EO12866_CAA Part 82ACEH 2060-AU26 NPRM FRN_20190228
                                                                      6560-50-P
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[EPA-HQ-OAR-2016-0271; FRL-XXXX-X]
RIN: 2060-AU26
Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production and Import, 2020-2029; and Other Updates
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
SUMMARY: The EPA is proposing to allocate production and consumption allowances for specific hydrochlorofluorocarbons, a type of ozone-depleting substance, for the years 2020-2029. These hydrochlorofluorocarbons may be used to service certain equipment manufactured before 2020. The EPA is also proposing to update other requirements under the program for controlling production and consumption of ozone-depleting substances, as well as proposing edits to the regulatory text for improved readability and clarity. These updates include revising the labeling requirements for containers of specific hydrochlorofluorocarbons; prohibiting the conversion of hydrochlorofluorocarbon allowances allocated through this rulemaking into allowances for hydrochlorofluorocarbons that have already been phased out; requiring the use of an electronic reporting system for producers, importers, exporters, transformers, and destroyers of class I and class II ozone-depleting substances; revising and removing recordkeeping and reporting requirements; improving the process for petitioning to import used substances for reuse; creating a certification process for importing used and virgin substances for destruction; and restricting the sale of known illegally imported substances. This notice further includes proposed clarifications to the certification requirements for methyl bromide quarantine and preshipment uses. The EPA is also proposing to add polyurethane foam systems containing ozone-depleting chlorofluorocarbons to the list of nonessential products. Lastly, the agency is proposing to update the definition of "destruction" as used in the context of the production and consumption phaseout and remove obsolete provisions.
DATES: Comments on this notice of proposed rulemaking must be received on or before [INSERT DATE 45 DAYS AFTER PUBLICATION IN FEDERAL REGISTER]. Any party requesting a public hearing must notify the contact listed below under FOR FURTHER INFORMATION CONTACT by 5 p.m. Eastern Daylight Time on [INSERT DATE 5 DAYS AFTER PUBLICATION]. If a public hearing is requested, the hearing will be held on [INSERT DATE 15 DAYS AFTER PUBLICATION]. The hearing will be held in Washington DC. More details concerning the hearing, including whether a hearing has been requested, will be available at https://www.epa.gov/ods-phaseout/phaseout-class-ii-ozone-depleting-substances.
 ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2016- - 0271, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (e.g., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Katherine Sleasman, Stratospheric Protection Division, Office of Atmospheric Programs, Mail Code 6205T, 1200 Pennsylvania Avenue, N.W., Washington, D.C., 20460; telephone number<PHONE_NUMBER>; email address<EMAIL_ADDRESS>You may also visit the Ozone Protection Web site of the EPA's Stratospheric Protection Division at https://www.epa.gov/ods-phaseout for further information about reporting and recordkeeping, other Stratospheric Ozone Protection regulations, the science of ozone layer depletion, and related topics.
SUPPLEMENTARY INFORMATION:
Acronyms and Abbreviations. The following acronyms and abbreviations are used in this document.
ACE/ITDS  -  Automated Commercial Environment/International Trade Data System
ARFF  -  Aircraft Rescue and Fire Fighting
CAA  -  Clean Air Act
CBP  -  Customs and Border Protection
CDC  -  Centers for Disease Control and Prevention
CDX  -  Central Data Exchange
CFC  -  Chlorofluorocarbon
CFR  -  Code of Federal Regulations
CROMMER  -  Cross-Media Electronic Reporting Regulation
DOT  -  Department of Transportation
EPA  -  Environmental Protection Agency
FAA  -  Federal Aviation Administration
FR  -  Federal Register
GPEA  -  Government Paperwork Elimination Act
HCFC  -  Hydrochlorofluorocarbon
HTSA - Harmonized Tariff Schedule of the United States Annotated
MMWR  -  Morbidity and Mortality Weekly Report
Montreal Protocol  -  Montreal Protocol on Substances that Deplete the Ozone Layer
MOP  -  Meeting of the Parties
MT  -  Metric Ton
NFPA  -  National Fire Protection Association
ODP  -  Ozone Depletion Potential
ODS  -  Ozone Depleting Substance
Party  -  Nations and regional economic integration organizations that have consented to be bound by the Montreal Protocol on Substances that Deplete the Ozone Layer
RACA  -  Request for Additional Consumption Allowances
SNAP  -  Significant New Alternatives Policy
TEAP  -  Technology and Economic Assessment Panel
UNEP  -  United Nations Environment Programme
Table of Contents
I. General Information
 Does this Proposed Action Apply to Me?
 What Action Is the Agency Proposing?
 What Is the Agency's Authority for this Proposed Action?
 What Are the Incremental Costs and Benefits of this Proposed Action?
II. Background
III. Allocation of HCFC Allowances for 2020-2029
 Allocation of HCFC-123 Production and Consumption Allowances
 Addition of Fire Suppression Servicing Uses to the HCFC Phaseout Schedule
 Revisions to Labeling Requirements
 Allocation of HCFC-124 Production and Consumption Allowances
 Changes to Transfer of Allowance Provisions in Section 82.23
IV. Updates to Other Provisions of the Production and Consumption Control Program
 Electronic Reporting
 Changes to Reporting Requirements in Sections 82.13, 82.23, and 82.24
 Changes to Methyl Bromide Provisions in Sections 82.4 and 82.13
 Changes to Provisions for the Import of ODS in Sections 82.3, 82.4, 82.13, 82.15, and 82.24
 Prohibiting the Sale of Illegally Imported Controlled Substances
V. Addition of Polyurethane Foam Systems Containing CFCs to the Nonessential Product Ban
VI. Updates to Sections 82.3, 82.104, and 82.270 Related to Destruction
VII. Removing Obsolete Provisions in Sections 82.3, 82.4, 82.9, 82.10, 82.12, 82.13, 82.15, 82.16, and 82.24
VIII. Economic Analysis
IX. References
X. Statutory and Executive Order Reviews
 Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review
 Paperwork Reduction Act (PRA)
 Regulatory Flexibility Act (RFA)
 Unfunded Mandates Reform Act (UMRA)
 Executive Order 13132: Federalism
 Executive Order 13175: Consultation and Coordination with Indian Tribal Governments
 Executive Order 13045: Protection of Children from Environmental Health and Safety Risks
 Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use
 National Technology Transfer and Advancement Act (NTTAA)
 Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

I. General Information
A. Does this Proposed Action Apply to Me?
	You may be potentially affected by any final action on this proposal if you manufacture, process, import, or distribute into commerce chemical substances and mixtures. Potentially affected entities may include but are not limited to:
 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing entities (NAICS 333415)
 Air-Conditioning Equipment and Supplies Merchant Wholesalers (NAICS 423620)
 Basic Chemical Manufacturing (NAICS 3251)
 Chlorofluorocarbon Gas Manufacturing and Import (NAICS 325120)
 Farm Product Warehousing and Storage (NAICS 493130)
 Farm Supplies and Merchant Wholesalers (NAICS 424910)
 Flour Milling (NAICS 311211)
 Fire Extinguisher Chemical Preparations Manufacturing (NAICS 325998)
 Fruit and Nut Tree Farming (NAICS 1113)
 General Warehousing and Storage (NAICS 493130)
 Greenhouse, Nursery, and Floriculture Production (NAICS 1114)
 Hazardous Waste Treatment and Disposal, Cement Manufacturing, Clinker (NAICS 327310)
 Hazardous Waste Treatment and Disposal, Incinerator, Hazardous Waste (NAICS 562211)
 Industrial Gas Manufacturing (NAICS 325120)
 Materials Recovery Facilities (NAICS 562920)
 Other Aircraft Parts and Auxiliary Equipment Manufacturing (NAICS 336413)
 Other Chemical and Allied Production Merchant Wholesalers (NAICS 424690)
 Other Crop Farming (NAICS 1119)
 Pesticide and Other Agricultural Chemical Manufacturing (NAICS 325320)
 Plumbing, Heating, and Air-Conditioning Contractors (NAICS 238220)
 Portable Fire Extinguishers Manufacturing (NAICS 339999)
 Postharvest Crop Activities (except Cotton Ginning) (NAICS 115114)
 Research and Development in Physical, Engineering, and Life Sciences (NAICS 541710)
 Rice Milling (NAICS 311212)
 Soil Preparation, Planting, and Cultivating (NAICS 115112)
 Vegetable and Melon Farming (NAICS 1112)
	This list is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this section could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.
B. What Action Is the Agency Proposing?
      The EPA is proposing a number of revisions to the production and consumption control program for ozone-depleting substances (ODS) in 40 CFR part 82, subpart A, which are divided into "class I" and "class II" substances. Section 602 of the Clean Air Act (CAA) contains initial lists of class I and class II substances and addresses additions to those lists. The current lists appear in appendices A and B in subpart A. The list of class I substances includes chlorofluorocarbons (CFCs), halons, carbon tetrachloride, methyl chloroform, and methyl bromide. The list of class II substances consists entirely of hydrochlorofluorocarbons (HCFCs). Today's action proposes specific revisions to the production and consumption control program including:
 the allocation of production and consumption allowances for HCFC-123 and HCFC-124 to service certain equipment manufactured before January 1, 2020;
 requiring the use of an electronic reporting system for producers, importers, exporters, transformers, and destroyers of ODS;
 revisions and removal of certain recordkeeping and reporting requirements;
 clarifications to the certification requirements for methyl bromide quarantine and preshipment uses;
 improvements to the process for petitioning to import used substances for reuse;
 creation of a certification process for importing used and virgin substances for destruction; and
 restrictions on the sale of known illegally imported ODS.
In addition, this action proposes changes to other subparts supporting the ODS phaseout, specifically:
 changes to the subpart E requirements for labeling of products containing HCFC-123 to clarify what are permitted uses;
 adding to the subpart C ban on sale and distribution or offer for sale and distribution in interstate commerce of certain products that contain class I ODS; and
 changes to subpart H for reducing halon emissions.
      As summarized below, the proposed changes outlined are grouped by relevance and thus may not be grouped by subparts as described above. The EPA is proposing to allocate annual production and consumption allowances for HCFC-123 and HCFC-124 for 2020 through 2029 to be used for servicing certain equipment manufactured before January 1, 2020. Section 605 of the CAA addresses the production, consumption, use, and introduction into interstate commerce of class II substances (listed HCFCs) within the United States. Sections 605 and 606 taken together constitute the primary source of authority for the domestic implementation of United States' obligations to phase out HCFCs under the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). The EPA regulations issued under sections 605 and 606 appear at 40 CFR part 82, subpart A. Those regulations reflect the agreed Montreal Protocol HCFC phaseout schedule. An element of that schedule is to phase out HCFC production and consumption by January 1, 2020, other than production and consumption for certain narrowly defined uses in an amount up to 0.5% of baseline annually. Under a previous adjustment to the Montreal Protocol in 1995, production and consumption during the years 2020 through 2029 was restricted to the servicing of refrigeration and air-conditioning equipment existing on January 1, 2020. In November 2018, the Parties to the Montreal Protocol adopted another adjustment that, among other things, added "the servicing of fire suppression and fire protection equipment" existing on January 1, 2020 as a permissible use. Consistent with this adjustment and a continuing servicing demand in fire suppression equipment using HCFCs in the United States, the EPA is proposing to revise subpart A to add servicing of existing "fire suppression equipment" to the authorized uses of newly produced or imported quantities of HCFC-123 and HCFC-124 during the 2020-2029 regulatory period. To facilitate compliance, the EPA is proposing to revise labeling requirements for containers of fire suppression agent containing HCFC-123 that are imported between 2020-2029 in subpart E. To align with existing regulations that prohibit the production and import of phased out HCFCs, in particular HCFC-22, the agency is proposing to modify the inter-pollutant allowance transfer provisions authorized by CAA section 607 to prohibit transfers into ODS that are already phased out.
      In addition, the EPA is proposing to update the requirements under other provisions of 40 CFR part 82, subpart A. To increase the accuracy of reported data and to reduce burden associated with reporting ODS data, the EPA is proposing to require that certain reports, import petitions, and certifications of intent to import for destruction be submitted electronically through the agency's Central Data Exchange (CDX). Each entity must establish an account in CDX in order to prepare, transmit, certify, and submit reports and submissions. The EPA is also proposing to amend the recordkeeping and reporting requirements by harmonizing requirements for class I and class II substances and removing reporting elements that would be made unnecessary by moving to electronic reporting. Required electronic reporting and reducing the number of reporting elements reduce the reporting burden.
      The EPA is proposing two changes to provisions related to the sale of quarantine and preshipment (QPS) methyl bromide, a fumigant used to control pests in agriculture and shipping, in response to the misapplication of this ODS in Puerto Rico and the U.S. Virgin Islands. First, the EPA is proposing to extend to all distributors of QPS methyl bromide a certification requirement that currently applies only to certain distributors and end users. This proposed change would help ensure that all distributors and applicators are aware of the restrictions on the use and sale of QPS methyl bromide. Second, the EPA is proposing to explicitly prohibit the use of methyl bromide produced under the QPS exemption for any use other than a quarantine use or a preshipment use. Additionally, the EPA is proposing revisions in §§82.4, 82.8, and 82.13 for readability, including changes to the naming convention for methyl bromide.
       The EPA is also proposing to revise provisions related to the import of ODS. The agency is proposing to modify the import petition process by clarifying that failure to provide additional information requested by the EPA during the process is grounds for objection, and by allowing for information from the government of the exporting country to be submitted in lieu of certain currently required information for petitions to import recovered class I ODS held in ODS banks. The agency would modify the petition process to import used class I substances for reuse and provide a new certification process for the import of ODS (used and virgin) for destruction in the United States. Additionally, the EPA is proposing to exempt halon 1211, a potent ODS used as a fire suppression streaming agent, in extinguishers used onboard aircraft from the import petition process to make it easier for companies to service fire suppression equipment, promoting proper maintenance of these bottles and preventing the emission of halon 1211.
      The EPA is also proposing two changes to reduce the likelihood that phased-out ODS will be sold and distributed in the United States, and thus reduce the potential for emissions of those substances in this country. First, the agency is proposing to prohibit the sale or offer for sale or distribution of any ODS that that the seller knows, or has reason to know, has been imported into the United States without consumption allowances or otherwise not subject to an exemption. Second, the EPA is proposing to add polyurethane foam systems containing CFCs to the list of class I nonessential products under 40 CFR part 82, subpart C to prohibit them from being sold or distributed in the United States.
      The agency is proposing to revise the definition of "destruction" to include additional technologies such as chemical conversion processes, all of which have been approved in decisions of the Parties to the Montreal Protocol which is found or otherwise discussed in subparts A, E, and H. Lastly, the EPA proposes to remove outdated provisions related to the allocation and transfer of class I ODS credits and allowances that are no longer in use in subpart A.
C. What Is the Agency's Authority for this Proposed Action?
	Several sections of the CAA provide authority for the actions proposed by the EPA in this notice of proposed rulemaking. Section 603 provides authority to establish monitoring and reporting requirements for ODS. Sections 604 and 605 provide authority to phase out production and consumption of class I and class II substances, respectively, and to restrict the use of class II ODS. Section 606 provides the EPA authority to establish a more stringent phaseout schedule than that set out in sections 604 and 605 based on (1) current scientific information that a more stringent schedule may be necessary to protect human health and the environment, (2) the availability of substitutes, or (3) to conform to any acceleration under the Montreal Protocol. Section 607 provides the EPA with authority to issue production and consumption allowances and to authorize allowance transfers, including inter-pollutant and inter-company transfers. Section 610, in relevant part, directs the EPA to issue regulations that identify nonessential products that release class I substances into the environment (including any release during manufacture, use, storage, or disposal) and prohibit any person from selling or distributing any such product, or offering any such products for sale or distribution, in interstate commerce. Section 611 requires EPA to establish and implement labeling requirements for containers of, and products containing or manufactured with, class I or class II ODS.
      The EPA's authority for this rulemaking is supplemented by section 114, which authorizes the EPA Administrator to require recordkeeping and reporting in carrying out any provision of the CAA (with certain exceptions that do not apply here). Section 301 further provides authority for the EPA to "prescribe such regulations as are necessary to carry out [the EPA Administrator's] functions" under the CAA. Additional authority for electronic reporting comes from the Government Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which provides "(1) for the option of the electronic maintenance, submission, or disclosure of information, when practicable as a substitute for paper; and (2) for the use and acceptance of electronic signatures, when practicable."
      Additional information on the EPA's authority to establish and manage an allocation system for the phaseout of class I and class II substances can be found at 58 FR 65018 (December 10, 1993) and 68 FR 2820 (January 21, 2003) respectively.
D. What Are the Incremental Costs and Benefits of this Proposed Action?
      The EPA considered the incremental costs and benefits associated with this rulemaking which stem from proposed changes to reporting and recordkeeping requirements. The revisions proposed here would require electronic submissions through CDX, create a streamlined Certification of Intent to Import ODS for Destruction, exempt halon 1211 in aircraft bottles from the import petitions process, and add recordkeeping certification requirement for methyl bromide QPS. The agency has analyzed the impact on the regulated community associated with the proposed regulatory changes, and the EPA estimates changes to reporting and recordkeeping would result in a cost of approximately $5,000 per year. However, the EPA estimates the annual costs savings to reporters as a result of reductions in reporting elements, streamlining forms, and added efficiencies to be approximately $13,000 per year. The one-time redesign labeling costs for containers of fire suppressants are estimated to costs between $1,000 to $3,000. In addition, the EPA analyzed the impact on small businesses and found there would be no additional costs imposed on small business, see the docket for the screening analysis on small businesses. A description of the results of the analysis and the methods used can be found in Section VIII of this notice.
II. Background
      The United States was one of the original signatories to the 1987 Montreal Protocol and ratified it on April 12, 1988. After ratification, Congress enacted, and President George H.W. Bush signed into law, the CAA Amendments of 1990, which included Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States could satisfy its obligations under the Montreal Protocol, in addition to establishing complementary measures such as the national recycling and emission reduction programs under section 608 and the labeling requirements under section 611.
      The 1992 Copenhagen Amendment to the Montreal Protocol created the stepwise reduction schedule, subsequently revised, and the eventual phaseout of HCFC consumption. The next milestone is a commitment to reduce HCFC consumption by 99.5% below the baseline by January 1, 2020, with consumption from 2020-2029 restricted to the servicing of refrigeration, air-conditioning, and fire suppression equipment existing on January 1, 2020. This is referred to as the "servicing tail." In November 2018, the Parties to the Montreal Protocol agreed to add fire suppression equipment existing on January 1, 2020 to the list of permissible servicing tail uses.
      The United States has chosen to implement the Montreal Protocol phaseout schedule of HCFCs on a chemical-by-chemical basis that employs a "worst-first" approach focusing on the phaseout of certain chemicals with higher ozone depletion potential (ODP) earlier than others. In 1993, the EPA established a phaseout schedule to eliminate HCFC-141b first, to greatly restrict HCFC-142b and HCFC-22 next, and to subsequently place restrictions on all other HCFCs ultimately leading to a complete phaseout of all HCFCs by 2030 (58 FR 15014, March 18, 1993; 58 FR 65018, December 10, 1993).
      The EPA designed the allowance program to implement the production and consumption controls of the CAA and to facilitate an orderly phaseout. To control production, the EPA allocated baseline production allowances to producers of specific ODS. To control consumption, the EPA allocated baseline consumption allowances to producers and importers of specific ODS. In the allowance program, the EPA allocates "calendar-year" or "annual" allowances to companies who expend them when they produce or import ODS. The allowances can be traded among companies both domestically and internationally (between countries that are Parties to the Protocol), with certain restrictions. Allocation of production and consumption allowances for most class I substances (CFCs, methyl chloroform, carbon tetrachloride, and halons) ended in 1996, and in 2005 for methyl bromide. Production and consumption allowances for class II substances (HCFCs) will be reduced to zero in 2030.
      Since the EPA is implementing the HCFC phaseout on a chemical-by-chemical basis, it allocates and tracks production and consumption allowances on an absolute kilogram basis for each chemical. An allowance is the unit of measure that controls production and consumption of ODS. The EPA allocates allowances for specific years; they are valid between January 1 and December 31 of a given control period (i.e., calendar year). In previous rulemakings, the EPA has allocated calendar-year allowances equal to a percentage of the baseline for specified control periods. A calendar-year allowance represents the privilege granted to a company to produce or import one kilogram (not ODP-weighted) of the specific substance. The EPA allocates two types of calendar-year allowances -- production allowances and consumption allowances. To produce an HCFC, an allowance holder must expend both production and consumption allowances. To import an HCFC, an allowance holder must expend only consumption allowances. An allowance holder exporting HCFCs for which it has expended consumption allowances may obtain a refund of those consumption allowances upon submittal of proper documentation to the EPA. Production and import of virgin HCFCs without allowances is prohibited except for transformation, destruction, transshipments, or heels (§82.15(a) and (b)).
      Under the chemical-by-chemical phaseout schedule for HCFCs, the EPA stopped allocating production and consumption allowances for HCFC-141b as of 2003; there will be no more production and consumption allowances for HCFC-22 and HCFC-142b as of 2020; and beginning in 2020 the use of newly produced or imported quantities of the remaining HCFCs will be limited to servicing refrigeration, air-conditioning, and fire suppression equipment existing at that date.
      The EPA notes that absent specific use restrictions, HCFCs can continue to be used after their production and import has ceased, for example, to service existing equipment such as refrigeration and air-conditioning systems. The EPA's intent has always been to facilitate a smooth transition to alternatives, which means avoiding stranding equipment that has not yet reached the end of its useful life. For example, used HCFC-22 that is recovered and reclaimed, or virgin material produced before the 2020 phaseout may continue to be used for as long as it is available to service existing HCFC-22 systems.
	 The allowance system for production and import that reduces the number of allowances over time is a central component of the ODS phaseout in the United States. The EPA limits how much ODS enters the market to meet the CAA and Montreal Protocol phaseout milestones. To smooth the phaseout steps, the EPA also takes complementary actions that reduce the demand for ODS, encourage recovery and recycling or reclamation of used ODS, allow for continued servicing to avoid stranding existing equipment, and encourage transition to safer alternatives.
      The EPA's most recent action related to the phaseout of HCFCs was a 2014 rule that allocated production and consumption allowances for HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 for 2015-2019 (79 FR 64254, October 28, 2014). In that action, the EPA also implemented the provisions in CAA section 605(a) that limit production and consumption to servicing refrigeration and air-conditioning appliances and for use in fire suppression applications. That notice provides additional discussion of the history of the phaseout of HCFCs.
III. Allocation of HCFC Allowances for 2020-2029
This section presents the EPA's proposed approach for issuing HCFC allowances for the next regulatory period that extends from 2020-2029, as well as complementary changes to implement a recent adjustment to the Montreal Protocol. The EPA is proposing to issue consumption allowances for HCFC-123 and consumption and production allowances for HCFC-124 consistent with the CAA, EPA regulations, and obligations of the United States under the Montreal Protocol. These are the two HCFCs not already slated for phaseout in the United States by 2020 under existing regulations. These HCFCs are currently used in the refrigeration, air-conditioning, and fire suppression sectors. The EPA is also proposing to add servicing of fire suppression equipment to the authorized uses of newly produced or imported quantities of these HCFCs during the 2020-2029 regulatory period. In addition, the EPA is proposing changes to the current labeling requirements for containers of fire suppression agent using HCFC-123.
      In this proposed action, the EPA is relying on its authority under CAA section 605(c) to promulgate regulations phasing out the production and restricting the use of class II substances in accordance with section 605, subject to previous accelerations under section 606 (See 58 FR 65018, December 19, 1993 and 74 FR 66411, December 15, 2009). The EPA is proposing limited changes to the existing regulations on production, consumption, and use of class II ODS to provide flexibility for the 2020-2029 regulatory period consistent with the requirements of section 605 and obligations of the United States under the Montreal Protocol.
      In developing the proposed allocations for HCFC-123 and HCFC-124 between 2020 and 2029, the EPA considered a number of factors, including existing company-specific consumption baselines listed in §82.19; the uses of HCFCs that are permissible in 2020 through 2029 under CAA section 605(a) and the availability of alternatives for those uses; the types of HCFCs that may be produced and consumed consistent with existing obligations and regulations; the quantity needed to meet the estimated demand for each permissible use; the estimated quantity of HCFCs that will be available from recycling and reclamation, as well as from the potential stockpiling of virgin HCFCs in advance of the 2020 phaseout step; and the transition that must occur by 2030 when HCFC production and consumption will be phased out completely. For each HCFC that will be allocated, the EPA identifies a total number of allowances to be allocated and then sets calendar-year allowances equal to a percentage of each company's baseline.[ ]The following discussion describes how the EPA considered each of these factors broadly in developing the proposed allocations.
      The first factor the EPA considered when developing this proposal was the existing limitation on permissible uses of HCFCs and the availability of alternatives for those uses. Section 605(a) of the CAA limited the use of newly-produced (i.e., virgin) HCFCs beginning January 1, 2015. The statute provides that starting on that date, it shall be unlawful for any person to introduce into interstate commerce or use any class II substance unless such substance (1) has been used, recovered, and recycled; (2) is used and entirely consumed (except for trace quantities) in the production of other chemicals; (3) is used as a refrigerant in appliances manufactured before January 1, 2020; or (4) is listed as acceptable under the Significant New Alternatives Policy (SNAP) program for use as a fire suppression agent for nonresidential applications. As detailed in the draft report in the docket titled The U.S. Phaseout of HCFCs: Projected Servicing Demands in the U.S. Air Conditioning, Refrigeration, and Fire Suppression Sector (2020-2030), hereafter referred to as the Draft Servicing Tail Report, the EPA considered the availability of alternatives for the latter two uses, with the understanding that it is typically best to service equipment with the same refrigerant or fire suppression agent it was designed to use. The SNAP program continues to review and list alternatives for applications that use HCFCs, including refrigeration and air conditioning and fire suppression applications that use HCFC-123. Substitutes are listed under that regulatory program as acceptable, unacceptable, or acceptable subject to use restrictions for specific uses. Any future use of substitutes listed as acceptable subject to use restrictions must comport with any conditions of the SNAP program, if applicable. Currently, the SNAP program lists a number of acceptable substitutes for HCFCs for use as a fire suppression agent for non-residential applications, making a variety of allocation options practicable for the 2020-2029 regulatory period.
      In addition to the statutory provisions in CAA section 605, the EPA established a "worst-first approach" in 1993 which addressed which HCFCs may be produced and consumed and prioritized the phaseout of HCFCs based on their ODPs (58 FR 15014 and 58 FR 65018). These regulations can be found in §82.16. HCFC-141b was phased out in 2003, except for certain exempted uses. HCFC-22 and HCFC-142b will be fully phased out of production and consumption starting in 2020, with exceptions for destruction and transformation. Consistent with that approach, the EPA is proposing to issue allowances for production and consumption of only HCFC-123 and HCFC-124, as these are the remaining HCFCs that have not been phased out domestically.
      Under the Montreal Protocol, the United States has committed to phase out HCFC production and consumption by January 1, 2020, other than production and consumption for certain narrowly defined uses in an amount up to 0.5% of baseline annually. Under a previous Montreal Protocol adjustment in 1995, production and consumption during the years 2020 through 2029 were restricted to the servicing of Ref/AC equipment existing on January 1, 2020. In the spring of 2018, the United States proposed adjusting the Montreal Protocol to allow for new production and import of HCFCs within the 0.5% cap for servicing fire suppression equipment existing on January 1, 2020. This proposal was based on extensive stakeholder consultation on HCFC needs during 2020-2029 and the EPA's analysis of available information, including the 2018 Draft Servicing Tail Report. In November 2018, the Parties to the Montreal Protocol decided to adopt an adjustment that, among other things,  added to Article 2F "the servicing of fire suppression and fire protection equipment" existing on January 1, 2020 as a permissible use for newly produced or imported HCFCs. While the term "fire protection" can be understood in some contexts to refer broadly to all measures taken to protect persons or property from harm, the terms "fire protection" and "fire suppression" have been used interchangeably in the Montreal Protocol context to refer to suppressing or putting out fires through the use of chemical substances. Section 605(a) of the Clean Air Act uses the term "fire suppression." In addition, the EPA views this term as the more precise term in the context of regulating ozone-depleting substances. Therefore, the EPA is proposing to add servicing of "fire suppression equipment" to the authorized uses of newly produced or imported quantities of these HCFCs during the 2020-2029 regulatory period. The adjustment adopted in November 2018 will enter into force on June 21, 2019. The final meeting report from the 30[th] Meeting of the Parties and Decision XXX/2 adopting the adjustment are included in the docket for this rulemaking.
      In developing the proposed allocations, the EPA considered the quantities needed to satisfy estimated demand for HCFC-123 and HCFC-124 to service certain equipment manufactured before 2020. These estimates are discussed in more detail in an updated Servicing Tail Report, which is available in the docket. This report and the proposed allocation are based on demand projections contained in the EPA's Vintaging Model, recent market research, discussions with industry on current HCFC uses and trends, and the expected availability of recovered, recycled/reclaimed, and reused material. The agency made the April 2018 draft report available on its website and in the docket along with a Notice of Data Availability published in the Federal Register on May 4, 2018 (83 FR 19757) and requested comment on the data and assumptions in the report. The EPA did not receive any substantive comments on the report but continues to welcome further input on all aspects of the revised report, including but not limited to the underlying assumptions and sensitivity analyses. As a result of the adjustment to Article 2F of the Montreal Protocol, the EPA has since revised the 2018 Draft Servicing Tail Report to reflect the demand for servicing fire suppression equipment manufactured before January 1, 2020. The EPA seeks comment on the 2019 Draft Servicing Tail Report specifically related to the fire suppression sector. Since the EPA will use the report to support the final rule, the agency requests any relevant data and market information that would improve the accuracy of the agency's projections. These data may be used in determining the final allocation.
      The last overarching factor the EPA considered is the 2030 phaseout date for HCFC production and import, with limited exceptions, under CAA section 605(b)(2) and (c). As for prior HCFC phaseout steps, the agency's intent is to accomplish the 2030 phaseout step in a manner that achieves a smooth transition to alternatives without stranding equipment. The goal is to allow equipment owners to continue servicing their HCFC-123 and HCFC-124 equipment that is still within its expected lifetime. Experience with prior HCFC-22 phaseout steps indicates that an abrupt increase or decrease to foster recovery, recycling, and reclamation of HCFCs and an orderly transition to approved alternatives.
A. Allocation of HCFC-123 Production and Consumption Allowances
      This section presents the EPA's proposed approach for determining the amount of HCFC-123 production and consumption allowances to be issued and takes comment on two alternatives.
      The agency is proposing to not provide any HCFC-123 production allowances for the 2020-2029 regulatory period. The EPA has never established a production baseline for HCFC-123, has no record of domestic production of HCFC-123 during the baseline years (2005-2007) (68 FR 28282), and has never previously allocated production allowances for HCFC-123. Under section 605(b)(1) of the CAA, it is unlawful for any person to produce any class II substance in an annual quantity greater than the quantity of such substance produced by such person during the baseline year. Therefore, the EPA proposes to not issue any production allowances for HCFC-123 for 2020-2029.
      In 2020, the consumption baseline of the United States for all HCFCs will be 0.5% which equates to 76.2 ODP weighted metric tons that could be available for servicing. Under section 605(c) of the CAA, the consumption of HCFCs by any person is also to be limited to the quantity consumed by that person during the baseline year. The EPA has implemented this requirement by limiting the number of annual allowances allocated for each chemical in §82.16. Consumption of HCFC-123 during the baseline year equates to 2,014 MT (40 ODP-weighted MT).
      Table 1 shows the number of HCFC-123 consumption allowances that would be allocated each year from 2020 to 2030 under the EPA's proposed approach and under the two alternatives on which the EPA is also taking comment. The proposed and alternative approaches are discussed in greater detail below.
Table 1: Comparison of HCFC-123 Consumption Allowance Allocation Approaches between 2020-2030 (MT)

                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
                                     2026
                                     2027
                                     2028
                                     2029
                                     2030
                                     Total
                                   Proposal
                                      650
                                      585
                                      520
                                      455
                                      390
                                      325
                                      260
                                      195
                                      130
                                      65
                                       0
                                     3,575
                                 Alternative 1
                                      520
                                      480
                                      450
                                      420
                                      380
                                      350
                                      310
                                      280
                                      250
                                      210
                                       0
                                     3,650
                                 Alternative 2
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                     2,014
                                       0
                                    20,140
      (1)  Proposal
      The agency proposes to issue consumption allowances equal to the estimated HCFC-123 demand for servicing existing refrigeration and air-conditioning and fire suppression equipment in 2020 and to then decrease the number of allowances issued in each subsequent year by an equal amount each year such that there are zero allowances issued in 2030. In effect, this proposal would meet the full servicing demand in 2020 with newly imported HCFC-123 and the full servicing demand in 2030 with reclaimed HCFC-123. Under this proposal, the EPA would allocate 650 MT in 2020. This is the maximum estimated HCFC-123 demand for servicing refrigeration, air-conditioning, and fire suppression equipment in 2020 as discussed in the 2019 Draft Servicing Tail Report.
      The EPA could use an equal yearly decrease approach but start at a higher or lower allocation. Specifically, the EPA could use a starting allocation in 2020 of up to 1,200 MT (24 ODP-weighted MT), which is the current average annual consumption of HCFC-123 (83 FR 19757). The agency could also use a lower starting allocation in 2020 of between 650 MT (the proposed starting allocation) and 520 MT (the starting allocation in the first alternative discussed below). The agency requests comment on the full range of possible starting allocations for this option.
      The EPA proposes to reduce the allocation annually by an equal amount each year to bring allocations down to zero by 2030. Gradually reducing HCFC allowances fosters transition and recycling/reclamation and is consistent with the EPA's approach in previous HCFC allocation rules (see 74 FR 66412, December 15, 2009; 76 FR 47451, August 5, 2011; 78 FR 20004, April 3, 2013; and 79 FR 64254, October 28, 2014). This approach also encourages use of stocks where available by reducing the allocation below estimated demand. During previous ODS phaseouts, decreasing the allocation has provided equipment owners with the proper market signal to foster transition to alternatives and to increase the financial incentive for recovery and reclamation.
      Consistent with our obligations as a party to the Montreal Protocol, and the use limitation in CAA section 605(a) regarding refrigeration and air-conditioning equipment, the EPA is not proposing to issue HCFC-123 allowances for use in fire suppression or refrigeration and air-conditioning equipment manufactured on or after January 1, 2020. The EPA notes that new fire suppression and refrigeration and air-conditioning equipment may be manufactured with recovered and recycled/reclaimed HCFCs in 2020 and beyond. Section 605(a) of the CAA does not restrict the use of recycled/reclaimed HCFC-123. The EPA does not anticipate any further manufacture of refrigeration and air-conditioning equipment using HCFC-123 but notes that, as explained in the 2019 Draft Servicing Tail Report available in the docket, the fire suppression sector has a long history of using recovered and recycled/reclaimed ODS for both servicing and new equipment. For example, there has been continuing demand for halons in newly-manufactured fire suppression equipment since the 1994 halon phaseout in the United States. This demand for halons has been satisfied with recycled/reclaimed halons. Any demand for HCFC-123 for charging and servicing fire suppression equipment manufactured on or after January 1, 2020 must also be met by recycled/reclaimed HCFC-123 or HCFC-123 that was stockpiled prior to 2020.
      Following the November 2018 Montreal Protocol adjustment, the EPA revised the 2018 Draft Servicing Tail Report to disaggregate estimated demand for fire suppression to show estimated demand for servicing compared to demand for new equipment. The EPA consulted with industry on the estimate of future market demand for HCFC‐123 fire suppression applications. Over the past several years, total demand (the manufacture of new equipment and the servicing of existing equipment) has varied, but the average has been approximately 260 MT per year. The EPA expects the servicing demand to be between 35 to 90 MT based on projections from the Vintaging Model and feedback from industry.
      Starting the allocation levels below the estimated demand for servicing both fire suppression and refrigeration and air-conditioning equipment, even though the amount reclaimed is expected to be significant, could lead to insufficient quantities of recycled/reclaimed HCFC-123 to meet fire suppression demand, as indicated in the 2019 Draft Servicing Tail Report. As such, the EPA does not think it would be prudent to reduce the allocation further to account for the complete amount of expected reclamation in the early years.
      The EPA seeks comment on all aspects of this proposed allocation including the proposed number of allowances to be issued for 2020. The agency requests comment on the rationale explained above for its proposal to allocate 650 MT HCFC-123 consumption allowances for the 2020 regulatory period; whether the starting allocation in 2020 should be higher or lower; the proposal to decrease this allocation by a constant amount each year after 2020; and whether this proposal would meet demand for HCFC-123 during 2020-2029. Commenters should provide as much detail, with as much quantitative reasoning (e.g., benefits, market effects, etc.), as possible. When developing a final rule, the EPA will take into account any comments received on the starting allocation number and the proposal to decrease the allocation by a constant amount each year.
      (2) Alternatives
      The EPA is also seeking comment on two alternative approaches the EPA considered for determining how many HCFC-123 consumption allowances to issue. The first alternative approach would be to issue allowances equal to the total modeled demand each year from 2020-2029 (which includes servicing of existing equipment and the manufacture of new equipment using reclaimed HCFC-123) minus the low end of the projection for reclamation each year from 2020-2029. This contrasts with the proposed approach which, as explained above, would neither take into account demand for the manufacture of new equipment using reclaimed HCFC-123 nor directly decrease allocations based on projections for reclamation. The EPA's low-end estimate for reclamation is 300 MT in 2020, rising by 10 MT per year to 390 MT in 2029. See Table 8 of the 2019 Draft Servicing Tail Report for more discussion of estimated reclaim. In Table 1, above, the first alternative presents the allocations that would result from applying this approach.
      Setting the initial allocation at total estimated demand in 2020 minus the low-end projections for reclamation would reflect current total HCFC-123 market conditions and allow companies to continue consuming HCFC-123 at a rate consistent with demand to ensure adequate supply. Decreasing the allocations gradually over time would potentially guard against oversupply. This approach would also account for continued manufacture of fire suppression equipment using HCFC-based fire suppression agent to the extent recycled/reclaimed HCFC-123 is available. While this approach would start at a lower allocation in 2020 than the proposed approach, it would give more time for industry to transition given the slower decrease in the allocation level over time, it would also result in a larger drop between 2029 and 2030 compared to the proposed approach. This could result in a situation where HCFC-123 equipment owners wait until the end of the regulatory period to transition or are unprepared for the 2030 phaseout.
      While the EPA estimates that the level of reclaimed HCFC-123, at 300 MT per year, will be higher than the estimated demand for new fire suppression equipment, the agency expects that much of this reclaimed material will be sold into the refrigeration and air-conditioning market given current business relationships. Based on industry feedback, the EPA has tentatively concluded that reclaimed HCFC-123 is currently sold exclusively into the refrigeration and air-conditioning market. Thus, it might not be immediately available for fire suppression. More availability of virgin HCFC-123 would allow time for the market for recycled/reclaimed HCFC-123 to shift towards new fire suppression equipment, as consumption of HCFC-123 under the Montreal Protocol is only for servicing equipment.
      The EPA seeks comment on this first alternate approach. EPA requests comment on accounting for the anticipated continued manufacture of fire suppression equipment using reclaimed HCFC-123. The EPA also requests comment on using the low end or the high end of the estimate for reclamation, or a point in between. Using the current high end of the expected reclamation estimate would equate to an allocation of approximately 470 MT in 2020, 220 MT in 2025, and 20 MT in 2029. The EPA also seeks comment on whether it should start at a higher amount in 2020 (up to 1,200 MT) consistent with current average consumption of HCFC-123, or a lower amount consistent with the high end of the expected reclamation estimate provided in Table 9 of the 2019 Draft Servicing Tail Report. Commenters should provide as much detail, with as much quantitative reasoning (e.g., benefits, market effects, etc.), as possible.
      Lastly, the EPA is seeking comment on a second alternative approach under which, as shown in Table 1 above, the EPA would issue 2,014 MT of HCFC-123 consumption allowances for each year from 2020 through 2029. This is equal to 100 percent of the aggregate consumption baseline allowances for HCFC-123 and is the maximum allocation allowed under section 605(c) of the CAA. This approach would allocate approximately half of the annual consumption cap allowed under the Montreal Protocol. Specifically, this allocation would equal 40.3 ODP-weighted MT compared to 76.2 ODP-weighted MT allowed during 2020 to 2029. This approach could be warranted given the relatively low ODP of HCFC-123 (0.02) and the long lifetime of equipment using HCFC-123.
      The agency believes this approach would provide significantly more allowances than are needed to meet demand for HCFC-123. The existing regulatory prohibition on producing or importing HCFC-123 for most uses, including in the manufacture of refrigeration and air-conditioning and fire suppression equipment as of January 1, 2020 will significantly reduce the demand for HCFC-123. However, this approach would be consistent with the EPA's past approach of issuing the maximum allocation for HCFC-123 during the 2015-2019 control periods. This option does not account for recycling or reclamation and might create an oversupply of HCFC-123. An oversupply risks decreased economic incentive to recover refrigerant at the end of life and during servicing, potentially resulting in higher emissions. It also would not incorporate specific reductions to foster reclamation and recycling or the transition to alternatives. The EPA anticipates it may also significantly curtail the existing market in the refrigeration and air-conditioning sector, since the only remaining market for reclaimed HCFC-123 would be for the manufacture new fire suppression equipment. This approach would also result in an abrupt decrease in allowances in 2030 when the allocation would decrease from 2,014 MT to zero, which is inconsistent with past practice of fostering a smooth transition to alternatives. The EPA welcomes comment on this alternative approach of issuing 2,014 MT in each year. Commenters should provide as much detail, with as much quantitative reasoning (e.g., benefits, market effects, etc.), as possible.
B. Addition of Fire Suppression Servicing Uses to the HCFC Phaseout Schedule
      The EPA is proposing to modify the regulations in 40 CFR part 82 consistent with CAA section 605 and the November 2018 adjustment to Article 2F of the Montreal Protocol that allows for the continued production and consumption of HCFCs for servicing fire suppression equipment manufactured before January 1, 2020. Specifically, the EPA is proposing to modify §§82.16(e) and 82.15(g) to allow for HCFC-123 to be produced and imported, as well as introduced into interstate commerce and used, during the years 2020-2029, to service fire suppression equipment existing on January 1, 2020, so long as it is being used as a streaming agent listed as acceptable for use or acceptable subject to narrowed use limits for nonresidential applications in accordance with the SNAP regulations.
      The EPA is proposing to modify §82.16(e)(2) to permit the production and import of HCFC-123 for servicing fire suppression equipment manufactured before January 1, 2020. While the agency is proposing to include the term "production" in this regulatory change, as stated above, this action does not propose to allocate production allowances for HCFC-123 given the lack of production in the United States. Section 82.16(e) establishes limits on the production and import of HCFC-123 starting on January 1, 2020. It provides that HCFC-123 may not be produced or imported for any purposes other than the listed permissible uses. The proposed revision would add to the list of permissible uses the following: use as a fire suppression streaming agent listed under the SNAP program as acceptable for use or acceptable subject to narrowed use limits for nonresidential applications. This revision would allow for this additional use in the years 2020-2029.
      The EPA is also proposing to add a new paragraph after §82.15(g)(4) to ensure consistency with the proposed change to §82.16(e)(2). Section 82.15(g) establishes limits on the introduction into interstate commerce and use of certain HCFCs at certain dates in accordance with the worst-first approach discussed previously. Section 82.15(g)(4)(i) establishes limits that apply to many HCFCs including HCFC-123 and HCFC-124, effective January 1, 2015. The EPA is proposing a new paragraph after §82.15(g)(4) that repeats the limits in §82.15(g)(4)(i) but may be helpful in clarifying the permissible uses of HCFC-123 and HCFC-124 produced or imported after January 1, 2020. Consistent with the restrictions on production and import in the Montreal Protocol (as modified through the adjustment adopted in 2018) and §82.16, with regard to fire suppression, HCFC-123 produced or imported after January 1, 2020, may only be used for servicing fire suppression equipment manufactured before January 1, 2020. Existing inventories of HCFC-123 produced or imported prior to January 1, 2020, may continue to be used to manufacture and service new fire suppression equipment after January 1, 2020. This change would ensure that the regulations are clear and consistent between §§82.15 and 82.16, and, as a practical matter, would add no additional limitations to those in §82.16.
      These proposed revisions, if finalized, would provide flexibility consistent with the November 2018 adjustment to the phaseout schedule for HCFCs in the Montreal Protocol. The United States was a proponent of adjusting the phaseout schedule to allow for the continued production and consumption of HCFCs to service existing fire suppression equipment from 2020 through 2029. The EPA's analysis indicates that in theory, the United States could meet its own domestic fire suppression needs with alternatives and recycled/reclaimed HCFC-123, absent competing demands from other sectors. Past phase-outs, such as the halon phaseout, demonstrated that the availability of recycled/reclaimed and stockpiled material provides flexibility for users of ODS long after the phaseout date. However, recycled/reclaimed HCFC-123, which is currently being sold predominately into the refrigeration and air-conditioning market, may not be immediately available to the fire suppression sector. The EPA is concerned that reclaimers and distributors would need to adjust current distribution and sales practices to ensure that reclaimed material is available for fire suppression. At least in the near term this could affect the availability and price of HCFC-123. Given that a lack of HCFC-123 based fire suppression agents could present a safety issue, especially for applications where there is not an approved alternative clean agent, such as for Aircraft Rescue and Fire Fighting (ARFF) vehicles, allowing continued consumption of HCFC-123 from 2020 through 2029 for servicing existing fire suppression equipment is prudent. This is also consistent with the EPA's long-standing policy of working to avoid the premature retirement of existing ODS-based equipment while fostering the transition to alternatives.
      The EPA notes that the November 2018 adjustment adopted by the Parties to the Montreal Protocol also contains an essential use provision and adds other uses under the Article 2F cap, namely solvent applications in rocket engine manufacturing and topical medical aerosol applications for the specialized treatment of burns. The EPA is only proposing regulatory changes that would allow production and consumption for the servicing of fire suppression equipment manufactured before 2020. The EPA does not currently have any information indicating a need in the United States for the additional flexibilities added to Article 2F; for that reason, the EPA has not assessed their practicality or its authority to implement them under the CAA, and we are not proposing any action on them at this time.
C. Revisions to Labeling Requirements
      This section presents the EPA's proposal to adjust the current labeling requirements to reflect the proposed change to 40 CFR part 82, subpart A, which would allow the use of newly-imported HCFC-123 for servicing fire suppression equipment manufactured before January 1, 2020. The proposed changes to §§82.15 and 82.16 in subpart A are discussed in Section III.B of this notice. Revising the existing labeling requirements in 40 CFR part 82, subpart E to reflect the limited ability to use HCFC-123 for fire suppression servicing would increase awareness of individuals servicing fire suppression equipment about the restriction on HCFC-123 use and support compliance with the proposed revisions to subpart A. In proposing to revise the current labeling requirements, the EPA is relying on authority under section 605(c) to issue regulations phasing out the production and consumption and restricting the use of class II substances that may be needed for compliance. To further support awareness of these new requirements, the EPA intends to conduct outreach initiatives for technicians, distributors, and service providers.
      If the proposed change to subpart A is finalized, HCFC-123 imported on or after January 1, 2020 could be used to make Halotron[(R)] I, a fire suppression agent produced with HCFC-123, and could be used to service fire suppression equipment manufactured before January 1, 2020. It could not, however, be used in the manufacture of new equipment on or after January 1, 2020 or to service equipment manufactured after January 1, 2020. Only Halotron[(R)] I produced with HCFC-123 that is reclaimed or was imported prior to 2020 may be used for those purposes. Thus, users will need to be able to know the date of manufacture of fire suppression equipment. They will also need to be able to distinguish fire suppression agents that may be used only for servicing equipment manufactured before January 1, 2020 from fire suppression agents that may be used for manufacturing new equipment or servicing equipment regardless of the date of manufacture.
      The EPA believes that users will be able to identify the date of equipment manufacture using existing methods as is the case with refrigeration and air-conditioning equipment. However, without additional labeling of containers of fire suppression agents that contain HCFC-123, namely Halotron[(R)] I, it may not be possible for users to distinguish containers that may only be used to service fire suppression equipment manufactured before January 1, 2020 from other containers. Therefore, the EPA is proposing to modify the current labeling requirements codified at 40 CFR part 82 subpart E for such containers. The EPA is proposing to conclude that such modified labeling is necessary to ensure that users will have sufficient information to determine which containers of fire suppression agent may be used in which equipment, in order to comply with the proposed revisions to the HCFC phaseout regulations. The EPA is also taking comment on whether to modify the current labeling requirements for containers of fire suppression agents that contain HCFC-123 that is either reclaimed or was imported before 2020.
      To the EPA's knowledge, the only HCFC used in a fire suppression agent is HCFC-123, and it is only used in an agent sold under the name Halotron[(R)] I. Clean agents like Halotron[(R)] I do not leave a residue, and are commonly used in applications such as data centers, clean rooms, and aircraft where high-value or life-saving equipment will not be damaged by its use, thereby minimizing economic damages from a fire (e.g., shorter equipment downtime or lower costs to repair). There are three main fire suppression streaming end uses where clean agents are used in the United States: (1) hand-held portables; (2) 150-pound wheeled units; and (3) ARFF vehicles.
      As per the National Fire Protection Association (NFPA) and DOT regulations at 49 CFR 180.250, all portable fire extinguishers must be maintained in a fully charged operable condition and undergo hydrostatic testing. NFPA is a codes and standards organization accredited by the American National Standards Institute established to minimize the risk and effects of fire by establishing criteria for building, processing, design, service, and installation around the world. Fire extinguishers, which include portable hand-held devices and wheeled units, are recommended to undergo maintenance to ensure that an extinguisher will operate effectively and safely in the event of fire (NFPA, 2018a). Equipment should be recharged after being used to extinguish a fire for it to be usable again. Technicians who conduct hydrostatic testing, perform inspections, or recharge fire suppression equipment after a discharge may need additional information to aid in distinguishing between the permissible uses of specific containers of Halotron[(R)] I.
      The EPA is proposing to modify the existing label required by section 611 of the CAA for certain containers of fire suppression agent. Section 611 requires containers of ODS to have a label and demonstrates that Congress recognized that labeling requirements may be needed to effectively implement the phase out. In 1993, the EPA established the labeling requirements for both class I and class II substances in 40 CFR part 82, subpart E (58 FR 8136, February 1, 1993). Containers in which ODS are stored or transported must bear a clearly legible and conspicuous warning label that can be read by consumers before they can be introduced into interstate commerce. Section 611 provides specific language for the label: "Warning: Contains [insert name of substance], a substance that harms public health and environment by destroying ozone in the upper atmosphere." This is reflected in the implementing regulations at §82.106. According to CAA section 611, the label must be "clearly legible and conspicuous." Labels generally should be within the principal display panel, the warning statement should be in sharp contrast to any background upon which it appears, and if there is any outer package for the container (e.g., cylinder, isotank, or other container), labels should be on the outside packaging. Specific requirements on the size, text, and location of the label are provided in §§82.106-82.110.
      The EPA is proposing to modify the required labeling of all containers of fire suppression agent made with HCFCs imported on or after January 1, 2020. The EPA believes that Halotron[(R)] I is the only fire suppression agent that uses HCFCs that would be manufactured after 2020. Containers of Halotron[(R)] I must currently be labeled per §82.102(a) because they contain a class II substance. The EPA is proposing to modify the current required label for all containers of Halotron[(R)] I made with HCFC-123, imported on or after January 1, 2020, by adding the following sentence: "Do not use to service equipment manufactured on or after January 1, 2020." The EPA believes that this information may be necessary for technicians to determine which containers of Halotron[(R)] I may or may not be used to service new fire suppression equipment after 2020, thereby aiding compliance with applicable regulations. Technicians would still need to locate the manufacture date on all fire extinguishers or ARFF vehicles to determine which container of Halotron[(R)] I may be used to service the equipment.
      The EPA is also requesting comment on whether it should also require a modified label for containers of Halotron[(R)] I made with recycled/reclaimed HCFC-123 or HCFC-123 imported before 2020. While there would be limited additional cost, this could help technicians distinguish between specific containers of Halotron[(R)] I. A second sentence could therefore be added to the existing label for containers of Halotron[(R)] I made with recycled/reclaimed HCFC-123 or HCFC-123 imported before 2020 that reads "Not restricted to use in servicing pre-2020 equipment."
      The agency intends to develop outreach materials in concert with the final rule and distribute them to appropriate stakeholders to ensure industry awareness of the servicing requirements. The EPA believes that there are existing methods to determine the date of manufacture of fire suppression equipment, as follows.
      DOT fire extinguisher regulations at 49 CFR 173.309 require that each fire extinguisher be tested before initial shipment and marked to indicate the year of the test. Technicians could use this date as a guide for determining servicing with Halotron[(R)] I. The agency recommends that technicians inspect the date on hand-held and wheeled fire extinguishers to determine if they were manufactured before or after January 1, 2020.
      For servicing ARFF vehicles, the EPA recommends that technicians inspect the manufactured date on the vehicle. For class I-III all-wheel drive commercial vehicles, vehicle identification numbers (VINs) are required by DOT per 49 CFR 565. VINs are located on the lower right-hand corner of the windshield. For smaller class IV and V vehicles, a Vehicle Information Data Plate must be in the cab of the vehicle and contain all the information in the "Aircraft Rescue and Fire-Fighting Vehicle Tilt Table Certification" per NFPA 414, including the make and model year (NFPA, 2017). Locating the year the vehicle was manufactured would aid the technician in determining whether a container of Halotron[(R)] I can be used for servicing.
      The EPA requests comment on whether individuals servicing fire suppression equipment can readily identify the date the equipment was manufactured and whether the EPA's understanding of the location of this information is accurate.
D. Allocation of HCFC-124 Production and Consumption Allowances
	This section presents the EPA's proposed approach for determining the amount of HCFC-124 production and consumption allowances to be issued for 2020 through 2029. HCFC-124 is minimally used as a refrigerant. It is a component in refrigerant blends such as R-401A, which is used in industrial process and transport refrigeration equipment. It is also used as a stand-alone refrigerant in some niche applications that reach high condensing temperatures. It is not currently used for fire suppression.
      As previously noted, under section 605(b)(1) and (c) of the CAA, it is unlawful for any person to produce or consume any class II substance in an annual quantity greater than the quantity of such substance produced or consumed by such person during the baseline year. This would equate to a maximum production amount of 4,029 MT (89 ODP-weighted MT) and a maximum consumption amount of 2,396 MT (53 ODP-weighted MT). Over the past five years, consumption has been approximately 250 MT per year and reclamation has been minimal. Based on recent sales data from the California Air Resources Board, the EPA estimates that annual demand for HCFC-124 is between 100 to 200 MT for servicing refrigeration and air-conditioning equipment nationally. More information on anticipated demand for HCFC-124 is in the 2018 Servicing Tail Report.
	Given the small projected need for HCFC-124 beyond 2019 and the continued use of certain refrigerant blends containing HCFC-124, the agency is proposing to issue HCFC-124 production and consumption allowances in 2020-2029 consistent with the level of demand in the 2018 Servicing Tail Report. Based on Vintaging Model estimates, along with industry feedback on anticipated demand, uses of HCFC-124, and the use of HCFC-124 allowances in recent years, the EPA is proposing to allocate 200 MT of HCFC-124 annually with a gradual decrease of 20 MT each year, as shown in Table 2. The EPA's goal is to ensure that servicing needs can be met, while also encouraging recovery and reuse and transition to alternatives. This proposed allocation supports this goal because it accounts for allowed end uses of HCFC-124 that may not be captured by the Vintaging Model (e.g. use of niche refrigerant blends containing HCFC-124 to service equipment manufactured before 2020).
      The EPA is also taking comment on whether, to ensure adequate supply, the agency should issue 200 MT annually beginning in 2020 without any decrease (Alternative 1 in Table 2) or wait until 2025 to begin a decline in allowances (Alternative 2 in Table 2). Without significant reclamation of HCFC-124, it may be preferable to err on the side of an oversupply than an undersupply. This is a small quantity in the broader context and would not have significant environmental effects given the low ODP (0.022) of HCFC-124.
Table 2: Comparison of HCFC-124 Production and Consumption Allowance Allocation Options between 2020-2030 (MT)

                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
                                     2026
                                     2027
                                     2028
                                     2029
                                     2030
                                  Cumulative
                                   Proposal
                                      200
                                      180
                                      160
                                      140
                                      120
                                      100
                                      80
                                      60
                                      40
                                      20
                                       0
                                     1,100
                       Alternative 1: No Annual Decrease
                                      200
                                      200
                                      200
                                      200
                                      200
                                      200
                                      200
                                      200
                                      200
                                      200
                                       0
                                     2,000
                     Alternative 2: Delay Annual Decrease
                                      200
                                      200
                                      200
                                      200
                                      200
                                      167
                                      133
                                      100
                                      67
                                      33
                                       0
                                     1,500
      The EPA is requesting comment on all aspects of this proposal, as well as whether to issue 200 MT of allowances per year without any decline or waiting until 2025 before starting to decrease allowances. Commenters should provide as much detail, with as much quantitative reasoning (e.g., benefits, market effects, etc.), as possible.
E. Changes to Transfer of Allowance Provisions in Section 82.23
      This section presents the EPA's proposal to prohibit the transfer of allowances for phased out HCFCs to allowances for HCFC-123 and HCFC-124. The proposal would prohibit calendar-year inter-pollutant transfers into ODS that are already phased out of production and consumption. This proposal responses to stakeholder inquiries about inter-pollutant transfers to phased out HCFCs. HCFC-123 and HCFC-124 are the only remaining HCFCs that can be produced or imported in 2020-2029, with limited exceptions. As such, the EPA is proposing to issue allowances for only these two substances. Production and import of HCFC-141b, HCFC-225ca, and HCFC-225cb have already been phased out and production and import of HCFC-22 and HCFC-142b are phased out starting in 2020. Demand for some of these HCFCs, particularly HCFC-22, will continue beyond 2020. This could create an incentive for HCFC-123 and HCFC-124 allowance holders to attempt to convert their allowances into allowances for phased out HCFCs, such as HCFC-22.
      Under CAA section 607, the EPA has issued regulations at §82.23 which provide for both inter-pollutant and inter-company transfers of allowances for class II ODS under certain conditions. In an inter-pollutant transfer, an allowance holder converts allowances for one class II ODS into allowances for another class II ODS (§82.23(b)). The EPA is concerned about the potential for allowance holders to attempt inter-pollutant transfers that would be inconsistent with the established chemical-by-chemical phaseout.
      The EPA views §82.16 as effectively prohibiting this practice by prohibiting production and import of HCFCs that have already been phased out. Section 82.16(b)-(e) prohibits individuals from producing or importing certain HCFCs that have been phased out, with limited exceptions. For example, production and import of HCFC-22 and HCFC-142b are prohibited in 2020, with limited exceptions that are not considered to be United States consumption under the CAA or Montreal Protocol. These provisions do not explicitly prohibit the transfer of HCFC-123 or HCFC-124 allowances into allowances for a phased out ODS even though the entity would be violating §82.16(e)(1) if it produced or imported that phased out ODS for any purpose other than the few listed exceptions, such as for use in a process resulting in its transformation.
      Given the EPA has already received several inquiries about whether inter-pollutant transfers from HCFC-123 or HCFC-124 to HCFC-22 will be allowed after the phaseout of HCFC-22, the EPA is proposing to explicitly prohibit calendar-year inter-pollutant transfers of HCFC-123 and HCFC-124 to phased out HCFCs in §82.23(b) to ensure clarity for the regulated community. Section 82.23(d) already prohibits permanent inter-pollutant transfers of baseline allowances, so there is no additional change needed in that paragraph. The proposed change to §82.23(b) would not have a practical effect on the ability of allowance holders to legally produce or import phased out ODS given the prohibition in §82.16. However, the proposed change would minimize confusion and reduce the likelihood that an allowance holder attempts to request an inter-pollutant transfer of HCFC-123 or HCFC-124 allowances to phased out HCFCs. Inter-pollutant transfers between HCFC-123 and HCFC-124 may continue so long as the newly produced or imported HCFC-123 and HCFC-124 are for an allowed use, such as for servicing refrigeration and air-conditioning appliances manufactured before January 1, 2020.
      The EPA is soliciting comments on the proposed prohibition on calendar-year inter-pollutant transfers into ODS that are already phased out of production and consumption to improve the clarity of the regulations at §82.23.
IV. Updates to Other Provisions of the Production and Consumption Control Program
      This section presents the EPA's proposal to update a number of other provisions in 40 CFR part 82, subpart A  -  Production and Consumption Controls. To decrease the burden of ODS reporting and increase the accuracy of reports, the EPA is proposing to require that certain reports, import petitions, and certifications of intent to import ODS for destruction be submitted electronically through CDX. To reduce the reporting burden, the EPA is proposing to update the reporting regulations, consolidate reporting elements, and harmonize reporting requirements for class I and class II substances. The EPA is also proposing changes to the recordkeeping provisions for QPS uses of methyl bromide to increase awareness of the existing use restrictions and to amend the regulatory text for readability. In addition, to better monitor imports into the United States and to facilitate imports of ODS for destruction, the EPA is proposing changes to provisions related to imports of ODS.
A. Electronic Reporting
      The EPA began allowing electronic reporting as an option for most types of reported information under this program in 2008 (73 FR 15520). The EPA provided electronic reporting forms and instructions to assist entities in fulfilling reporting requirements in §§82.13, 82.20, and 82.24 but did not require their use and allowed the submission of hard-copy forms. Upon receipt of the reports, the EPA either enters the data manually or imports it electronically via CDX into the ODS Tracking System. Manual entry of data provided in hard copy is time consuming for the agency as well as a potential source of error. On July 1, 2018 the EPA launched a new electronic platform for the ODS Tracking System along with revised and streamlined electronic forms. The EPA is proposing to require the use of the agency's CDX to submit reports electronically by the first quarter of 2020, with certain exceptions. To achieve this, the EPA would update the definition of "Administrator" in §82.3, define "Central data exchange" in §82.3, add a new section at §82.14 with instructions on the process for electronic reporting, and revise provisions at §§82.13(c) and 82.24(a)(1) to indicate the effective date when electronic reporting through CDX would be required.
      Currently, the definition of "Administrator" instructs submitters to mail all reports and petitions to import ODS. The EPA is proposing to amend the definition of "Administrator" to require electronic reporting for the reports and petitions that are available in CDX, which includes the majority of reports under subpart A, as well as the import petitions and the Certification of Intent to Import ODS for Destruction, a new process which the EPA is proposing to create, as discussed further in Section IV.D of this notice. The EPA is also proposing to revise §§82.13, 82.23, and 82.24 to clarify that where a form is electronically available in CDX it must be submitted electronically through that tool. The EPA is also proposing to add the definition of "central data exchange" and provide instructions on how to register in CDX and submit information electronically in a new section at §82.14. Each entity must establish an account in CDX in order to prepare, transmit, certify, and submit reports and submissions.
      CDX is the EPA's electronic system for environmental data exchange and serves as the EPA's main mechanism for receiving and exchanging electronic information reported via the Internet. CDX provides the capability for submitters to access their data through the use of web services. CDX enables the EPA to work with stakeholders to enable streamlined electronic submission of data via the Internet. All information sent via CDX is transmitted securely to protect CBI. A reporting entity may register for a CDX account or gain access to an existing CDX account at https://cdx.epa.gov, as discussed further below.
      The ODS Tracking System is a secure database that serves as the primary vehicle for tracking the production and consumption of ODS in the United States. The ODS Tracking System allows producers, importers, and exporters of class I (excluding methyl bromide) and class II substances to submit quarterly and annual reports electronically. The ODS Tracking System maintains the data submitted to the EPA and helps the agency to: (1) maintain oversight over total production and consumption of ODS in the United States; (2) monitor compliance of individual companies with domestic limits and restrictions on production, imports, and transfers and with specific exemptions from the phaseout; (3) enforce against entities illegally importing without allowances; and (4) assess and report on compliance with the United States production and consumption caps established under the Montreal Protocol, as implemented through the CAA.
      Providing a system to facilitate electronic reporting is consistent with the EPA's E-Enterprise initiative to reduce transaction costs and burdens for the regulated community by leveraging technologies. Eliminating paper-based submissions in favor of electronic reporting, including use of the revised Excel reporting forms, and CDX, is part of broader government efforts to move to modern electronic methods of information gathering. One of the objectives of E-Enterprise is to reduce paperwork burden for the regulated community by offering electronic reporting, optimized operations, and advanced real-time monitoring tools. For more information on the EPA's E-Enterprise efforts please visit: https://www.epa.gov/e-enterprise.
      Section 603 of the CAA grants the EPA the authority to issue certain regulations on the monitoring and reporting of ODS. The EPA may also use the information gathering authority under CAA section 114(a) to carry out the provisions of Title VI, including the production and consumption controls, and may require anyone who is subject to Title VI, or who may have information necessary to carry out Title VI, to make such reports as may reasonably be required. It is reasonable to require electronic reporting for the reasons set forth in this notice. Using electronic reporting enables more efficient data transmittal and reduces errors through built-in validation procedures. It reduces the reporting burden for submitters by reducing the cost and time required to review, edit, and transmit data to the agency. It also promotes efficiency in communications and cost savings in submissions and correspondence. Additional support for electronic reporting comes from the Government Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which states that Executive agencies are to provide "(1) for the option of the electronic maintenance, submission, or disclosure of information, when practicable as a substitute for paper; and (2) for the use and acceptance of electronic signatures, when practicable." The EPA's CROMERR (40 CFR part 3), published in the Federal Register on October 13, 2005 (70 FR 59848), provides that any requirement in title 40 of the CFR to submit a report directly to the EPA can be satisfied with an electronic submission that meets certain conditions once the agency has published a notice in the Federal Register announcing that the EPA is prepared to receive certain documents in electronic form. See 40 CFR 3.2(a). For more information about CROMERR, go to https://www.epa.gov/cromerr.
      The EPA designed the electronic reporting forms with input from stakeholders to reduce effort and allow submitters to paste transaction-level data into the form from other spreadsheets. They contain built-in validations, drop-down lists, and auto-populated cells to reduce errors from data entry. Once the form is complete, users generate a comma separated value (CSV) file and submit the Excel report, CSV file, and any required supporting attachments via CDX. Refer to the EPA's website for additional information on electronic form submission: https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting. The web-based tool, as appropriate, also allows the user to choose "Print," "Save," or "Transmit through CDX." The reporting tool encrypts the file and electronically submits it through CDX. The user can also check the status of their submissions at any time via CDX. Upon successful receipt of the submission by the EPA, the status of the submissions will be flagged as completed. The CDX inbox is currently used to notify the users of any correspondence related to user registration.
      Under this proposal, entities generally would be required to submit the first quarter reports for the 2020 reporting year, due April 1, 2020, through CDX. Other reports that are available for submission through CDX, including import petitions and certifications of intent to import ODS for destruction, also would be required to be submitted electronically through CDX starting April 1, 2020. The EPA believes this would give the regulated community sufficient time to register in CDX and familiarize themselves with the revised electronic reporting forms and format. If this rule is finalized as proposed, reporting entities would be required to register and electronically submit most reports and petitions through CDX. Specifically, for production, import, export, destruction, transformation, transfers, and trades of ODS entities must use specified forms to allow for submission through CDX. Some reports are not required to be submitted through CDX and would continue to be submitted to the EPA in hardcopy. These are low-volume reports for which the EPA has not released an electronic form, and include the laboratory use certifications and applications for critical use exemptions f - or methyl bromide. The OMB control number for this information collection request (ICR) and these forms is 2060-0170. The following electronic forms were released on July 1, 2018 and are available at https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting and through CDX:
       Class I Producer Quarterly Report (EPA Form 5900-151);
       Class I Importer Quarterly Report (EPA Form 5900-150);
       Class I Exporter Annual Report (EPA Form 5900-149);
       Class I Laboratory Supplier Quarterly Report (EPA Form 5900-153);
       Second-Party Transformation Annual Report (EPA Form 5900-147);
       Second-Party Destruction Annual Report (EPA Form 5900-148);
       Class II Producer Quarterly Report (EPA Form 5900-202);
       Class II Importer Quarterly Report (EPA Form 5900-200);
       Class II Exporter Quarterly Report (EPA Form 5900-199);
       Class II Trades (EPA Form 5900-205);
       Class II Request for Additional Consumption Allowances (EPA Form 5900-201).
       Methyl Bromide Producer Quarterly Report (EPA Form 5900-141);
       Methyl Bromide Importer Quarterly Report (EPA Form 5900-144);
       Methyl Bromide Exporter Quarterly Report (EPA 5900-140);
       Distributor of QPS Methyl Bromide Quarterly Report (EPA Form 5900-155); and
       Methyl Bromide Pre-2005 Stocks Annual Report (EPA Form 5900-142).
      Petitioners currently have the option of using CDX to submit petitions. The current CDX process guides users through a series of drop downs, fillable fields, and uploads of PDF attachments using an electronic webform. The EPA is proposing to require reporting entities importing ODS for reuse or destruction to submit their reports through CDX because it would enable more efficient data transmittal and would reduce errors, as it has built-in validation procedures. For instance, missing information in a required field would prevent the petitioner from submitting the petition until all fields are completed. Thus, the EPA and entities would expect to benefit from electronic reporting by receiving complete submissions in a system that allows for secure electronic communication.
      The EPA estimates that entities submitting ODS reports who have not yet registered in CDX would incur a one-time burden associated with registration. Most entities have already registered with CDX to voluntarily submit electronic ODS Tracking System forms or for other agency regulatory programs. As of October 2018, 70 of the 93 entities that report ODS production, import, or export to the EPA had registered in CDX. Therefore, the EPA estimates 33 respondents would need to incur the one-time CDX registration burden. Based on the EPA's Cross-Media Electronic Reporting Regulation (CROMERR) (ICR number 2002.07; OMB Control No. 2025-0003), the EPA assumes that entities would spend fifteen minutes per employee to register with CDX and complete Lexis Nexis identity proofing. Furthermore, the EPA assumes that an average of two technical staff members would need to register for each company, resulting in 20 minutes of burden per entity.
      The EPA estimates that only those entities who have not yet registered in CDX would incur a one-time burden for this change. Based on the number of entities that are already reporting through CDX, the EPA expects more than 90% of reporting entities will be reporting electronically at the start of 2019. Thus, the EPA estimates initial CDX registration and electronic signature costs incurred in the first year would be $1,179 because a majority of entities have previously registered in CDX and are reporting electronically. The EPA estimates the annual costs savings to reporters to be $16,200 per year.
      As discussed in the supporting statement for the accompanying ICR available in the docket to this rule, the EPA also expects to reduce its own burden as the result of receiving electronic submissions and communicating electronically with entities. The agency resources and time requirements to review and process data would decrease, and document storage and retrieval would require fewer resources. The electronic submission of data through CDX would allow for the direct import of data into the ODS Tracking System. This would reduce the time the agency spends manually entering data into the ODS Tracking System from paper forms as well as reduce the potential for human error that exists when data are entered by hand. Agency personnel would also be able to communicate more efficiently with entities electronically. The conversion to an electronic reporting system as well as the adoption of CDX to facilitate form submission and processing are expected to create long-term burden reductions and increased efficiencies for the EPA. Annual costs to EPA would be associated with the operation and maintenance of CDX for the data flow.
      The EPA seeks comment on its proposal to require electronic reporting for ODS data under 40 CFR part 82, subpart A, with exceptions for a few low volume forms. In addition, the EPA seeks input on experience to date with electronic reporting of ODS data and whether entities that have already transitioned to electronic reporting have been able to lower their reporting costs, and if so, by how much.
B. Changes to Reporting Requirements in Sections 82.13, 82.23, and 82.24
       This section presents the EPA's proposal to consolidate and harmonize ODS reporting elements. The agency has provided the option of electronic reporting for most submissions since 2008 to assist stakeholders in the reporting process. The proposed regulatory changes would reflect current practices by entities that can be designed into electronic forms. The EPA monitors company compliance, in part, through the recordkeeping and reporting regulations at §§82.13 and 82.24. The EPA is proposing these updates under CAA sections 603 and 114. Many of these proposed regulatory changes would ease the reporting burden. For example, the EPA is proposing to remove reporting elements in §§82.23(a), 82.24(b), and 82.24(c) that require the reporter to calculate values from data already provided. Requiring this of the entity is unnecessary because if finalized as proposed, the requirement to report electronically through CDX means these values can automatically be calculated and populated. This would save reporting entities time in reporting and reduce errors in submissions. The EPA is also proposing to change §§82.13(h) and 82.24(d) so that the quantity (rather than the percentage) of used, recycled, or reclaimed class I and class II substances, respectively, would be a required reporting element. This change would improve consistency with the importer reporting requirements and correspond with the way companies report their annual data. It would also streamline the exporter reporting forms by eliminating the need for an entity to calculate a percentage. The EPA is also proposing to remove references to expended and unexpended production and consumption allowances at §82.13(f)(3)(iv) and (g)(4)(viii), which likewise can be calculated automatically with the use of electronic reporting forms.
      Other proposed regulatory changes would harmonize the requirements for class I and class II substances. For example, the EPA is proposing that the timeframe submitters have to make revisions to forms for class I and class II substances be the same. Currently under §82.24 class II reporters have 180 days from the end of the applicable reporting period to make revisions while the class I provisions in §82.13 are silent on the issue. The EPA is proposing to address this omission in the class I regulations by adding a provision that revisions to reports for class I substances under §82.13 be made within 180 days of the end of the applicable reporting period. This would conform to the current practices followed by entities that make revisions to class I reports and is consistent with EPA's current practice of allowing such revisions to reports for class I substances. These changes would also be consistent with the current regulations in §82.24 for revisions to reports for class II substances.
      The EPA is further proposing to amend §82.24(d)(1) to clarify that exporters who submit a Request for Additional Consumption Allowances (RACA) must still include that export on their quarterly exporter report. Under §82.20, companies may submit a request for additional consumption allowances if they export class II substances that were previously produced in or imported into the United States using consumption allowances. Currently, the regulatory text at §82.24(d)(1) excludes from quarterly reporting those RACAs even though exporters do typically include those exports in their quarterly reporting. For ease of review by the EPA and for consistency of reporting by exporters, the agency is proposing that all exports be included in the quarterly export report, even if the EPA had issued additional consumption allowances to the exporter for that particular export. This proposed change matches current practice so the agency does not anticipate an increase in burden for the exporter.
      The EPA is also proposing to amend the reporting requirements at §82.13(v) to add the contact information for the source company from which the material was purchased and the laboratories to whom the material is sold. This proposal would allow EPA to better track the sale of ODS for laboratory purposes through the Class I Laboratory Supplier Report.
      Lastly, the EPA is proposing to correct class I reporting requirements for exporters by replacing the term "Employee Identification Number" with the correct term "Employer Identification Number" in §82.13(h).
      The EPA seeks comment on its proposed regulatory changes to the reporting requirements under 40 CFR part 82, subpart A. The EPA welcomes comment on any other changes that would ease burden on reporters.
C. Changes to Methyl Bromide Provisions in Sections 82.4 and 82.13
      The EPA is proposing to amend the existing regulatory provisions related to the QPS exemption for methyl bromide under CAA section 604(d)(5) and ensure that QPS methyl bromide is not used in a manner inconsistent with the exemption. The EPA's regulations implementing CAA section 604(h) set January 1, 2005 as the production and import phaseout date (§82.4(b), (d)). Certain exceptions apply, including an exemption for methyl bromide produced or imported for quarantine and preshipment applications. Quarantine applications and preshipment applications are both defined at §82.3. Briefly, quarantine applications are treatments for commodities entering or leaving the United States or any State (or political subdivision thereof) to prevent the introduction, establishment, and/or spread of quarantine pests (including diseases), or to ensure their official control. Preshipment applications are those non-quarantine applications applied within 21 days before export to meet the official requirements of the importing country or existing official requirements of the exporting country. The current recordkeeping and reporting regulations relating to QPS methyl bromide appear at §82.13 and establish specific requirements for producers, importers, distributors, and applicators, including in some instances requirements for written certifications that the methyl bromide will be used only for QPS applications in accordance with the definitions in §82.3.
      This section discusses three types of proposed changes to the QPS regulations. As a brief overview, first, the EPA is proposing to clarify that it is a violation to sell or use methyl bromide produced under the QPS exemption for any uses other than QPS applications. Second, the EPA is proposing to extend the existing certification requirements to all purchasers of QPS methyl bromide. Third, the EPA is proposing to make non-substantive changes to §§82.4 and 82.13 to improve readability, including changes to the naming convention for methyl bromide where appropriate and removal of unnecessary references to "used" material.
      These proposed changes are, in part, in response to the misuse of QPS methyl bromide by applicators and distributors in the U.S. Virgin Islands and Puerto Rico. As described in the Centers for Disease Control's (CDC) Morbidity and Mortality Weekly Report (MMWR), on March 18, 2015, a U.S. Virgin Islands pest control company, Terminix International USVI LLC, fumigated a condominium complex in St. John with a product containing methyl bromide for the purpose of exterminating household pests. As a result, a family of four suffered acute methyl bromide poisoning resulting in three family members having life-altering illnesses. On March 25, 2015, the U.S. Virgin Islands Department of Planning and Natural Resources issued a stop-use order for methyl bromide to the company that performed the fumigation. A subsequent investigation by the Department of Planning and Natural Resources and the EPA revealed that a previous fumigation with methyl bromide had occurred on October 20, 2014, at the same condominium resort. In total, 37 persons may have been exposed to methyl bromide as a result of the October 2014 and March 2015 fumigations (Kulkarni et al., 2015). Terminix, LP and Terminix, USVI were sentenced to pay a total of $10 million in criminal fines and restitution for violating the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (EPA, 2017). The companies were also ordered to perform community service following an investigation and guilty pleas to their use and application of illegal fumigants in multiple residential locations in the U.S. Virgin Islands.
      As a result of the exposures in the U.S. Virgin Islands, as well as documented misuse of QPS methyl bromide in Puerto Rico, and the high health risk potential from mishandling or misuse of QPS methyl bromide, the EPA is proposing to add a regulatory provision at §82.4(r) to expressly prohibit the sale or use of QPS methyl bromide for any uses other than QPS applications. The proposed provision would also explicitly state that it is a violation of subpart A to sell or use methyl bromide produced or imported under the QPS exemption for any uses other than QPS applications.
      The existing regulations at §82.13(y)(1) and (z)(2) require certification statements from distributors, applicators, commodity owners, shippers or their agent that methyl bromide "will be used only for quarantine and preshipment applications." Similarly, §82.13(f)(2)(xviii) and (xix) describe the exempted quantities of methyl bromide as "produced solely for quarantine and preshipment applications." The EPA interprets this existing text as already prohibiting the use of methyl bromide produced or imported under the QPS exemption for any uses other than QPS applications. Although the EPA is proposing to add an express statement of the prohibition at §82.4(r) to add clarity and enforceability to this prohibition, the EPA does not view this as changing the existing requirements. The proposed prohibition that would appear at §82.4(r) for the QPS exemption is modelled on the language at §82.4(n), which contains an express prohibition on using controlled substances produced under the essential use exemption.
      Second, to help avoid future exposures stemming from misuse of QPS methyl bromide, the EPA is proposing to extend the existing certification requirements to all purchasers of QPS methyl bromide, including purchasers who purchase for further distribution. Under the existing recordkeeping and reporting requirements at §82.13(f)(2)(xviii), producers of methyl bromide must maintain certifications that methyl bromide produced for QPS applications has been purchased by distributors or applicators to be used only for QPS applications. Under §82.13(y), distributors of QPS methyl bromide must certify when they purchase or receive QPS material from producers and importers that the controlled substances will be used only for QPS applications. Applicators of QPS methyl bromide must also certify to distributors that the controlled substance will only be used only for QPS applications under the existing regulation at §82.13(z).
      The EPA has identified a gap in this certification chain when the material is sold through multiple distributors before reaching the applicator. When one distributor sells to a second distributor, neither distributor is required to certify or maintain a certification that the material will be used only for a QPS application. The EPA is proposing to revise §82.13(y) to extend the certification requirement to purchasers who purchase or receive material for further distribution to address this gap.
      The proposed extension of the certification requirement would help to ensure that distributors are knowledgeable of the requirements for the sale of QPS methyl bromide. The sales and misapplications of QPS methyl bromide in Puerto Rico and the U.S. Virgin Islands demonstrate that distributors may not have been aware of, or may have ignored, the limitations on the use of this material. The purpose of the requirement when established was to ensure that anyone selling or purchasing QPS methyl bromide signed a certification verifying that they would comply with requirements under Title VI of the CAA (66 FR 37760). Distributors are more likely to make themselves aware of those requirements and be mindful of the fact that QPS methyl bromide can only be used for QPS applications if they are required to sign a certification addressing these requirements and provide it before each purchase. This proposal would fill the gap in the distribution chain and ensure the original intent of the regulation is implemented.
      The EPA is therefore proposing to extend the existing requirement that every distributor of QPS methyl bromide certify to the producer or importer from whom they purchased or received the material that quantities purchased or received would be sold only for quarantine applications or preshipment applications to also require such a certification when the material is purchased or received from a distributor. Likewise, the existing requirement that such distributors receive from any applicator, to whom they sold or delivered the methyl bromide a certification, prior to delivery of the quantity, stating that the quantity would be used or sold solely for QPS applications in accordance with definitions in subpart A would be extended to sales and deliveries to any exporter or distributor under the proposed changes. For exporters, the invoice or sales agreement currently required in §82.13(h)(2)(viii) is sufficient for this purpose. The EPA is proposing to make these changes to §82.13(y).
      The EPA is also proposing that the distributor certify that they are selling the material for a QPS application rather than certify that it will be used for a QPS application, as is required in the existing regulations. This would better align the rule text with the distributor's role. The proper sale of the material is within the distributor's control whereas the use may not be, given that the material may be resold by another distributor and applied by an end user or third-party applicator.
	The EPA seeks comment on its proposed addition of §82.4(r) relating to the prohibition against using QPS methyl bromide for anything other than QPS uses and its proposed changes to the certification requirements for QPS methyl bromide.
	The EPA is also proposing edits to §82.13(h)(2), which contains the recordkeeping requirements for exporters of certain "types" of methyl bromide by companies that did not produce the material. The EPA is proposing edits to clarify what is meant by "type" of methyl bromide. Specifically, the EPA is proposing to more clearly state that the provision requires reporting of the quantity of methyl bromide exported for transformation, destruction, critical use, and QPS uses. These are the only exempted uses of methyl bromide, and this would match the information requested in the existing reporting forms. The EPA is also proposing to remove the requirement in the existing provision that exporters state how much of the exports are of "used, recycled or reclaimed material." Unlike other ODS, methyl bromide is a product that is registered and controlled under FIFRA and thus is not sold "used" or "recycled" or "reclaimed." Therefore, these adjectives are not applicable to methyl bromide and this phrase is not needed.
      Lastly, the EPA is proposing to replace references to "class I, Group VI controlled substances" with "methyl bromide" where appropriate for readability throughout §§82.4 and 82.13. "Class I, Group VI controlled substances" is how methyl bromide is classified under the EPA's regulations in appendix A to subpart A, but methyl bromide is the only compound within this category. Using the common name would improve the readability of the QPS regulations.
      The EPA seeks comment on these proposed changes to §§82.4 and 82.13 for readability and clarity of the regulations, as well as on the proposed changes to the recordkeeping requirements at §82.13(h)(2) for exports of certain types of methyl bromide.
D. Changes to Provisions for the Import of Ozone-Depleting Substances in Sections 82.3, 82.4, 82.13, 82.15, and 82.24
	Under CAA sections 604, 605, and 606, the EPA restricts the import of ODS consistent with both the CAA and the Montreal Protocol. As discussed previously in Section II of this notice, importing virgin ODS requires the importer to expend consumption allowances. Controlling the number of allowances and knowing who holds those allowances allows the EPA to ensure that the phaseout obligations under the Montreal Protocol as implemented through the CAA are met. Used ODS can be imported without consumption allowances, and generally without use restrictions, as long as certain conditions are satisfied. Imports of used ODS are currently regulated under §82.13(g)(2)-(3) (for imports of used class I substances) and §82.24(c)(3)-(4) (for imports of used class II substances). The EPA has reviewed the import petition process and is proposing amendments to improve data collection. Such changes would require collection of additional information when additional verification is needed to determine whether the material has been previously used and remove data elements that are currently collected but that are no longer needed. The EPA is also proposing to create a procedure for imports of both used and virgin ODS when they are imported for destruction. This proposal may lead to more used ODS being imported for reuse or destruction, which is beneficial for fostering a smooth transition to alternatives and reducing emissions of ODS to the atmosphere. Additionally, these proposals would reduce the chance that virgin ODS are imported under the false pretense that it is "used."
      Anyone wanting to import used ODS must currently submit a petition to the agency and receive a "non-objection notice" approving the import. The petition to import a used ODS must contain certain information, which the EPA considers in determining whether the ODS is in fact used. Required information includes: a description of the previous use of the substance; the identity of source facilities from which the material was recovered; a contact person at each source facility; the name, make, and model number of the equipment from which the material was recovered at each source facility; a best estimate of when the material was removed; and an export license from the appropriate government agency from the country of export. See §§82.13(g)(2) and 82.24(c)(3). After review, the EPA responds to the petition by issuing either a "non-objection notice," which allows the import to proceed, or an "objection notice," which has the effect of prohibiting the import because a non-objection notice is required for the lawful import of such material.
       The EPA established the petition process to import used class I ODS (under CAA sections 603 and 604) in 1998 (63 FR 41626) and in 2003 (68 FR 2819) for class II ODS (under CAA sections 603 and 605) out of concern that some importers were circumventing the production and import controls by importing virgin class I and class II substances that had been intentionally mislabeled as used. The petition process has been effective in addressing this potential problem because the information requirements and the review undertaken by the EPA make it difficult for importers to falsify documents. Sections 604, 605, and 606 of the CAA provide statutory authority for controlling the import of ODS, including the petition process and the proposed changes to that process. Section 603 of the CAA requires reporting of the amount of ODS imported on a quarterly basis or on a basis determined by the Administrator. To the extent that these proposed changes involve recordkeeping and reporting of information, the EPA also relies upon its authority under CAA section 114, which authorizes the EPA to require recordkeeping and reporting in carrying out any provision of the CAA (with certain exceptions that do not apply here). Specifically, the EPA is proposing changes to the recordkeeping and reporting requirements to carry out the import provisions of sections 604, 605, and 606.
 	Despite the effectiveness of the petition process at providing information that allows the EPA to verify that ODS are used before they are imported, the EPA has identified potential improvements to the process. For example, the current requirements are difficult to satisfy if the imported material comes from a halon bank or other ODS banks. The current regulations exempt only halon 1301 aircraft bottles from the petition process for hydrostatic testing, yet aircraft bottles containing halon 1211 are also imported for such testing. The current petition process also does not distinguish imports of used ODS that are intended to be destroyed from imports of all other used material that are intended to be reclaimed for continued use, though the agency recognizes that the verification requirements do not need to be as rigorous when the ODS are to be destroyed. The existing regulations also do not provide a mechanism to pre-approve the import of virgin material for destruction, resulting in delays at the port of entry while the shipment is verified by the EPA.
i. Changes to the Petition Process to Import Used ODS for Reuse in Sections 82.13 and 82.24
      The EPA is proposing changes to the petition process that would generally ease the burden on importers, while still allowing the agency to verify that the material being imported is used. Specifically, the agency is proposing to: allow, under certain circumstances, submission of an official letter from the appropriate government agency in that country where the material is stored attesting that a class I substance is used in lieu of detailed equipment-level source information; allow submission of an application for an export license in lieu of the license itself; require that petitions include email addresses in contact information (while removing the requirement to provide fax numbers) and commodity codes for the material; and specifically authorize the agency to request additional information when additional verification is needed before issuing a non-objection notice. In general, the EPA anticipates these changes would increase the availability of used class I substances in the United States and thus help to provide a greater supply of used material for servicing existing equipment, which might otherwise have to be retired before the end of its useful life.
      First, the EPA is proposing to amend §82.13(g)(2) in recognition that banks of halon and other class I ODS overseas are a potential source of used ODS. Since halons were phased out in the United States and other non-Article 5 countries in 1994, many countries and organizations established halon banks where they aggregate and store previously used and recovered halon for reuse in fire suppression applications. In most cases the managers of such banks do not have the complete information required by the EPA's petition process especially since the material may have been recovered more than two decades ago. As detailed above, the import petition must currently contain information about the used ODS including the source facility and name, make, and model number of the equipment and from which the material was recovered. Petitioners sourcing class I substances from banks, therefore, rarely have sufficient records to provide all the information required in the petition process, and as a result the petitions are subject to denial.
      The EPA is proposing to waive the requirement for specific source information for halon and other class I substances stored in either a national government ODS bank or a privately-operated bank authorized by a national government to collect and manage ODS if the petitioners include an official letter from the appropriate national government agency of the exporting country attesting that the class I substance(s) proposed for export to the United States is used. The EPA would consider this official letter along with all the other evidence provided in determine whether the material is used. However, providing an official letter does not mean that the EPA would automatically approve the petition. The EPA is proposing to define bank for clarity in the regulatory text.
      Stakeholders have indicated to the agency that this type of change to the petition process would allow U.S. companies to potentially access large reserves of halon held overseas for which source information cannot be obtained. Halons are used for fire protection applications, such as in civil aviation, military, and oil and gas drilling and the continued availability of used halons remains important to many U.S. operations. Industry in the United States has successfully managed the recovery and use of halons since the domestic phaseout of production in 1994 and the EPA anticipates that they will continue to do so. However, as we get further from the phaseout, the available supply of halons decreases.
      The Montreal Protocol's Technology and Economic Assessment Panel (TEAP) has provided information on the availability and expected need for halons in the future. The TEAP issued a report in September 2018, noting continued demand for halons, in particular for servicing fire suppression equipment for civilian aviation (UNEP, 2018a). Civil aircraft will continue to need halon to meet fire protection requirements for lavatory bottles, handheld extinguishers, engine nacelles, auxiliary power units, and cargo compartments (FAA, 2014) until there is a transition to alternatives for all applications on new aircraft as well as to service the civil aircraft fleet. This proposal would allow halon to be more easily sourced from overseas banks and thus should make more halon available to service aircraft in the United States. In addition, the military and oil and gas drillers continue to need halons for fire suppression applications.
      Second, the EPA is proposing to amend the criteria for when the EPA may issue an objection notice to a petition to import a used ODS. When sufficient information is not provided with the initial petition for a determination, the EPA requests additional information from the petitioner in order to verify that the material was used. The EPA is therefore proposing to clarify that not providing this requested information could be grounds for issuing an objection notice to the petition. As one example of information that may be requested, the EPA may request results of purity sampling of class I or class II substances. The EPA understands that if a halon is used, the purity will typically be much lower (on the order of 90 to 95 percent pure) than if the material is virgin. The EPA may request the results of purity tests in situations where having those results would give the EPA and the company receiving the used ODS information that could confirm, before the material is imported, that the ODS is in fact used. Under this proposal, if petitioners fail to respond to requests from the agency for addition information, the EPA could issue an objection notice.
      Other examples of information that the EPA has requested in reviewing petitions to verify the substances is used before issuing a non-objection notice include: a photo of each unit that contained the used ODS, with serial numbers visible; photos of a representative sample of the cylinders, with serial numbers visible; a description of the facility from which the used ODS originates, which includes what is produced at the facility, the location of the facility, and how long the facility has been in the location; a description of each unit from which the used ODS originates; links to websites showing brochures, photographs, and/or descriptions of each different unit from which the used ODS originates; copies of the original, signed work orders authorizing collecting of the used ODS; copies of the paperwork showing that the company completed the work; copies of payment to the company that collected the used ODS for their services, with redactions for confidential or sensitive information such as bank account numbers; copies of business licenses from the government authorizing collection companies to do this type of work; and information on how transport will occur within the exporting country and to the United States. For used ODS from Europe, the EPA has requested a screen shot of the European Commission export license; the name and contact information for the European Commission official who signed the Export License; and copies of all paperwork required for movement within the European Union, such as the "Notification document for transboundary movement/shipments of waste." The EPA is not proposing to collect all such information for each petition and thus is not proposing to revise the regulatory text to require that it be provided in every petition. However, the agency does wish to provide notice to petitioners that it may request additional information to confirm that the ODS is in fact used and is proposing to amend the regulations to make clear that failure to provide such information when requested would be a ground to issue an objection notice. The EPA specifically requests comment on this proposal for an additional ground for denying a petition to import used ODS and on whether the EPA should specifically list the types of information in the regulations that the agency may, on a case by case basis, request from the petitioner after reviewing the initial submission to confirm that the material is used. If the agency were to add a list of specific types of information that it might request on a case-by-case basis, that list could include some or all of the information described in the prior paragraphs of this notice that the EPA has requested in reviewing petitions in the past.
      Third, the EPA is proposing multiple minor amendments to the petition process to ensure accuracy, faster review, and facilitate the import of used ODS. In particular, the EPA is proposing to update the requested contact information by requiring email addresses and removing fax numbers. The EPA is also proposing to require that the petition for import include the amount of material authorized under the export license or export license application to ensure the petitioned amount is equal to or less than the amount that arrives at the United States port of entry. The EPA is also proposing to require that petitioners provide the commodity code associated with the ODS to be imported. The commodity codes are classifications for goods and services traded among countries. This proposal would match the agency's other import and export requirements in §§82.13(g) and (h) and 82.24(c) and (d), and help to ensure that the data are correctly entered in Customs and Border Protection's Automated Commercial Environment and International Trade Data System (ACE/ITDS).
      The EPA is also proposing to update the commodity codes for HCFC-123 and HCFC-124 in Appendix K. The U.S. International Trade Commission is responsible for publishing the Harmonized Tariff Schedule of the United States Annotated (HTSA). The HTSA provides the applicable tariff rates and statistical categories for all merchandise imported into the United States. It is based on the international Harmonized System, the global system of nomenclature that is used to describe most world trade in goods. This action updates the commodity codes for HCFC-123 and HCFC-124 in the appendix so that they coincide with those currently in effect and in use by the U.S. International Trade Commission.
      In addition, the EPA is proposing to amend §§82.13(g)(2) and 82.24(c)(3) to allow importers of class I and class II substances, respectively, to provide an application for an export license in lieu of an actual export license, as is currently required. For example, Canada, the largest exporter of used ODS to the United States, requires the EPA to approve the export before they issue an export license. As such, petitioners are only able to provide the submitted application for an export license with their petition. In light of this, the agency has worked with Canada to accept the submitted application in lieu of the export license. However, there may be other countries that also require approval prior to export, and the EPA wants to ensure all countries receive equal treatment and that all petitioners are aware of this option. As such, the agency desires to formalize the option in the regulations. The EPA is also proposing to require an English translation of the export license application or export license to facilitate the agency's review.