that are pre-charged with HCFCs undergoing a phaseout.  Without
today’s final rule, domestic and foreign manufacturers as well as
their distributors would face differing requirements.  Foreign
manufactured pre-charged products and appliances could continue to enter
U.S. commerce charged with virgin HCFC-22 and HCFC-142b, thus increasing
the service need for HCFC appliances in the United States and
potentially resulting in shortages of virgin HCFC-22 and HCFC-142b given
the restrictions on production and consumption of these substances in
the United States.  EPA believes that this final rule supports the
phaseout of HCFC-22 and HCFC-142b by banning all sale and distribution
of HCFC-22 and HCFC-142b pre-charged appliances and components.

Petition process for the importation of reclaimed HCFC-22.

Hudson notes that since the petition process of used HCFCs only applies
to shipments over five pounds of used class II substances, that there is
a possibility that pre-charged equipment containing less than five
pounds of refrigerant would not be subject to compliance with the
petition process. This commenter notes concern that any potential
exemption, coupled with the ability to ship newly manufactured equipment
that claims to be pre-charged with reclaimed refrigerant will provide
opportunities to subvert the underlying process of the petition process
and the regulation.  The commenter suggests that foreign manufacturers
should not be allowed to circumvent the petition process, obtaining a
competitive advantage over domestic manufacturers. [0064.1]

EPA Response: EPA notes in the final rule that the ban does not affect
the import of bulk quantities of used HCFC-22 or HCFC-142b under the EPA
petitioning process established under 40 CFR 82.24(c).  Importers of
bulk shipments of used HCFC-22 or HCFC-142b greater than five pounds
must still seek and obtain approval from EPA to import on a per-shipment
basis.  Imported pre-charged equipment less than five pounds will be
subject to the same prohibition as domestically-manufactured equipment.

THE EXPORT OF PRE-CHARGED APPLIANCES

Eighteen commenters submitted 19 comments requesting clarification on
the ability to export to Article 5 countries and the allowance of
transshipments. Comments were in reference to two main topics:

8.1    Allowing export of pre-charged appliances manufactured after
January 1, 2010 to Article 5 countries.

8.2   Allowing transshipments of pre-charged appliances manufactured
after January 1, 2010.

Count	Commenter	Organization	Document ID No

1	Karim Amrane	Air Conditioning, Heating, and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0029

2	Steven Bernhardt	Honeywell International (Honeywell)
EPA-HQ-OAR-2007-0163-0038.2

3	Tony Digmanese	Johnson Controls, Inc.	EPA-HQ-OAR-2007-0163-0039

5	Jim Crawford	Trane/Ingersoll-Rand	EPA-HQ-OAR-2007-0163-0041.1

6	Maureen Beatty	National Refrigerants, Inc. (NRI)
EPA-HQ-OAR-2007-0163-0044.1

7	John Reilly III	United Refrigerants, Inc. (URI)
EPA-HQ-OAR-2007-0163-0045.1

8	Frank Xu	Eubank National Coil Company (NCC)
EPA-HQ-OAR-2007-0163-0046.1

9	Dan Hinchman	Aireco Supply, Inc (Aireco)	EPA-HQ-OAR-2007-0163-0048.1

10	Karen Myers	Rheem Manufacturing Company	EPA-HQ-OAR-2007-0163-0053.1

11	Mike Coyle	Bally Refrigerated Boxes, Inc. (Bally)
EPA-HQ-OAR-2007-0163-0055.1

12	Vince Mucciola	National Refrigeration and Air Conditioning, Inc.
(NRAC)	EPA-HQ-OAR-2007-0163-0056.1

13	Dave Stirpe	Alliance for Responsible Atmospheric Policy (Alliance)
EPA-HQ-OAR-2007-0163-0058.1

14	Maria A. Gomez	Innovair Corporation (Innovair)
EPA-HQ-OAR-2007-0163-0059

15	Paul L. Doppel	Mitsubishi Electric HVAC Advanced Products Division
(MEUS HVAC)	EPA-HQ-OAR-2007-0163-0060.1

16	Daniel J. Arnold	Nordyne	EPA-HQ-OAR-2007-0163-0061.1

17	Karim Amrane	Air Conditioning, Heating, and Refrigeration Institute
(AHRI)	EPA-HQ-OAR-2007-0163-0062.1

18	John M. Mandyck	Carrier Corporation (Carrier)
EPA-HQ-OAR-2007-0163-0063.1

19	Kyle Gilley	Lennox International Inc. (Lennox)
EPA-HQ-OAR-2007-0163-0065.1

Allowing export of pre-charged appliances manufactured after January 1,
2010 to Article 5 countries.

Fourteen commenters request that EPA allow the continued exportation of
un-charged and pre-charged HCFC-22 equipment to Article 5 countries
after January 1, 2010.  By currently extending the ban to cover exports
to Article 5 countries, EPA is disadvantaging US manufacturers that are
globally competing against non-US manufacturers selling in Article 5
countries. These commenters state it is unrealistic to assume that
market share in Article 5 countries would be replaced by non-HCFC
products.

AHRI, NRI, URI, NCC, Aireco, Bally, and NRAC note that they do not
support EPA’s extension of the proposed rule to cover appliances
solely manufactured for export to other countries as this does not make
a level playing field for US based companies. [0029, 0044.1, 0045.1,
0046.1, 0048.1, 0055.1, 0056.1]

EPA Response: EPA is not attempting to regulate foreign commerce through
this action.  EPA is solely regulating U.S. interstate commerce, which
includes the domestic sale and distribution of any appliance intended
for ultimate export from the United States. The prohibition on sale and
distribution applies to products destined for export to the same extent
that it applies to products manufactured and distributed solely within
the United States.  This action is not intended to govern the sale or
distribution, or offer for sale or distribution, of any previously owned
or used appliances that were manufactured prior to January 1, 2010.

This rulemaking is not restricting or amending the amount of HCFCs that
are produced and manufactured in the U.S. for export to Article 5
countries.  Nor is EPA supporting this rulemaking with assumptions based
upon HCFC demand in Article 5 countries.  EPA is not restricting the
export of appliances that are shipped without refrigerant or with a
holding charge of nitrogen.  Thus, U.S. manufacturers are not precluded
from responding to the demand for HCFC appliances in Article 5
countries.

EPA notes that export of appliances that do not contain an HCFC
refrigerant charge is legal under both this pre-charged products rule
and the final allocation rule.  In addition, EPA is not prohibiting
introduction of HCFCs into interstate commerce for the purpose of export
to Article 5 countries.  Thus, U.S. industry may meet the Article 5
demand for HCFC appliances.

Trane/Ingersoll-Rand, Nordyne, and the Alliance suggest amending the
rule to allow for exports of units intended for use with R-22
refrigerants, but allow them to be exported without a refrigerant
charge. [0041.1, 0061.1]

EPA Response: EPA states explicitly in the final rule that EPA is not
restricting the export of appliances that are shipped without
refrigerant or with a holding charge of nitrogen. EPA responds to this
concern further in Section 8.1a.

Trane/Ingersoll-Rand and Innovair state that extending the ban will
result in a loss of domestic jobs, the closing of small businesses, and
probably the net export status of the industry. [0041.1, 0059]

EPA Response: EPA believes that costs associated directly with this
rulemaking are limited. The global HCFC phaseout is already underway,
and restrictions on production, import, and sale and distribution of
specific types of HCFC products are already in place in the United
States and in international markets.  International markets for
refrigerants may similarly follow U.S. market trends to adjust the
phasedown of HCFC production and import for both Article 2 and Article 5
countries.  As such, it can be reasonably expected that similar shifts
in refrigerant pricing and overall transitions are likely to occur in
developing countries with an increase in the price of HCFC-22 and a drop
in the price of some ODS alternatives.  For example, some foreign
companies that produce pre-charged HCFC-22 appliances for the U.S.
market have further incentives to begin making the long-term capital
investments toward the transition to non-ODS alternatives sooner than
they would otherwise have done, seeing the advantage of investing in
alternatives early.  This market strategy would likely have some impact
on the economics of refrigerant pricing because the demand created for
ODS alternatives by the U.S. market may lead to economies of scale in
the countries producing the pre-charged equipment for export to the
United States.

U.S. companies continue to have the option of manufacturing appliances
and appliance components for export if they are not pre-charged with
HCFC-22 of HCFC-142b.  ,  as Since EPA is not banning the export of
appliances and appliance components that are not charged with
refrigerant but intended for use with HCFC-22 or HCFC-142b, EPbut are
not precharged with these HCFCs

Johnson Controls Inc. and Honeywell both note that banning the export of
precharged and dry products designed for HCFC-22 will provide no net
environmental benefits and would instead damage US businesses because of
the loss of market share and export revenue for US manufacturers.
[0038.2, 0039]

      EPA Response: Please refer to response 8.1.a and 8.1.c.

Honeywell notes that banning commerce for products containing virgin
HCFC-22 and HCFC-142b for equipment to be exported would be detrimental
to US manufacturers, because purchasers of such equipment, particularly
in the developing world, are very price sensitive. Honeywell expects
they would still obtain such equipment however it would be sourced from
other countries. If this occurred, there would be no net global
environmental benefit and it would damage US businesses. Honeywell
suggests EPA allow export to countries that allow continued use of
HCFC-22 in new equipment after January 1, 2010. [0038.2]

EPA Response: Please refer to response in Section 8.1.c.

 Johnson Controls Inc. notes that the industry currently exports an
estimated $5 billion of products, a large portion of which are HCFC-22
pre-charged products to Article 5 countries where HCFC-22 is still
legal. When EU implemented the ban on HCFCs in 2001 in Europe, export
for HCFC charged products was allowed. Article 5 countries or regions
(where R22 is still legal) could simply import from other competing HVAC
producing countries, resulting in no environmental benefits but loss of
market share and export revenue for US manufacturers. US manufacturers
could adopt the option of moving manufacturing outside the US to
preserve their market share, resulting in loss of US domestic jobs, and
probably the "net export" status of the industry. Johnson Controls Inc.
urge the EPA to revise the rule provision allowing export of precharged
HCFC22 products to continue. [0039]

EPA Response:  EPA is not banning the export of appliances and appliance
components destined for Article 5 countries, as long as such equipment
is not pre-charged with HCFC-22 or HCFC-142b.  Please refer to response
in Section 8.1.c.

Trane/Ingersoll-Rand states that recognition by the Parties to the
Montreal Protocol, and by the US EPA, of the developing country need for
HCFC refrigerant supply carries with it an implicit recognition of the
need of these countries for equipment which uses these HCFCs as
refrigerants. Further, if the need for these countries to import HCFCs
will persist at least until 2020, then it is reasonable to assume the
need for HCFC-using equipment will persist till 2020 as well. [0041.1]

EPA Response: Please refer to response 8.1.c.

Carrier states that this limitation places a significant portion of
Carrier’s business at risk. US air conditioning products are often
specified in developing countries that can continue to use HCFC-22 after
2010. This demand is satisfied by many US manufacturers like Carrier. If
EPA bans the export of products containing HCFC-22, that demand will be
met in the local country or region, with the net effect of exporting US
jobs and manufacturing investments. [0063.1]

EPA Response: Please refer to response 8.1.a. and 8.1.c.

AHRI urges EPA to exempt products intended solely for exports from the
final rule.  [0029, 0062.1]

EPA Response: Please refer to response 8.1.a.and 8.1.c.

Allowing transshipments of pre-charged appliances manufactured after
January 1, 2010.

Five commenters believe that EPA has not discussed the idea of
“trans-shipments,” meaning the import of products only for the
purpose of re-shipping them to another country.  Commenters request that
the Final Rule clearly state that transshipments of pre-charged R-22
equipment be allowed on or after January 1, 2010.

The Alliance and MEUS HVAC state they are in favor of
“trans-shipments” and urge EPA to clearly state in the Final Rule
that “trans-shipments” will be allowed on or after January 1, 2010.
[0058.1, 0060.1]

EPA Response: For purposes of this final rule, EPA is not considering
transhipment, as defined at §82.3, of pre-charged appliances or
components as “sale or distribution in interstate commerce”.  Sale
and distribution in interstate commerce, rather than import or export,
are the prohibited acts.  Please refer to the preamble for a complete
discussion.

Rheem states that EPA should not ban the import of appliances intended
solely for export.  Rheem has several manufacturing facilities that ship
appliances to the United States for bundling and shipment with other
products. Thus, the ban on exports included in the rule would have a
significant financial impact on Rheem because over 90 percent of our
export production is produced in Mexico. Currently, all of these units
are shipped back into the United States for containerization to other
countries. Rheem has limited port capability near our Mexican facilities
so this rule would greatly disadvantage our company, and other US
companies with Mexican operations that need to avail themselves of US
ports. Thus, Rheem requests that the Final Rule clearly state that
transshipments of pre-charged R-22 equipment be allowed on or after
January 1, 2010. In addition, trans-shipment through free trade zones to
article 5 countries should be allowed regardless of when the unit is
manufactured. It is important that EPA does not penalize US
manufacturers for selling products that are legal in other countries.
[0053]

EPA Response: EPA responds to this comment in the response in Section
8.2a.

Carrier states that it is common in the air conditioning industry to
import products not made in the US, such as duct-free split air
conditioners, for re-export to countries in Latin America, the Middle