­
1­
MEMORANDUM
______________________________________________________________________________

SUBJECT:
Development
of
2003
Nomination
for
a
Critical
Use
Exemption
for
Methyl
Bromide
from
the
United
States
of
America
FROM:
U.
S.
Environmental
Protection
Agency/
Office
of
Air
and
Radiation/
Office
of
Atmospheric
Programs/
Global
Programs
Division
TO:
E­
Docket
OAR­
2003­
0230
This
Memorandum
serves
as
a
follow­
up
document
explaining
the
U.
S.
government
process
for
development
of
the
2003
Nomination
for
a
Critical
Use
Exemption
for
Methyl
Bromide
from
the
United
States
of
America.

The
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer
(
Protocol)
calls
for
the
phaseout
of
methyl
bromide
production
and
importation
in
2005
for
industrialized
nations,
but
allows
for
exemptions
to
the
phaseout
for
authorized
critical
uses.
Each
Party
to
the
Protocol
may
submit
an
annual
nomination
for
a
Critical
Use
Exemption
(
CUE),
which
is
reviewed
by
two
independent
advisory
bodies
to
the
Protocol:
(
1)
the
Methyl
Bromide
Technical
Options
Committee
(
MBTOC),
and
(
2)
the
Technical
and
Economic
Assessment
Panel
(
TEAP).
These
bodies
then
make
recommendations
to
the
Parties
regarding
the
nominations,
specifically
the
amount
of
methyl
bromide
to
be
exempted
from
the
phaseout.

In
the
U.
S.,
the
nomination
process
initially
began
in
March
2000,
when
EPA
and
USDA
met
to
initially
discuss
the
CUE
process.
During
2001,
EPA
facilitated
ten
different
stakeholder
meetings
and
conference
calls,
some
of
which
were
held
with
specific
sectors,
such
as
strawberries,
tomatoes,
cut
flowers,
and
nurseries.
In
January
2002,
EPA
held
an
all­
day
"
Methyl
Bromide
Critical
Use
Exemption
Program
Meeting"
that
was
widely
attended
by
agricultural
stakeholders
and
industry
representatives.
Records
of
these
meetings
show
stakeholders
were
opposed
to
the
idea
of
including
individual
farm
data
in
their
applications
for
a
CUE.
In
May
2002,
through
a
notice
in
the
Federal
Register,
EPA
solicited
applications
for
CUEs
for
2005,
2006
and
2007
from
methyl
bromide
users.
EPA
solicited
data
for
years
after
1995
because
it
was
not
known
at
the
time
whether
exemptions
would
last
for
one
or
more
years.
EPA's
Office
of
Pesticide
Programs
(
OPP)
took
the
lead
in
coordinating
the
U.
S.
government
review
of
the
applications
that
were
submitted.
In
accordance
with
the
TEAP
Handbook
on
Critical
Use
Nominations
for
Methyl
Bromide,
published
in
May
2002,
the
substantive
criteria
for
a
Critical
Use
Exemption
were
agreed
to
by
the
Parties
at
the
Seventh
Meeting
in
Decision
IX/
6:

Decision
IX/
6:
Critical­
use
exemptions
for
methyl
bromide
­
2­
1.
To
apply
the
following
criteria
and
procedure
in
assessing
a
critical
methyl
bromide
use
for
the
purposes
of
control
measures
in
Article
2
of
the
Protocol:

(
a)
That
a
use
of
methyl
bromide
should
qualify
as
"
critical"
only
if
the
nominating
Party
determines
that:

(
i)
The
specific
use
is
critical
because
the
lack
of
availability
of
methyl
bromide
for
that
use
would
result
in
significant
market
disruption;
and
(
ii)
There
are
no
technically
and
economically
feasible
alternatives
or
substitutes
available
to
the
user
that
are
acceptable
from
the
standpoint
of
environment
and
health
and
are
suitable
to
the
crops
and
circumstances
of
the
nomination,"

(
b)
That
production
and
consumption,
if
any,
of
methyl
bromide
for
critical
uses
should
be
permitted
only
if:

(
i)
All
technically
and
economically
feasible
steps
have
been
taken
to
minimize
the
critical
use
and
any
associated
emission
of
methyl
bromide;

(
ii)
Methyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide,
also
bearing
in
mind
the
developing
countries'
need
for
methyl
bromide;

(
iii)
It
is
demonstrated
that
an
appropriate
effort
is
being
made
to
evaluate,
commercialize
and
secure
national
regulatory
approval
of
alternatives
and
substitutes,
taking
into
consideration
the
circumstances
of
the
particular
nomination
and
the
special
needs
of
Article
5
Parties,
including
lack
of
financial
and
expert
resources,
institutional
capacity,
and
information.
Non­
Article
5
Parties
must
demonstrate
that
research
programmes
are
in
place
to
develop
and
deploy
alternatives
and
substitutes.
Article
5
Parties
must
demonstrate
that
feasible
alternatives
shall
be
adopted
as
soon
as
they
are
confirmed
as
suitable
to
the
Party's
specific
conditions
and/
or
that
they
have
applied
to
the
Multilateral
Fund
or
other
sources
for
assistance
in
identifying,
evaluating,
adapting,
and
demonstrating
such
options;

2.
To
request
the
Technology
and
Economic
Assessment
Panel
to
review
nominations
and
make
recommendations
based
on
the
criteria
established
in
paragraphs
1
(
a)
(
ii)
and
1
(
b)
of
the
present
decision;

3.
That
the
present
decision
will
apply
to
Parties
operating
under
Article
5
and
Parties
not
so
operating
only
after
the
phase­
out
date
applicable
to
those
Parties;
­
3­
While
conducting
the
U.
S.
government
review,
which
included
45
scientists
from
EPA,
the
U.
S.
Department
of
Agriculture,
and,
land­
grant
universities,
EPA
chose
to
assess
critical
uses
from
applications
on
a
case­
by­
case
basis.
However,
the
applications
were
often
aggregated
into
sectors,
generally
by
crop.
Each
application
was
then
assigned
a
primary
biologist
and
a
primary
economist.

To
assess
technical
feasibility
of
methyl
bromide
alternatives,
the
biologists
compiled
an
initial
assessment
of
alternatives
and
considered
the
best
alternative
regime
to
methyl
bromide
for
the
crop/
commodity,
reviewed
the
target
pest
list,
determined
the
likely
crop
yields
in
the
absence
of
methyl
bromide
using
both
chemical
and
non­
chemical
alternatives,
considered
time
lost
through
use
of
alternatives,
reviewed
the
alternatives
list
provided
by
MBTOC,
and
determined
where
additional
data,
if
any,
was
needed.
In
addition,
the
biologists
reviewed
related
items
such
as
planting/
harvesting
time
changes,
application
rates
for
methyl
bromide,
weed
control,
impacts
of
temperature
and
soil
type,
as
relevant
to
the
crop/
commodity
under
review.

The
assessment
of
economic
feasibility
of
alternatives
involved
carefully
weighing
five
economic
factors,
specifically:
(
1)
loss
per
hectare,
(
2)
loss
per
kilogram
of
methyl
bromide,
(
3)
loss
as
a
percent
of
gross
revenue,
(
4)
loss
as
a
percent
of
net
cash
returns,
and
(
5)
change
in
profit
margins.
Using
an
approach
involving
multiple
measures
allowed
for
a
more
complete
understanding
of
the
potential
economic
impacts
of
using
alternatives
to
methyl
bromide.
In
addition,
some
environmental
benefits
not
captured
by
traditional
cost
measures
were
considered.
For
example,
in
the
forest
seedling
sector,
applications
were
for
bare
root
seedlings
to
be
used
predominately
for
reforestation.
While
it
is
technically
feasible
to
grow
these
seedlings
in
containers,
the
cost
is
three
to
four
times
higher
and
the
higher
the
seedling
cost,
the
lower
the
rate
of
reforestation.
Other
non­
cost
measures
incorporated
into
the
analysis
included
regulatory
constraints,
such
as
buffer
zones
near
inhabited
areas.

The
economists
also
verified
the
worksheets
submitted
by
the
applicants
and
incorporated
yield
information
for
alternative
regimens
as
submitted
by
the
biologists;
calculated
fixed,
overhead,
and
operating
costs;
and
conducted
additional
sensitivity
analyses
when
necessary.
Other
calculations
included
increased
pest
control
costs,
and
price
analysis.

The
issue
of
"
significant
market
disruption"
is
left
to
the
discretion
of
each
Party
to
the
Protocol
to
define.
When
considering
the
evaluation
of
"
market
disruption,"
EPA
defined
"
market"
in
terms
of
agricultural
commodities.
Markets
are
partially
defined
by
the
interaction
between
supply
and
demand,
which
determines
the
price
and
quantity
of
a
good
traded
in
a
market.
EPA's
position
is
that
a
disruption
to
either
side
of
a
commodity
market,
demand
or
supply,
would
result
in
market
disruption.
EPA
believes
that
disruptions
to
domestic
supply
of
agricultural
commodities
would
be
a
disruption
to
the
market;
thus,
driving
out
domestic
production,
even
if
it
were
replaced
by
imports
so
that
consumers
would
not
experience
a
reduction
in
the
amount
supplied.
This
situation
may
constitute
a
significant
market
disruption.
­
4­
As
a
result,
any
loss
of
crop
production
due
to
a
disruption
in
the
domestic
supply
of
methyl
bromide
would
constitute
significant
market
disruption.
Though
the
original
Decision
language
distinguished
between
the
economic
feasibility
of
alternatives
and
significant
market
disruption,
EPA
considered
the
two
criteria
together
and
used
the
same
factors
that
it
used
to
determine
economic
feasibility
of
methyl
bromide
alternatives
when
evaluating
significant
market
disruption.
Further,
the
absence
of
economically
feasible
alternatives
would
result
in
significant
market
disruption
if
methyl
bromide
could
not
be
used.
For
the
aforementioned
reasons,
significant
market
disruption
was
not
given
independent
weight
but
instead
linked
with
economic
infeasibilty
of
alternatives
to
methyl
bromide.

The
evaluation
of
each
individual
application
was
rigorous.
In
addition
to
the
team
of
the
primary
biologist
and
economist,
each
application
was
also
assigned
to
a
secondary
biologist
and
economist.

The
responsibility
of
the
primary
team
was
to
determine
if
some
portion
of
the
sector
described
in
an
application
would
likely
warrant
a
CUE
because
that
portion
does
not
have
technically
or
economically
feasible
alternatives
available
for
the
specific
circumstances
of
use.
In
addition,
the
primary
team
assessed
whether
or
not
the
crops
in
specific
areas
were
affected
by
key
pests
(
pests
not
controlled
by
alternative
methods),
what
yield
changes
(
such
as
quantity,
quality,
and
timing
of
the
crops)
might
be
expected
when
alternative
methods
of
pest
control
were
used,
as
well
as
what
cost
and
revenue
changes
might
be
anticipated.
The
reviewers
assumed
that
if
the
alternatives
were
economically
infeasible,
or
if
no
alternatives
existed
for
the
commodity
under
review,
then
significant
market
disruption
would
result.
The
reviewers
used
the
information
provided
by
the
applicants
as
well
as
information
from
peer­
reviewed
articles,
research
reports,
crop
budgets,
contractor
reports,
as
well
as
data
from
other
sources
and
their
own
field
experience
with
both
research
and
regulatory
impacts.

The
responsibility
of
the
secondary
team
was
to
ensure
the
thoroughness
of
the
primary
review
and
add
any
additional
necessary
information.
Additionally,
the
secondary
review
team
reviewed
any
spreadsheets
compiled
for
the
economic
analysis
as
well
as
other
key
issues
related
to
the
crop/
commodity
under
review.

Once
both
the
primary
and
secondary
teams
had
reviewed
the
applications,
the
application
was
discussed
among
the
45
reviewers
during
a
weekly
conference
call.
(
These
calls
occurred
from
September­
December
2002).
The
primary
review
team
facilitated
the
discussion
of
each
application.
After
a
thorough
discussion
and
overview
of
the
applicant's
situation,
consensus
was
sought
as
to
whether
applicants
had
made
a
case
that
there
were
no
technically
or
economically
feasible
alternatives
to
methyl
bromide
for
use
in
their
particular
situation.
During
the
process
of
reaching
consensus,
significant
market
disruption
was
equated
with
economic
infeasibility
of
alternatives.
If
consensus
could
not
be
reached,
participants
in
the
conference
call
raised
issues
that
would
need
resolution
before
consensus
could
be
reached.
In
those
cases,
the
primary
review
team
was
given
the
responsibility
of
gathering
any
additional
information
or
data
that
would
allow
all
the
reviewers
to
reach
consensus.
­
5­
The
purpose
of
this
process
was
to
determine
if
an
applicant
had
made
a
case
that
at
least
some
portion
of
their
requested
use
could
be
considered
`
critical'
in
the
sense
that
there
were
no
technically
or
economically
feasible
alternatives,
and
if
significant
market
disruption
would
result.
A
second
step
of
the
process
was
used
to
determine
the
amount
that
the
U.
S.
government
would
put
forward
to
the
Parties
to
the
Montreal
Protocol
as
its
request
for
methyl
bromide
CUEs.

The
fact
that
the
applications
were
aggregated
into
sectors
by
crop
enabled
the
reviewers
to
carefully
scrutinize
many
different
user
groups.
This
classification
also
allowed
the
reviewers
to
remove
the
following
factors,
thus
strengthening
the
case
for
`
critical'
uses:

°
Double
counting
°
Any
requested
growth
beyond
historical
acreage
planted
°
Requested
amounts
that
fall
under
the
quarantine
and
pre­
shipment
(
QPS)
uses.

In
addition,
the
amount
of
methyl
bromide
requested,
per
each
applicant
and
then
aggregated
by
sector,
in
the
U.
S.
nomination
was
adjusted
to
account
for
additional
measures
such
as:

°
Only
the
area
where
pest
pressure
cannot
be
controlled
by
alternatives
°
The
area
where
regulatory
constraints,
such
as
buffer
zones
near
inhabited
areas
limit
the
use
of
certain
alternatives
°
The
area
where
soil/
geological
features
limits
the
use
of
certain
alternatives,
such
as
groundwater
contamination
with
Karst
topography.

The
amount
of
methyl
bromide
requested
in
the
U.
S.
nomination
also
incorporates
minimum
efficacious
use
rates,
mixtures
of
methyl
bromide
with
chloropicrin
when
applicable
for
preplant
soil
fumigation
uses,
the
use
of
tarps
to
improve
efficacy
and
reduce
emissions,
and
also
builds
in
a
small
margin
of
error
into
the
U.
S.
request.

The
final
nomination
was
submitted
to
the
Ozone
Secretariat
of
the
United
Nations
Environment
Program
in
February
2003,
and
can
be
viewed
on
E­
Docket
OAR­
2003­
0017,
on
documents
numbered
0091­
0111.
The
responses
to
requests
for
clarification
by
MBTOC
are
documents
numbered
0113­
0126.
These
documents
can
also
be
viewed
on
E­
Docket
OAR­
2003­
0230.
This
series
of
documents
provides
additional
clarification
as
they
contain
spreadsheets,
with
footnotes,
of
the
analyses
and
references
used
in
the
development
of
the
nomination.
