[Federal Register Volume 86, Number 95 (Wednesday, May 19, 2021)]
[Proposed Rules]
[Pages 27150-27223]
[FR Doc No: 2021-09545]

Vol. 86

Wednesday,

No. 95

May 19, 2021

Part II

Environmental Protection Agency

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40 CFR Parts 9 and 84

Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation
and Trading Program Under the American Innovation and Manufacturing
Act; Proposed Rule

Federal Register / Vol. 86 , No. 95 / Wednesday, May 19, 2021 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9 and 84

[EPA-HQ-OAR-2021-0044; FRL-10023-08-OAR]
RIN 2060-AV17

Phasedown of Hydrofluorocarbons: Establishing the Allowance
Allocation and Trading Program Under the American Innovation and
Manufacturing Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency is proposing to issue
regulations to implement certain provisions of the American Innovation
and Manufacturing Act, as enacted on December 27, 2020. This rulemaking
proposes to: Establish the hydrofluorocarbon production and consumption
baselines based on historical data; establish the allowance allocation
program to phase down hydrofluorocarbon production and consumption;
determine an initial methodology to allocating allowances and allowing
for the transfer of those allowances; establish provisions for the
international transfer of allowances; establish requirements to support
compliance with phasing down hydrofluorocarbon production and
consumption; establish recordkeeping and reporting requirements;
release certain data to provide transparency and support implementation
of the program; and, address certain other elements related to the
effective implementation of the American Innovation and Manufacturing
Act. In addition to the proposed provisions, EPA is seeking advance
input on how the Agency may alter its determination of company-specific
allocations in later years. EPA is considering these issues, and
therefore is seeking public input on them, but is not making any
particular proposal in relation to them, and therefore will not
finalize any requirements on these topics before issuing a notice of
proposed rulemaking and requesting public comment.

DATES: Comments on this notice of proposed rulemaking must be received
on or before July 6, 2021. Under the Paperwork Reduction Act (PRA),
comments on the information collection provisions are best assured of
consideration if the Office of Management and Budget (OMB) receives a
copy of your comments on or before June 18, 2021. The Environmental
Protection Agency (EPA) will hold a virtual public hearing on June 3,
2021. The date, time, and other relevant information for the virtual
public hearing will be available at https://www.epa.gov/climate-hfcs-reduction.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2021-0044, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov
(our preferred method). Follow the online instructions for submitting
comments.
     Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Air and Radiation Docket, Mail Code 28221T, 1200 Pennsylvania
Avenue NW, Washington, DC 20460.
     Hand Delivery or Courier (by scheduled appointment only):
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Avenue NW, Washington, DC 20004. The Docket Center's hours of
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal
Holidays).
    Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to https://www.regulations.gov, including any personal information
provided. EPA is temporarily suspending its Docket Center and Reading
Room for public visitors, with limited exceptions, to reduce the risk
of transmitting COVID-19. Our Docket Center staff will continue to
provide remote customer service via email, phone, and webform. We
encourage the public to submit comments via https://www.regulations.gov
as there may be a delay in processing mail. Hand deliveries and
couriers may be received by scheduled appointment only. For further
information on EPA Docket Center services and the current status,
please visit us online athttps://www.epa.gov/dockets.
    You may find the following suggestions helpful for preparing your
comments: Direct your comments to specific sections of this proposed
rulemaking and note where your comments may apply to future separate
actions where possible; explain your views as clearly as possible;
describe any assumptions that you used; provide any technical
information or data you used that support your views; provide specific
examples to illustrate your concerns; offer alternatives; and, make
sure to submit your comments by the comment period deadline. Please
provide any published studies or raw data supporting your position.
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. 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).
    If you produced, imported, exported, or destroyed
hydrofluorocarbons (HFCs) and were subject to the regulatory Greenhouse
Gas Reporting Program (GHGRP) \1\ requirements (under 40 CFR part 98)
and are seeking to provide EPA with your past HFC activity, you must
report that data to EPA's electronic Greenhouse Gas Reporting Tool (e-
GGRT) (https://ghgreporting.epa.gov/ghg/login.do). Companies that were
not subject to the GHGRP may also submit HFC activity through e-GGRT.
Information on how to report through e-GGRT in general is available at:
https://ccdsupport.com/confluence, and specific guidance on HFC
reporting is available at: https://ccdsupport.com/confluence/display/help/e-GGRT+and+HFC+Data+Reporting+related+to+AIM. EPA requests that
any company that reports on HFC activity to the GHGRP in response to
the requests in this proposed rule also submit a comment to the docket
noting the date that the company submitted the information to e-GGRT so
that EPA can more easily track such submissions.
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    \1\ OMB Control No. 2060-0629.
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    EPA recognizes that given the nature of this proposed rulemaking,
potentially affected entities may wish to submit Confidential Business
Information (CBI) or other confidential information. CBI should not be
submitted through https://www.regulations.gov. For submission of
confidential comments or data (e.g., information relevant to your
company's use of a hydrofluorocarbon in an application listed in
subsection (e)(4)(B)(iv) titled Mandatory Allocations), please work
with the person listed in the FOR FURTHER INFORMATION CONTACT section,
particularly if submitting a comment containing CBI. 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: Andy Chang, U.S. Environmental
Protection Agency, Stratospheric Protection Division, telephone number:

202-564-6658; or email address<EMAIL_ADDRESS>You may also visit
EPA's website at https://www.epa.gov/climate-hfcs-reduction for further
information.

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we,''
``us,'' ``the Agency,'' or ``our'' is used, we mean EPA. Acronyms that
are used in this rulemaking that may be helpful include:

AD/CVD--Anti-Dumping/Countervailing Duties
AIM Act--American Innovation and Manufacturing Act of 2020
ANPRM--Advanced Notice of Proposed Rulemaking
CAA--Clean Air Act
CBI--Confidential Business Information
CBP--Customs and Border Protection
CFC--Chlorofluorocarbon
CO2--Carbon Dioxide
DRE--Destruction and Removal Efficiency
e-GGRT--Electronic Greenhouse Gas Reporting Tool
EVe--Exchange Value Equivalent
GHG--Greenhouse Gas
GHGRP--Greenhouse Gas Reporting Program
GWP--Global Warming Potential
HCFC--Hydrochlorofluorocarbon
HFC--Hydrofluorocarbon
IPCC--Intergovernmental Panel on Climate Change
MDI--Metered Dose Inhaler
MMTCO2 eq--Million Metric Tons of Carbon Dioxide
Equivalent
MMTEVe--Million Metric Tons of Exchange Value Equivalent
MT--Metric tons
MTCO2 eq--Metric Tons of Carbon Dioxide Equivalent
MVAC--Motor Vehicle Air Conditioner
NAICS--North American Industry Classification System
NPRM--Notice of Proposed Rulemaking
NRC--National Research Council
ODP--Ozone Depletion Potential
ODS--Ozone-Depleting Substance
RIA--Regulatory Impact Analysis
SC-HFCs--Social Cost of HFCs
TRI--Toxics Release Inventory
USGCRP--U.S. Global Change Research Program

    This supplementary information section is arranged as follows:

I. What is the background for this proposed action?
    A. Does this proposed action apply to me?
    B. What is the AIM Act, and what are its main areas of focus?
    C. What are HFCs?
    D. How do HFCs affect public health and welfare?
II. What is the summary of this proposed action?
III. How is EPA considering environmental justice?
IV. What definitions are proposed to implement the AIM Act?
    A. What definitions is EPA proposing to adopt from 40 CFR 82.3
without substantive change?
    B. What definitions is EPA proposing to adopt from 40 CFR 82.3
with substantive change?
    C. What new definitions is EPA proposing?
V. How is EPA proposing to establish the HFC production and
consumption baselines?
    A. What are the components of the production and consumption
baselines?
    1. How is EPA proposing to determine the HFC component of the
production and consumption baselines?
    (a) What is the GHGRP and what data are available from it?
    (b) What outreach is EPA doing to collect data to fill known
gaps in the GHGRP?
    2. What is the current HFC component of the production and
consumption baselines?
    3. What are the HCFC and CFC components of the production and
consumption baselines?
    B. What are the proposed HFC production and consumption
baselines?
VI. How is EPA proposing to establish allowances?
    A. What is an allowance?
    B. What are EPA's proposed options for determining allowances?
    1. For which years is EPA proposing to issue allowances?
    2. Based on currently available data, which companies is EPA
proposing to issue allowances to?
    3. What is EPA's proposed framework for determining how many
allowances each company receives?
    4. What is EPA's proposed framework for issuing allowances?
    5. What process is EPA proposing to respond to requests for
additional consumption allowances?
    C. What are EPA's proposals for the sectors to receive
application-specific allowances?
    1. Overview of the Application-Specific Sectors
    2. At which point in the application-specific sector production
process is EPA proposing to issue allowances?
    3. How is EPA proposing to address transfers of application-
specific allowances?
    4. What are the criteria EPA is proposing to use for evaluating
application-specific allowance requests?
    D. What are EPA's proposed provisions for transferring
allowances?
    E. What is EPA's proposed set aside pool of allowances?
    F. What is EPA proposing to require for HFC-23 emission controls
for allowance holders?
VII. What other elements of the AIM Act is EPA addressing in this
proposed rulemaking?
    A. How is EPA proposing to address international trades or
transfers of HFC allowances?
    B. How is EPA proposing to address destruction of regulated
HFCs?
    1. Which destruction technologies is EPA proposing to approve
for the destruction of regulated HFCs?
VIII. What enforcement and compliance provisions is EPA proposing?
    A. What are the proposed administrative consequences available
to EPA with respect to allowances?
    B. What practices could warrant EPA's proposed administrative
action for allowances?
    1. Falsifying or Failing To Disclose Relevant Information
    2. Compliance With the AIM Act
    3. Violation of Department of Commerce and Customs and Border
Protection Trade Provisions
    C. What process is EPA proposing to apply administrative
consequences for allowances?
    D. What is EPA proposing for packaging and labeling
requirements?
    1. Ban on Disposable Cylinders
    2. Ban on Importing HFCs To Be Used in Feedstocks in Cylinders
    3. Labeling
    E. What is EPA proposing to require for auditing?
    F. Petitions To Import HFCs as Feedstocks or for Destruction
    G. How is EPA proposing to track the movement of HFCs in
commerce?
IX. What are the proposed recordkeeping and reporting requirements?
    A. What generally applicable recordkeeping and reporting
provisions is EPA proposing?
    B. What recordkeeping and reporting is EPA proposing that is
applicable to specific types of entities?
    C. How is EPA proposing to coordinate AIM Act reporting with
other EPA reporting requirements?
    D. How does EPA propose to release HFC data collected under the
AIM Act?
    1. Which general data elements does EPA propose to release?
    (a) Company-Level Production and Consumption Data
    (b) Aggregated National Data
    (c) Company-Specific Allowance Data
    (d) Transfer Data
    (e) Information Relevant to the Kigali Amendment and the
Montreal Protocol
X. What are the costs and benefits of this proposed action?
XI. What should EPA consider in future rulemakings?
    A. How should EPA consider future allowance allocations?
    B. How should EPA address the potential health effects of air
toxics associated with changes in the production of HFCs and
substitutes in a future rulemaking?
    1. Adjustments to Transfer Offsets
    2. Issuing Allowances at a Facility Level
    3. Release of Relevant Facility Data
XII. Statutory and Executive Order Review

I. What is the background for this proposed action?

A. Does this proposed action apply to me?

    You may be potentially affected by this proposal if you produce,
import, export, destroy, use as a feedstock, reclaim, or otherwise
distribute HFCs. You may also be potentially affected by this proposal
if you use HFCs to manufacture products, such as

refrigeration and air conditioning systems, foams, aerosols, and fire
suppression systems, and the six applications eligible for an
allocation under section (e)(4)(B)(iv) of the American Innovation and
Manufacturing Act of 2020 (AIM Act or the Act). Potentially affected
categories, North American Industry Classification System (NAICS)
codes, and examples of potentially affected entities are included in
Table 1.

     Table 1--NAICS Classification of Potentially Affected Entities
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         NAICS code                   NAICS industry description
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211120......................  Crude Petroleum Extraction.
221210......................  Natural Gas Distribution.
236118......................  Residential Remodelers.
236220......................  Commercial and Institutional Building
                               Construction.
238220......................  Plumbing, Heating, and
                               Air[dash]Conditioning Contractors.
238990......................  All Other Specialty Trade Contractors.
311351......................  Chocolate and Confectionery Manufacturing
                               from Cacao Beans.
322299......................  All Other Converted Paper Product
                               Manufacturing.
325120......................  Industrial Gas Manufacturing.
325180......................  Other Basic Inorganic Chemical
                               Manufacturing.
325199......................  All Other Basic Organic Chemical
                               Manufacturing.
325211......................  Plastics Material and Resin Manufacturing.
325320......................  Pesticide and Other Agricultural Chemical
                               Manufacturing.
325412*.....................  Pharmaceutical Preparation Manufacturing.
325414*.....................  Biological Product (except Diagnostic)
                               Manufacturing.
325992......................  Photographic Film, Paper, Plate and
                               Chemical Manufacturing.
325998......................  All Other Miscellaneous Chemical Product
                               and Preparation Manufacturing.
326150*.....................  Urethane and Other Foam Product.
331420......................  Copper Rolling, Drawing, Extruding, and
                               Alloying.
332312......................  Fabricated Structural Metal Manufacturing.
332313......................  Plate Work Manufacturing.
333132......................  Oil and Gas Field Machinery and Equipment
                               Manufacturing.
333314......................  Optical Instrument and Lens Manufacturing.
333316......................  Photographic and Photocopying Equipment
                               Manufacturing.
333413......................  Industrial and Commercial Fan and Blower
                               and Air Purification Equipment
                               Manufacturing.
333415......................  Air[dash]Conditioning and Warm Air Heating
                               Equipment and Commercial and Industrial
                               Refrigeration Equipment Manufacturing.
333611......................  Turbine and Turbine Generator Set Unit
                               Manufacturing.
333996......................  Fluid Power Pump and Motor Manufacturing.
334413*.....................  Semiconductor and Related Device
                               Manufacturing.
334419*.....................  Other Electronic Component Manufacturing.
334515......................  Instrument Manufacturing for Measuring and
                               Testing Electricity and Electrical
                               Signals.
334516......................  Analytical Laboratory Instrument
                               Manufacturing.
334613......................  Blank Magnetic and Optical Recording Media
                               Manufacturing.
336212*.....................  Truck Trailer Manufacturing.
336214*.....................  Travel Trailer and Camper Manufacturing.
336411*.....................  Aircraft Manufacturing.
336510......................  Railroad Rolling Stock Manufacturing.
336611*.....................  Ship Building and Repairing.
336612*.....................  Boat Building.
336992*.....................  Military Armored Vehicle, Tank, and Tank
                               Component Manufacturing.
339999*.....................  All Other Miscellaneous Manufacturing.
SIC 373102*.................  Military Ships, Building, and Repairing.
423120......................  Motor Vehicle Supplies and New Parts
                               Merchant Wholesalers.
423450......................  Medical, Dental, and Hospital Equipment
                               and Supplies Merchant Wholesalers.
423460......................  Ophthalmic Goods Merchant Wholesalers.
423730......................  Warm Air Heating and Air[dash]Conditioning
                               Equipment and Supplies Merchant
                               Wholesalers.
423740......................  Refrigeration Equipment and Supplies
                               Merchant Wholesalers.
423830......................  Industrial Machinery and Equipment
                               Merchant Wholesalers.
423860*.....................  Transportation Equipment and Supplies
                               (except Motor Vehicle) Merchant
                               Wholesalers.
423990*.....................  Other Miscellaneous Durable Goods Merchant
                               Wholesalers.
424210......................  Drugs and Druggists' Sundries Merchant
                               Wholesalers.
424410......................  General Line Grocery Merchant Wholesalers.
424610......................  Plastics Materials and Basic Forms and
                               Shapes Merchant Wholesalers.
424690......................  Other Chemical and Allied Products
                               Merchant Wholesalers.
424910......................  Farm Supplies Merchant Wholesalers.
441310......................  Automotive Parts and Accessories Stores.
443141......................  Household Appliance Stores.
443142......................  Electronics Stores.
444130......................  Hardware Stores.
446191......................  Food (Health) Supplement Stores.
452311......................  Warehouse Clubs and Supercenters.
453998......................  All Other Miscellaneous Store Retailers
                               (except Tobacco Stores).
454110......................  Electronic Shopping and Mail-Order Houses.
481111......................  Scheduled Passenger Air Transportation.
482111......................  Line[dash]Haul Railroads.
488510......................  Freight Transportation Arrangement.
493110......................  General Warehousing and Storage.

522293......................  International Trade Financing.
523130......................  Commodity Contracts Dealing.
531110......................  Lessors of Residential Buildings and
                               Dwellings.
531120......................  Lessors of Nonresidential Buildings
                               (except Miniwarehouses).
532420......................  Office Machinery and Equipment Rental and
                               Leasing.
541330......................  Engineering Services.
541519......................  Other Computer Related Services.
541715......................  Research and Development in the Physical,
                               Engineering, and Life Sciences (except
                               Nanotechnology and Biotechnology).
561210......................  Facilities Support Services.
561910......................  Packaging and Labeling Services.
561990......................  All Other Support Services.
562920......................  Recovery and Reclamation.
722511......................  Full-Service Restaurants.
811219......................  Other Electronic and Precision Equipment
                               Repair and Maintenance.
811412......................  Appliance Repair and Maintenance.
922160*.....................  Fire Protection.
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* Codes marked with an asterisk may apply to sectors that receive
  application-specific allowances under the AIM Act.

    This table is not intended to be exhaustive, but rather provide 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. 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 is the AIM Act, and what are its main areas of focus?

    On December 27, 2020, the AIM Act was enacted as section 103 in
Division S, Innovation for the Environment, of the Consolidated
Appropriations Act, 2021 (Pub. L. 116-260).\2\ The AIM Act directs EPA
to address HFCs by providing new authorities in three main areas: To
phase down the production and consumption of listed HFCs, manage these
HFCs and their substitutes, and facilitate the transition to next-
generation technologies by restricting use of these HFCs in the sector
or subsectors in which they are used. This rulemaking focuses on the
first area--the phasedown of the production and consumption of HFCs.
EPA anticipates that there will be future rulemakings including those
related to the latter two main areas, and therefore EPA is only
accepting comment on the first area in this proposed rulemaking.
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    \2\ EPA is proposing to interpret the phrase ``under this
section'' in the AIM Act to refer to section 103 of the Consolidated
Appropriations Act, 2021, and thus to mean ``under the AIM Act.''
This approach would be consistent with the language included in the
Act, such as subsection (a) which states that ``[t]his section may
be cited as American Innovation and Manufacturing Act of 2020.''
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    Subsection (e) of the AIM Act gives EPA authority to phase down the
production and consumption of listed HFCs through an allowance
allocation and trading program. The Act uses the term ``produce'' to
mean ``the manufacture \3\ of a regulated substance from a raw material
or feedstock chemical,'' but excludes from the definition destruction
of HFCs using approved technologies; reclamation, reuse, or recycling
of HFCs; and HFCs for transformation.\4\ The Act uses the term
``consumption'' to refer to the amount of HFCs produced in and imported
to the United States, subtracting the amount exported.
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    \3\ While the AIM Act and the proposed definition in this rule
use the term ``manufacture'' in defining the term ``produce,'' in
implementing EPA's CAA Title VI programs the agency has historically
used the term ``production'' when referring to the manufacture of
chemicals and ``manufacture'' when referring to the manufacture of
equipment. EPA intends to continue using this framing when
describing production of chemicals and manufacture of equipment
under the AIM Act to help distinguish between the two activities.
    \4\ The AIM Act uses the phrase ``a regulated substance that is
used and entirely consumed (except for trace quantities) in the
manufacture of another chemical'' instead of ``transformation'' in
this definition. The quoted phrase is the definition used in Part 82
for the term ``transform.'' The AIM Act subsequently uses the terms
``transformation'' and ``use as a feedstock'' interchangeably. These
two terms are intended to have the same meaning and are also used
interchangeably in this proposal.
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    The Act lists 18 saturated HFCs, and by reference any of their
isomers not so listed, that are covered by the statute's provisions,
referred to as ``regulated substances'' under the Act. Congress also
assigned an ``exchange value'' 5 6 to each regulated
substance (along with other chemicals that are used to calculate the
baseline). The table in subsection (c)(1), reproduced here in Table 2,
lists the 18 regulated substances and their exchange values.
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    \5\ EPA has determined that the exchange values included in
subsection (c) of the AIM Act are identical to the global warming
potentials (GWPs) included in IPCC (2007). EPA uses the terms
``global warming potential'' and ``exchange value'' interchangeably
in this proposal.
    \6\ IPCC (2007): Solomon, S., D. Qin, M. Manning, R.B. Alley, T.
Berntsen, N.L. Bindoff, Z. Chen, A. Chidthaisong, J.M. Gregory, G.C.
Hegerl, M. Heimann, B. Hewitson, B.J. Hoskins, F. Joos, J. Jouzel,
V. Kattsov, U. Lohmann, T. Matsuno, M. Molina, N. Nicholls, J.
Overpeck, G. Raga, V. Ramaswamy, J. Ren, M. Rusticucci, R.
Somerville, T.F. Stocker, P. Whetton, R.A. Wood and D. Wratt, 2007:
Technical Summary. In: Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change [Solomon,
S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor
and H.L. Miller (eds.)]. Cambridge University Press, Cambridge,
United Kingdom and New York, NY, USA https://www.ipcc.ch/report/ar4/wg1.

     Table 2--List of Regulated Substances and Their Exchange Values
------------------------------------------------------------------------
                                                                Exchange
          Chemical name                   Common name            value
------------------------------------------------------------------------
CHF2CHF2........................  HFC-134....................      1,100
CH2FCF3.........................  HFC-134a...................      1,430
CH2FCHF2........................  HFC-143....................        353
CHF2CH2CF3......................  HFC-245fa..................      1,030
CF3CH2CF2CH3....................  HFC-365mfc.................        794
CF3CHFCF3.......................  HFC-227ea..................      3,220
CH2FCF2CF3......................  HFC-236cb..................      1,340
CHF2CHFCF3......................  HFC-236ea..................      1,370
CF3CH2CF3.......................  HFC-236fa..................      9,810
CH2FCF2CHF2.....................  HFC-245ca..................        693
CF3CHFCHFCF2CF3.................  HFC-43-10mee...............      1,640
CH2F2...........................  HFC-32.....................        675
CHF2CF3.........................  HFC-125....................      3,500
CH3CF3..........................  HFC-143a...................      4,470
CH3F............................  HFC-41.....................         92
CH2FCH2F........................  HFC-152....................         53
CH3CHF2.........................  HFC-152a...................        124
CHF3............................  HFC-23.....................     14,800
------------------------------------------------------------------------

    The AIM Act requires EPA to phase down the consumption and
production of the statutorily listed HFCs on an exchange value-weighted
basis according to the schedule stated in (e)(2)(C) as outlined in
Table 3, beginning on January 1 of each year.

                       Table 3--Phasedown Schedule
------------------------------------------------------------------------
                                           Percentage of   Percentage of
                  Date                      production      consumption
                                             baseline        baseline
------------------------------------------------------------------------
2020-2023...............................              90              90
2024-2028...............................              60              60
2029-2033...............................              30              30
2034-2035...............................              20              20
2036 and thereafter.....................              15              15
------------------------------------------------------------------------

The AIM Act requires that the EPA Administrator ensure the annual
quantity of all regulated substances produced or consumed \7\ in the
United States does not exceed the applicable percentage listed for the
production or consumption baseline.
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    \7\ In the context of allocating and expending allowances, EPA
interprets the word ``consume'' as the verb form of the defined term
``consumption.'' For example, subsection (e)(2)(A), states the
phasedown consumption prohibition as ``no person shall . . . consume
a quantity of a regulated substance without a corresponding quantity
of consumption allowances.'' While a common usage of the word
``consume'' means ``use,'' EPA does not believe that Congress
intended for everyone who charges an appliance or fills an aerosol
can with an HFC to expend allowances.
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    In order to execute this statutory directive, EPA must determine
both a production and consumption baseline from which the yearly
targets are calculated. The AIM Act provides formulas for how to set a
baseline. The equations are composed of an HFC component, a
hydrochlorofluorocarbon (HCFC) component, and a chlorofluorocarbon
(CFC) component. Specifically, EPA is directed to calculate the
production baseline by adding: (i) The average annual quantity of all
regulated substances produced in the United States from January 1,
2011, through December 31, 2013, and (ii) 15 percent of the production
level of HCFCs in calendar year 1989, and (iii) 0.42 percent of the
production level of CFCs in calendar year 1989.
    EPA is directed to calculate the consumption baseline by adding:
(i) The average annual quantity of all regulated substances consumed in
the United States from January 1, 2011, through December 31, 2013, and
(ii) 15 percent of the consumption level of HCFCs in calendar year
1989, and (iii) 0.42 percent of the consumption level of CFCs in
calendar year 1989. To implement the directive that the production and
consumption of regulated substances in the United States does not
exceed the statutory targets, the AIM Act in subsection (e)(3) requires
EPA to issue regulations within 270 days of the Act's enactment
establishing an allowance allocation and trading program to phase down
the production and consumption of the listed HFCs. These allowances are
limited authorizations for the production or consumption of regulated
substances. Subsection (e)(2)(D) directs EPA to ``determine the
quantity of allowances for the production and consumption of regulated
substances that may be used for the following calendar year'' by
October 1 each year. Subsection (e)(2) of the Act has a general
prohibition that no person \8\ shall produce or consume a quantity of
regulated substances in the United States without a corresponding
quantity of allowances. Also within 270 days, EPA is directed in
subsection (g) to establish regulations governing the transfer of
production and consumption of allowances. Subsection (e)(2)(A) also
provides that no person shall hold, use, or transfer an allocated
production or consumption allowance except in accordance with the
transfer regulations. Under subsection (g), the transfer regulations
are to use the applicable exchange values and ``ensure that the
transfers . . . will result in greater total reductions'' in production
and consumption ``than would occur during the year in the absence of
the transfers.''
---------------------------------------------------------------------------

    \8\ Under the Act's term, this general prohibition applies to
any ``person.'' Because EPA anticipates that the parties that
produce or consume HFCs--and that would thus be subject to the Act's
production and consumption controls--are companies or other
entities, we frequently use those terms to refer to regulated
parties in this proposal. Using this shorthand, however, does not
alter the applicability of the Act's requirements and prohibitions.
---------------------------------------------------------------------------

    Subsection (e)(4)(B)(iv) of the Act requires EPA to allocate
allowances sufficient to meet the full quantity needed for production
and consumption for six specific applications for five years following
enactment. EPA is to determine the necessary allowance amount for these
applications ``based on projected, current, and historical trends.''
The six statutorily listed applications are: Propellants in metered-
dose inhalers; defense sprays (e.g., bear spray); structural composite
preformed polyurethane foam for marine use and trailer use; etching of
semiconductor material or wafers and the cleaning of chemical vapor
deposition (CVD) chambers within the semiconductor manufacturing
sector; mission-critical military end uses; and on board aerospace fire
suppression. The allowances EPA allocates for these applications are
for the ``exclusive use'' in one of the six applications.
    Subsection (j) of the AIM Act speaks to international cooperation.
Of particular relevance to this rulemaking, subsection (j)(4) requires
EPA to promulgate a rule by December 27, 2021, to carry out the
subsection. The AIM Act outlines several restrictions and requirements
governing international transfers of production allowances in
subsections (j)(1) and (j)(2) and also provides some discretionary
authority to EPA in (j)(3) regarding the effect of such transfers on
production limits.
    In subsection (k)(1)(A), the AIM Act provides EPA with the
authority to promulgate necessary regulations to carry out EPA's
functions under the Act, including its obligations to ensure that the
Act's requirements are satisfied. The Act also states that Clean Air
Act (CAA) sections 113, 114, 304, and 307 apply to the AIM Act and any
regulations EPA promulgates under the AIM Act as though the AIM Act
were part of Title VI of the CAA. Accordingly, this rulemaking is
subject to CAA section 307(d) (42 U.S.C. 7607(d)(1)(I)) (CAA section
307(d) applies to ``promulgation or revision of regulations under
subchapter VI of this chapter (relating to stratosphere and ozone
protection)'').
    In addition, although there is limited legislative history
available on the AIM Act, Congress is generally presumed to legislate
with an awareness of the existing law that is pertinent to enacted
legislation. Given the similarities in the text, structure, and
function of the production and consumption phasedown provisions of the
AIM Act and EPA's program phasing out ozone-depleting substances (ODS)
under Title VI of the CAA,\9\ EPA finds it reasonable to build on its
experience phasing out ODS when developing the AIM Act's HFC allowance
allocation and trading program, while also recognizing that there are
areas where the AIM Act's requirements diverge from the text and
framework of Title VI of the CAA. For example, EPA uses the
recordkeeping and reporting provisions that the Agency has refined over
time in the ODS context as the starting point for the proposed
recordkeeping and reporting requirements in this rule. There are many
instances where the definitions and structure are either identical or
have only slight differences. For example, the definitions of
``import'' in the AIM Act and section 601 of the CAA are materially
similar though they have slightly different phrasing. In at least some
instances, Congress adopted language in the AIM Act that matches EPA's
implementation approach for

ODS production and consumption controls under CAA Title VI as reflected
in 40 CFR part 82, subpart A. For example, the definition for
``produce'' in the AIM Act mirrors the parallel definition in CAA
section 601 in many respects, but in contrast to the CAA definition,
the AIM Act explicitly excludes the destruction of regulated substances
using technologies approved by the Administrator from being counted in
production. While the CAA definition does not explicitly exclude
destruction from production, EPA's regulatory definition for
``production'' in 40 CFR 82.3 does exclude destruction from being
counted as production. Throughout this proposed rulemaking, EPA
explains how the Agency is relying on and building from its experience
implementing the ODS phaseout provisions in the CAA and its
implementing regulations where such considerations are relevant to
creating the framework structure for the AIM Act's required HFC
allowance allocation and trading program. Given EPA's extensive
experience phasing out ODS under similar CAA authority for a regulated
community that bears marked resemblance to entities that could be
impacted by the rulemaking, reliance on EPA's expertise will help
achieve the goals outlined by Congress in implementing the AIM Act.
---------------------------------------------------------------------------

    \9\ EPA's well-established regulatory program at 40 CFR part 82,
subpart A, provides for the allocation of ODS production and
consumption allowances, implementing the ODS production and
consumption controls of Title VI of the CAA and facilitating an
orderly phaseout.
---------------------------------------------------------------------------

C. What are HFCs?

    HFCs are intentionally produced \10\ fluorinated chemicals that
have no known natural sources. HFCs are used in the same applications
that ODS have historically been used in, such as refrigeration and air
conditioning, foam blowing agents, solvents, aerosols, and fire
suppression. HFCs are potent greenhouse gases (GHGs) with 100-year
global warming potentials (GWPs) (a measure of the relative climatic
impact of a GHG) that can be hundreds to thousands of times more potent
than carbon dioxide (CO2).
---------------------------------------------------------------------------

    \10\ While the overwhelming majority of HFC production is
intentional, EPA is aware that HFC-23 can be a byproduct associated
with the production of other chemicals, including but not limited to
HCFC-22.
---------------------------------------------------------------------------

    Although HFCs represent a small fraction (~1.5 percent) of the
current total GWP-weighted amount of GHG emissions,\11\ their use is
growing worldwide due to the global phaseout of ODS under the Montreal
Protocol on Substances that Deplete the Ozone Layer (Montreal
Protocol), and the increasing use of refrigeration and air-conditioning
equipment globally. HFC emissions had previously been projected to
increase substantially over the next several decades, but global
adherence to the Kigali Amendment to the Montreal Protocol (Kigali
Amendment) would substantially reduce future emissions, leading to a
peaking of HFC emissions before 2040.\12\
---------------------------------------------------------------------------

    \11\ World Meteorological Organization (WMO), Scientific
Assessment of Ozone Depletion: 2018, World Meteorological
Organization, Global Ozone Research and Monitoring Project--Report
No. 58, 67 pp., Geneva, Switzerland, 2018. https://ozone.unep.org/sites/default/files/2019-05/SAP-2018-Assessment-report.pdf
    \12\ Ibid
---------------------------------------------------------------------------

    Atmospheric observations of most currently measured HFCs confirm
their amounts are increasing in the global atmosphere at accelerating
rates. Total emissions of HFCs increased by 23 percent from 2012 to
2016 and the four most abundant HFCs in the atmosphere, in GWP-weighted
terms, are HFC-134a, HFC-125, HFC-23, and HFC-143a.\13\
---------------------------------------------------------------------------

    \13\ Ibid.
---------------------------------------------------------------------------

    In 2016, HFCs accounted for a radiative forcing of 0.025 W/m\2\,
not including additional forcing from HFC-23 of 0.005 W/m\2\: this is a
36 percent increase in total HFC forcing relative to 2012. This
radiative forcing was projected to increase an order of magnitude to
0.25 W/m\2\ by 2050, not including additional forcing from HFC-23. In
2016, in Kigali, Rwanda, countries agreed to adopt an amendment to the
Montreal Protocol, known as the Kigali Amendment, which outlines a
global phasedown of the production and consumption of HFCs. If the
Kigali Amendment were to be fully implemented, it is expected to reduce
the future radiative forcing due to HFCs (excluding HFC-23) to 0.13 W/
m\2\ in 2050, a reduction of about 50 percent compared to the radiative
forcing projected in the baseline scenario of uncontrolled HFCs.\14\
---------------------------------------------------------------------------

    \14\ Ibid.
---------------------------------------------------------------------------

    There are hundreds of possible HFC compounds. The 18 HFCs listed as
regulated substances by the AIM Act are some of the most commonly used
HFCs and have high impacts as measured by the quantity emitted
multiplied by their respective GWPs. These 18 HFCs are all saturated,
meaning they have only single bonds between their atoms and therefore
have longer atmospheric lifetimes.
    In the United States, HFCs are primarily used in refrigeration and
air-conditioning equipment in homes, commercial buildings, and
industrial operations (~75 percent of total HFC use in 2018) and in air
conditioning in vehicles and refrigerated transport (~8 percent).
Smaller amounts are used in foam products (~11 percent), aerosols (~4
percent), fire protection systems (~1 percent) and solvents (~1
percent).\15\
---------------------------------------------------------------------------

    \15\ Calculations based on EPA's Vintaging Model, which
estimates the annual chemical emissions from industry sectors that
historically used ODS, including refrigeration and air-conditioning,
foam blowing agents, solvents, aerosols, and fire suppression. The
model uses information on the market size and growth for each end
use, as well as a history and projections of the market transition
from ODS to alternatives. The model tracks emissions of annual
``vintages'' of new equipment that enter into operation by
incorporating information on estimates of the quantity of equipment
or products sold, serviced, and retired or converted each year, and
the quantity of the compound required to manufacture, charge, and/or
maintain the equipment. Additional information on these estimates is
available in U.S. EPA, April 2016. EPA Report EPA-430-R-16-002.
Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2014.
Available at https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2014.
---------------------------------------------------------------------------

    EPA considered the emissions reductions from an HFC phasedown in
the United States and presented the results in the 2016 Biennial Report
to the United Nations Framework Climate Change Convention (UNFCCC).\16\
At the time, EPA provided a reductions estimate of 113 million metric
tons of carbon dioxide equivalent (MMTCO2e) of reduced U.S.
HFC emissions associated with the implementation of an amendment
proposal submitted in 2015 by the United States, Canada, and Mexico
that was under consideration by the parties to the Montreal Protocol
and was very similar to the Kigali Amendment. While the Kigali
Amendment ultimately adopted under the Montreal Protocol has certain
marked differences from the AIM Act, given the two documents have a
nearly identical list of HFCs to be phased down following the same
schedule, the 2016 Biennial Report provides useful information. The
Biennial Report included estimates for HFC actions under CAA section
612 modeled in the 2016 Current Measures. HFC emissions reductions
through additional measures in 2020 and 2025 relative to the 2016
Current Measures scenario were presented under the Additional Measures
scenario and included both options for continued action under the CAA
and the implementation of an HFC phasedown in the United States, which
is similar to the requirements of the AIM Act with an earlier start
date.\17\ The

emissions reductions for the Additional Measures were estimated to be
63 MMTCO2e in 2020 and 113 MMTCO2e in 2025.
---------------------------------------------------------------------------

    \16\ U.S. Department of State. Second Biennial Report of the
United States of America Under the United Nations Framework
Convention on Climate Change. Washington, DC, 2016. Web. 15 March
2021. http://unfccc.int/national_reports/biennial_reports_and_iar/submitted_biennial_reports/items/7550.php
    \17\ The ``Current Measures'' scenario in the Biennial Report
included HFC reductions estimated under a final rule EPA issued on
July 20, 2015, which, among, other things, changed listings for
certain HFCs and blends from acceptable to unacceptable in various
end uses in the aerosols, refrigeration and air conditioning, and
foam blowing sectors. The ``Additional Measures'' scenario in the
Biennial Report included additional actions, some of which were
included in a final rule EPA issued on December 1, 2016, that EPA
anticipated under a proposed amendment to the Montreal Protocol to
phase down HFC production and consumption. Since the 2016 Biennial
Report, after a challenge to the 2015 rule, the U.S. Court of
Appeals for the D.C. Circuit (``the court'') issued a partial
vacatur of the 2015 rule ``to the extent it requires manufacturers
to replace HFCs with a substitute substance,'' and remanded the rule
to EPA for further proceedings. Later, the court issued a similar
decision on portions of the final rule issued December 1, 2016. See
Mexichem Fluor, Inc. v. EPA, 866 F.3d 451, 462 (D.C. Cir. 2017); see
also Mexichem Fluor, Inc. v. EPA, Judgment, Case No. 17-1024 (D.C.
Cir., April 5, 2019), 760 Fed. Appx. 6 (Mem).
---------------------------------------------------------------------------

D. How do HFCs affect public health and welfare?

    Elevated concentrations of GHGs including HFCs have been warming
the planet, leading to changes in the Earth's climate including changes
in the frequency and intensity of heat waves, precipitation, and
extreme weather events, rising seas, and retreating snow and ice. The
changes taking place in the atmosphere as a result of the well-
documented buildup of GHGs due to human activities are changing the
climate at a pace and in a way that threatens human health, society,
and the natural environment. While EPA does not need to make any
particular scientific or factual findings in order to regulate HFCs
under the AIM Act's phasedown provisions, in this section, EPA is
providing some scientific background on climate change to offer
additional context for this rulemaking and to help the public
understand the environmental impacts of GHGs such as HFCs.
    Extensive additional information on climate change is available in
the scientific assessments and the EPA documents that are briefly
described in this section, as well as in the technical and scientific
information supporting them. One of those documents is EPA's 2009
Endangerment and Cause or Contribute Findings for Greenhouse Gases
Under Section 202(a) of the CAA (74 FR 66496, December 15, 2009).\18\
In the 2009 Endangerment Finding, the Administrator found under section
202(a) of the CAA that elevated atmospheric concentrations of six key
well-mixed GHGs--CO2, methane (CH4), nitrous
oxide (N2O), HFCs, perfluorocarbons (PFCs), and sulfur
hexafluoride (SF6)--``may reasonably be anticipated to
endanger the public health and welfare of current and future
generations'' (74 FR 66523). The 2009 Endangerment Finding, together
with the extensive scientific and technical evidence in the supporting
record, documented that climate change caused by human emissions of
GHGs (including HFCs) threatens the public health of the U.S.
population. It explained that by raising average temperatures, climate
change increases the likelihood of heat waves, which are associated
with increased deaths and illnesses (74 FR 66497). While climate change
also increases the likelihood of reductions in cold-related mortality,
evidence indicates that the increases in heat mortality will be larger
than the decreases in cold mortality in the United States (74 FR
66525). The 2009 Endangerment Finding further explained that compared
with a future without climate change, climate change is expected to
increase tropospheric ozone pollution over broad areas of the United
States, including in the largest metropolitan areas with the worst
tropospheric ozone problems, and thereby increase the risk of adverse
effects on public health (74 FR 66525). Climate change is also expected
to cause more intense hurricanes and more frequent and intense storms
of other types and heavy precipitation, with impacts on other areas of
public health, such as the potential for increased deaths, injuries,
infectious and waterborne diseases, and stress-related disorders (74 FR
66525). Children, the elderly, and the poor are among the most
vulnerable to these climate-related health effects (74 FR 66498).
---------------------------------------------------------------------------

    \18\ In describing these 2009 Findings in this proposal, EPA is
neither reopening nor revisiting them.
---------------------------------------------------------------------------

    The 2009 Endangerment Finding also documented, together with the
extensive scientific and technical evidence in the supporting record,
that climate change touches nearly every aspect of public welfare \19\
in the United States with resulting economic costs, including: Changes
in water supply and quality due to changes in drought and extreme
rainfall events; increased risk of storm surge and flooding in coastal
areas and land loss due to inundation; increases in peak electricity
demand and risks to electricity infrastructure; and the potential for
significant agricultural disruptions and crop failures (though offset
to some extent by carbon fertilization). These impacts are also global
and may exacerbate problems outside the United States that raise
humanitarian, trade, and national security issues for the United States
(74 FR 66530).
---------------------------------------------------------------------------

    \19\ The CAA states in section 302(h) that ``[a]ll language
referring to effects on welfare includes, but is not limited to,
effects on soils, water, crops, vegetation, manmade materials,
animals, wildlife, weather, visibility, and climate, damage to and
deterioration of property, and hazards to transportation, as well as
effects on economic values and on personal comfort and well-being,
whether caused by transformation, conversion, or combination with
other air pollutants.'' 42 U.S.C. 7602(h).
---------------------------------------------------------------------------

    In 2016, the Administrator similarly issued Endangerment and Cause
or Contribute Findings for greenhouse gas emissions from aircraft under
section 231(a)(2)(A) of the CAA (81 FR 54422).\20\ In the 2016
Endangerment Finding, the Administrator found that the body of
scientific evidence amassed in the record for the 2009 Endangerment
Finding compellingly supported a similar endangerment finding under CAA
section 231(a)(2)(A), and also found that the science assessments
released between the 2009 and the 2016 Findings ``strengthen and
further support the judgment that GHGs in the atmosphere may reasonably
be anticipated to endanger the public health and welfare of current and
future generations'' (81 FR 54424).
---------------------------------------------------------------------------

    \20\ In describing these 2016 Findings in this proposal, EPA is
neither reopening nor revisiting them.
---------------------------------------------------------------------------

    Since the 2016 Endangerment Finding, the climate has continued to
change, with new records being set for several climate indicators such
as global average surface temperatures, greenhouse gas concentrations,
and sea level rise. Additionally, major scientific assessments continue
to be released that further improve our understanding of the climate
system and the impacts that GHGs have on public health and welfare both
for current and future generations. These updated observations and
projections document the rapid rate of current and future climate
change both globally and in the United States.21 22 23 24
---------------------------------------------------------------------------

    \21\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
https://nca2018.globalchange.gov.
    \22\ Roy, J., P. Tschakert, H. Waisman, S. Abdul Halim, P.
Antwi-Agyei, P. Dasgupta, B. Hayward, M. Kanninen, D. Liverman, C.
Okereke, P.F. Pinho, K. Riahi, and A.G. Suarez Rodriguez, 2018:
Sustainable Development, Poverty Eradication and Reducing
Inequalities. In: Global Warming of 1.5[deg]C. An IPCC Special
Report on the impacts of global warming of 1.5[deg]C above pre-
industrial levels and related global greenhouse gas emission
pathways, in the context of strengthening the global response to the
threat of climate change, sustainable development, and efforts to
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner,
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C.
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X.
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T.
Waterfield (eds.)]. In Press. https://www.ipcc.ch/sr15/chapter/chapter-5.
    \23\ National Academies of Sciences, Engineering, and Medicine.
2019. Climate Change and Ecosystems. Washington, DC: The National
Academies Press. https://doi.org/10.17226/25504.
    \24\ NOAA National Centers for Environmental Information, State
of the Climate: Global Climate Report for Annual 2020, published
online January 2021, retrieved on February 10, 2021, from https://www.ncdc.noaa.gov/sotc/global/202013.

---------------------------------------------------------------------------

II. What is the summary of this proposed action?

    In this rulemaking, EPA is proposing to: Establish the HFC
production and consumption baselines based on historical data;
establish the allowance allocation program to phase down HFC production
and consumption; determine an initial approach to allocating calendar-
year allowances and allowing for the transfer of those allowances;
establish provisions for the international transfer of allowances;
establish recordkeeping and reporting requirements; release certain
data to provide transparency and support implementation of the program;
and, address certain other elements related to the effective
implementation of the AIM Act.
    The AIM Act directs EPA to issue a final rule by September 23,
2021, to provide for the phasedown of the production and consumption of
HFCs through an allowance allocation and trading program. This
rulemaking, when finalized, is intended to fulfill that statutory
directive. Additionally, under the AIM Act, by October 1 of each
calendar year, EPA must calculate and determine the quantity of
production and consumption allowances for the following year. Thus, by
October 1, 2021, EPA must calculate and determine the quantity of
production and consumption allowances for 2022. EPA intends to issue
allowances for the 2022 calendar year no later than October 1, 2021,
using the procedure established through this rulemaking. EPA proposes
that this be a single year allocation and intends to issue individual
allowances for the 2023 calendar year no later than October 1, 2022,
using the procedure established through this rulemaking. The AIM Act
further directs EPA to promulgate by September 23, 2021, a regulation
governing the transfer of production and consumption allowances, and
EPA is herein proposing regulatory requirements related to this
statutory directive. The AIM Act also directs EPA to issue by December
27, 2021, regulations related to the international transfer of
production allowances. EPA is herein proposing regulatory requirements
related to this statutory directive as well.
    EPA is proposing to establish a regulatory framework under the
statutory timelines required by the AIM Act, but also acknowledges at
the outset that we intend to revisit how to allocate allowances for
2024 and beyond and further build out aspects of the program. To
accurately reflect that intention in this rule, EPA is proposing that
the initial approach for determining allowance allocations that EPA
would establish in this framework rule be time-limited. This would
necessitate completion of another notice-and-comment rulemaking prior
to October 1, 2023, to issue allowances for calendar year 2024 and
later years. As a result, section XI of this preamble, which includes
an ANPRM, explains ideas the Agency is considering for a separate
future rulemaking that will address the criteria/framework for issuing
allowances for 2024 and later years. Given high baseline health risks
related to air toxics in communities near facilities that produce HFCs,
EPA is seeking input in sections III and XI (the ANPRM) on whether
there are potential environmental justice concerns that could be
affected by the phasedown of HFCs, allowance transfers, and/or the
production of substitutes. EPA is also seeking input on ways to ensure
that these elevated risks not be further exacerbated by changes in the
use patterns for production of HFCs or their substitutes. The Agency is
soliciting comments on the concepts introduced in the ANPRM but is not
proposing any action associated with those elements in this rulemaking.
Instead, any comments received on elements of the ANPRM will be taken
under advisement by the Agency and incorporated, as appropriate, in
future and separate rulemakings with an opportunity for public comment
prior to finalization of any provisions.
    EPA estimates that in 2022 the annual net benefits are $2.6
billion, reflecting compliance costs of $200 million and social
benefits of $2.8 billion. In 2036, when the final phasedown step is
reached at 15 percent of the statutorily defined HFC baseline, the
estimated annual net benefits are $17.9 billion. The present value of
cumulative net benefits evaluated from 2022 through 2050 is $283.9
billion at a three percent discount rate or $278.6 billion at a seven
percent discount rate.\25\ The present value of net benefits are
calculated over the 29-year period from 2022-2050 to account for the
years that emissions will be reduced following the consumption
reductions from 2022-2036. Over the 15-year period of the phasedown of
HFCs, at a three percent discount rate the present value of cumulative
compliance costs are negative $5 billion, or $5 billion in savings, the
present value of cumulative social benefits is $103.6 billion, and the
present value of cumulative net benefits is $108.2 billion. Evaluated
at a seven percent discount rate, the present value of cumulative
compliance costs are negative $3 billion, or $3 billion in savings, and
the present value of cumulative net benefits is $106.6 billion. Climate
benefits are based on changes (reductions) in HFC emissions and are
calculated using four different estimates of the social cost of HFCs
(SC-HFCs) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; and 95th percentile at 3 percent discount rate). The
benefits presented in this paragraph are the benefits associated with
the average SC-HFC at a 3 percent discount rate, but the Agency does
not have a single central SC-HFC point estimate. The Interagency
Working Group on the Social Cost of Greenhouse Gases (IWG) emphasized
the importance and value of considering the benefits calculated using
all four estimates.
---------------------------------------------------------------------------

    \25\ All values for costs and benefits in this section are given
in 2020 dollars and are calculated by discounting future costs and
benefits to 2022 using a three percent discount rate. Calculations
using other discount rates and discussion of the impact of the
discount rate are found in the Regulatory Impact Analysis.
---------------------------------------------------------------------------

    As summarized further in section X of the preamble and described
more fully in the Regulatory Impact Analysis (RIA) for this proposed
rulemaking, EPA's analysis indicates the principal costs (or savings)
result from industry transitioning to substitute chemicals and
technology. The principal benefits result from a decrease in emissions
of HFCs into the atmosphere and the corresponding effects on global
warming. The benefits are monetized by using the Social Cost of HFCs
(SC-HFCs). SC-HFCs is estimated using a method consistent with the
method used to estimate the Social Cost of Greenhouse Gases (SC-GHGs).
An alternative method was also considered which estimates SC-HFCs by
using the GWP (or exchange value) of HFCs and scaling to the known
social cost of another GHG, e.g., CO2, CH4, or
N2O.

III. How is EPA considering environmental justice?

    Executive Order 12898 (59 FR 7629; February 16, 1994) and Executive
Order 14008 (86 FR 7619; January 27, 2021) establish federal executive
policy on

environmental justice. Executive Order 12898's main provision directs
federal agencies, to the greatest extent practicable and permitted by
law, to make environmental justice part of their mission by identifying
and addressing, as appropriate, disproportionately high and adverse
human health or environmental effects of their programs, policies, and
activities on minority populations and low-income populations in the
United States. EPA defines environmental justice as the fair treatment
and meaningful involvement of all people regardless of race, color,
national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and
policies.\26\ Meaningful involvement means that: (1) Potentially
affected populations have an appropriate opportunity to participate in
decisions about a proposed activity that will affect their environment
and/or health; (2) the public's contribution can influence the
regulatory Agency's decision; (3) the concerns of all participants
involved will be considered in the decision-making process; and (4) the
rule-writers and decision-makers seek out and facilitate the
involvement of those potentially affected.\27\ The term
``disproportionate impacts'' refers to differences in impacts or risks
that are extensive enough that they may merit Agency action. In
general, the determination of whether there is a disproportionate
impact that may merit Agency action is ultimately a policy judgment
which, while informed by analysis, is the responsibility of the
decision-maker. The terms ``difference'' or ``differential'' indicate
an analytically discernible distinction in impacts or risks across
population groups. It is the role of the analyst to assess and present
differences in anticipated impacts across population groups of concern
for both the baseline and proposed regulatory options, using the best
available information (both quantitative and qualitative) to inform the
decision-maker and the public.\28\
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    \26\ See, e.g., ``Environmental Justice.'' Epa.gov,
Environmental Protection Agency, 4 Mar. 2021, www.epa.gov/environmentaljustice.
    \27\ The criteria for meaningful involvement are contained in
EPA's May 2015 guidance document
    ``Guidance on Considering Environmental Justice During the
Development of an Action.'' Epa.gov, Environmental Protection
Agency, 17 Feb. 2017, www.epa.gov/environmentaljustice/guidance-considering-environmental-justice-during-development-action.
    \28\ The definitions and criteria for ``disproportionate
impacts,'' ``difference,'' and ``differential'' are contained in
EPA's June 2016 guidance document ``Technical Guidance for Assessing
Environmental Justice in Regulatory Analysis.'' Epa.gov,
Environmental Protection Agency, https://www.epa.gov/sites/production/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf.
---------------------------------------------------------------------------

    A regulatory action may involve potential environmental justice
concerns if it could: (1) Create new disproportionate impacts on
minority populations, low-income populations, and/or indigenous
peoples; (2) exacerbate existing disproportionate impacts on minority
populations, low-income populations, and/or indigenous peoples; or (3)
present opportunities to address existing disproportionate impacts on
minority populations, low-income populations, and/or indigenous peoples
through the action under development.
    Executive Order 14008 calls on agencies to make achieving
environmental justice part of their missions ``by developing programs,
policies, and activities to address the disproportionately high and
adverse human health, environmental, climate-related and other
cumulative impacts on disadvantaged communities, as well as the
accompanying economic challenges of such impacts.'' Executive Order
14008 further declares a policy ``to secure environmental justice and
spur economic opportunity for disadvantaged communities that have been
historically marginalized and overburdened by pollution and under-
investment in housing, transportation, water and wastewater
infrastructure, and health care.'' In addition, the Presidential
Memorandum on Modernizing Regulatory Review calls for procedures to
``take into account the distributional consequences of regulations,
including as part of a quantitative or qualitative analysis of the
costs and benefits of regulations, to ensure that regulatory
initiatives appropriately benefit, and do not inappropriately burden
disadvantaged, vulnerable, or marginalized communities.'' EPA also
released its June 2016 ``Technical Guidance for Assessing Environmental
Justice in Regulatory Analysis'' (2016 Technical Guidance) to provide
recommendations that encourage analysts to conduct the highest quality
analysis feasible, recognizing that data limitations, time and resource
constraints, and analytic challenges will vary by media and
circumstance.
    As described elsewhere in this notice, this rule proposes to
establish the framework for, and begin, the United States' phasedown of
HFCs, which is projected to achieve significant benefits by reducing
production and consumption of certain chemicals with high GWPs. Section
I.D. of this proposal briefly summarizes the public health and welfare
effects of GHG emissions (including HFCs) as documented in EPA's 2009
and 2016 Endangerment Findings. As part of these Endangerment Findings,
the Administrator considered climate change risks to minority
populations and low-income populations, finding that certain parts of
the population may be especially vulnerable based on their
characteristics or circumstances, including the poor, the elderly, the
very young, those already in poor health, the disabled, those living
alone, and/or indigenous populations dependent on one or limited
resources due to factors including but not limited to geography,
access, and mobility.
    More recent assessment reports by the U.S. Global Change Research
Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC),
and the National Research Council (NRC) of the National Academies
demonstrate that the potential impacts of climate change raise
environmental justice issues. These reports concluded that poorer
communities can be especially vulnerable to climate change impacts
because they tend to have more limited adaptive capacities and are more
dependent on climate-sensitive resources such as local water and food
supplies. In corollary, some communities of color, specifically
populations defined jointly by both ethnic/racial characteristics and
geographic location, may be uniquely vulnerable to climate change
health impacts in the United States. Native American tribal communities
possess unique vulnerabilities to climate change, particularly those
impacted by degradation of natural and cultural resources within
established reservation boundaries and threats to traditional
subsistence lifestyles. Tribal communities whose health, economic well-
being, and cultural traditions that depend upon the natural environment
will likely be affected by the degradation of ecosystem goods and
services associated with climate change. The Technical Support Document
for the 2009 Endangerment Finding also specifically noted that
Southwest native cultures are especially vulnerable to water quality
and availability impacts, and Native Alaskan communities are already
experiencing disruptive impacts, including coastal erosion and shifts
in the range or abundance of wild species crucial to their livelihoods
and well-being.
    As alluded to elsewhere in this proposal, and detailed in the RIA,
which can be found in the docket for this rulemaking, the provisions in
this proposed rulemaking as part of the phasedown of HFCs in the United
States

would, if finalized, achieve significant benefits associated with
reducing climate change. However, as described in the RIA and
summarized below, there is significant uncertainty about how the
phasedown of HFC production, the issuance of allowances, and market
trends independent of this proposed rulemaking could affect production
of HFCs and HFC substitutes--and associated air pollution emissions--at
individual facilities, particularly in communities that are
disproportionately burdened by air pollution. EPA is soliciting comment
and/or data or other information in section XI that could help reduce
the potential for inadvertent or unexpected distributional effects from
this program, including the potential for environmental justice
concerns due to the release of toxic chemicals that are feedstocks,
catalysts, or byproducts in the production of HFCs or HFC substitutes.
    More specifically, EPA is seeking comment on whether changes in
emissions, particularly in communities that are already
disproportionately affected by air pollution, could occur as the result
of the HFC phasedown, the associated ability to transfer allowances, or
other unrelated changes in the market. EPA also seeks comment on
whether there are remedies that could be applied as part of the design
of the program in the event the Agency determines such unintended
distributional impacts exist. In addition, EPA solicits comment on
whether other regulatory authorities would be more appropriate to
address any inadvertent or unexpected distributional effects that are
identified, for example, if a producer obtained allowances in
sufficient quantities to grow HFC production, which could potentially
increase air emissions at that location. In such instances, where other
authorities may be a more appropriate avenue, EPA expects that effects
would be addressed through that avenue outside of AIM Act regulatory
processes under timelines appropriate to those other programs.
    EPA intends to develop another rule before allowances are allocated
for calendar year 2024 that may alter the framework and procedure for
issuing allowance allocations and could possibly address any identified
environmental justice concerns past the year 2023. The HFC phasedown
schedule prescribed by Congress may also reduce the potential for a
facility to increase emissions above current levels for a prolonged
period. EPA notes that this rule affects a small number of entities
through a distinct allocation program, and that these entities
manufacture a wide variety of products and are subject to a number of
distinct market and regulatory forces independent of this HFC program.
As such, the issues identified here and possible remedies may not be
broadly applicable or practicable in other rulemakings.
    A reasonable starting point for assessing the need for a more
detailed environmental justice analysis is to review the available
evidence from the published literature and from community input on what
factors may make population groups of concern more vulnerable to
adverse effects (e.g., cumulative exposure from multiple stressors),
including but not limited to the 2009 and 2016 Endangerment Findings
and the reports from USGCRP, IPCC, and NRC. It is also important to
evaluate the data and methods available for conducting an environmental
justice analysis.
    EPA's 2016 Technical Guidance does not prescribe or recommend a
specific approach or methodology for conducting an environmental
justice analysis, though a key consideration is consistency with the
assumptions underlying other parts of the regulatory analysis when
evaluating the baseline and regulatory options. Where applicable and
practicable, the Agency's Regulatory Impact Analysis, available in the
docket for this rulemaking, examines certain metrics for an
environmental justice analysis comprising more than just climate change
effects, including: The proximity of companies receiving allowances to
minority populations, low-income populations, and/or indigenous
peoples; the number of companies receiving allowances that may be
impacting population groups of concern; the nature, amounts, and
location of regulated HFC production that may impact population groups
of concern; and potential exposure pathways associated with the
production of the regulated HFCs or with chemicals used as feedstocks,
catalysts, or byproducts of HFC production unique to particular
populations (e.g., workers). The environmental justice analysis is
described in the RIA and is based on public data from the Toxics
Release Inventory (TRI), GHGRP, EJSCREEN (an environmental justice
mapping and screening tool developed by EPA), Enforcement and
Compliance History Online (ECHO), and Census data. The analysis of
potential environmental justice concerns focuses mainly on
characterizing baseline emissions of air toxics that are also
associated with chemical feedstock use for HFC production. As noted in
the RIA, there is uncertainty around the role that HFC production plays
in emissions of these air toxics. In addition, EPA conducted a
proximity analysis to examine community characteristics within one and
three miles of these facilities. The relatively small number of
facilities affected by the proposed rule has enabled EPA to assemble a
uniquely granular assessment of the characteristics of these facilities
and the communities where they are located.
    Overall, this rule would reduce GHG emissions, which would benefit
populations that may be especially vulnerable to damages associated
with climate change. However, the manner in which producers transition
from high-GWP HFCs could drive changes in future risk for communities
living near facilities that produce HFCs, to the extent the use of
toxic feedstocks, byproducts, or catalysts changes and those chemicals
are released into the environment with adverse local effects. The
environmental justice analysis, which examines racial and economic
demographic and health risk information, finds heterogeneity in
community characteristics around individual facilities. The analysis
shows that the total baseline cancer risk and total respiratory risk
from air toxics (not all of which stem from HFC production) varies, but
is generally higher, and in some cases much higher, within one to three
miles of a HFC production facility. The analysis also finds that higher
percentages of low income and Black or African American individuals
live near several HFC production facilities compared with the
appropriate national and state level average. It is not clear the
extent to which these baseline risks are directly related to HFC
production, but some HFC production feedstocks, catalysts, and
byproducts are toxic, particularly with respect to potential
carcinogenicity (e.g., carbon tetrachloride, tetrachloroethylene,
trichloroethylene, etc.). Additionally, some HFC alternatives, e.g.,
HFOs, use the same chemicals as feedstocks in their production or
released as byproducts, potentially raising concerns about local
exposure to them. However, given limited information regarding where
substitutes will be produced and what other factors might affect
production and emissions at those locations, it is unclear to what
extent this proposed rule would affect baseline risks from hazardous
air toxics for communities living near HFC production facilities. EPA
requests commenters provide data or other information to help better
characterize these changes and their implications for

nearby communities for analysis of the final rule.
    As discussed, EPA's preliminary analysis of potential environmental
justice concerns is contained in the RIA, which is available in the
docket, as well as information on non-production releases (as defined
by TRI), water releases, and off-site disposal for chemicals used in
HFC production. EPA seeks input on the environmental justice analysis
contained in the RIA, as well as broader input on other health and
environmental risks the Agency should assess. To support the
development of comments, EPA is seeking data or analysis to identify
whether it is reasonable to expect net increases in emissions; and if
so how we might isolate the impacts of this program (i.e., effects
resulting from the phasedown itself, the trading of production
allowances, or some other factor) that would enable the Agency to
conduct a more nuanced analysis of changes in releases associated with
chemical feedstocks and byproducts for HFC substitutes, given the
inherent uncertainty regarding where, and in what quantities,
substitutes will be produced. EPA is also seeking comment on whether
there are other regulatory tools better suited than adjustments to the
HFC program design to address potential increases in emissions in non-
HFC feedstocks and byproducts observed at facilities subject to the
Congressionally mandated phasedown of HFCs under the AIM Act, if any.
EPA is also soliciting comment on key assumptions underlying the
environmental justice analysis. In addition to the questions asked in
this section III, EPA is also soliciting input in section XI on what
mechanisms the Agency could consider to prevent or mitigate any
increase in exposure to air toxics emissions from facilities located
near high risk communities, including from the proposed provisions
relating to transfer of allowances. EPA invites readers to refer to
section XI for that discussion.

IV. What definitions are proposed to implement the AIM Act?

    EPA is proposing to establish definitions that would implement the
framework for the AIM Act generally and the allowance allocation and
trading program specifically. Where possible, EPA is proposing to adopt
definitions as written in 40 CFR part 82, subpart A, with modifications
if needed to conform to differences in the AIM Act.

A. What definitions is EPA proposing to adopt from 40 CFR 82.3 without
substantive change?

    EPA is proposing to adopt definitions for the following defined
terms as used in 40 CFR 82.3 with only those changes that are needed to
conform with the AIM Act. These defined terms are used in the same or
substantially similar manner as in the ODS phaseout under the CAA. In
many instances, the only proposed change to the definition of a term is
to replace ``controlled substances'' with ``regulated substances,'' as
the latter is the term used to describe HFCs in the AIM Act. In other
instances, EPA is not including citations to 40 CFR part 82, subpart A,
that were found in those definitions but that are not directly relevant
for implementing the AIM Act. Because there is significant overlap
between the regulated community of the AIM Act and those who partook in
the ODS phaseout under Title VI of the CAA, maintaining the same
definitions, where consistent with AIM Act requirements, would provide
certainty to those that have been using and are familiar with these
terms from the ODS phaseout experience. EPA welcomes comment on whether
any of these terms should be updated or modified.
    These terms are: Administrator, Central Data Exchange, Consumption,
Consumption allowances, Export, Exporter, Foreign country, Heel,
Importer, Individual shipment, Non-objection notice, Person, Production
allowances, Source facility, Transform, Transhipment, and Used
regulated substances.

B. What definitions is EPA proposing to adopt from 40 CFR 82.3 with
substantive change?

    EPA is proposing to adopt the definitions for the following defined
terms as written in 40 CFR 82.3 with some changes necessary to align
the definition with the AIM Act beyond those described in the previous
section. The terms are: Confer, Destruction, Facility, Import, Metered
Dose Inhaler (MDI), and Reclaim.
    Destruction. EPA is proposing to define destruction as ``the
expiration of a regulated substance to the destruction and removal
efficiency actually achieved. Such destruction might result in a
commercially useful end product, but such usefulness would be secondary
to the act of destruction.'' Inclusion of the second sentence clarifies
that the listed technologies in proposed section 84.29 that are
conversion technologies are included within the proposed definition for
destruction and are not considered transformation. Unlike the
definition for this term in 40 CFR part 82, subpart A, EPA is proposing
not to distinguish between destruction and completely destroy. The
Agency expects that all destruction of regulated substances occurs at
98 percent or greater, which was the definition for ``completely
destroy.'' EPA is also proposing that the new definition not include a
reference to the Parties. Lastly, in place of the part 82 list of
approved technologies, EPA is proposing to list the technologies
approved by the Administrator in Sec.  84.29.
    Confer. EPA is proposing to define this term as ``to shift
unexpended application-specific allowances obtained in accordance with
subsection (e)(4)(B)(iv) of the AIM Act from the end user allocated
such allowances to another entity for the production or import of a
regulated substance for use by the end user.'' This proposed term is
intended to distinguish conferring an allowance, which is not subject
to an offset, from an allowance transfer, which is subject to an
offset.
    Facility. EPA is proposing to define this term in 40 CFR part 84 to
mean ``one or more production lines at the same location owned by or
under common control of the same person.'' This is similar to the
definition of ``plant'' in 40 CFR part 82. This would align the
definition of ``facility'' more closely with definitions used in other
CAA regulatory programs, including the GHGRP. As discussed in the
following section of the preamble, EPA is creating a new definition
``production line'' that has the same meaning as the definition of
``facility'' in 40 CFR part 82.
    Import. EPA is proposing to adopt the definition of the term
``import'' contained in subsection (b) of the AIM Act, which is nearly
identical to the definition of ``import'' in 40 CFR part 82, and add
one of the three exemptions from the part 82 definition. EPA is
proposing to include an exemption for the off-loading of used regulated
substances from a ship during servicing. This occurs, for example, when
a foreign ship's refrigeration system is serviced in a U.S. port and
refrigerant that is recovered from that system is offloaded for
reclamation or destruction. The alternatives would be requiring
shipping companies to hold allowances or store the used refrigerant on
board until reaching another country. Issuing allowances to shipping
companies would be impractical as servicing can happen unexpectedly to
any type of vessel and EPA does not have data on which to base an
allocation. Prohibiting offloading is potentially problematic because
it could result in venting of the

refrigerant when the ship is offshore rather than the proper
reclamation or disposal that is required under EPA's refrigerant
management regulations at 40 CFR part 82, subpart F.
    Metered dose inhaler. EPA is proposing to define MDIs as ``a
handheld pressurized inhalation system that delivers small, precisely
measured therapeutic doses of medication directly to the airways of a
patient. MDIs treat health conditions such as asthma and chronic
obstructive pulmonary disease and are approved for such use by the U.S.
Food and Drug Administration (FDA).'' This definition is substantially
similar to the definition of ``essential metered dose inhaler'' in 40
CFR part 82 (except that the part 82 definition refers to a
determination of essentiality by either the Parties to the Montreal
Protocol or the FDA).
    Reclaim. EPA is proposing to define reclaim as ``the reprocessing
of regulated substances to all of the specifications in appendix A of
40 CFR part 82, subpart F (based on AHRI Standard 700-2016) that are
applicable to that regulated substance and to verify that the regulated
substance meets these specifications using the analytical methodology
prescribed in section 5 of appendix A of 40 CFR part 82, subpart F.''

C. What new definitions is EPA proposing?

    Subsection (b) of the AIM Act defines some specific terms and the
Act as a whole introduces other new terms that it does not define. EPA
is proposing to establish definitions for a number of new terms that
are relevant for the allowance allocation and trading program. These
terms are: Allowance, Application-specific allowance, Bulk, Chemical
vapor deposition chamber cleaning, Defense spray, Etching, Exchange
value, Exchange value equivalent, Final customer, Mission-critical
military end uses, On board aerospace fire suppression, Process agent,
Production/Produce, Production line, Regulated substance, and
Structural composite preformed polyurethane foam.
    Allowance. The AIM Act defines allowance as a limited authorization
for the production or consumption of a regulated substance established
under subsection (e). EPA is proposing to adopt that definition and add
that an allowance allocated under this subsection does not constitute a
property right as stated in subsection (e)(2)(D)(ii)(aa) and that an
allowance allocated under the authority of the AIM Act can be retired,
revoked, or withheld at the discretion of the relevant Agency official.
EPA notes that the framework for issuing allowances is subject to
change through notice and comment rulemaking.
    Application-specific allowance. EPA is proposing to establish a new
category of allowances that would be issued only to entities in the six
listed applications at (e)(4)(B)(iv) of the AIM Act. EPA is proposing
to define this term as ``a limited authorization granted in accordance
with subsection (e)(4)(B)(iv) of the AIM Act for the production or
import of a regulated substance for use in the specifically identified
applications that are listed in that subsection and in accordance with
the restrictions contained at Sec.  84.5(c). An application-specific
allowance does not constitute a property right and can be retired,
revoked, or withheld at the discretion of the relevant Agency
official.''
    Bulk. EPA is proposing to define this term as ``a regulated
substance of any amount that is in a container for the transportation
or storage of that substance such as cylinders, drums, ISO tanks, and
small cans. A regulated substance that must first be transferred from a
container to another container, vessel, or piece of equipment in order
to realize its intended use is a bulk substance. A regulated substance
contained in a manufactured product such as an appliance, an aerosol
can, or a foam is not a bulk substance.'' EPA is proposing to define
this term so as to distinguish between a regulated substance that is in
a container from a regulated substance that is in a product or other
type of use system. The examples provided in the definition are not
exclusive.
    Chemical vapor deposition chamber cleaning. EPA is proposing to
define this term as, ``in the context of semiconductor manufacturing, a
process type in which chambers used for depositing thin films are
cleaned periodically using plasma-generated fluorine atoms and other
reactive fluorine-containing fragments.'' This definition is closely
based on the source category definition for electronics manufacturing
in the GHGRP (40 CFR 98.90(a)(2)).
    Defense spray. EPA is proposing to define this term as ``an
aerosol-based spray used for self-defense, including pepper spray and
animal sprays, and containing the irritant capsaicin and related
capsaicinoids (derived from oleoresin capsicum), an emulsifier, and an
aerosol propellant.'' EPA is taking comment on whether this definition
is inclusive of defense sprays potentially covered by subsection
(e)(4)(B)(iv) of the AIM Act.
    Etching. EPA is proposing to define etching as, ``in the context of
semiconductor manufacturing, a process type that uses plasma-generated
fluorine atoms and other reactive fluorine-containing fragments that
chemically react with exposed thin-films (e.g., dielectric, metals) or
substrate (e.g., silicon) to selectively remove portions of material.''
This definition is closely based on the definition of the electronics
manufacturing source category in the GHGRP (40 CFR 98.90(a)(1)).
    Exchange value. The AIM Act defines ``exchange value'' as the value
assigned to a regulated substance in accordance with subsections (c)
and (e), as applicable. Subsection (c) includes a list of regulated
substances with listed exchange values. Subsection (e) includes a list
of ODS with listed exchange values. EPA is proposing to adopt the
definition contained in the AIM Act, including the tables, which EPA
would replicate in Appendix A of 40 CFR part 84.
    Exchange value equivalent. This proposal also uses the term
``exchange value equivalent'' or ``EVe'' to provide a common unit of
measure. EPA is proposing to define EVe to be determined by multiplying
the mass of a regulated substance by the exchange value of that
substance. For example, 50 kilograms of HFC-134a would be 71,500 kgEVe
(50 x 1,430). This can also be written as 71.5 metric tons exchange
value equivalent (MTEVe). EPA is proposing to issue allowances in units
of one MTEVe. This proposal also uses the term ``EV-weighted'' to
describe a number presented in exchange value equivalents. For example,
EPA is proposing that the size of an allowance be one EV-weighted ton.
    EVe allows for the comparison between, and calculation with,
different regulated substances. For example, a blend containing
multiple regulated substances would have an EVe that could be used to
determine the quantity of allowances needed to produce or consume the
regulated HFCs that are components of the blend. However, the EVe would
only reflect the components of the blend that are regulated substances
under the AIM Act. In situations where the blend contains components
that are not regulated substances (e.g., hydrofluoroolefins or HFOs),
the EVe would not match the GWP of the blend and would be slightly
lower. This would be the case for blends

R-448A,\29\ R-449A, and R-450A, which contain a mix of HFCs and HFOs.
---------------------------------------------------------------------------

    \29\ There are a number of different blends that contain HFCs
and non-regulated substances such as HFOs. As an example, the blend
R-448A is made of five components, three of which are HFCs regulated
under the AIM Act and two HFOs. The percentage of the blend and the
exchange value of the constituents are: 26 percent HFC-32 (675), 26
percent HFC-125 (3,500), 21 percent HFC-134a (1,430), 20 percent
HFO-1234yf (0), and 7 percent HFO-1234ze (0). The contribution of
each HFC to the total EVe of the blend is calculated by multiplying
the percentage of the blend made up of that HFC times its EVe, and
the sum of the contributions of all the blend constituents is the
blend EVe. Thus, the EVe of R-448A is (0.26 x 675) + (0.26 x 3,500)
+ (0.21 x 1,430) + (0.20 x 0) + (0.07 x 0) = 1,385.8.
---------------------------------------------------------------------------

    Final customer. EPA is proposing to define this term as ``the last
person to purchase a bulk regulated substance before its intended
use.'' For each use of HFCs, the final customer can be different. For
example, an air-conditioning contractor would generally be the final
customer in the residential air conditioning market. For foams, the
foam systems house would be the final customer, as they are making a
product (i.e., a foam system). Likewise, aerosol fillers, semiconductor
manufacturers, air-conditioning and refrigeration equipment
manufacturers that ship equipment pre-charged, fire extinguisher
manufacturers would be the final customer. EPA seeks comment on whether
a list of examples like this should be incorporated into the
definition.
    Mission-critical military end uses. EPA is proposing to define this
term as ``those uses of regulated substances by an agency of the
Federal Government responsible for national defense which have a direct
impact on mission capability, as determined by the U.S. Department of
Defense, including, but not limited to uses necessary for development,
testing, production, training, operation, and maintenance of Armed
Forces vessels, aircraft, space systems, ground vehicles, amphibious
vehicles, deployable/expeditionary support equipment, munitions, and
command and control systems.''
    On board aerospace fire suppression. EPA is proposing to define
this term as ``use of a regulated substance in fire suppression
equipment used on board commercial and general aviation aircraft and
space vehicles. On board commercial aviation fire suppression systems
are installed throughout mainline and regional passenger and freighter
aircraft, including engine nacelles, auxiliary power units (APUs),
lavatory trash receptacles, baggage/crew compartments, and handheld
extinguishers.'' EPA takes comment on whether this definition should
include general aviation, which consists of private and/or business
aircraft, which may not have the same requirements as commercial
aircraft for on board fire suppression systems. This definition
excludes military aircraft because they are already covered under the
definition of mission-critical military end uses. EPA has previously
defined ``space vehicle'' under Title VI regulations at 40 CFR 82.3 as
a man-made device, either manned or unmanned, designed for operation
beyond earth's atmosphere. This definition includes integral equipment
such as models, mock-ups, prototypes, molds, jigs, tooling, hardware
jackets, and test coupons. Also included is auxiliary equipment
associated with test, transport, and storage, which through
contamination can compromise the space vehicle performance. EPA takes
comment on whether space vehicle, as defined above, is inclusive of
applications that would be considered as on board fire suppression. EPA
requests relevant information on HFC use in these applications.
    Process agent. The AIM Act uses the term ``process agent'' without
defining it. EPA is proposing to define the term as ``the use of a
regulated substance to form the environment for a chemical reaction
(e.g., use as a solvent, catalyst, or stabilizer) where the regulated
substance is not consumed in the reaction, but is removed or recycled
back into the process and where no more than trace quantities remain in
the final product. A feedstock, in contrast, is consumed during the
reaction.'' \30\ This definition matches the definition used by the
Montreal Protocol's Technology and Economic Assessment Panel (TEAP) and
is well-established and understood in the ODS context.\31\
---------------------------------------------------------------------------

    \30\ The term ``consume'' in the AIM Act has two separate
meanings. In the context of describing transformation/feedstock uses
of HFCs, the word ``consume'' is used to mean the decomposition of
the substance. For example, subsection (b)(7)(B) excludes from the
definition of ``produce'' ``the manufacture of a regulated substance
that is used and entirely consumed (except for trace quantities) in
the manufacture of another chemical.'' (emphasis added).
    \31\ Montreal Protocol on Substances that Deplete the Ozone
Layer, Medical and Chemical Technical Options Committee 2018
Assessment Report (United Nations Environmental Programme, 2018).
https://ozone.unep.org/sites/default/files/2019-04/MCTOC-Assessment-Report-2018.pdf.
---------------------------------------------------------------------------

    Production/Produce. EPA is proposing to adopt the definition of the
term ``produce'' that is found in subsection (b) of the AIM Act. While
substantially similar to the definition of the term ``production'' at
40 CFR 82.3, there are a few differences. First, the AIM Act definition
does not use the word ``transformed'' but rather textually incorporates
most of the definition of the defined term ``transform'' from Sec.
82.3. Second, the definition specifically excludes the reclamation of a
regulated substance from the term production. This exclusion was not
found in Sec.  82.3 but matches EPA's long-held interpretation in CAA
Title VI programs that reclamation does not constitute production and
that reclaimed material is inherently reused/recycled.
    In addition, EPA is proposing to specifically exclude from
production ``the inadvertent or coincidental creation of insignificant
quantities of a regulated substance during a chemical manufacturing
process, resulting from unreacted feedstock, from the listed
substance's use as a process agent present as a trace quantity in the
chemical substance being manufactured, or as an unintended byproduct of
research and development applications.'' This phrase appears in the 40
CFR 82.3 definition of ``controlled substance.'' EPA is proposing that
the exclusion of these insignificant quantities is more properly
considered in defining what qualifies as production given they describe
acts of ``creation'' or ``resulting from'' or ``byproduct of.'' Under
this proposal, such insignificant quantities created in the above-
listed circumstances would be considered regulated substances, but
would not be considered production. Combining all of the exclusions
under one term increases clarity when interpreting the terms
``produce'' and ``regulated substance'' together.
    Production line. EPA is proposing to define the term ``production
line'' to mean ``any process equipment (e.g., reactor, distillation
column) used to convert raw materials or feedstock chemicals into
regulated substances or consume regulated substances in the production
of other chemicals.'' In 40 CFR part 82, EPA used this same description
to define the term ``facility.'' The Agency considers the term
``production line'' to be more consistent with common usage in the
chemical industry to refer to a specific set of process equipment, as
opposed to the buildings and land where production takes place.
    Regulated substance. The AIM Act uses the term ``regulated
substance'' to refer to HFCs statutorily listed in the AIM Act and any
such substance added to the list in future consistent with subsection
(c)(3)(A). EPA is proposing to define the term as ``a hydrofluorocarbon
listed in the table contained in subsection (c)(1) of the AIM Act and a
substance included as a regulated substance by the Administrator under

the authority granted in subsection (c)(3). A current list of regulated
substances can be found in appendix A of this part.''
    Structural composite preformed polyurethane foam. EPA is proposing
to define this term as ``a foam blown from polyurethane that is
reinforced with fibers and with polymer resin during the blowing
process, and is preformed into the required shape (e.g., specific boat
or trailer design) to increase structural strength, while reducing the
weight of such structures.''
    EPA welcomes comment on these proposed defined terms and whether
any additional terms should be defined in this rulemaking.

V. How is EPA proposing to establish the HFC production and consumption
baselines?

    The first step in phasing down HFCs through an allowance allocation
and trading program is to establish the U.S. production and consumption
baselines. It is from these baselines that the total annual production
and consumption allocations can be derived in a stepwise manner over
time.

A. What are the components of the production and consumption baselines?

    Subsection (e)(1) of the AIM Act directs EPA to establish a
production baseline and a consumption baseline and provides the
equations for doing so. The equations comprise an HFC component, an
HCFC component, and a CFC component. Specifically, the production
baseline is equal to the sum of: (i) The average annual quantity of all
regulated substances produced in the United States from January 1,
2011, through December 31, 2013, and (ii) 15 percent of the production
level of HCFCs in calendar year 1989, and (iii) 0.42 percent of the
production level of CFCs in calendar year 1989. For the purposes of
establishing the baselines, EPA must use the exchange values assigned
by Congress to develop an exchange value-weighted amount for both
production and consumption. The equation representing the production
baseline calculation is:
[GRAPHIC] [TIFF OMITTED] TP19MY21.000

Similarly, the AIM Act defines the consumption baseline as equal to the
sum of (i) the average annual quantity of the consumption \32\ of
regulated substances in the United States from January 1, 2011, through
December 31, 2013, and (ii) 15 percent of the consumption of HCFCs in
calendar year 1989, and (iii) 0.42 percent of the consumption of CFCs
in calendar year 1989. The equation representing the consumption
baseline calculation is below.
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    \32\ Consumption is equal to production plus imports minus
exports.
[GRAPHIC] [TIFF OMITTED] TP19MY21.001

    In developing the proposed HFC consumption baseline, EPA is
proposing to include HFCs that are bulk chemicals and exclude HFCs that
are contained in a product. This proposal is based on EPA's experience
implementing similar provisions under CAA Title VI for ODS.\33\ The CAA
Title VI provisions are written and structured similarly to the AIM Act
provisions, and therefore it is reasonable to interpret and implement
those terms in a similar manner. Under the phaseout requirements for
ODS (40 CFR part 82, subpart A), only imports and exports of bulk
controlled substances are counted as part of the consumption cap.\34\
Using a different mechanism under the HFC phasedown could create
confusion and would likely cause disruption within the imported
products market. Specifically, many companies that import bulk HFCs
also imported bulk ODS substances and are therefore familiar with EPA's
regulations and allocation program used to phaseout ODS under Title VI
of the Clean Air Act. If the HFC allocation framework under the AIM Act
were expanded beyond bulk substances to include products containing
HFCs, the regulated importer community would be many times greater,
would likely be caught unawares, and would encompass entities
unfamiliar with EPA's general approach to the allocation program.
Further, if the Agency were to include HFCs contained in products in
the baseline figures, it also would need to include data reflecting
HCFCs and CFCs

contained in products in 1989 to complete the baseline formula. The
Agency does not have this data and given the amount of time that has
passed since 1989, it would be administratively infeasible to collect
such data now (as opposed to bulk CFC and bulk HCFC data which the
Agency already collected many years ago). Given the indications that
subsection (e) of the AIM Act does contemplate regulation of bulk
substances--such as the exceptions for feedstocks and process agents
(which are both examples of bulk substances) in subsection (e)(4)(A)
and the references in (e)(4)(B)(i) and (iv) to allocation of allowances
for use of regulated HFCs in particular applications--and given that it
does not appear to contemplate the implications of importing products
or equipment, EPA believes that this proposed interpretation is
consistent with the goals of the Act.
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    \33\ This approach is also consistent with the approach taken
under the Montreal Protocol. Decision I/12A, taken at the first
Meeting of the Parties to the Montreal Protocol, defines
``controlled substances'' as bulk chemical. As such, the production
and consumption schedules under the Montreal Protocol only apply to
bulk chemical.
    \34\ For purposes of implementing the ODS phaseout regulations
(40 CFR part 82, subpart A), EPA defined a controlled substance, in
part, as any listed ODS, whether existing alone or in a mixture, but
excluding any such substance or mixture that is in a manufactured
product other than a container used for the transportation or
storage of the substance or mixture. Any amount of a listed
substance that is not part of a use system containing the substance
is a controlled substance. If a listed substance or mixture must
first be transferred from a bulk container to another container,
vessel, or piece of equipment in order to realize its intended use,
the listed substance or mixture is a ``controlled substance.''
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    EPA is also proposing not to include transhipments within the
baseline. A transhipment is the continuous shipment of a regulated
substance, from a foreign country of origin through the United States,
to a second foreign country of final destination. Transhipments do not
enter interstate commerce in the United States. EPA proposes to not
include transhipments in the baseline calculation because the sum
effect of this activity would be zero--the regulated substance is both
imported (which would be added to the consumption baseline) and
exported (which would be subtracted from the consumption baseline) in
identical quantities.
1. How is EPA proposing to determine the HFC component of the
production and consumption baselines?
    In order to calculate the production and consumption baselines, EPA
must determine the annual production and consumption of the statutorily
listed HFCs in the years 2011, 2012, and 2013. EPA is proposing to use
three sources of data in order to calculate HFC consumption and
production figures for 2011 through 2013: (1) Data reported to EPA's
GHGRP; (2) data received in response to EPA's ongoing and planned
outreach, including the notice of data availability (NODA) published
February 11, 2021, stakeholder meetings, and planned letters sent out,
including under CAA section 114; and (3) any data received in response
to this notice of proposed rulemaking by the comment due date.
(a) What is the GHGRP and what data are available from it?
    The GHGRP was established in 2009 and requires various facilities
and suppliers to annually report data related to GHGs to EPA (see 40
CFR part 98). The relevant subpart that relates to reporting on HFC
production and consumption is subpart OO, ``Suppliers of Industrial
Greenhouse Gases.'' Because the HFCs listed as regulated substances
under the AIM Act are industrial GHGs, EPA has been collecting since
the GHGRP's inception a significant amount of data relevant to HFC
production and consumption as defined under the AIM Act. EPA can use
these data to begin approximating the historic HFC production and
consumption figures necessary to calculate baselines under the AIM
Act.\35\
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    \35\ While EPA determined that chemical-specific GHG data at the
facility and importer/exporter level is CBI, EPA also determined
that it would release the data in aggregated amounts as long as the
aggregations meet the criteria outlined in the Federal Register
notice cited here. For purposes of the data presented in the NODA
accompanying this rulemaking and in the docket for this proposed
rule, EPA determined that release of the aggregated data would not
disclose CBI. The data presented in this proposed rule are
aggregations for which the aggregation criteria have been met to
ensure the underlying CBI is shielded from public disclosure, and
the individual reporters have been notified of EPA's intent to
aggregate.
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    Under the GHGRP, reporting and other requirements apply to the
facility or supplier based on the source and/or supplier categories
located at the facility, their emission and/or supply levels (as
applicable to a source or supplier category), and other factors.
Facilities that undertake some types of activities (e.g., import or
export of fluorinated GHGs) \36\ must report for that source or
supplier category only if their emissions or supplies (or related
quantities) meet or exceed a threshold. Facilities that undertake other
types of activities (e.g., fluorinated GHG production) are required to
report for at least three years regardless of the magnitude of their
emissions or supplies. Once data are submitted, EPA conducts a multi-
step verification process to ensure reported data are complete and
accurate.
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    \36\ For the purposes of the GHGRP and this proposal, the term
``fluorinated GHGs'' does not include controlled substances under
CAA Title VI.
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    Subpart OO captures the vast majority of the bulk HFC production,
import, and export in the United States. Subpart OO requires reporting
from producers of HFCs and certain importers, exporters, and destroyers
of HFCs. The data reported are by chemical, and thus, EPA can exclude
from the calculation of baselines any HFCs reported to the GHGRP that
are not listed as regulated substances under the AIM Act. All producers
of HFCs, as defined in 40 CFR 98.410(b), are required to report the
quantities that they produce, transform (unless the transformed
feedstock is produced onsite), destroy, or send off-site for
transformation or destruction, unless otherwise provided in subpart OO.
Importers with bulk imports of N2O, fluorinated GHGs, and
CO2 that in combination are equivalent to 25,000 metric tons
of carbon dioxide equivalent (MTCO2e) or more are required
as part of their annual report to report the quantities that they
import, destroy, or send off-site for transformation or destruction.
Exporters with bulk exports of N2O, fluorinated GHGs, and
CO2 that in combination are equivalent to 25,000
MTCO2e or more are required as part of their annual report
to report the quantities that they export.
    As a result of these requirements, the data provided through the
GHGRP reflects most of the production, import, export, and destruction
of regulated substances for the baseline years. However, EPA is aware
of some data that are not collected through GHGRP that are relevant for
calculating the HFC component of the AIM Act baselines.
    Companies that import or export fewer than 25,000 MTCO2e
of industrial gases, including HFCs, are exempted from reporting.\37\
Analyses performed during the development of the GHGRP indicated that
this threshold would have minimal impact on the overall topline number
of HFCs imported and exported, exempting less than one percent of the
GWP-weighted quantities of industrial GHGs in containers that are
imported or exported.\38\ This high coverage is due in part to the high
GWPs of fluorinated GHGs, including HFCs, which trigger reporting at
relatively low volumes (e.g., 17.5 metric tons (MT) for HFC-134a or 7.2
MT of HFC-125), and in part to the fact that the largest importers and
exporters account for the

majority of the imported and exported quantities.
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    \37\ For importers and exporters, the GHGRP also exempts the
reporting of individual shipments containing less than 25 kg of
fluorinated GHGs. In an analysis performed in 2006, EPA found that
exempting such shipments would reduce the total quantity of
industrial GHGs reported by only 0.01 percent. Thus, this exemption
is not likely to have a material impact on the figures used for
imports and exports in calculating the AIM Act consumption baseline.
    \38\ See the Technical Support Documents for subpart OO (below).
One caveat is that this is based on data from 2006, and it is
possible that import and export patterns have changed since then.
U.S. Environmental Protection Agency, Office of Air and Radiation.
Technical Support Document for Bulk Imports and Exports of
Fluorinated GHGs N2O and CO2: Proposed Rule for Mandatory Reporting
of Greenhouse Gases, 2009. https://www.epa.gov/sites/production/files/2015-07/documents/tsd_bulk_imports_exports_2-02-09.pdf.
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    EPA routinely reviews import data provided by U.S. Customs and
Border Protection (CBP) to verify reported supply data and identify
facilities that may be subject to annual GHG reporting under 40 CFR
part 98. Based on this review and other information, there also appear
to be companies that imported or exported more than 25,000
MTCO2e of HFCs annually that have not reported imports or
exports to the GHGRP. Section V.B.2 of this proposal provides
instructions for late reporting.
    Subpart OO also does not require the reporting of HFC-23 that is
intentionally coproduced, captured, and refined for use, or
unintentionally created. Consequently, EPA is lacking data related to
the creation of HFC-23 and any subsequent destruction or refinement for
sale. To address this data gap, EPA has sought information from
facilities that create HFC-23, either intentionally or unintentionally.
EPA is not docketing the individual responses related to HFC-23 due to
companies' CBI claims, but has included aggregated data in the analyses
in the docket.
    Two other data gaps include (1) the amounts of HFCs other than HFC-
23 that were destroyed by free-standing destruction facilities (i.e.,
facilities that destroy HFCs but do not import or produce) during the
baseline years \39\ and (2) any amounts of HFCs that were transformed
by facilities that transform HFCs but that do not also produce them
(which is necessary to determine the quantity of HFCs that are produced
for use as feedstock).
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    \39\ Such facilities have only been required to report the
quantities that they destroy since 2019, when they reported their
destruction for 2018.
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    Not accounting for quantities that were destroyed or transformed
would result in overestimates of production and consumption as those
quantities are defined under the AIM Act, since the quantities
destroyed or transformed are subtracted from GHGRP production to obtain
AIM Act production. While EPA is not aware of any facilities in the
U.S. that transform HFCs but do not produce HFCs, we cannot rule out
the possibility that they exist.
(b) What outreach is EPA doing to collect data to fill known gaps in
the GHGRP?
    As outlined in the prior section, the data available through GHGRP
will significantly contribute to EPA's ability to calculate the amount
of HFCs produced and consumed in the United States in 2011-2013 for
purposes of determining the AIM Act baselines. However, there are known
gaps in the GHGRP data, and EPA is making best efforts to fill these
gaps. Specifically, EPA published a NODA on February 11, 2021,
outlining the same information provided in the prior section concerning
what data are available through GHGRP and where EPA perceived data gaps
(86 FR 9059). EPA invited the public to provide additional data and
identify other potential gaps in EPA's knowledge. In response to the
NODA, EPA received 29 public comments which can be found in the docket
for this rulemaking, five comments containing material claimed as CBI,
and at least one additional report of historic HFC data not previously
reported to the GHGRP. EPA received a number of public comments that
were outside of the scope of the NODA, i.e., several comments were not
germane to additional data that could help inform the HFC production
and consumption baselines for 2011, 2012, and 2013. Some of these
comments focused on implementation of various provisions of the AIM
Act, including but not limited to allocation methodology, the statutory
years used to establish the HFC production and consumption baselines,
application-specific allowances, and projected market trends for, and
associated with, various end uses of the regulated HFCs. EPA
appreciates these comments and, in some instances, has proposed
provisions in this rulemaking that address several of the specific
points or has integrated specific points into section XI of the
preamble, which includes the ANPRM. Nonetheless, the Agency's intent in
releasing the NODA was to ask for additional data that could inform the
HFC production and consumption baseline for 2011, 2012, and 2013. The
Agency has reviewed the comments submitted containing material claimed
as CBI as well as the data submitted via e-GGRT, and to the extent that
these submissions fill in our known data gaps, the proposed HFC
production and consumption baseline reflect this information and data
accordingly. Some of the information received starts to fill in the
gaps EPA identified in the NODA and above. EPA continues to invite
public input through this proposed rulemaking and welcomes provision of
additional data related to HFC production and consumption in the years
2011, 2012, and 2013.
    EPA has separately requested approval under the Paperwork Reduction
Act to collect missing data \40\ and intends to send letters under the
authority of subsection (k)(1)(C) of the AIM Act and section 114 of the
CAA to companies who may have relevant data.
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    \40\ View Information Collection Request (ICR) Package; https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202103-2060-005.
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    EPA also held a stakeholder meeting on February 25, 2021.
Approximately 200 people participated in the stakeholder meeting to
learn more about the AIM Act and how EPA was moving forward with
implementation. At that meeting, EPA reminded stakeholders to submit
relevant data to help inform this rulemaking. Additionally, five
stakeholder workshops were held between March 11, 2021, and March 12,
2021, specific to stakeholders interested in the statutorily listed
applications identified in AIM Action section (e)(4)(B)(iv); as with
the February 25, 2021, stakeholder meeting, these workshops provided
participants the opportunity to learn more about the AIM Act and how
EPA was moving forward with implementation. One workshop was held for
each sector identified in AIM Act section (e)(4)(B)(iv). EPA did not
hold a stakeholder workshop for the mission-critical military sector
because, as will be explained in a subsequent section of this preamble,
EPA is working directly with the Department of Defense on distributing
allowances for mission-critical military end uses. Stakeholders at each
workshop were similarly reminded during these workshops to submit
relevant data to help inform this rulemaking. In addition, EPA has met
with numerous stakeholders and participated in meetings sponsored by
other government and non-government entities (e.g., Small Business
Administration's February 26, 2021, small business environment
roundtable). A full list of meetings EPA has conducted with
stakeholders is provided in the rulemaking docket.
    For anyone seeking to submit data to the Agency regarding HFC
production, consumption or use in the six applications listed in
subsection (e)(4)(B)(iv) of the AIM Act, please contact the individual
listed under FOR FURTHER INFORMATION CONTACT.
2. What is the current HFC component of the production and consumption
baselines?
    The equations in the AIM Act for the production and consumption
baselines include the average annual production and consumption of HFCs
between January 1, 2011, and December 31, 2013. Based on the
information reported to the GHGRP and gathered through recent data
collection efforts, EPA estimates average HFC consumption at 256
million metric tons of exchange value equivalent (MMTEVe) and HFC
production at 331 MMTEVe for those

three years. A memo to the docket (``HFC Production and Consumption
Data--Proposed Rule'') provides the current aggregated data for each of
the three years similar to that provided in the NODA, as well as a list
of companies that have reported data to EPA for those years. EPA
anticipates that these values will change in the final rule as the
Agency continues to collect additional data.
3. What are the HCFC and CFC components of the production and
consumption baselines?
    The equations in the AIM Act for the production and consumption
baselines include HCFC and CFC components from 1989. That year was
designated under the Montreal Protocol as the baseline year used for
several class I substances (Groups III, IV, and V in the Montreal
Protocol) as well as for class II substances (HCFCs). See, e.g., 74 FR
66412 (December 15, 2009). As a result, EPA has previously developed a
complete accounting of ODS production, import, and export during that
year and is therefore not specifically requesting comment on that
value.\41\
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    \41\ For more information on historic U.S. ODS production and
consumption data, please visit the United Nations Environment
Program's website at https://ozone.unep.org/countries/profile/usa.
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    Specifically, the 1989 production and consumption levels for HCFCs
are 216.9 MMTEVe and 210.3 MMTEVe respectively, and the 1989 production
and consumption baselines for CFCs are 2,799.8 MMTEVe and 2,784.5
MMTEVe respectively. Fifteen percent of the 1989 HCFC production and
consumption baselines is 32.5 MMTEVe and 31.5 MMTEVe respectively,
while 0.42 percent of the 1989 CFC production and consumption baselines
is 11.8 MMTEVe and 11.7 MMTEVe respectively.

B. What are the proposed HFC production and consumption baselines?

    Using the equation provided in the AIM Act, based on the data
currently available to EPA (which, as noted in the prior section, EPA