DRAFT
EPA
DOCUMENT
­
2­
regulations,
the
science
of
ozone
layer
depletion,
and
other
related
topics.

SUPPLEMENTARY
INFORMATION:
This
proposed
rule
concerns
Clean
Air
Act
restrictions
on
the
consumption,
production
and
on
the
use
of
methyl
bromide
(
class
I,
Group
VI
controlled
substance)
for
critical
uses
after
the
phaseout
date
of
January
1,
2005.
Under
the
Clean
Air
Act,
methyl
bromide
consumption
and
production
will
be
phased
out
on
January
1,
2005
apart
from
allowable
exemptions,
namely
the
proposed
critical
use
exemption
and
the
existing
quarantine
and
pre­
shipment
exemption.
With
today's
action,
EPA
is
proposing
a
framework
for
how
the
critical
use
exemption
will
operate
as
well
as
specific
amounts
of
methyl
bromide
to
be
made
available
for
proposed
critical
uses.

Table
of
Contents
I.
General
Information
A.
Regulated
Entities
B.
How
Can
I
Get
Copies
Of
Related
Information
?
C.
How
and
To
Whom
Do
I
Submit
Comments?
D.
How
Should
I
Submit
CBI
To
the
Agency?
II.
What
is
the
Background
of
the
Phaseout
Regulations
for
Ozone­
Depleting
Substances?
III.
What
is
Methyl
Bromide?
IV.
What
is
the
Legal
Authority
for
Exempting
the
Production
and
Import
of
Methyl
Bromide
for
Critical
Uses
Authorized
by
the
Parties
to
the
Montreal
Protocol?
V.
What
is
the
Critical
Use
Exemption
Process?
VI.
What
are
Today's
Proposed
Changes
to
the
Phaseout
Schedule
for
Methyl
Bromide?
A.
What
is
the
Total
Amount
of
Methyl
Bromide
that
May
be
Supplied
for
U.
S.
Critical
Uses?
B.
What
is
the
Proposed
Regulatory
Framework
for
Implementing
the
Critical
Use
Exemption
And
What
is
a
Critical
Use
Allowance
(
CUA)
and
a
Critical
Stock
Allowance
(
CSA)?
C.
How
Will
Critical
Use
Allowances
(
CUAs)
be
Distributed?
D.
How
are
Critical
Stock
Allowances
(
CSAs)
Distributed?
E.
Are
Allowances
to
be
Allocated
on
a
Sector­
Specific
Basis
or
as
One
Lump
Sum
for
All
Sectors?
F.
How
Many
Critical
Use
Allowances
(
CUAs)
and
Critical
Stockpile
Allowances
(
CSAs)
Will
Producers,
Importers
and
Distributers
be
Allocated?
G.
What
are
the
Tracking
Requirements
for
a
Sector­
or
Applicant­
Specific
Allocation?
H.
How
Do
"
Approved
Critical
Users"
Acquire
Methyl
Bromide
Under
Today's
Proposal?
I.
Who
is
an
Approved
Critical
User?
J.
Can
New
Market
Entrants
or
New
Consortia
Members
be
Approved
Critical
Users?
DRAFT
EPA
DOCUMENT
­
3­
K.
What
Uses
and
"
Limiting
Critical
Condition"
are
Permitted
Access
to
the
Methyl
Bromide
under
the
Critical
Use
Exemption?
L.
What
are
the
Reporting
Requirements?
M.
What
are
the
Record­
Keeping
Requirements?
N.
How
Often
will
Critical
Use
Allowances
(
CUAs)
be
Distributed
and
How
are
Allowances
Expended?
O.
Can
Allowances
be
Traded?
P.
Are
Allowances
Bankable
from
One
Year
to
the
Next?
Q.
How
is
Unused
Critical
Use
Methyl
Bromide
Treated
at
the
End
of
the
Compliance
Period?
R.
What
are
the
Enforcement
Provisions
Governing
Critical
Uses?
S.
What
is
the
Interaction
between
this
Proposed
Rulemaking
and
the
Federal
Insecticide,
Fungicide
and
Rodenticide
Act
(
FIFRA)?
VII.
What
are
Other
Options
on
which
EPA
Seeks
Comment?
C.
Distribution
of
Critical
User
Permits
(
CUP)
to
End
Users
of
Methyl
Bromide.
D.
What
is
a
CUP
and
Can
it
Be
Traded?
E.
Who
is
Eligible
to
Receive
an
Initial
Allocation
of
CUPs
and
Who
May
Use
CUPs?
F.
Who
May
Hold
a
CUP?
G.
Methods
for
Distribution
of
Critical
User
Permits:
Distribution
Based
on
Data.
H.
Submitting
Individual
Entity
Data.
I.
Methods
for
Distribution
of
Critical
User
Permits:
Distribution
Using
Auctions.
J.
Frequency
of
Auctions
and
Set
Asides.
K.
Other
Methods
for
Distributing
CUPs.
L.
Tracking
Permits
M.
Redeeming
CUPs
for
Methyl
Bromide
N.
Reporting
Requirements
for
CUP
Holders
O.
Interaction
between
CUPs
and
CUAs.
VIII.
What
Conforming
Amendments
Is
EPA
Proposing
With
Respect
to
Essential
Use
Allowances?
IX.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
12866:
Regulatory
Planning
and
Review
B.
Paperwork
Reduction
Act
C.
Regulatory
Flexibility
Act
D.
Unfunded
Mandates
Reform
Act
E.
Executive
Order
13132:
Federalism
F.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
G.
Executive
Order
13045:
Protection
of
Children
from
Environmental
Health
&
Safety
Risks
H.
Executive
Order
13211:
Actions
that
Significantly
Affect
Energy
Supply,
Distribution,
or
Use
I.
National
Technology
Transfer
Advancement
Act
DRAFT
EPA
DOCUMENT
­
4­
I.
General
Information
A.
Regulated
Entities
Entities
potentially
regulated
by
this
proposed
action
are
those
associated
with
the
production,
import,
export,
sale,
application
and
use
of
methyl
bromide.
Potentially
regulated
categories
and
entities
include:

Category
Examples
of
Regulated
Entities
Industry
Producers,
Importers
and
Exporters
of
methyl
bromide;
Applicators,
Distributors
of
methyl
bromide;
Users
of
methyl
bromide,
e.
g.
farmers
of
vegetable
crops
and
seedlings;
and
owners
of
stored
food
commodities
and
structures
such
as
grain
mills
and
processors,
Government
and
non­
government
researchers.

The
above
table
is
not
intended
to
be
exhaustive,
but
rather
provides
a
guide
for
readers
regarding
entities
likely
to
be
regulated
by
this
proposed
action.
This
table
lists
the
types
of
entities
that
EPA
is
aware
could
potentially
be
regulated
by
this
proposed
action.
To
determine
whether
your
facility,
company,
business,
or
organization
is
regulated
by
this
proposed
action,
you
should
carefully
examine
the
regulations
promulgated
at
40
CFR
82,
Subpart
A.
If
you
have
questions
regarding
the
applicability
of
this
action
to
a
particular
entity,
consult
the
person
listed
in
the
preceding
"
FOR
FURTHER
INFORMATION
CONTACT"
Section.

B.
How
Can
I
Get
Copies
Of
This
Document
and
Other
Related
Information
?
1.
Docket.
EPA
has
established
an
official
public
docket
for
this
action
under
the
Office
of
Air
and
Radiation
Docket
&
Information
Center,
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230.
The
official
public
docket
consists
of
the
documents
specifically
referenced
in
this
action,
any
public
comments
received,
and
other
information
related
to
this
action.
Although
a
part
of
the
official
docket,
the
public
docket
does
not
include
Confidential
Business
Information
(
CBI)
or
other
information
whose
disclosure
is
restricted
by
statute.
The
official
public
docket
is
the
collection
of
materials
that
is
available
for
public
viewing
at
EPA
West,
1301
Constitution
Ave.
NW,
Room
B108,
Mail
Code
6102T,
Washington,
D.
C.
20460,
Phone:
(
202)­
566­
1742,
Fax:
(
202)­
566­
1741.
The
materials
may
be
inspected
from
8:
30am
until
4:
30pm
Monday
through
Friday,
excluding
legal
holidays.
A
reasonable
fee
may
be
charged
for
copying
docket
materials.
2.
Electronic
Access.
You
may
access
this
Federal
Register
document
electronically
through
the
EPA
Internet
under
the
"
Federal
Register"
listings
at
http://
www.
epa.
gov/
fedrgstr/.
An
electronic
version
of
the
public
docket
is
available
through
EPA's
electronic
public
docket
and
comment
system,
EPA
Dockets.
EPA
prefers
that
you
use
the
electronic
EPA
Dockets
at
http://
www.
epa.
gov/
edocket/
to
submit
or
view
public
comments
and
access
the
index
listing
of
the
contents
of
the
official
public
docket.
To
locate
the
docket
on
EPA's
docket
website,
select
"
search,"
then
key
in
the
appropriate
docket
identification
number,
in
this
case
OAR­
2003­
0230.
DRAFT
EPA
DOCUMENT
­
5­
Additional
supporting
documents
related
to
this
proposed
action
may
be
found
in
EPA's
electronic
docket
system,
docket
numbers
OAR­
2002­
0018
and
OAR­
2003­
0017
and
in
EPA's
paper
docket,
Air
Docket
ID
No.
A­
2000­
24.
Certain
types
of
information
will
not
be
placed
in
the
EPA
Dockets.
Information
claimed
as
confidential
business
information
(
CBI)
and
other
information
whose
disclosure
is
restricted
by
statute,
will
not
be
included
in
the
official
public
docket
and
will
not
be
available
for
public
viewing
in
EPA's
electronic
public
docket.
EPA's
policy
is
that
copyrighted
material
will
not
be
placed
in
EPA's
electronic
public
docket
but
will
be
available
only
in
printed,
paper
form
in
the
official
public
docket.
Although
not
all
docket
materials
may
be
available
electronically,
you
may
still
access
any
of
the
publicly
available
docket
materials
through
the
docket
facility
identified
in
Unit
B.
For
public
commenters,
it
is
important
to
note
that
EPA's
policy
is
that
public
comments,
whether
submitted
electronically
or
in
paper,
will
be
made
available
for
public
viewing
in
EPA's
electronic
public
docket
as
EPA
receives
them
and
without
change,
unless
the
comment
contains
copyrighted
material,
CBI,
or
other
information
whose
disclosure
is
restricted
by
statute.
When
EPA
identifies
a
comment
containing
copyrighted
material,
EPA
will
provide
a
reference
to
that
material
in
the
version
of
the
comment
that
is
placed
in
EPA's
electronic
public
docket.
Public
comments
submitted
on
computer
disks
that
are
mailed
or
delivered
to
the
docket
will
be
transferred
to
EPA's
electronic
public
docket.
Public
comments
that
are
mailed
or
delivered
to
the
Docket
will
be
scanned
and
placed
in
EPA's
electronic
public
docket.
Where
practical,
physical
objects
will
be
photographed,
and
the
photograph
will
be
placed
in
EPA's
electronic
public
docket
along
with
a
brief
description
written
by
the
docket
staff.

C.
How
and
To
Whom
Do
I
Submit
Comments?
You
may
submit
comments
electronically,
by
mail
or
through
hand
delivery/
courier.
The
preferred
method
for
submitting
comments
on
this
proposed
rulemaking
is
to
submit
comments
to
the
electronic
docket
OAR­
2003­
0230.
To
ensure
proper
receipt
by
EPA,
identify
the
appropriate
docket
identification
number
in
the
subject
line
on
the
first
page
of
your
comment,
in
this
instance
OAR­
2003­
0230
Please
ensure
that
your
comments
are
submitted
within
the
specified
comment
period.
Comments
received
after
the
close
of
comment
period
will
be
marked
late.
EPA
is
not
required
to
consider
late
comments.
If
you
plan
to
submit
comments,
please
notify
Hodayah
Finman,
U.
S.
Environmental
Protection
Agency,
Global
Programs
Division
(
6205J),
1200
Pennsylvania
Ave.
NW,
Washington,
D.
C.
20460,
(
202)
343­
9246.
Information
designated
as
Confidential
Business
Information
(
CBI)
under
40
CFR,
Part
2,
Subpart
2,
must
be
sent
directly
to
the
contact
person
for
this
notice.
However,
the
Agency
is
requesting
that
all
respondents
submit
a
non­
confidential
version
of
their
comments
to
the
docket
as
well.
To
submit
an
electronic
comment
as
described
below,
EPA
recommends
that
you
include
your
name,
mailing
address,
and
an
e­
mail
address
or
other
contact
information
in
the
body
of
your
comment.
Also
include
this
contact
information
on
the
outside
of
any
disk
or
CD
ROM
you
submit,
and
in
any
cover
letter
accompanying
the
disk
or
CD
ROM.
This
ensures
that
you
can
be
identified
as
the
submitter
of
the
comment
and
allows
EPA
to
contact
you
in
case
EPA
cannot
DRAFT
EPA
DOCUMENT
­
6­
read
your
comment
due
to
technical
difficulties
or
needs
further
information
on
the
substance
of
your
comment.
EPA's
policy
is
that
EPA
will
not
edit
your
comment,
and
any
identifying
or
contact
information
provided
in
the
body
of
a
comment
will
be
included
as
part
of
the
comment
that
is
placed
in
the
official
public
docket,
and
made
available
in
EPA's
electronic
public
docket.
If
EPA
cannot
read
your
comment
due
to
technical
difficulties
and
cannot
contact
you
for
clarification,
EPA
may
not
be
able
to
consider
your
comment.
i.
EPA
Dockets.
Your
use
of
EPA's
electronic
public
docket
to
submit
comments
is
the
preferred
method
for
submitting
comments.
Go
directly
to
EPA
dockets
at
http://
www.
epa.
gov/
edocket,
and
follow
the
online
instructions
for
submitting
comments
to
docket
OAR­
2003­
0230.
ii.
By
Mail.
Send
one
copy
of
your
comments
to
each
of
the
following
two
offices:
U.
S.
Environmental
Protection
Agency,
Air
and
Radiation
Docket
(
6102),
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230
Washington,
D.
C.
20460
and
to
U.
S.
Environmental
Protection
Agency,
(
6205J)
1200
Pennsylvania
Ave.
N.
W.,
Washington,
D.
C.,
20460
attn:
Hodayah
Finman
docket
no.
OAR­
2003­
0230.
iii.
By
Hand
Delivery
or
Courier.
Deliver
your
comments
to:
Hodayah
Finman
1310
L
Street
N.
W.,
Washington,
D.
C.,
20005,
Attention
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230.
Such
deliveries
are
only
accepted
during
the
normal
hours
of
operation
9
a.
m
to
5
p.
m.
iv.
By
Facsimile.
Fax
your
comments
to
both:
(
202)
566­
1741,
Attention
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230
and
to
(
202)
343­
2337,
Attention
Hodayah
Finman,
Electronic
Ar
Docket
No.
OAR­
2003­
0230.

D.
How
Should
I
Submit
Confidential
Business
Information
(
CBI)
To
the
Agency?
Do
not
submit
information
that
you
consider
to
be
CBI
electronically
through
EPA's
electronic
public
docket
or
by
e­
mail.
Send
or
deliver
information
identified
as
CBI
only
to
the
mail
or
courier
addresses
listed
in
the
"
FOR
FURTHER
INFORMATION
CONTACT"
Section,
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230.
You
may
claim
information
that
you
submit
to
EPA
as
CBI
by
marking
any
part
or
all
of
that
information
as
CBI
(
if
you
submit
CBI
on
disk
or
CD
ROM,
mark
the
outside
of
the
disk
or
CD
ROM
as
CBI
and
then
identify
electronically
within
the
disk
or
CD
ROM
the
specific
information
that
is
CBI).
Information
so
marked
will
not
be
disclosed
except
in
accordance
with
procedures
set
forth
in
40
CFR
Part
2.
In
addition
to
one
complete
version
of
the
comment
that
includes
any
information
claimed
as
CBI,
a
copy
of
the
comment
that
does
not
contain
the
information
claimed
as
CBI
should
be
submitted
for
inclusion
in
the
public
docket
and
EPA's
electronic
public
docket.
If
you
submit
the
copy
that
does
not
contain
CBI
on
disk
or
CD
ROM,
mark
the
outside
of
the
disk
or
CD
ROM
clearly
that
it
does
not
contain
CBI.
Information
not
marked
as
CBI
will
be
included
in
the
public
docket
and
EPA's
electronic
public
docket
without
prior
notice.
If
you
have
any
questions
about
CBI
or
the
procedures
for
claiming
CBI,
please
consult
the
person
identified
in
the
"
FOR
FURTHER
INFORMATION
CONTACT"
Section.

II.
What
is
the
Background
to
the
Phaseout
Regulations
for
Ozone­
Depleting
Substances?
The
current
regulatory
requirements
of
the
Stratospheric
Ozone
Protection
Program
that
DRAFT
EPA
DOCUMENT
­
7­
limit
production
and
consumption
of
ozone
depleting
substances
can
be
found
at
40
CFR
Part
82
Subpart
A.
The
regulatory
program
was
originally
published
in
the
Federal
Register
on
August
12,
1988
(
53
FR
30566),
in
response
to
the
1987
signing
of
the
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer
(
Protocol).
The
U.
S.
was
one
of
the
original
signatories
to
the
1987
Montreal
Protocol
and
the
U.
S.
ratified
the
Protocol
on
April
21,
1988.
Congress
then
enacted,
and
President
Bush
signed
into
law,
the
Clean
Air
Act
Amendments
of
1990
(
CAA
or
the
Act)
that
included
Title
VI
on
Stratospheric
Ozone
Protection
to
ensure
that
the
United
States
could
satisfy
its
obligations
under
the
Protocol.
EPA
has
made
several
amendments
to
the
regulations
since
that
time.

III.
What
is
Methyl
Bromide?
Methyl
bromide
is
an
odorless,
colorless,
toxic
gas,
which
is
used
as
a
broad­
spectrum
pesticide
and
is
controlled
under
the
CAA
as
a
Class
I
ozone
depleting
substance
(
ODS).
Methyl
bromide
is
used
in
the
U.
S.
and
throughout
the
world
as
a
fumigant
to
control
a
wide
variety
of
pests
such
as
insects,
weeds,
rodents,
pathogens,
and
nematodes.
Additional
characteristics
and
details
about
the
uses
of
methyl
bromide
can
be
found
in
the
proposed
rule
on
the
phaseout
schedule
for
methyl
bromide
published
in
the
Federal
Register
on
March
18,
1993
(
58
FR
15014)
and
the
final
rule
published
in
the
Federal
Register
on
December
10,
1993
(
58
FR
65018).
The
phaseout
schedule
for
methyl
bromide
was
revised
in
a
concurrent
proposal
and
direct
final
rulemaking
on
November
28,
2000
(
65
FR
70795)
which
allowed
for
the
phased
reduction
in
methyl
bromide
consumption
and
extended
the
phaseout
to
2005.
The
revised
phaseout
schedule
was
again
amended
to
allow
for
an
exemption
for
quarantine
and
preshipment
purposes
on
July
19,
2001
(
66
FR
37751)
with
an
interim
final
rule
and
with
a
final
rule
(
68
FR
238)
on
January
2,
2003.
Information
on
methyl
bromide
can
be
found
at
the
following
sites
of
the
World
Wide
Web:
http://
www.
epa.
gov/
ozone/
mbr
and
http://
teap.
org
or
by
contacting
the
Stratospheric
Ozone
Hotline
at
1­
800­
296­
1996.
Because
it
is
a
pesticide,
methyl
bromide
is
also
regulated
by
EPA
and
the
states
under
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act
(
FIFRA)
and
other
statutes
and
regulatory
authority.
Under
FIFRA,
methyl
bromide
is
a
restricted
use
pesticide.
Because
of
this
status,
a
restricted
use
pesticide
is
subject
to
certain
federal
and
state
requirements
governing
its
sale,
distribution,
and
use.
Nothing
in
this
proposed
rule
implementing
the
Clear
Air
Act
is
intended
to
derogate
from
provisions
in
any
other
federal,
state,
or
local
laws
or
regulations
governing
actions
including,
but
not
limited
to,
the
sale,
distribution,
transfer,
and
use
of
methyl
bromide.
All
entities
that
would
be
affected
by
the
proposed
provisions
must
continue
to
comply
with
FIFRA
and
other
pertinent
statutory
and
regulatory
requirements
for
pesticides
(
including,
but
not
limited
to,
requirements
pertaining
to
restricted
use
pesticides)
when
acquiring,
selling,
distributing,
transferring,
or
using
methyl
bromide
for
critical
uses.
The
proposed
regulations
in
today's
rulemaking
are
intended
only
to
implement
Clean
Air
Act
restrictions
on
the
production,
consumption
and
use
of
methyl
bromide
for
critical
uses
exempted
from
the
phaseout
of
methyl
bromide.

IV.
What
is
the
Legal
Authority
for
Exempting
the
Production
and
Import
of
Methyl
DRAFT
EPA
DOCUMENT
­
8­
Bromide
for
Critical
Uses
Authorized
by
the
Parties
to
the
Montreal
Protocol?
Methyl
bromide
was
added
to
the
Protocol
as
an
ozone
depleting
substance
in
1992
through
the
Copenhagen
Amendment
to
the
Protocol.
The
Parties
to
the
Protocol
established
a
freeze
in
the
level
of
methyl
bromide
production
and
consumption
for
industrialized
countries
at
the
1992
Meeting
in
Copenhagen.
The
Parties
agreed
that
each
industrialized
country's
level
of
methyl
bromide
production
and
consumption
in
1991
should
be
the
baseline
for
establishing
the
freeze.
EPA
published
a
final
rule
in
the
Federal
Register
on
December
10,
1993
(
58
FR
69235),
listing
methyl
bromide
as
a
class
I,
Group
VI
controlled
substance,
freezing
U.
S.
production
and
consumption
at
this
1991
level,
and,
in
Section
82.7
of
the
rule,
setting
forth
the
percentage
of
baseline
allowances
for
methyl
bromide
granted
to
companies
in
each
control
period
(
each
calendar
year)
until
the
year
2001
(
58
FR
65018).
This
phaseout
date
was
consistent
with
requirements
under
602(
d)
of
the
CAA
for
newly
listed
class
I
ozone­
depleting
substances
that
"
no
extension
under
this
subsection
may
extend
the
date
for
termination
of
production
of
any
class
I
substance
to
a
date
more
than
7
years
after
January
1
of
the
year
after
the
year
in
which
the
substance
is
added
to
the
list
of
class
I
substances."
Therefore,
the
1993
regulation
established
a
United
States
phaseout
for
methyl
bromide
in
2001.
At
their
1995
meeting,
the
Parties
made
adjustments
to
the
methyl
bromide
control
measures
and
agreed
to
reduction
steps
and
a
2010
phaseout
date
for
industrialized
countries
with
exemptions
permitted
for
critical
uses.
At
this
time,
the
U.
S.
continued
to
have
a
2001
phaseout
date
in
accordance
with
the
Clean
Air
Act
language.
At
their
1997
meeting,
the
Parties
agreed
to
further
adjustments
to
the
phaseout
schedule
for
methyl
bromide
in
industrialized
countries,
with
reduction
steps
leading
to
a
2005
phaseout
for
industrialized
countries.
In
October
1998,
the
U.
S.
Congress
followed
by
amending
the
CAA
to
direct
EPA
to
promulgate
regulations
reflecting
the
Protocol
phaseout
date
of
2005,
with
interim
phasedown
steps
in
1999,
2001,
and
2003,
and
permitting
exemptions
for
quarantine
and
preshipment
uses,
and
for
critical
uses.
In
Section
764
of
the
1999
Omnibus
Consolidated
and
Emergency
Supplemental
Appropriations
Act
(
PL
105­
277,
October
21,
1998),
Congress
amended
Title
VI
of
the
CAA
to
bring
the
U.
S.
phaseout
of
methyl
bromide
in
line
with
the
global
requirements
specified
under
the
Protocol
and
to
provide
for
the
exemptions
under
the
Protocol.
These
amendments
were
codified
in
Section
604
of
the
CAA.
On
November
28,
2000,
EPA
issued
regulations
to
amend
the
phaseout
schedule
for
methyl
bromide
and
extend
the
phaseout
to
2005
(
65
Fed
Reg.
70795).
Today,
EPA
is
proposing
to
further
amend
40
CFR
Part
82
to
implement
an
exemption
to
the
2005
phaseout
of
methyl
bromide
that
allows
continued
production
and
consumption
of
methyl
bromide
for
critical
uses.
Section
604(
d)(
6)
of
the
Clean
Air
Act,
as
added
in
1999,
provides
that
"[
t]
o
the
extent
consistent
with
the
Montreal
Protocol,
the
Administrator,
after
notice
and
the
opportunity
for
public
comment,
and
after
consultation
with
other
departments
or
instrumentalities
of
the
Federal
Government
having
regulatory
authority
related
to
methyl
bromide,
including
the
Secretary
of
Agriculture,
may
exempt
the
production,
importation,
and
consumption
of
methyl
bromide
for
critical
uses."
42
U.
S.
C.
§
7271c(
d)(
6).
Article
2H
(
5)
of
the
Montreal
Protocol
provides
that
the
2005
methyl
bromide
phaseout
shall
not
apply
"
to
the
extent
the
Parties
decide
to
permit
the
level
of
production
or
consumption
that
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses."
DRAFT
EPA
DOCUMENT
­
9­
Both
Section
604(
d)(
6)
and
Section
614(
b)
of
the
CAA
address
the
relationship
between
the
Montreal
Protocol
and
actions
taken
under
Title
VI
of
the
Act.
Section
604(
d)(
6)
addresses
critical
uses
specifically,
while
Section
614(
b)
is
more
general
in
scope.
Section
604(
d)(
6)
states
that
the
critical
use
exemption
must
ensure
consistency
with
U.
S.
obligations
under
the
Protocol.
Section
614(
b)
states
that
Title
VI
"
shall
be
construed,
interpreted,
and
applied
as
a
supplement
to
the
terms
and
conditions
of
the
Montreal
Protocol,
as
provided
in
Article
2,
paragraph
11
thereof,
and
shall
not
be
construed,
interpreted,
or
applied
to
abrogate
the
responsibilities
or
obligations
of
the
United
States
to
implement
fully
the
provisions
of
the
Montreal
Protocol.
In
case
of
a
conflict
between
any
provision
of
this
subchapter
[
Title
VI]
and
any
provision
of
the
Montreal
Protocol,
the
more
stringent
provision
shall
govern."
Accordingly,
EPA
may
not
adopt
a
more
expansive
definition
of
"
critical
use"
domestically
than
the
definition
agreed
to
by
the
Parties
to
the
Protocol
since
a
more
expansive
definition
would
not
be
consistent
with
U.
S.
implementation
of
its
obligations
under
the
Protocol.
EPA
must
take
into
account
not
only
the
text
ofArticle
2H
but
also
the
related
Decisions
of
the
Protocol
Parties
that
interpret
that
text.
Under
customary
international
law,
as
codified
in
the
1969
Vienna
Convention
on
the
Law
of
Treaties
(
8
International
Legal
Materials
679
(
1969))
both
the
treaty
text
and
the
practice
of
the
parties
in
interpreting
that
text
form
the
basis
for
its
interpretation.
Although
the
United
States
is
not
a
party
to
the
1969
Convention,
the
United
States
has
regarded
it
since
1971
as
"
the
authoritative
guide
to
current
treaty
law
and
practice."
See
Secretary
of
State
William
D.
Rodgers
to
President
Richard
Nixon,
October
18,
1971,
92d
Cong.,
1st
Sess.,
Exec.
L
(
Nov.
22,
1971).
Specifically,
Article
31(
1)
of
the
Vienna
Convention
provides
that
"[
a]
treaty
shall
be
interpreted
in
good
faith
in
accordance
with
the
ordinary
meaning
to
be
given
to
the
terms
of
the
treaty
in
their
context
and
in
light
of
its
object
and
purpose."
Article
31(
3)
goes
on
to
provide
that
"[
t]
here
shall
be
taken
into
account,
together
with
the
context:
(
a)
any
subsequent
agreement
between
the
parties
regarding
the
interpretation
of
the
treaty
or
the
application
of
its
provisions."
In
the
current
circumstances,
the
relevant
Decisions
of
the
Parties
can
be
construed
as
subsequent
consensus
agreements
among
the
Parties
to
the
Montreal
Protocol,
including
the
United
States,
regarding
the
interpretation
and
application
of
the
Protocol.
In
accordance
with
Article
2H(
5),
the
Parties
have
issued
several
Decisions
pertaining
to
the
critical
use
exemption.
At
their
Ninth
Meeting
in
1997,
the
Parties
issued
Decision
IX/
6
which
established
criteria
applicable
to
the
critical
use
exemption.
In
Decision
IX/
6,
the
Parties
agreed
as
follows:
(
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
a
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
DRAFT
EPA
DOCUMENT
­
10­
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
account
the
circumstances
of
the
nomination
.
.
.
Non­
Article
V
[
Developed
country]
parties
must
demonstrate
that
research
programmes
are
in
place
to
develop
and
deploy
alternatives
and
substitutes.
.
.
The
Parties
also
agreed
in
Decision
IX/
6
that
the
Technology
and
Economic
Assessment
Panel,
which,
together
with
its
Technical
Options
Committees,
reviews
nominations
and
makes
recommendations
regarding
approval,
would
base
its
review
and
recommendations
on
the
criteria
in
paragraphs
(
a)(
ii)
and
(
b).
The
criterion
in
paragraph
(
a)(
i)
was
not
subject
to
review
by
the
Protocol's
Panels
or
Committees.
At
the
First
Extraordinary
Meeting
of
the
Parties
in
March
of
2004,
the
Parties
issued
several
decisions
that
address
the
agreed
critical
uses,
the
allowable
levels
of
new
production
and
consumption
for
critical
uses,
the
conditions
for
granting
critical
use
exemptions,
and
reporting
obligations.
Decision
Ex.
I/
3
covers
the
agreed
critical
uses
and
allowable
levels
of
new
production
and
consumption
for
the
year
2005.
This
Decision
includes
the
following
terms:
1.
For
the
agreed
critical
uses
set
forth
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties
to
the
Montreal
Protocol
for
each
Party,
to
permit,
subject
to
the
conditions
set
forth
in
decision
Ex.
I/
4,
the
levels
of
production
and
consumption
set
forth
in
annex
II
B
to
the
present
report
which
are
necessary
to
satisfy
critical
uses,
with
the
understanding
that
additional
levels
and
categories
of
uses
may
be
approved
by
the
Sixteenth
Meeting
of
the
Parties
in
accordance
with
decision
IX/
6;
2.
That
a
Party
with
a
critical­
use
exemption
level
in
excess
of
permitted
levels
of
production
and
consumption
for
critical
uses
is
to
make
up
any
such
difference
between
those
levels
by
using
quantities
of
methyl
bromide
from
stocks
that
the
Party
has
recognized
to
be
available;
3.
That
a
Party
using
stocks
under
paragraph
2
above
shall
prohibit
the
use
of
stocks
in
the
categories
set
forth
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties
to
the
Montreal
Protocol
when
amounts
from
stocks
combined
with
allowable
production
and
consumption
for
critical
uses
exceed
the
total
level
for
that
Party
set
forth
in
annex
II
A
to
the
present
report;
4.
That
Parties
should
endeavor
to
allocate
the
quantities
of
methyl
bromide
recommended
by
the
Technology
and
Economic
Assessment
Panel
as
listed
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties;
5.
That
each
Party
which
has
an
agreed
critical
use
should
ensure
that
the
criteria
in
paragraph
1
of
decision
IX/
6
are
applied
when
licensing,
permitting
or
authorizing
the
use
of
methyl
bromide
and
that
such
procedures
take
into
account
available
stocks.
Each
Party
is
requested
to
report
on
the
implementation
of
the
present
paragraph
to
the
Ozone
Secretariat;
DRAFT
EPA
DOCUMENT
­
11­
The
agreed
critical
uses
and
allowable
levels
of
production
and
consumption
are
set
forth
in
annexes
to
the
Parties'
report.
Decision
Ex
I/
4
addresses
the
conditions
for
granting
and
reporting
critical­
use
exemption
for
methyl
bromide.
Decisions
IX/
6,
Ex.
I/
3,
and
Ex.
I/
4
are
subsequent
consensus
agreements
of
the
Parties
that
address
the
interpretation
and
application
of
the
critical
use
provision
in
Article
2H(
5)
of
the
Protocol.
For
example,
Decision
Ex.
I/
3
reflects
a
decision
called
for
by
the
text
of
Article
2H(
5)
where
the
parties
are
directed
to
"
decide
to
permit
the
level
of
production
or
consumption
that
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses."
EPA
intends
to
follow
the
terms
of
Decisions
IX/
6,
Ex.
I/
3,
and
Ex.
I/
4.
This
would
ensure
consistency
with
the
Montreal
Protocol
and
would
also
satisfy
the
requirements
of
Section
614(
b)
of
the
CAA.
Decision
Ex.
I/
3
recognizes
that
article
2H(
5)
of
the
Protocol
contemplates
that
the
Parties
will
make
two
separate
determinations
when
establishing
the
critical
use
exemption.
First,
the
Parties
agree
on
the
total
amount
and
categories
of
uses
that
are
deemed
critical
under
the
criteria
established
in
Decision
IX/
6.
Second,
the
Parties
determine
the
maximum
level
of
new
production
and
consumption
that
should
be
permitted
because
it
is
necessary
to
satisfy
those
critical
uses.
Under
paragraph
1
of
Decision
Ex.
I/
3,
the
first
of
the
these
determinations
(
the
"
agreed
critical
uses")
is
reflected
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties.
For
the
United
States,
the
Parties
agreed
to
16
critical
uses
for
methyl
bromide
and
authorized
use
of
8,942
metric
tonnes
of
methyl
bromide
for
these
critical
uses.
The
second
of
these
determinations
is
set
forth
in
annex
II
B
which
allows
the
United
States
7,659
metric
tons
of
production
and
consumption
of
methyl
bromide
to
satisfy
critical
uses.
Where
the
level
of
agreed
critical
uses
exceeds
the
level
of
new
production
and
consumption
determined
by
the
Parties
to
be
necessary
to
satisfy
those
uses,
a
Party
is
to
utilize
available
stocks
of
methyl
bromide
to
fill
the
gap.
Decision
Ex.
I/
3,
para.
2.
Parties
are
to
ensure
that
the
total
use
of
methyl
bromide
material
supplied
from
existing
stocks
and
new
production
and
consumption
does
not
exceed
the
overall
level
of
use
agreed
to
be
critical.
Decisions
Ex.
I/
3,
para.
3.
Thus,
Decision
Ex.
I/
3
establishes
two
caps
with
respect
to
methyl
bromide
for
2005
 
one
on
the
level
of
new
production
and
consumption
for
critical
uses
and
one
on
the
total
usage
of
methyl
bromide
in
the
agreed
critical
use
categories.
Under
this
Decision,
the
United
States
is
allowed
a
total
of
8,942
metric
tons
of
methyl
bromide
in
2005
to
satisfy
critical
uses.
In
accordance
with
Ex
I/
3,
the
quantity
of
new
production
and
consumption
in
combination
with
the
amount
of
stocks
determined
to
be
available
for
the
specified
critical
uses
cannot
exceed
for
2005
the
amount
of
8,942
metric
tons.
Because
of
the
cap
on
the
amount
of
methyl
bromide
available
for
the
specified
critical
uses,
EPA
will
not
authorize
new
production
and
consumption
that,
when
combined
with
use
of
available
stocks,
would
exceed
the
agreed
critical
use
level
of
8,942
metric
tons.
The
methyl
bromide
to
satisfy
those
uses
may
be
derived
from
available
stocks
of
material
or
new
production
and
consumption.
The
upper
limit
on
the
amount
of
new
production
and
consumption
for
the
specified
critical
uses
is
up
to
7,659
metric
tons.
However,
this
level
of
new
production
and
consumption
was
authorized
by
the
Parties
subject
to
compliance
with
the
conditions
set
forth
in
Decisions
Ex.
I/
3
and
Ex.
I/
4.
One
of
these
conditions,
in
paragraph
5
of
Decision
Ex.
I/
3,
provides
that
"
each
Party
which
has
an
agreed
critical
use
should
ensure
that
the
criteria
in
paragraph
1
of
decision
DRAFT
EPA
DOCUMENT
­
12­
IX/
6
are
applied
when
licensing,
permitting
or
authorizing
the
use
of
methyl
bromide
and
that
such
procedures
take
into
account
available
stocks."
In
accordance
with
this
paragraph,
when
the
EPA
authorizes
new
production
and
consumption
for
critical
uses
under
Decision
Ex.
I/
3,
the
Agency
should
ensure
that
it
takes
available
stocks
into
account
and
applies
the
criteria
in
Decision
IX/
6.
These
criteria
in
Decision
IX/
6
include
the
direction
in
paragraph
1(
b)
"
That
production
and
consumption,
if
any,
of
methyl
bromide
for
critical
uses
should
be
permitted
only
if:
...
(
ii)
Methyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide."
Thus,
to
remain
consistent
with
Decision
IX/
6
and
Decision
Ex.
I/
3,
paragraph
5,
EPA's
decision
to
license
new
production
and
consumption
of
methyl
bromide
for
critical
uses
will
musttake
into
account
available
stocks
of
methyl
bromide
material.
Therefore,
EPA
is
adjusting
the
level
of
new
production
and
consumption
allowed
in
the
United
States
to
reflect
the
amount
of
methyl
bromide
from
stocks
recognized
by
EPA
to
be
"
available"
for
critical
uses.
In
addition,
to
prevent
the
total
use
levels
of
methyl
bromide
from
exceeding
the
critical
use
cap,
Paragraph
3
of
Decision
Ex.
I/
3
requires
that
Parties
prohibit
the
use
of
stocks
of
methyl
bromide
under
certain
circumstances.
This
provision
states
that
"
a
Party
using
stocks
under
paragraph
2
above
shall
prohibit
the
use
of
stocks
in
the
categories
set
forth
in
annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
of
the
Parties
to
the
Montreal
Protocol
when
amounts
from
stocks
combined
with
allowable
production
and
consumption
exceed
the
total
level
for
that
Party
set
forth
in
annex
II
A
to
the
present
report."
This
restriction
applies
in
countries
where
methyl
bromide
material
necessary
to
meet
the
agreed
critical
uses
is
derived
from
a
combination
of
available
stocks
and
new
production
or
imports.
In
this
situation,
a
Party
may
not
allow
the
total
amount
of
material
supplied
from
stocks
and
new
production
and
consumption
to
exceed
the
level
of
use
determined
by
the
Parties
to
be
critical.
This
restriction
is
necessary
to
ensure
that
a
Party's
total
level
of
critical
use
does
not
exceed
the
level
which
formed
the
basis
for
the
Parties'
decision
to
authorize
new
production
and
consumption
at
particular
levels.
Thus,
to
accord
with
Decision
Ex.
I/
3,
if
EPA
authorizes
new
production
and
consumption
to
supplement
available
stocks,
EPA
will
restrict
the
use
of
existing
stocks
of
methyl
bromide
in
cases
where
use
of
stocks
combined
with
the
authorized
level
of
new
production
and
consumption
could
exceed
the
critical
use
cap.
In
light
of
the
Parties'
agreement
in
Decision
Ex.
I/
3
that
such
a
restriction
is
needed
to
implement
Article
2H(
5)
of
the
Protocol,
EPA
is
authorized
under
sections
604(
b)(
6)
and
614(
b)
of
the
Clean
Air
Act
to
regulate
the
use
of
existing
stocks
of
methyl
bromide.
EPA's
power
under
section
604(
b)(
6)
to
exempt
new
production,
importation,
and
consumption
of
methyl
bromide
for
critical
uses
exists
only
"
to
the
extent
consistent
with
the
Montreal
Protocol."
42
U.
S.
C.
§
7671c(
b)(
6).
Because
the
Parties
have
interpreted
the
Protocol
to
impose
such
a
use
restriction
as
a
condition
for
the
authorization
of
new
production
and
consumption
for
critical
uses,
EPA
will
adhere
to
the
same
restriction
in
its
domestic
implementation
of
the
critical
use
exemption.
This
adherence
is
consistent
with
Section
614(
b)
of
the
Clean
Air
Act.
42
U.
S.
C.
§
7671m(
b).
Although
many
parts
of
the
Montreal
Protocol
and
subchapter
VI
of
the
Clean
Air
Act
focus
on
controlling
the
production
and
consumption
of
ozone
depleting
substances,
select
provisions
also
require
restrictions
on
the
use
of
such
substances.
For
example,
section
605
of
the
DRAFT
EPA
DOCUMENT
­
13­
Clean
Air
Act
restricts
the
use
of
class
II
substances
(
hydrochloroflourocarbon)
to
a
limited
number
of
applications
starting
in
2015.
42
U.
S.
C.
§
7671d(
a).
Section
608
of
the
Act
requires
the
Administrator
to
promulgate
regulations
to
reduce
the
use
and
emission
of
class
I
substances
during
the
service,
repair,
and
disposal
of
appliances
and
refrigeration
equipment.
42
U.
S.
C.
§
7671g.
The
essential
use
exemption
in
sections
604(
d)(
1)­(
3)
authorizes
limited
production
of
controlled
substances
subject
to
the
limitation
that
such
substances
may
only
be
used
in
specific
applications.
42
U.
S.
C.
§
7671c(
d).
Likewise,
the
critical
use
exemption
under
section
604(
d)(
6)
permits
exempted
production,
importation,
and
consumption
but
only
"
for
critical
uses."
42
U.
S.
C.
§
7671c(
d)(
6).
Thus,
under
the
essential
use
and
critical
use
exemptions,
new
production
and
consumption
is
necessarily
restricted
to
particular
use
categories.
In
the
case
of
the
critical
use
exemption
for
methyl
bromide,
the
Parties
recognized
in
Decision
Ex.
I/
3
that
the
use
restrictions
on
newly
produced
material
must
also
extend
to
the
use
of
existing
stocks
of
such
material
in
those
use
categories
for
which
new
production
and
consumption
has
been
permitted
by
the
Parties
under
the
exemption.
As
noted
above,
such
a
restriction
is
necessary
to
ensure
that
Parties
abide
by
the
critical
use
representations
underlying
the
authorization
of
new
production
and
consumption.
Where
new
production
and
consumption
is
authorized
because
sufficient
material
is
not
available
from
existing
stocks,
then
the
predicate
for
this
decision
would
be
undermined
if
Article
2H(
5)
of
the
Protocol
was
interpreted
to
permit
unrestricted
use
of
existing
stocks
in
the
categories
of
use
that
may
utilize
newly
produced
material.
Furthermore,
placing
such
a
limitation
on
the
use
of
existing
stocks
encourages
the
entities
in
possession
of
the
methyl
bromide
material
to
make
it
available
for
critical
uses.
If
quantities
of
methyl
bromide
greater
than
the
available
amount
identified
by
EPA
cannot
be
sold
for
critical
uses,
suppliers
are
prevented
from
subsequently
introducing
additional
quantities
into
the
market
after
the
EPA
has
authorized
new
production
for
a
given
year.
This
limitation
reduces
the
incentive
for
entities
to
withhold
methyl
bromide
material
from
the
market
in
order
to
induce
EPA
to
authorize
more
new
production.
This
kind
of
a
restriction
on
the
use
of
existing
stocks
is
also
authorized
under
the
essential
use
exemption
as
a
condition
for
allowing
new
production
and
consumption.
However,
for
practical
reasons
the
Parties
and
EPA
have
never
needed
to
expressly
impose
such
restrictions
under
the
essential
use
exemption.
The
limited
quantities
of
CFCs
and
methyl
chloroform
produced
and
consumed
in
the
United
States
under
the
essential
use
exemption
have
historically
been
held
by
the
users
of
such
substances.
In
addition,
the
number
of
essential
uses
and
size
of
the
user
community
is
very
small.
Essential
uses
have
been
limited
to
use
of
CFCs
as
propellants
in
asthma
inhalers
by
not
more
than
10
companies
and
the
servicing
of
space
vehicles
by
the
National
Aeronautical
and
Space
Administration.
Thus,
it
has
been
much
easier
under
the
essential
use
exemption
for
the
Parties
and
EPA
to
determine
how
much
existing
material
is
available
to
the
essential
users
and
to
ensure
that
the
exempted
production
and
consumption
in
a
given
year
was
not
grossly
exceeding
the
level
of
essential
need.
In
the
case
of
the
essential
use
exemption,
the
Parties
never
agreed
to
a
Decision
that
limited
the
amount
of
material
available
from
stocks
for
uses
deemed
essential.
However,
the
Parties
track
the
stocks
of
these
essential
use
materials
to
ensure
the
exempted
production
and
consumption
does
not
result
in
a
growing
stockpile.
DRAFT
EPA
DOCUMENT
­
14­
In
contrast,
in
the
case
of
methyl
bromide,
the
majority
of
existing
stocks
of
methyl
bromide
are
not
owned
and
controlled
by
users
but
by
producers,
distributors,
and
importers
of
such
material.
There
are
also
hundreds
of
potential
users
and
many
uses
for
methyl
bromide.
In
addition,
the
Parties
have
authorized
a
greater
number
of
critical
uses
for
methyl
bromide
(
16
categories
in
the
U.
S.),
and
each
of
these
uses
are
subject
to
specific
limiting
conditions
under
which
methyl
bromide
use
in
those
categories
becomes
critical.
In
this
situation,
there
is
more
risk
that
the
use
level
in
critical
use
categories
could
exceed
the
level
of
agreed
critical
use
without
express
regulation.
In
the
case
of
essential
use
allowances,
there
was
no
need
for
an
express
restriction
on
use
of
existing
stocks
because
the
marketplace
and
the
user
community
selfregulated
However,
in
a
situations
such
as
methyl
bromide
where
the
distribution
patterns
of
the
material
are
different
and
the
user
group
and
critical
use
profile
is
much
larger,
the
EPA
can
no
longer
rely
solely
on
self­
regulation
to
ensure
the
appropriate
use
level.
Thus,
in
accordance
with
these
authorities,
EPA
is
proposing
a
limit
on
the
sale
of
stocks
of
methyl
bromide
to
the
critical
use
categories
permitted
to
obtain
new
production
and
consumption
for
their
critical
uses.
This
action
proposes
that
holders
of
stocks
will
be
authorized
to
sell
methyl
bromide
for
critical
use
by
expending
critical
stock
allowances
(
CSAs)
allocated
by
EPA
through
this
rulemaking
action.
The
proposed
limitation
on
the
sale
of
stocks
is
narrowly
defined
and
applicable
only
to
the
categories
of
critical
uses
for
which
new
production
and
consumption
has
been
authorized
because
of
a
demonstrated
critical
need.
EPA
proposes
that
stocks
of
methyl
bromide
produced
or
imported
prior
to
January
1,
2005,
may
continue
to
be
used
by
other
applications,
not
determined
to
have
a
critical
need,
without
additional
limitations
other
than
those
already
existing
under
applicable
pesticide
laws.

V.
What
is
the
Critical
Use
Exemption
Process?
The
procedural
requirements
for
the
critical
use
exemption
are
delineated
in
Decision
IX/
6
of
the
Parties
to
the
Protocol.
As
applied
in
the
United
States,
users
of
methyl
bromide
who
believe
they
may
meet
the
criteria
to
qualify
for
a
critical
use
exemption
may
make
an
application
to
EPA
for
inclusion
in
the
U.
S.
nomination
of
critical
uses.
Starting
in
2002,
EPA
began
notifying
applications
as
to
the
availability
of
the
application,
and
the
deadline
to
apply,
with
a
notice
in
the
Federal
Register
(
68
FR
24737)
and
an
announcement
on
the
methyl
bromide
website
at
www.
epa.
gov/
ozone/
mbr.
Applicants
for
the
critical
use
exemption
must
provide
information
demonstrating
to
the
U.
S.
government
that
they
have
no
technically
and
economically
feasible
alternatives
to
methyl
bromide
available
to
them.
Applicants
for
the
exemption
must
also
submit
information
on
their
use
of
methyl
bromide,
on
research
into
the
use
of
alternatives
to
methyl
bromide,
on
efforts
to
minimize
use
of
methyl
bromide
and
to
reduce
emissions
and
on
the
specific
technical
and
economic
results
of
testing
alternatives
to
methyl
bromide.
Applicants
may
apply
as
individuals
or
as
part
of
a
group
of
users
(
a
"
consortium")
who
face
the
same
limiting
critical
conditions
(
i.
e.
specific
conditions
which
establish
a
critical
need
for
methyl
bromide).
Users
of
methyl
bromide
who
believe
they
may
meet
the
criteria
to
qualify
for
a
critical
use
exemption
may
make
an
application
to
EPA
for
inclusion
in
the
U.
S.
nomination
of
critical
uses.
The
U.
S.
government
reviews
applications
and
creates
a
package
for
submission
to
the
Ozone
Secretariat
of
the
Protocol
for
uses
nominated
as
having
a
critical
need
for
methyl
bromide
DRAFT
EPA
DOCUMENT
­
15­
beyond
the
phaseout.
Each
Party
must
justify
such
a
request
by
determining
that
there
are
no
technically
and
economically
feasible
alternatives
to
methyl
bromide
for
the
use
in
question
and
that
significant
market
disruption
would
result
without
continued
use
of
methyl
bromide.
The
critical
use
nominations
(
CUNs)
of
various
countries
are
then
reviewed
by
a
technical
committee
that
advises
the
countries
that
have
ratified
the
Protocol
(
the
"
Parties"
to
the
Protocol).
This
technical
committee
is
known
as
the
Methyl
Bromide
Technical
Options
Committee
("
MBTOC")
of
the
Technical
and
Economic
Assessment
Panel
("
TEAP").
Based
on
the
recommendations
of
MBTOC
and
TEAP
and
their
own
review
of
the
Critical
Use
Nominations
(
CUNs)
submitted
by
various
countries
seeking
a
critical
use
exemption,
the
Parties,
at
their
annual
meeting,
take
decisions
to
authorize
critical
use
exemptions
which
"
permit
the
level
of
production
or
consumption
[
of
methyl
bromide]
that
is
necessary
to
satisfy
uses
agreed
to
them
to
be
critical
uses"
(
Article
2H,
paragraph
5).
After
decisions
by
the
Parties,
for
each
control
period,
EPA
will
provide
an
opportunity
such
as
this
for
comment
on
the
amounts
of
methyl
bromide
that
may
be
supplied
under
the
critical
use
exemption
and
the
end
uses
eligible
to
use
critical
use
methyl
bromide.
EPA
recognizes
that
users
of
methyl
bromide
who
qualify
for
a
critical
use
exemption
and
producers
and
importers
of
methyl
bromide,
need
to
have
certainty
regarding
the
amounts
of
methyl
bromide
that
will
be
available
under
this
proposed
exemption
and
the
additional
regulatory
procedures
that
govern
the
production
and
use
of
critical
use
methyl
bromide
before
the
phaseout
date
of
January
1,
2005.
Therefore,
EPA
is
considering
all
available
regulatory
procedures
that
will
allow
affected
entities
to
have
operational
certainty
that
an
exemption
of
some
form
will
be
in
place
in
advance
of
the
phaseout
date.

VI.
What
are
the
Details
of
Today's
Proposed
Action
to
Implement
the
Critical
Use
Exemption
for
Methyl
Bromide?
In
today's
proposed
action,
which
is
the
first
rule
EPA
has
proposed
to
implement
the
critical
use
exemption,
the
Agency
is
proposing
both
(
1)
the
regulatory
framework
for
how
the
exemption
will
operate;
(
2)
and
the
allocation
of
the
allowances
established
under
this
framework
to
methyl
bromide
suppliers
for
the
2005
control
period.
[
It
might
be
worth
addressing
why
the
EPA
is
not
taking
action
with
regard
to
the
other
criteria
in
Decision
IX/
6
 
e.
g.,
those
criteria
are
already
taken
into
account
through
other
U.
S.
procedures
or
through
TEAP's
consideration.]

A.
What
is
the
Total
Amount
of
Methyl
Bromide
that
May
be
Supplied
for
U.
S.
Critical
Uses?
EPA
is
proposing
a
determination
that
the
United
States
has
a
critical
need
for
methyl
bromide
of
8,942,214
kilograms
to
satisfy
the
agreed
critical
uses
for
2005
(
including
from
available
stocks
and
new
production
or
imports).
This
is
the
amount
that
the
U.
S.
government
included
in
the
U.
S.
Critical
Use
Nomination
as
adjusted
by
the
Parties
in
Decision
Ex
I/
3.
This
amount
is
adjusted
from
the
9,777,288
kilograms
originally
nominated
by
the
U.
S.
government.
The
difference
between
the
two
amounts
is
accounted
for
by
the
following
adjustments:
(
a)
the
removal
of
methyl
bromide
for
tobacco
seedling
float
trays,
totaling
1,323
kilograms,
a
use
category
that
the
Parties
agreed
did
not
meet
the
conditions
for
a
critical
use
exemption,
(
b)
a
reduction
of
53,328
kilograms
to
account
for
the
market
uptake
of
sulfuryl
flouride,
a
newly
DRAFT
EPA
DOCUMENT
­
16­
registered
alternative
for
the
fumigation
of
stored
food
items,
(
c)
a
reduction
of
635,027
kilograms
from
strawberry
field
uses
of
methyl
bromide
due
to
further
adoption
of
alternatives,
in
particular
emulsified
1,3
dichloropropene
formulations,
(
d)
a
reduction
of
145,367
kilograms
for
turfgrass
production
to
reflect
lower
application
rates
using
mixtures
with
lower
concentrations
of
methyl
bromide,
and
(
e)
a
small
number
of
kilograms
based
on
rounding
adjustments.
EPA
seeks
comment
on
the
amount
of
methyl
bromide
the
Agency
has
determined
to
be
necessary
to
satisfy
the
critical
uses
authorized
by
the
Parties
for
2005
EPA
refers
commenters
to
the
E­
Docket
where
the
U.
S.
nominations
and
additional
responses
to
MBTOC
are
available.
These
are
the
technical
documents
which
are
the
basis
for
the
Parties
and
EPA's
determination.
Supplies
of
methyl
bromide
for
critical
uses
can
only
be
obtained
by
end
users
from
available
stocks
of
methyl
bromide,
or,
new
production
or
imports
if
the
available
stocks
are
insufficient
to
meet
the
needs
of
the
agreed
critical
uses
authorized
by
the
Parties.
Based
on
the
review
of
the
nominations
discussed
above,
the
Parties
to
the
Montreal
Protocol
allowed
the
United
States
to
permit
up
to
7,659
metric
tons
of
newly
produced
and
imported
quantities
of
methyl
bromide
for
the
agreed
critical
uses
set
forth
in
Annex
II.
a
of
Decision
Ex
I/
3
if
this
amount
is
determined
by
EPA
to
be
necessary
to
satisfy
the
agreed
critical
uses.
To
accord
with
Decision
Ex.
I/
3,
however,
the
United
States
will
consider
during
the
domestic
authorization
process
implemented
by
EPA,
whether
it
should
adjust
the
authorized
level
of
new
production
and
consumption
for
critical
uses
by
the
amount
of
"
available"
stocks
(
consumption
is
defined
as
production
plus
imports
minus
exports).
Specifically,
paragraph
5
of
Decision
Ex
1/
3
states
that
the
Parties
"
should
ensure
that
the
criteria
in
paragraph
1of
Decision
IX/
6
are
applied
when
licensing,
permitting,
or
authorizing
the
use
of
methyl
bromide
and
that
such
procedures
take
into
account
available
stocks."
The
relevant
portion
of
Decision
IX/
6
1(
b)
states
"
That
production
and
consumption,
if
any,
of
methyl
bromide
for
critical
uses
should
be
permitted
only
if:
...
(
ii)
Methyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
and
recycled
methyl
bromide,
also
bearing
in
mind
the
developing
countries'
need
for
methyl
bromide."
As
recognized
by
the
Parties,
the
level
of
existing
stocks
may
differ
from
the
level
of
available
stocks.
In
order
to
apply
the
Decision
IX/
6
criteria,
EPA
will
assess
how
much
methyl
bromide
is
available
from
existing
inventories
and
then
determine
how
much
is
available
to
meet
market
demand
for
critical
uses.
The
Decision
clearly
points
to
an
adjustment
to
account
for
inventory
intended
to
meet
the
needs
of
developing
countries.
Hence,
EPA
will
need
to
determine
not
just
if
stocks
exist
in
the
United
States
but
in
fact
what
amount
is
available
for
approved
critical
users
in
this
country.
Decision
Ex
I/
3
(
2)
further
states,
"
That
a
Party
with
a
critical­
use
exemption
level
in
excess
of
permitted
levels
of
production
and
consumption
for
critical
uses
is
to
make
up
any
such
difference
between
those
levels
by
using
quantities
of
methyl
bromide
from
stocks
that
the
Party
has
recognized
to
be
available."
Thus,
Decision
IX/
6
and
Decision
Ex
I/
3
recognize
that
not
all
existing
stocks
may
be
available
to
meet
critical
uses.
Although
enumerated
in
Decision
IX/
6,
the
needs
of
Article
5(
1)
countries
is
not
the
only
factor
that
may
limit
the
availability
of
stocks
for
critical
uses.
The
terms
of
Decision
IX/
6
do
not
preclude
Parties
from
considering
other
factors
that
determine
the
amount
of
stocks,
if
any,
that
are
available.
[
This
short
paragraph
is
supporting
a
lot
of
weight.
As
it
stands
now,
it
highlights
DRAFT
EPA
DOCUMENT
­
17­
the
issue
for
challenge
because
the
existence
of
an
explicit
exception
just
as
easily
argues
for
the
lack
of
implicit
exceptions.
We'd
recommend
removing,
or
replacing
with
language
that
relies
more
on
EPA's
authority
and
expertise
to
determine
availability.
Perhaps
use
language
like:
"
To
accord
with
Decision
Ex
I/
3,
the
United
States
will
make
a
determination
as
to
which
existing
stocks
it
"
recognize[
s]
to
be
available."
The
EPA
has
the
authority
to
make
this
determination,
and
has
developed
an
analysis
which
it
believes
is
consistent
with
the
Clean
Air
Act
and
with
Decision
Ex
I/
3."]
EPA
has
solicited
information
on
existing
and
available
stocks
from
approved
critical
users
and
from
producers,
importers,
and
major
distributors
of
methyl
bromide
in
the
United
States
through
a
combination
of
the
critical
use
exemption
applications
and
information
request
letters
sent
to
entities
pursuant
to
Section
114
of
the
Clean
Air
Act.
In
developing
today's
action
for
the
2005
compliance
period,
EPA
believes
it
has
sufficient
information
to
make
a
preliminary
determination
about
the
level
of
existing
and
available
stocks.
To
update
this
information
about
existing
and
available
stocks,
EPA
is
publishing
in
today's
Federal
Register
a
Section
114
Information
Request
asking
any
person
who
has
stocks
of
methyl
bromide
as
of
[
DATE
OF
PUBLICATION]
that
are
unrestricted
(
not
for
quarantine
and
preshipment
and
produced
solely
for
export
to
Article
5
countries)
and
not
under
contract
for
delivery
to
a
specific
end­
user
to
submit
information
to
EPA
by
[
INSERT
20
DAYS
AFTER
PUBLICATION].
For
years
beyond
2005,
EPA
describes
later
in
this
proposed
rulemaking
annual
reporting
requirements
that
will
provide
the
Agency
with
sufficient
information
to
determine
the
level
of
existing
and
available
stocks.
EPA
proposes
to
use
the
following
methodology,
based
on
reasoning
described
below
in
this
section,
to
determine
how
much
of
the
existing
stocks
are
available.
EPA
seeks
comment
on
the
proposed
formula
and
reasoning
described
in
the
following
paragraphs.
EPA
proposes
to
determine
available
stocks
using
the
formula
AS
=
ES
­
E1
­
E2
­
C
­
N
­
D
where
AS
=
available
stocks;
ES
=
existing
stocks
or
unrestricted
total
stocks
held
in
the
United
States
by
producers,
importers,
distributors,
and
applicants
as
of
the
end
of
calendar
year
2003;
E1
=
stocks
not
produced
with
Article
5
allowances
held
for
export
to
developing
countries;
E2
=
amounts
held
for
export
to
developed
countries
in
2004;
C
=
amounts
held
in
catastrophic
reserve;
N
=
amounts
held
for
transition
management
in
non­
critical
use
categories
in
2005,
and;
D
=
the
estimated
drawdown
of
stocks
by
U.
S.
and
international
consumers
in
2004.
Existing
stocks
do
not
include
restricted
stocks
of
methyl
bromide
that
were
produced
under
the
exemptions
for
quarantine
and
preshipment
and
with
expended
Article
5
allowances
to
meet
the
basic
domestic
needs
of
Article
5
countries.
Export
is
an
important
global
consideration
in
determining
the
level
of
available
stocks
for
domestic
critical
uses.
The
U.
S.
faces
different
circumstances
from
many
other
Parties
because
it
is
a
methyl
bromide
producer
country
as
well
as
a
user
country.
Unlike
the
majority
of
the
Parties
that
have
authorized
critical
uses
for
2005,
the
U.
S.
has
stocks
of
methyl
bromide
to
meet
global
demands
in
2004
for
methyl
bromide
not
just
for
developing
countries
but
for
developed
countries
as
well.
Therefore,
particularly
in
the
case
of
the
U.
S.,
stocks
held
by
U.
S.
companies
are
not
necessarily
available
for
U.
S.
users.
This
is
a
different
case
from
Parties
that
satisfy
their
demand
for
methyl
bromide
strictly
through
imports.
Any
stocks
available
in
the
distribution
chain
of
an
DRAFT
EPA
DOCUMENT
­
18­
importing
country
are
presumably
imported
for
the
express
purpose
of
meeting
the
demands
of
domestic
end
users.
EPA
believes
that
an
accurate
accounting
of
available
stocks
must
take
into
account
the
global
demand
for
the
product
in
both
developed
(
E2)
and
developing
(
E1)
countries
as
authorized
under
the
Protocol.
Furthermore,
the
U.
S.
is
the
world's
largest
supplier
of
methyl
bromide.
In
the
event
of
an
unforseen
catastrophe
such
as
the
destruction
of
a
production
plant,
EPA
believes
that
a
strategic
buffer
should
be
held
in
reserve
in
order
to
meet
real
time
global
demand
for
methyl
bromide.
Since
U.
S.
companies
supply
a
significant
portion
of
the
world,
a
catastrophe
in
the
U.
S.
would
not
only
effect
U.
S.
users
but
would
effect
those
users
who
have
authorized
critical
uses
in
developed
countries
as
well
as
the
users
in
developing
countries
who
have
not
yet
phased
out
of
methyl
bromide.
EPA
estimates
that
a
catastrophic
plant
incident
that
resulted
in
unforseen
shutdown
could
result
in
a
three
month
supply
disruption
and
that
a
catastrophic
buffer
(
C)
equal
to
the
amount
of
methyl
bromide
produced
for
both
domestic
and
overseas
markets
for
transformation,
quarantine
and
preshipment,
and
critical
uses
for
that
period
of
time
is
necessary
to
prevent
a
significant
impact
on
certain
agricultural
sectors.
EPA
seeks
comment
on
the
impact
of
a
three
month
closure
on
global
methyl
bromide
supplies.
In
addition,
some
entities
in
the
U.
S.
did
not
apply
for
a
critical
use
exemption
because
they
intend
to
meet
their
small,
limited
needs
through
existing
U.
S.
inventories
of
methyl
bromide.
EPA
therefore
has
deducted
from
the
available
stockpile,
amounts
(
N)
set
aside
to
meet
the
needs
of
end
users
who
did
not
apply
for
an
exemption
but
who
are
still
using
methyl
bromide
during
their
transition
to
alternatives.
[
Brevity
would
be
best
here;
the
current
text
highlights
an
awkward
issue
a
bit
too
much.]
Finally,
stocks
in
the
United
States
will
continue
to
be
sold
and
used
by
domestic
and
international
consumers
throughout
the
2004
calendar
year,
in
advance
of
the
January
1,
2005
phaseout
date.
This
drawdown
(
D)
should
be
considered
in
determining
the
amount
of
stocks
available
for
critical
uses
in
2005.
EPA
is
proposing
to
use
the
formula
described
above
to
determine
how
much
of
the
existing
stocks
are
available
for
critical
uses.
EPA
will
then
deduct
the
amount
of
available
stocks
from
the
amount
of
methyl
bromide
determined
by
EPA
to
be
necessary
for
critical
uses.
To
satisfy
the
remainder
of
the
critical
need
that
cannot
be
satisfied
with
available
stocks,
EPA
is
proposing
to
issue
critical
use
allowances
(
CUAs)
for
new
production
and
import
for
the
agreed
critical­
use
categories
at
a
level
not
to
exceed
any
amounts
of
methyl
bromide
authorized
by
the
Parties
to
be
produced
or
consumed
to
satisfy
critical
uses.
In
Decision
Ex.
I/
3,
the
Parties
agreed
that
for
2005
the
United
States
had
demonstrated
a
critical
need
for
8,942,214
kilograms
of
methyl
bromide.
However,
the
Parties
only
authorized
the
United
States
to
produce
up
to
7,659,000
kilograms
of
methyl
bromide
for
critical
uses
in
2005
with
the
understanding
that
the
United
States
would
likely
have
stocks
available.
In
the
event
that
EPA
determines
that
the
available
stocks
are
greater
than
this
difference
between
critical
need
and
authorized
production,
EPA
intends
to
deduct
this
additional
amount
of
available
stocks
from
any
authorization
made
by
the
Parties.
EPA
believes
that
this
standard
is
most
consistent
with
the
language
agreed
to
in
Decision
IX/
6
(
b)(
ii)
and
Decision
Ex.
I/
3.
Using
the
formula
proposed
above
(
AS
=
ES
­
E1
­
E2
­
C
­
N
­
D),
EPA
has
determined
DRAFT
EPA
DOCUMENT
­
19­
that
1,656,800
kilograms
of
methyl
bromide
are
available
from
existing
stocks.
Therefore
EPA
proposes
to
allocate
critical
use
allowances
(
CUAs)
authorizing
7,285,414
kilograms
of
new
methyl
bromide
production
or
import
for
the
agreed
critical­
use
categories
in
2005.
This
proposed
quantity
of
new
production
or
import
is
the
difference
between
the
total
amount
of
methyl
bromide
use
authorized
by
the
Parties
for
the
agreed
critical­
use
categories
in
Decision
Ex
I/
3,
an
amount
of
8,942,214
kilograms,
and
the
amount
of
available
stocks
of
1,656,800
kilograms.
Since
EPA
is
proposing
that
more
than
1,283,214
kilograms,
which
is
equal
to
five
percent
of
the
U.
S.
baseline
is
available
from
stocks,
today's
action
is
proposing
not
to
allocate
the
full
amount
of
new
production
and
import
that
was
authorized
by
the
Parties
in
Ex
I/
3.
In
making
this
determination
of
available
stocks,
EPA
derived
the
total
amount
of
existing
stocks
(
ES)
from
information
that
EPA
currently
has
on
the
amount
of
methyl
bromide
stocks
held
by
a
handful
companies
in
the
United
States
as
of
the
end
of
2003.
As
described
above,
EPA
is
seeking
to
update
its
information
on
existing
stocks.
The
information
EPA
currently
has
on
existing
stocks
was
obtained
through
responses
to
Section
114
requests
that
EPA
sent
to
this
handful
of
companies.
However,
each
of
these
companies
claimed
their
responses
to
EPA's
request
to
be
Confidential
Business
Information.
As
a
result,
EPA
is
not
authorized
to
release
this
information
until
it
completes
the
process
for
evaluating
these
claims
prescribed
by
the
Agency's
CBI
regulations
at
40
C.
F.
R.
Part
2,
Subpart
B.
EPA
is
currently
evaluating
the
merits
of
these
claims
in
accordance
with
these
procedures
and
expects
to
make
a
final
determination
on
the
CBI
claims
prior
to
finalizing
the
proposed
critical
use
exemption
regulation.
Pending
the
completion
of
the
process
required
under
40
C.
F.
R.
Part
2,
Subpart
B,
EPA
is
treating
the
companies'
methyl
bromide
stockpile
information
as
CBI.
In
addition,
EPA
is
treating
the
aggregate
total
of
the
stocks
held
by
these
companies
as
CBI
because
of
concerns
that
publication
of
the
aggregate
amount
could
allow
the
small
number
of
producers,
imports,
and
distributors
who
know
the
size
of
their
own
holdings
to
calculate
the
amounts
claimed
as
CBI
by
their
competitors.
Because
EPA
has
not
yet
completed
its
review
of
these
CBI
claims
regarding
methyl
bromide
stocks,
this
notice
does
not
include
the
total
amount
of
existing
stocks
(
ES)
and
other
quantitative
values
that
EPA
derived
to
determine
available
stocks
using
the
formula
set
forth
above.
EPA
is
concerned
that
the
amount
of
existing
stocks
(
ES)
could
be
revealed
by
simple
arithmetic
if
EPA
were
to
publish
its
methodology
for
determining
available
stocks
and
quantify
all
the
values
used
to
derive
the
amount
of
available
stocks
except
for
the
amount
of
existing
stocks.
However,
to
provide
the
public
with
a
meaningful
opportunity
to
comment
on
its
determination
of
available
stocks,
EPA
has
published
the
total
amount
of
available
stocks
in
this
notice
and
described
the
methodology
used
to
derive
this
figure.
EPA
has
also
prepared
a
detailed
Technical
Support
Document
which
elaborates
on
the
reasoning
and
methodology
that
EPA
used
to
calculate
each
of
the
values
in
the
formula
described
above.
Interested
parties
may
find
a
copy
of
this
document
within
EPA's
electronic
docket,
Electronic
Air
Docket
ID
No.
OAR­
2003­
0230,
and
EPA's
paper
docket,
Air
Docket
ID
No.
A­
2000­
24.
If,
in
accordance
with
the
procedures
set
forth
in
40
C.
F.
R.
Part
2,
Subpart
B,
EPA
determines
that
all
or
part
of
the
information
on
existing
stocks
of
methyl
bromide
stocks
may
be
released
to
the
public,
EPA
DRAFT
EPA
DOCUMENT
­
20­
will
place
this
information
in
the
docket
and
quantify
the
other
values
in
the
formula.
As
a
condition
for
authorizing
new
production
for
the
agreed
critical­
use
categories,
Decision
Ex
I/
3
stipulates
that
Parties
will
limit
the
use
of
stocks
by
those
categories
beyond
the
level
that
has
been
determined
by
a
Party
to
be
available
for
critical
uses.
In
other
words,
Decision
Ex
I/
3
aims
to
limit
the
total
use
of
methyl
bromide
by
the
agreed
critical­
use
categories
in
a
given
year
to
that
level
agreed
by
the
Parties
to
be
critical.
Where
new
production
is
permitted
on
the
grounds
that
sufficient
material
is
not
available
from
stocks,
a
party
will
ensure
that
no
more
methyl
bromide
from
stocks
is
used
by
the
authorized
critical
uses
categories
than
the
total
amount
determined
to
be
available
from
stocks
plus
the
level
of
new
production
authorized
by
that
party.
Thus,
in
accordance
with
this
Decision
and
other
authorities
discussed
above,
EPA
is
proposing
a
restriction
on
the
sale
of
stocks
of
methyl
bromide
to
the
agreed
critical
use
categories
that
are
permitted
to
obtain
new
production
and
consumption.
The
proposed
limitation
on
the
sale
of
stocks
is
narrowly
defined
and
applicable
only
to
the
categories
of
critical
uses
for
which
new
production
and
consumption
has
been
authorized
because
of
a
demonstrated
critical
need.
EPA
proposes
that
stocks
of
methyl
bromide
produced
or
imported
prior
to
January
1,2005,
may
continue
to
be
used
for
other
applications
not
determined
to
have
a
critical
need
and
authorized
by
the
Parties,
without
additional
limitations
other
than
those
already
existing
under
applicable
pesticide
laws.
To
implement
this
rule
on
a
national
basis
in
2005,
EPA
proposes
to
prohibit
entities
holding
stocks
of
methyl
bromide
from
selling
or
distributing
such
material
to
critical
use
categories
for
which
new
production
and
import
is
authorized
under
Decision
Ex
I/
3,
unless
that
entity
holds
a
"
critical
stock
allowance"
allocated
by
EPA.
EPA
proposes
to
allocate
"
critical
stock
allowances"
(
CSAs)
in
an
amount
(
1,656,800
kilograms)
equal
to
the
amount
of
the
methyl
bromide
determined
by
EPA
to
be
available
from
stocks
for
the
agreed
critical­
use
categories.
In
the
event
that
market
forces
reveal
that
EPA
has
under­
predicted
the
amount
of
material
available
from
stocks,
EPA
proposes
to
allow
holders
of
critical
use
allowances
(
CUAs)
to
retire
such
allowances
in
exchange
for
additional
critical
stock
allowances
(
CSAs)
to
be
issued
by
EPA.
EPA
seeks
comment
on
the
amounts
of
critical
use
allowances
(
CUAs)
and
critical
stock
allowances
(
CSAs)
proposed
for
allocation
under
the
critical
use
exemption
framework.
EPA
also
seeks
comment
on
its
methodology
for
determining
available
stocks
for
2005.

B.
What
is
the
Proposed
Regulatory
Framework
for
Implementing
the
Critical
Use
Exemption
And
What
is
a
Critical
Use
Allowance
(
CUA)
and
a
Critical
Stock
Allowance
(
CSA)?
EPA
proposes
to
implement
the
critical
use
exemption
by
using
an
allowance
system.
EPA
believes
an
allowance
system
that
regulates
the
production
and
import
of
critical
use
methyl
bromide,
as
opposed
to
regulating
the
actual
users
of
methyl
bromide,
is
the
simplest
and
most
transparent
method
available
for
ensuring
U.
S.
compliance
with
Protocol
obligations.
There
are
only
a
relatively
few
entities
to
regulate
that
produce
and
import
methyl
bromide
and
these
entities
are
already
providing
high
quality
reporting
data
to
EPA
that
is
verifiable
and
easy
to
track.
In
accordance
with
Protocol
obligations
and
CAA
requirements
the
EPA
primarily
regulates
production
and
consumption
(
defined
as
production
plus
imports
minus
exports)
of
ozone­
DRAFT
EPA
DOCUMENT
­
21­
depleting
substances.
Given
that
the
universe
of
producers
and
importers
is
considerably
smaller
than
the
universe
of
end
users,
and
that
producers
and
importers
generally
have
more
infrastructure
for
regulatory
compliance
than
end
users,
this
method
of
regulation
is
proven
to
be
cost
effective
for
ensuring
U.
S.
compliance
with
obligations
under
the
Montreal
Protocol
and
requirements
under
the
CAA.
Thus,
EPA
proposes
to
create
critical
use
allowances
(
CUA)
which
would
entitle
the
allowance
holder
(
producer
or
importer)
to
produce
or
import
1
kilogram
of
methyl
bromide
for
the
exclusive
purpose
of
satisfying
the
needs
of
the
agreed
critical­
use
categories
during
the
2005
control
period
(
calendar
year).
A
CUA
holder
would
expend
one
allowance
for
producing
or
importing
one
kilogram
of
methyl
bromide.
In
addition,
in
order
to
control
the
amount
of
methyl
bromide
obtained
in
2005
by
the
agreed
critical
use
categories,
EPA
is
also
proposing
to
create
critical
stock
allowances
(
CSAs).
A
CSA
would
entitle
the
allowance
holder
(
producer,
importer,
distributor
or
applicator)
to
sell
1
kilogram
of
methyl
bromide
of
available
stockpiled
material
to
an
approved
critical
user.
For
example,
a
distributor
with
100
CSAs
may
sell
100
kilograms
of
stockpiled
methyl
bromide
to
an
approved
critical
user
for
use
in
an
agreed
critical
use
category
of
fumigation.
EPA
is
proposing
to
prohibit
the
sale
of
methyl
bromide
stocks
to
an
approved
critical
user
for
critical
uses
without
a
critical
stock
allowance.
Thus,
EPA
would
control
the
total
amount
of
stocks
that
can
be
sold
or
distributed
to
the
critical
use
categories
authorized
by
the
Parties
through
the
allocation
of
a
limited
number
of
critical
stock
allowances.
The
issuance
of
critical
stock
allowances
(
CSAs)
does
not
obligate
holders
of
stocks
to
make
these
quantities
available
to
critical
uses
if
they
choose
for
practical
or
business
reasons
not
to
sell
or
distribute
stocks
to
critical
uses.
However,
EPA
believes
that
if
the
critical
need
is
sufficient,
market
prices
will
encourage
suppliers
to
shift
material
away
from
other
priorities
such
as
export
to
developing
countries.
The
CSA
would
be
expended
upon
the
sale
of
methyl
bromide
to
an
approved
critical
user,
which
would
include
instances
where
an
approved
critical
user
contracts
with
a
distributor
to
provide
fumigation
services.
A
CSA
would
not
be
expended
upon
the
transfer
of
methyl
bromide
from
producers
or
importers
to
a
distributor.
See
the
additional
discussion
below
on
transfers
of
CSAs.
EPA
seeks
comments
on
the
proposed
allowance
allocation
framework
for
implementing
the
"
double
cap"
agreed
to
in
Decision
Ex
I/
3
by
the
Parties
to
the
Protocol
C.
How
Will
Critical
Use
Allowances
(
CUAs)
be
Distributed?
With
today's
action,
EPA
is
proposing
to
allocate
critical
use
allowances
(
CUAs)
to
producers
and
importers
of
methyl
bromide
on
a
pro­
rata
basis
based
on
their
1991
consumption
baseline
levels.
EPA
proposes
using
historic
1991
baseline
levels
of
consumption
allowances
to
allocate
CUAs
because
it
is
consistent
with
the
method
of
allocation
currently
in
place
under
the
phaseout
of
methyl
bromide
and
because
EPA
has
easily
verifiable
baseline
data
for
1991.
EPA
is
proposing
to
use
consumption
baselines
and
not
production
baselines
because
critical
use
methyl
bromide
can
be
legally
sourced
in
the
U.
S.
through
either
domestic
production
or
import.
A
critical
use
allowance
(
CUA),
as
described
in
Section
B.
of
this
proposed
rule,
DRAFT
EPA
DOCUMENT
­
22­
entitles
the
allowance
holder
either
to
produce
or
to
import
one
(
1)
kilogram
of
methyl
bromide.
Therefore,
EPA
believes
that
the
production
baseline
would
be
inappropriate
to
use
since
it
would
exclude
importers
from
meeting
the
needs
of
critical
uses.
Although
EPA
is
proposing
to
distribute
allowances
to
producers
and
importers
based
on
the
1991
baseline,
EPA
also
requests
comment
on
the
option
of
allocating
allowances
to
producers
and
importers
based
on
the
volume
of
material
marketed
over
a
previous
historic
period,
such
as
the
immediate
past
four
years.
EPA
does
not
have
adequate
data
to
create
a
new
baseline
of
marketed
material
for
methyl
bromide
producers
and
importers.
EPA
believes
that
acquiring
sufficient,
credible
data
of
this
nature,
would
require
the
Agency
to
review
all
transaction
records
for
each
sale
made
by
a
methyl
bromide
producer
or
importer
to
a
distributor,
other
supplier,
or
directly
to
end
users.
It
is
not
clear
to
EPA
that
such
records
are
available
in
their
entirety.
The
Agency
is
concerned
that
it
would
take
a
long
time
to
compile,
receive
and
analyze
such
detailed
information.
In
addition,
such
a
process
of
compiling
and
submitting
the
information
to
make
a
new
baseline
determination
would
impose
additional
burden
on
the
regulated
community.
This
burden
would
likely
be
annual
since
the
volumes
of
marketed
material
would
not
remain
static
from
year­
to­
year
after
2005.
EPA
also
requests
comment
on
an
allocation
method
that
equally
divides
the
number
of
allowances
amongst
those
entities
with
historic
production
and
consumption.
EPA
believes
that
this
would
be
the
simplest
approach
to
allocating
allowances.
However,
a
simple
division
of
the
critical
use
allowances
(
CUAs)
based
on
the
number
of
entities
involved
would
grossly
distort
historic
and
current
relative
market
shares
of
the
regulated
entities;
some
would
receive
far
more
than
their
historic
production
and
consumption
and
others
would
receive
far
less.
Allocating
allowances
based
on
volume
of
recently
marketed
material
may
more
closely
reflect
current
market
shares
for
each
company,
but,
for
reasons
involving
the
annual
burden
on
industry
and
government
discussed
above,
this
is
not
a
desirable
distributional
mechanism.
Therefore,
EPA
is
proposing
to
allocate
allowances
based
on
the
1991
historic
baseline
that
has
been
used
for
more
than
a
decade
in
the
U.
S.
to
determine
relative
market
shares
among
producers
and
importers.
Allocating
CUAs
based
on
each
company's
1991
baseline
allowances
(
on
a
pro­
rata
basis)
is
a
better
reflection
of
market
share
than
simply
dividing
the
number
of
allowances
by
the
total
number
of
entities,
and
would
be
less
burdensome
than
conducting
a
detailed
recent
historical
market
share
analysis
on
a
an
annual
basis.
Using
the
1991
historic
baseline
method
for
distributing
CUAs
is
consistent
with
how
EPA
has
allocated
methyl
bromide
production
and
consumption
allowances
for
the
past
decade
under
the
methyl
bromide
phaseout.
EPA
seeks
comment
on
these
options
for
baseline
determination
and
critical
use
allowance
(
CUA)
distribution.
During
stakeholder
meetings
prior
to
development
of
this
rule,
one
stakeholder
suggested
that
EPA
give
the
allowances
to
a
third
party
not­
for­
profit
entity
who
would
in
turn
auction
the
allowances
to
the
producers,
importers,
and
distributors.
After
the
producer,
importer
and
distributor
purchased
the
requisite
number
of
allowances,
these
entities
could
then
expend
the
allowances
as
described
in
Sections
VI.
B.
and
VI.
M..
of
this
proposed
rule.
The
revenue
derived
from
the
auction
would
be
used
by
the
not­
for­
profit
entity
to
fund
transitions
to
alternatives
where
the
alternatives
are
technically
available
but
not
economically
feasible
and
research
into
DRAFT
EPA
DOCUMENT
­
23­
alternatives
to
methyl
bromide
where
no
technically
feasible
alternatives
exist
to
date.
Under
the
allowance
auction
approach,
no
additional
activities
would
be
required
of
the
end
users
but
they
would
receive
a
substantial
benefit
in
the
form
of
the
transition
fund
described
above
in
this
paragraph.
One
of
the
economic
benefits
of
the
auction
would
be
the
redistribution
of
windfall
profits
that
the
producers
and
importers
of
methyl
bromide
currently
receive
under
the
phaseout
of
methyl
bromide
and
that
will
be
extended
under
the
proposed
critical
use
exemption.
There
are
relatively
few
producers
and
importers
of
methyl
bromide
and
the
regulatory­
induced
scarcity
created
by
the
Protocol
and
CAA
means
higher
prices
can
be
charged
and
the
additional
profits
are
then
received
and
kept
by
the
producer
and
importer
companies.
Under
an
auction
however,
producers
and
importers
would
pay
for
the
right
to
produce
or
import
methyl
bromide,
thereby
decreasing
their
windfall
profits.
Apart
from
a
small
amount
of
money
to
maintain
operations
of
the
not­
for­
profit
entity,
in
theory
the
revenues
derived
from
the
auction
could
be
transferred
to
end
users
of
methyl
bromide
to
ease
the
economic
burden
of
their
phaseouts.
A
second
stakeholder
commented
that
an
auction
could
be
established
as
follows.
EPA
would
distribute
allowances
to
producers
and
importers
as
described
in
this
NPRM
which
would
entitle
the
companies
to
take
two
actions
(
a)
produce
and
import
kilograms
of
methyl
bromide
up
to
the
number
of
allowances
held,
or
(
b)
auction
the
allowances
to
critical
end
users.
The
end
users
would
then
turn
in
their
allowances
to
the
methyl
bromide
supplier
at
the
time
of
purchase.
EPA
seeks
comment
on
these
alternative
allowance
distribution
options
suggested
in
stakeholder
meetings.

D.
How
are
Critical
Stock
Allowances
(
CSAs)
Distributed?
EPA
proposes
to
allocate
CSAs
on
a
pro­
rata
basis
between
each
of
the
identified
entities
that
holds
stocks.
EPA
will
pro­
rate
the
total
amount
of
stocks
that
the
Agency
has
determined
are
available
between
each
known
entity
relative
to
the
percentage
of
the
total
existing
stocks
they
hold.
For
example,
if
company
A
holds
one
percent
of
all
existing
stocks
and
EPA
determines
that
1,000
kilograms
of
stocks
are
available,
EPA
will
issue
that
company
10
critical
stock
allowances
(
CSAs).
EPA
believes
this
is
the
most
equitable
and
least
arbitrary
method
available
for
allocating
CSAs.
Based
on
information
currently
available,
EPA
proposes
to
issue
CSA's
to
the
handful
of
companies
that
had
stocks
of
methyl
bromide
in
2003.
The
amount
allocated
to
each
of
these
companies
(
and
any
other
company
that
may
come
forward)
will
be
determined
in
the
final
rule
on
the
basis
of
comments
and
additional
information
collected
by
EPA.
EPA
seeks
comment
on
the
proposal
to
allocate
Critical
Stock
Allowances
on
a
pro­
rata
basis
to
these
companies
(
and
any
other
party
holding
stocks)
based
on
the
amount
of
stocks
held
by
each
entity
and
the
Agency's
determination
of
available
stocks
for
meeting
critical
use
needs.
In
today's
Federal
Register,
EPA
is
requesting
additional
information
on
the
amount
of
available
stocks
in
the
United
States.
Elsewhere
in
today's
Federal
Register
EPA
is
publishing
a
notice
under
Section
114
of
the
CAA
calling
for
every
entity
to
submit
to
EPA
by
[
INSERT
DATE
20
DAYS
AFTER
PUBLICATION]
information
on
their
stocks
of
methyl
bromide
that
are
unrestricted
(
not
for
quarantine
and
preshipment
and
produced
solely
for
export
to
Article
5
countries)
and
not
under
contract
for
delivery
to
a
specific
end­
user
as
of
[
DATE
OF
DRAFT
EPA
DOCUMENT
­
24­
PUBLICATION].
An
entity
that
does
not
submit
information
to
EPA
regarding
stocks
of
methyl
bromide
they
hold
for
sale
or
transfer
to
another
entity
on
[
DATE
OF
PUBLICATION]
will
not
receive
critical
stock
allowances
(
CSAs)
in
the
allocation
made
in
the
final
rule.
Such
persons
will
not,
therefore,
be
able
to
sell
methyl
bromide
to
any
of
the
approved
critical
users
in
the
16
agreed
critical­
use
categories
defined
in
Decision
Ex
I/
3
by
the
Parties
to
the
Protocol.
As
noted
above,
EPA
is
currently
evaluating
(
in
accordance
with
the
procedures
in
40
C.
F.
R.
Part
2,
Subpart
B)
whether
the
inventory
amounts
held
by
individual
entities
are
entitled
to
be
withheld
from
the
public
as
confidential
business
information.
If
EPA
makes
a
final
determination
that
the
amount
of
stocks
held
by
each
entity
is
not
confidential
business
information,
then
the
final
rule
will
contain
the
specific
amounts
of
CSA's
allocated
to
each
entity
on
the
basis
of
the
information
submitted
to
EPA.
However,
if
EPA
determines
that
individual
company
holdings
of
methyl
bromide
stocks
are
CBI,
then
the
final
rule
will
list
the
names
of
the
parties
issued
CSAs
without
including
the
amounts.
EPA
would
then
confidentially
inform
each
party
of
amount
of
CSAs
allocated
to
them
for
2005.
Alternatively,
EPA
might
be
able
to
allocate
CSAs
on
a
pro­
rata
basis
without
revealing
the
amount
of
existing
stocks
held
by
each
party.
This
is
because
the
CSA
allocation
would
be
a
pro­
rata
percentage
of
"
available"
stocks,
which
may
be
an
lesser
amount
than
the
aggregate
of
existing
stocks
held
by
all
the
companies,
and
therefore
not
the
actual
amount
held
by
each
of
the
companies.
EPA
seeks
comment
on
whether
this
approach
would
reconcile
its
competing
obligations
to
provide
notice
to
the
public
and
to
protect
confidential
business
information.

E.
Are
Allowances
to
be
Allocated
on
a
Sector­
Specific
Basis
or
as
One
Lump
Sum
for
All
Sectors?
Decision
Ex
I/
3
(
4)
states
that,
"
Parties
should
endeavor
to
allocate
quantities
of
methyl
bromide"
in
accordance
with
the
recommendations
made
by
the
Technology
and
Economic
Assessment
Panel
(
TEAP)
as
listed
in
agreed
critical­
use
categories.
EPA
is
therefore
requesting
comment
on
a
sector­
based
allocation
of
allowances,
as
well
as
several
other
more
flexible
methods
for
making
allocations.
Under
a
sector­
specific
option,
in
2005
EPA
would
create
and
allocate
16
different
types
of
CUAs,
one
type
for
each
end
use
category
authorized
by
the
Parties.
End
users
of
methyl
bromide
made
applications
to
EPA
for
an
exemption
and
the
U.
S.
government
created
a
nomination
of
uses
with
similar
circumstances
to
be
considered
by
the
Parties.
These
nominations
aggregated
similar
circumstances
of
methyl
bromide
use
into
sectors.
In
a
sector­
specific
allocation
scheme,
each
producer
and
importer
of
methyl
bromide
would
be
allocated
16
different
types
of
CUAs
on
a
pro­
rata
basis
in
relation
to
their
overall
1991
consumption
baseline.
For
example,
assume
producer
A
has
a
consumption
baseline
that
equals
50%
of
total
allowable
U.
S.
consumption.
If
the
Parties
authorized
new
production
of
100
kilograms
of
methyl
bromide
for
tomatoes
and
20
kilograms
of
methyl
bromide
for
flower
nurseries,
EPA
would
allocate
50
tomato
critical
use
allowances
(
tomato
CUAs)
and
10
flower
nursery
critical
use
allowances
(
flower
nursery
CUAs)
to
company
A.
See
Section
VI.
N.
below
for
the
proposed
sector­
specific
allocation
of
CUAs
to
individual
producers
and
importers.
The
methyl
bromide
produced
or
DRAFT
EPA
DOCUMENT
­
25­
imported
with
a
tomato
CUA
could
only
be
sold
and
used
for
growing
tomatoes
by
an
approved
critical
user
that
has
the
limiting
critical
conditions
cited
as
the
basis
for
the
critical
methyl
bromide
need
in
the
nomination
that
was
subsequently
authorized
by
the
Parties.
EPA
recognizes
that
not
all
allowance
holders
may
want
or
need
allowances
of
all
types.
For
example,
some
allowance
holders
may
supply
only
certain
geographic
markets
or
certain
sectors.
If
EPA
were
to
implement
an
allocation
scheme,
such
as
a
sector­
specific
system,
that
is
more
restrictive
than
the
current
market,
EPA
would
permit
allowance
trading
amongst
allowance
holders.
Section
607
of
the
CAA
allows
for
trading
in
part
to
encourage
rationalization
in
the
industry.
It
would
be
difficult
for
EPA
to
know
exactly
which
company
services
which
particular
group
of
end
users.
However,
the
market­
based
mechanisms
(
transfers
of
allowances)
described
later
in
this
preamble
may
rectify
such
issues
under
a
sector­
specific
allocation
scheme.
In
light
of
these
issues,
EPA
requests
comment
on
the
option
of
creating
one
pool
of
CUAs
and
one
pool
of
CSAs
that
can
be
used
to
supply
critical
use
methyl
bromide
across
sectors
in
what
is
known
as
a
"
lump
sum"
or
"
universal"
approach.
This
means
that
critical
use
methyl
bromide
produced
or
imported
with
CUAs
could
be
used
for
any
of
the
agreed
critical­
use
categories.
Likewise,
with
a
lump
sum
allocation
of
critical
stock
allowances
(
CSAs),
the
limited
inventory
that
is
available
for
sale
into
the
critical
use
market
would
be
for
any
of
the
agreed
critical­
use
categories.
EPA
also
requests
comment
on
making
allowances
specific
to
applicants.
Under
this
option,
in
2005
EPA
would
create
and
allocate
51
different
types
of
CUAs
and
51
different
types
of
CSAs,
one
for
each
authorized
applicant.
Again,
these
allowances
would
be
distributed
to
producers
and
importers
in
a
pro­
rated
fashion
and
would
be
tradable
amongst
them.
EPA
recognizes
that
the
more
types
of
allowances
we
create,
the
more
administratively
and
logistically
complex
the
regulation
becomes
for
the
regulated
community.
With
added
administrative
complexity
generally
comes
higher
costs
of
implementation
and
greater
inflexibility
in
the
market.
EPA
also
is
requesting
comment
on
a
hybrid
approach
that
would
create
sector­
or
applicant­
specific
CUAs
and
universal
or
"
lump
sum"
CSAs.
EPA
realizes
that
stocks
may
be
held
by
distributors
and
applicators.
Unlike
producers
and
importers
whom
EPA
has
historically
regulated,
some
of
these
entities
are
smaller
or
more
specialized.
For
example,
EPA
is
aware
of
a
distributor
and
custom
applicator
based
on
the
East
Coast
that
only
services
customers
in
the
eastern
part
of
the
U.
S.
It
is
unlikely
that
this
East
Coast
distributor
and
applicator
will
have
any
customers
from
the
California
fruit
tree
nursery
sector
that
was
authorized
for
critical
use
methyl
bromide,
since
this
is
a
region
the
distributor
and
applicator
does
not
service.
Thus,
an
allocation
of
fruit
tree
nursery
CSAs
would
be
of
little
practical
use
to
this
company.
If
the
allocation
were
sector­
specific,
the
company
could
trade
its
fruit
tree
nursery
CSAs
with
one
of
the
distributor/
applicator
companies
that
operates
in
California.
However,
if
the
company
on
the
east
coast
was
allocated
only
a
small
number
of
fruit
tree
nursery
CSAs,
it
may
not
be
worth
the
time
and
cost
to
find
a
suitable
trading
partner
and
engage
in
the
trade.
Therefore,
EPA
is
also
requesting
comment
on
an
allocation
scheme
that
would
have
sector­
specific
or
even
applicantspecific
CUAs,
but
universal
CSAs.
The
universal
CSAs
would
alleviate
problems
associated
with
dividing
small
quantities
of
inventories
scattered
throughout
the
distribution
system
into
many
different
types
of
end
uses
that
may
be
of
little
use
to
a
distributor
in
a
specific
geographic
DRAFT
EPA
DOCUMENT
­
26­
location.
In
addition,
the
universal
CSAs
would
provide
some
flexibility
to
the
end
user
community
in
the
event
that
unanticipated
market
forces
drive
up
demand
in
a
particularly
commodity
area
or
pest
outbreaks
in
a
particular
crop
are
unusually
high
in
a
particular
growing
season.
EPA
is
also
requesting
comment
on
making
CUAs
and
CSAs
universal
but
requiring
distributors
and
others
who
sell
methyl
bromide
directly
to
end
users
to
"
endeavor"
to
make
quantities
of
critical
use
methyl
bromide
available
to
their
customers
as
prescribed
in
Decision
Ex
I/
3
annex
II
a.
This
option
would
rely
on
entities
at
the
point
of
sale
to
ration
methyl
bromide
to
their
customers
the
same
way
they
have
been
doing
under
the
phaseout
­­
based
on
each
clients
historical
purchases
­­
in
essence
giving
each
sector
(
customer)
the
right
of
first
refusal
to
a
specific
quantity
of
methyl
bromide.
However,
under
a
scheme
where
distributors
endeavor
to
make
the
critical
use
methyl
bromide
available
in
accordance
with
the
quantities
associated
with
specific­
sectors
in
annex
II
a
of
Decision
Ex
I/
3,
the
methyl
bromide,
whether
from
CUAs
or
CSAs
would
still
be
"
universal,"
and
distributors
would
have
the
flexibility
to
move
quantities
of
critical
use
methyl
bromide
from
one
sector
that
does
not
need
their
full
amount,
to
another
sector
that
may
have
higher
than
anticipated
need.
Finally,
regarding
the
allocation
of
critical
use
allowances
(
CUAs)
for
new
production
and
import
of
methyl
bromide
after
the
January
1,
2005
phaseout,
EPA
is
seeking
comments
on
whether
a
percentage
should
be
allocated
on
a
sector­
specific
basis
and
a
percentage
should
be
allocated
in
a
universal,
lump
sum
basis.
This
option
of
allocating
a
percentage
of
the
CUAs
as
sector­
specific
and
a
percentage
of
CUAs
as
universal
would
provide
some
measure
of
certainty
for
each
applicant
as
well
as
providing
flexibility
if
a
few
of
the
sectors
faced
greater
need
for
methyl
bromide
in
the
2005
control
period.
EPA
is
seeking
comments
on
these
hybrid
approaches
and
in
particular,
comments
on
what
portion
of
the
authorized
quantity
should
be
made
sector­
or
applicant­
specific,
if
any,
and
what
portion
should
be
made
universal
through
any
allocation
scheme.
Under
a
universal
allocation
system,
EPA
anticipates
that
the
actual
critical
use
will
closely
follow
the
sector
breakout
listed
by
the
TEAP
and
incorporated
into
Decision
Ex
I/
3.
[
We
are
skeptical
of
the
previous
statement.
Is
there
a
sufficient
basis
for
this?]
The
TEAP
recommendations
are
based
on
data
submitted
by
the
U.
S.
which
in
turn
are
based
on
recent
historic
use
data
under
the
current
methyl
bromide
phaseout
market
which
is
a
"
universal"
system.
In
other
words,
the
TEAP
recommendations
agreed
to
by
the
Parties
are
based
on
current
use
and
the
current
uses
are
taking
place
in
a
marketplace
where
all
methyl
bromide
users
compete
for
the
lump
sum.
Thus,
EPA
expects
that
2005
use
under
a
universal
approach
will
look
similar
to
the
TEAP
recommendations
and
annex
II
a
in
Decision
Ex
I/
3.
To
the
extent
that
any
discrepancies
between
expected
and
actual
use
in
2005
occurs,
a
later
section
of
today's
proposed
rulemaking
describes
tracking
and
reporting
requirements
that
will
help
verify
actual
use
by
sector
and
help
refine
future
U.
S.
nominations
for
critical
use
exemptions
by
highlighting
differences
between
amounts
nominated
for
a
sector,
recommended
by
TEAP,
and
agreed
by
the
Parties
and
the
actual
use
by
that
sector
during
the
2005
control
period.
EPA
believes
that
a
more
restrictive
allocation
based
on
sector­
or
applicant­
specific
categories
would
provide
some
certainty
to
each
sector
or
group
of
applicants
that
a
defined
DRAFT
EPA
DOCUMENT
­
27­
amount
of
methyl
bromide
would
be
available
for
that
particular
user
group.
However,
under
this
system,
if
a
user
group
did
not
use
its
entire
allowable
amount
of
methyl
bromide,
it
would
not
be
available
for
other
approved
critical
users.
So
too,
if
a
group
needed
more
methyl
bromide
because
they
had
a
particularly
bad
pest
infestation
or
demand
for
their
product
suddenly
increased,
the
group
would
not
be
able
to
secure
additional
quantities
without
first
seeking
approval
from
the
Parties
during
the
annual
nomination
process
and
obtaining
a
higher
allocation
through
EPA's
subsequent
notice­
and­
comment
rulemaking.
A
more
restrictive
sector­
or
applicant­
specific
allocation
provides
more
certainty
to
each
group
but
at
the
cost
of
flexibility.
EPA
would
like
to
note
that
currently
the
methyl
bromide
market
under
the
phaseout
reductions
(
since
1994)
operates
as
a
"
universal"
system.
All
end
users
of
methyl
bromide
compete
in
the
same
marketplace
for
methyl
bromide
under
the
phaseout
regulations.
[
This
language
would
make
things
very
difficult
for
us
in
international
fora.]
In
addition
to
the
logistic
and
administrative
reasons
for
implementing
a
universal
allocation
scheme,
there
are
significant
economic
reasons
to
implement
such
a
lump
sum
approach.
The
more
restrictive
the
methyl
bromide
caps
are,
the
less
efficient
the
distribution
of
methyl
bromide
one
would
expect
in
the
market.
According
to
economic
theory,
under
a
universal
cap,
methyl
bromide
would
go
to
those
users
with
the
highest
marginal
cost
of
substitution
who
would
set
the
price
of
methyl
bromide.
This
price
of
methyl
bromide
would
lead
those
users
with
marginal
costs
of
substitution
lower
than
the
price
of
methyl
bromide
to
move
instead
to
an
alternative
that
may
not
have
been
previously
economically
feasible,
thus
resulting
in
a
comparatively
more
efficient
distribution
of
material
and
an
overall
lower
cost
of
compliance
for
the
regulated
community
as
a
whole.
EPA
estimates
that
the
benefits
to
industry
(
the
analysis
discussed
below
refers
to
negative
costs)
of
an
illustrative
sector­
specific
approach
may
be
between
$
20
to
$
27
million;
while
the
benefits
(
negative
costs)
to
industry
under
an
illustrative
universal
approach
would
be
$
22
to
$
31
million
(
see
section
VII
a
for
more
information
on
this
analysis).
Thus,
the
universal
approach
results
in
a
less
expensive
regulation
to
industry
overall.
However,
to
the
extent
that
cost
savings
from
the
universal
approach
accrue
to
the
industry
as
a
whole,
many
stakeholders
may
prefer
the
security
of
knowing
that
a
certain
amount
of
methyl
bromide
is
set
aside
for
their
specific
end
use
compared
to
the
theoretical
cost
savings
that
could
be
realized
under
a
less
restrictive
approach.
[
It
would
be
better
to
communicate
this
idea
more
tersely,
as
suggested
in
the
next
paragraph.]
In
today's
action,
EPA
is
seeking
comments
on
several
different
methods
for
allocating
allowances
from
more
specific
than
the
agreed
critical­
use
categories
to
less
specific.
The
circumstances
that
are
the
basis
for
the
U.
S.
sector
nominations
and
the
TEAP
recommendations
for
specific
sectors
may
have
changed
since
that
data
was
submitted.
However,
since
EPA
will
not
make
more
critical
use
methyl
bromide
available
than
the
amount
authorized
by
the
Parties,
this
proposed
rulemaking
provides
stakeholders
with
the
opportunity
to
request
flexibility
in
how
the
material
is
made
available
to
accommodate
changes
in
the
marketplace
that
have
transpired
since
the
TEAP
review.
This
NPRM
represents
part
of
EPA's
endeavor
to
allocate
methyl
bromide
in
accordance
with
TEAP's
recommendations,
but
the
possibility
exists
that
a
sectorspecific
allocation
scheme
would
be
unworkable.
Thus,
EPA
seeks
comment
on
the
universal,
sector­
specific,
application­
specific,
and
hybrid
methods
for
allocating
CUAs
and
CSAs.
EPA
DRAFT
EPA
DOCUMENT
­
28­
will
evaluate
and
reconcile
these
comments
and
then
publish
a
final
rule
that
describes
how
allowances
will
be
distributed.

F.
How
Many
Critical
Use
Allowances
(
CUAs)
and
Critical
Stockpile
Allowances
(
CSAs)
Will
Producers,
Importers
and
Distributers
be
Allocated?
Using
the
methodology
described
in
the
immediately
preceding
sections
of
this
proposed
rulemaking,
EPA
proposes
the
following
allocation
of
critical
use
allowances
and
critical
stock
allowances.
In
today's
proposal,
EPA
is
taking
comment
on
options
that
would
allow
for
sectorspecific
allocations
of
critical
use
allowances(
CUAs),
or
for
a
universal
allocation
of
critical
use
allowances
(
CUAs).
In
addition,
today's
action,
proposes
a
universal
allocation
of
critical
stock
allowances
(
CSAs).
The
distribution
of
CUAs
to
specific
producers
and
importers
of
methyl
bromide
is
as
follows
for
a
universal
allocation
(
Table
I),
and
for
a
sector­
specific
allocation
(
Table
II).
The
proposed
distribution
of
CSAs
would
be
as
follows
for
a
universal
allocation
(
Table
III),
unless
EPA
receives
new
information
in
response
to
the
Section
114
request
published
elsewhere
in
today's
Federal
Register.

Table
I­
Critical
Use
Allowance
Allocation
for
the
Calendar
Year
2005
(
Universal)

Company
/
Universal
Allocation
Number
of
Critical
Use
Allowances
(
kilograms)

Great
Lakes
Chemical
Corporation
4,427,693
Albemarle
Corportion
1,820,736
AmeriBrom,
Inc.
1,005,814
Trical,
Inc.
31,171
Total
7,285,414
Table
II­
Critical
Use
Allowance
Allocation
for
the
Calendar
Year
2005
(
Sector
Specific)

Sector­
Specific
Allocation
Number
of
Critical
Use
Allowances
(
kilograms)
for
each
Company
for
Each
Sector
Approved
Critical­
Use
Sectors
Great
Lakes
Chemical
Corporation
Albemarle
Corporation
Ameribrom,
Inc
Trical,
Inc.

Chrysanthemum
cuttings
­
rose
plants
14,563
5,989
3,308
103
Curcurbits
­
field
588,133
241,850
133,603
4,141
Dried
fruit,
beans
and
nuts
42,955
17,664
9,758
302
DRAFT
EPA
DOCUMENT
­
29­
Eggplant
­
field
36,423
14,978
8,274
256
Forest
tree
nurseries
95,323
39,198
21,654
671
Fruit
tree
nurseries
22,678
9,325
5,152
160
Ginger
production
­
field
4,555
1,873
1,035
32
Mills
and
processors
239,155
98,344
54,327
1,684
Orchard
replant
349,660
143,785
79,430
2,462
Peppers
­
field
537,381
220,979
122,074
3,783
Smokehouse
ham
449
185
102
3
Strawberry
fruit
­
field
908,020
373,392
206,269
6,393
Strawberry
runners
27,227
11,196
6,185
192
Sweet
potato
­
field
40,023
16,458
9,092
282
Tomato
­
field
1,418,739
583,408
322,287
9,988
Turfgrass
102,409
42,112
23,264
721
TOTAL
4,427,693
1,820,736
1,005,814
31,173
Table
III­
Critical
Stock
Allowance
Allocation
Company
Number
of
Critical
Stock
Allowances
(
kilograms)

Company
A...
...
reserved
Company
B...
...
reserved
pending
resolution
of
CBI
claim
and
Section
114
request
Total
1,656,800
G.
What
are
the
Tracking
Requirements
for
a
Sector­
or
Applicant­
Specific
Allocation?
In
the
event
that
EPA
puts
in
place
a
final
rule
that
issues
sector­
or
applicant­
specific
allowances,
EPA
must
devise
a
system
that
would
ensures
compliance
with
the
sector/
applicant
level
caps.
EPA
believes
that
tracking
types
of
allowances
expended
(
e.
g.
pepper
CUAs)
in
order
to
ensure
compliance
with
a
sector
cap
is
essentially
an
accounting
question
and
is
therefore
seeking
comment
on
a
system
that
controls
sector­
or
applicant­
level
production
and
import
through
different
types
of
CUAs.
EPA
seeks
comment
on
a
system
where
entities
in
the
supply
chain
such
as
producers,
importers,
and
distributors
would
create
and
keep
an
on­
going
log
of
the
DRAFT
EPA
DOCUMENT
­
30­
amount
and
type
of
critical
use
methyl
bromide
(
i.
e.,
eggplant
CUAs),
on
a
per
kilogram
basis,
that
they
acquire
and
sell
during
the
year.
In
addition,
entities
that
acquire
critical
use
methyl
bromide
from
a
supplier
would
sign
a
self
certification
form
indicating
that
they
understand
they
are
taking
possession
of
a
certain
number
of
kilograms
of
critical
use
methyl
bromide
of
a
specific
type.
EPA
believes
that
it
is
the
responsibility
of
the
distributor
or
other
supplier
to
place
orders
with
producers
or
importers
for
critical
use
methyl
bromide
of
the
appropriate
type
to
meet
the
needs
of
their
customers
which
means
that
a
distributor
may
have
to
call
more
than
one
company
to
find
the
correct
type
of
material
in
sufficient
quantity
to
meet
demand
(
see
Sections
VI.
L.
and
VI.
M.
for
more
information
on
record
keeping
and
reporting
requirements).
EPA
received
a
suggestion
during
the
public
meetings
on
potential
allocation
framework
options
held
during
the
summer
of
2003
to
require
the
use
of
a
database
system
to
track
critical
use
methyl
bromide.
Currently,
a
real
time
database
system
is
being
used
in
the
state
of
California
to
track
the
use
of
1,3­
dichloropropene
and
ensure
that
the
township
caps
are
not
exceeded.
Under
this
option,
EPA
would
require
registrants
to
populate
the
database
with
information
on
the
allowable
critical
uses,
the
approved
critical
users,
and
the
amount
of
critical
use
methyl
bromide
produced,
imported
or
available
from
critical
stockpiles.
Distributors
and
applicators
would
consult
the
database
and
reserve
a
specific
amount
of
critical
use
methyl
bromide
when
an
order
is
placed
for
the
material
or
for
fumigation
with
critical
use
methyl
bromide.
The
reservation
would
freeze
the
amounts
of
critical
use
methyl
bromide
for
14
days
­­
at
which
point
the
company
that
made
the
reservation
would
lose
its
reservation
unless
it
indicated
that
the
material
had
already
been
used
in
a
fumigation.
This
database
could
be
created
by
EPA
through
a
contractor
or
EPA
could
require
regulated
entities
to
utilize
existing
commercial
database
programs.
EPA
believes
that
producers,
importers,
distributers,
and
applicators
would
likely
have
to
make
some
capital
expenditures
to
be
able
to
use
the
database
for
tracking
purposes.
EPA
believes
that
the
database
approach
would
provide
high
quality
use
data
on
critical
use
of
methyl
bromide
and
that
it
could
be
used
under
a
sector
specific
or
applicant
specific
approach
to
ensure
that
distributers
and
other
points
of
sale
do
not
exceed
total
allowable
amounts
of
critical
use
methyl
bromide
for
that
particular
use.
EPA
seeks
comment
on
the
use
of
a
commercially
available
database
system
to
track
the
sale
of
critical
use
methyl
bromide.

H.
How
Do
"
Approved
Critical
Users"
Acquire
Methyl
Bromide
Under
Today's
Proposal?
With
today's
action,
EPA
is
proposing
that
approved
critical
users
(
end
users)
within
an
agreed
critical­
use
sector,
that
also
have
the
"
limiting
critical
conditions"
for
their
specific
circumstances
of
use,
acquire
methyl
bromide
following
a
system
nearly
identical
to
the
existing
procedures
under
the
quarantine
and
preshipment
exemption
(
QPS)
to
the
phaseout
of
methyl
bromide
(
68
FR
237
(
January
2,
2003)).
The
phrases
"
approved
critical
user"
and
"
limiting
critical
condition"
are
further
discussed
below
in
Sections
H.
and
J.,
respectively.
EPA
proposes
that
approved
critical
users
of
methyl
bromide
who
wish
to
acquire
critical
use
methyl
bromide,
or
who
contract
for
fumigation
with
critical
use
methyl
bromide,
will
self
certify
that
they
are
approved
critical
users
at
the
time
of
purchase.
EPA
will
create
a
form
that
an
approved
critical
user
will
complete
with
basic
information
about
the
user
(
name,
location
of
fumigation,
consortium,
etc),
the
number
of
kilograms
to
be
purchased
and
the
area
to
be
treated,
the
agreed
DRAFT
EPA
DOCUMENT
­
31­
critical­
use
category
(
i.
e.
tomatoes,
bean
storage,
etc.),
and
a
check
list
of
the
applicable
limiting
critical
conditions
approved
by
EPA
and
the
Parties
(
e.
g.
karst
topography,
heavy
to
moderate
nutsedge
infestation).
The
form
would
be
signed
by
the
approved
critical
user
(
purchaser)
of
the
methyl
bromide
and
given
to
the
supplier
of
methyl
bromide
to
indicate
that
the
purchaser
is
acquiring
exempted
critical
use
methyl
bromide
from
the
supplier
to
use
in
accordance
with
the
exemption
and
bears
the
full
penalty
of
law
for
providing
false
information
or
for
use
that
is
not
in
accordance
with
the
critical
use
exemption
regulations.
Producers,
importers,
and
distributors
will
be
prohibited
from
selling
methyl
bromide
in
critical
use
categories
without
obtaining
a
self­
certification
from
an
approved
critical
user.
If
an
approved
critical
user
seeks
methyl
bromide
from
stocks
existing
prior
to
2005,
then
the
user
must
find
a
supplier
who
holds
a
sufficient
amount
of
critical
stock
allowances
(
CSAs)
to
sell
methyl
bromide
to
an
agreed
critical­
use
category.
To
obtain
methyl
bromide
produced
or
imported
in
2005
under
the
exemption,
the
approved
critical
user
must
go
to
a
supplier
who
has
methyl
bromide
newly
produced
or
imported
through
expended
2005
critical
use
allowances
(
CUAs).
EPA
requests
comment
on
the
proposed
self
certification
system.

I.
Who
is
an
Approved
Critical
User?
An
"
approved
critical
user"
is
an
entity
whose
circumstance
of
methyl
bromide
use
is
covered
by
an
application
that
is
included
in
the
U.
S.
nomination
and
subsequently
authorized
by
a
Decision
of
the
Parties
to
the
Montreal
Protocol
for
a
critical
use
exemption
and
then
determined,
through
an
EPA
notice­
and­
comment
rulemaking,
to
be
eligible
for
exempted
critical
use
methyl
bromide
(
see
Section
A.
of
this
proposed
rulemaking).
Thus,
EPA
proposes
to
define
an
"
approved
critical
user"
as
a
person
meeting
the
following
two
criteria:
(
1)
The
user,
for
the
applicable
control
period,
applied
to
EPA
for
a
critical
use
exemption
or
is
a
member
of
a
consortium
that
applied
for
a
critical
use
exemption
for
a
use
that
was
included
in
the
U.
S.
nomination,
authorized
by
a
Decision
of
the
Parties
to
the
Montreal
Protocol,
and
then
finally
determined
by
EPA
in
a
noticeand
comment
rulemaking
to
be
a
critical
use,
AND
(
2)
The
user
has
an
area
that
requires
methyl
bromide
fumigation
because
the
area
is
subject
to
a
limiting
critical
condition.
To
summarize,
EPA
proposes
that
in
order
to
be
an
approved
critical
user,
a
user
must
have
the
circumstances
of
methyl
bromide
use
included
in
an
application
for
the
specific
control
period
that
was
nominated
by
the
U.
S.
for
a
critical
use
exemption
which
was
subsequently
authorized
by
the
Parties
to
the
Protocol
and
determined
by
EPA
through
notice­
and­
comment
rulemaking
to
be
a
critical
use
with
the
limiting
critical
condition
in
their
circumstance
of
use
of
methyl
bromide.

J.
Can
New
Market
Entrants
or
New
Consortia
Members
be
Approved
Critical
Users?
EPA
proposes
that
an
approved
critical
user
can
include
a
member
of
a
consortium
during
the
control
period
even
if
the
user
was
not
a
member
at
the
time
the
application
was
submitted
to
EPA.
In
today's
proposal,
EPA
is
defining
consortium
as
an
organization
representing
a
group
of
DRAFT
EPA
DOCUMENT
­
32­
methyl
bromide
users
that
has
collectively
submitted
an
application
for
a
critical
use
exemption
on
behalf
of
all
members
of
the
group.
The
members
of
a
consortium
would
be
determined
by
the
rules
established
by
the
consortium.
Members
could
either
be
required
to
formally
join
the
consortium
(
i.
e.,
by
submitting
an
application
or
paying
dues)
or
may
automatically
become
members
upon
meeting
particular
criteria
(
i.
e.
a
grower
of
a
specific
crop
in
a
particular
region).
EPA
does
not
believe
that
it
is
up
to
the
Agency
or
to
distributors
and
third
party
applicators
of
methyl
bromide
to
discern
between
different
types
of
consortium
members.
For
example,
the
Auburn
University
Cooperative
consists
of
a
certain
number
of
forest
seedling
nursery
operators.
The
Cooperative
made
an
application
to
EPA
for
a
critical
use
exemption
that
only
included
its
members.
Therefore,
only
members
of
the
Cooperative
would
qualify
as
approved
critical
users
pursuant
to
the
consortium's
application.
However,
if
a
company
that
was
not
a
member
of
the
Cooperative
at
the
time
of
the
application
in
2002
decided
to
join
the
cooperative
in
2004,
EPA
is
proposing
that
the
company
be
eligible
to
access
critical
use
methyl
bromide
available
to
members
of
the
consortium
once
the
exemption
takes
effect
in
2005
since
the
company
would
be
a
member
of
the
Cooperative
during
the
control
period.
A
second
example
is
the
California
Strawberry
Commission,
which
made
an
application
to
EPA
to
cover
all
strawberry
growers
in
the
state
of
California.
Because
the
initial
application
was
made
on
behalf
of
all
growers
in
that
state,
any
strawberry
grower
in
California
regardless
of
the
date
when
he
first
entered
the
market
is
considered
by
EPA
to
be
a
member
of
the
consortium.
Thus,
a
new
strawberry
grower
who
enters
the
market
in
California
in
2005
and
who
meets
the
limiting
critical
condition
for
the
agreed
critical­
use
category
would
be
able
to
access
the
critical
use
methyl
bromide
under
the
framework
set
forth
in
today's
proposal.
In
summary,
EPA
proposes
that
an
approved
critical
user
may
include
an
entity
who
newly
enters
the
market
of
a
crop/
use
that
has
a
limiting
critical
condition;
an
entity
who
switches
to
a
crop/
use
that
has
a
limiting
critical
condition;
an
entity
who
increases
production
of
a
crop/
use
that
has
a
limiting
critical
condition;
or
an
entity
who
switches
production
of
a
crop/
use
with
a
limiting
critical
condition
from
one
physical
location
to
another.
In
each
instance,
such
an
entity
would
need
to
meet
the
limiting
critical
condition
and
qualify
as
a
member
of
consortium
that
applied
for
and
obtained
a
critical
use
exemption.
Under
the
second
example
described
above,
any
consortium
that
applied
for
an
exemption
for
a
broad
geographic
group
of
users
may
in
fact
be
encouraging
free
riders.
However,
EPA
believes
that
those
consortia
that
applied
on
behalf
of
an
entire
state
or
region
in
their
initial
application
believe
that
all
users
in
that
location
need
a
critical
use
exemption
based
on
technical
and
economic
criteria.
Therefore,
if
a
new
user
enters
the
market
place
in
that
same
location,
EPA
believes
that
the
user
would
have
automatically
become
a
member
of
the
consortium
as
if
he
had
entered
the
market
at
the
time
the
application
was
made.
Therefore,
the
only
remaining
relevant
question
is
whether
or
not
the
new
market
entrant
in
the
geographic
area
meets
the
limiting
critical
condition
and
therefore
may
be
an
approved
critical
user.
In
public
meetings,
EPA
received
a
suggestion
from
the
affected
community
which
called
for
allowing
critical
use
exemptions
to
only
be
made
available
to
those
users
who
are
"
users
of
record."
A
user
of
record
was
suggested
to
be
an
approved
critical
user
who
was
engaged
in
production
of
a
crop
or
commodity
in
a
critically­
exempted
sector
immediately
prior
to
the
DRAFT
EPA
DOCUMENT
­
33­
control
period.
The
effect
of
such
a
provision
would
be
to
require
any
entity
that
was
not
a
user
of
record
to
use
an
alternative
to
methyl
bromide
for
the
first
year
it
engages
in
crop
or
commodity
production.
After
the
first
year,
the
new
market
entrant
would
become
a
user
of
record
and
would
be
able
to
avail
himself
of
critical
use
methyl
bromide.
EPA
believes
that
this
system
may
provide
an
incentive
for
new
entrants
to
try
alternatives
to
methyl
bromide.
However,
this
system
would
be
difficult
to
administer
outside
of
the
state
of
California
where
such
information
is
already
tracked
by
state
regulators.
In
addition,
critical
use
methyl
bromide
will
only
be
available
for
those
users
who
do
not
have
any
technically
and
economically
feasible
alternatives
available
to
them;
therefore,
a
requirement
such
as
the
one
suggested
would
foreclose
any
new
entrants
altogether.
EPA
believes
that
in
order
to
accommodate
the
ever
shifting
marketplace,
growers
and
other
users
of
methyl
bromide
should
be
allowed
to
increase
or
move
production
as
needed
so
long
as
total
U.
S.
production
and
import
of
methyl
bromide
for
use
in
a
given
sector
remains
under
the
limits
authorized
by
the
Parties
and
determined
to
be
a
critical
use
in
the
U.
S.
through
notice­
and­
comment
rulemaking.
Therefore
EPA
is
proposing
an
option
in
today's
notice
that
allows
for
shifts
in
the
marketplace
(
market
entry
and
exit,
and
rotation
into
new
production
areas)
while
still
ensuring
fairness
to
those
groups
who
applied
for
a
CUE.
It
is
important
to
note
that
the
amount
of
methyl
bromide
that
may
be
supplied
for
critical
uses
in
a
calendar
year
(
control
period)
will
not
increase
even
if
the
number
of
users
or
treated
area
increases.
The
only
way
the
amount
of
methyl
bromide
available
for
critical
uses
will
be
increased
is
if
the
Parties
authorize
such
an
increase
and
EPA
incorporates
the
increase
into
its
phaseout
regulation
through
notice­
and­
comment
rulemaking,
a
lengthy
process.
Under
the
proposed
framework
outlined
in
this
section,
users
who
have
the
limiting
critical
condition
but
who
are
not
users
or
members
of
a
group
of
users
that
submitted
an
application
to
EPA,
are
not
eligible
critical
users.
For
example,
a
consortium
applied
on
behalf
of
certain
raspberry
nurseries
in
California
and
Oregon.
This
use
was
determined
by
EPA
to
qualify
for
an
exemption
because
of
the
limiting
critical
condition
that
there
are
no
technically
feasible
alternatives
which
provide
adequate
control
of
pests
for
raspberry
nursery
propagative
stock.
If
a
raspberry
nursery
operator
in
California
met
the
limiting
critical
condition
but
was
not
a
member
of
the
consortium
and
needed
to
buy
methyl
bromide,
under
the
proposed
option,
they
would
not
be
an
approved
critical
user
because
the
application
that
was
made
to
EPA
was
not
on
behalf
of
all
growers
in
California,
only
certain
identified
companies.
EPA
did
consider
allowing
such
a
person
to
acquire
critically
exempted
material.
EPA
decided
not
to
propose
this
option
in
order
to
discourage
free
riders
who
did
not
invest
the
time
and
effort
to
apply
for
an
exemption
or
even
join
a
consortium
that
submitted
an
application.
EPA
understands
that
users
who
applied
for
an
exemption
sometimes
spent
hundreds
of
hours
preparing
an
application
for
a
critical
use
exemption.
EPA
recommends
that
users
who
did
not
submit
an
application
or
are
not
part
of
a
consortia,
consult
with
USDA
or
EPA
immediately
to
determine
if
they
could
be
included
in
the
next
U.
S.
nomination
of
critical
uses.
Such
users
should
also
consider
contacting
any
consortium
that
applied
for
an
exemption
for
their
use
category.
EPA
is
seeking
comment
on
this
manner
of
treating
new
market
entrants
and
users
of
methyl
bromide
that
were
not
part
of
the
consortia
or
companies
that
submitted
applications
for
critical
use
exemptions.
DRAFT
EPA
DOCUMENT
­
34­
K.
What
Uses
and
"
Limiting
Critical
Condition"
are
Permitted
Access
to
the
Methyl
Bromide
under
the
Critical
Use
Exemption?
A
"
limiting
critical
condition"
is
the
basis
on
which
the
critical
need
for
methyl
bromide
is
demonstrated
and
authorized.
The
limiting
critical
condition
placed
on
a
use
category
reflects
certain
regulatory,
technical
or
economic
factors
that
either
prohibit
the
use
of
feasible
alternatives
or
represent
the
lack
of
a
technically
or
economically
feasible
alternative
for
that
use
or
circumstance.
For
example,
EPA
may
determine
that
a
critical
use
exemption
for
tomatoes
is
only
necessary
for
areas
of
tomato
production
in
karst
topography
even
if
the
EPA
received
applications
for
all
of
U.
S.
fresh
market
tomato
production.
In
this
example,
not
all
tomato
growers
would
be
eligible
to
acquire
exempted
critical
use
methyl
bromide.
Only
those
growers
with
production
in
an
area
with
the
limiting
critical
condition
of
karst
topography
would
have
access
to
the
methyl
bromide
under
the
critical
use
exemption.
Another
example
is
as
follows:
EPA
received
applications
for
exemptions
for
all
U.
S.
grain
milling
companies
that
are
members
of
the
North
American
Milling
Association
(
NAMA).
The
Parties
authorized
the
exemption
because
grain
milling
companies
have
a
critical
need
for
methyl
bromide
because
the
alternatives
can
not
be
used,
in
part,
due
to
corrosivity
to
electronic
equipment.
Thus,
one
of
the
limiting
critical
conditions
for
this
critical
use
category
is
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity
from
fumigation
with
the
alternative.
All
grain
mills
that
are
members
of
NAMA
that
have
sensitive
electronic
equipment
would
be
able
to
acquire
and
use
critical
use
methyl
bromide.
Some
approved
critical
users
have
limiting
critical
conditions
that
are
contingent.
These
"
contingent
critical
uses"
are
those
uses
of
methyl
bromide
which
qualify
as
an
approved
critical
use
only
if
a
specified
condition
has
been
met.
For
example,
a
number
of
potential
critical
use
needs
for
methyl
bromide
in
California
currently
use
the
alternative
1,3­
Dichloropropene
(
1,3­
D)
in
various
formulations.
This
chemical
is
regulated
by
the
state
of
California
so
that
specific
townships
have
limits
on
the
amount
of
1,3­
D
that
can
be
used
over
a
given
time
period.
Certain
of
the
agreed
critical­
use
categories
in
Decision
Ex
I/
3
may
have
a
contingent
need
for
critical
use
methyl
bromide
in
the
event
that
the
township
cap
for
1,3­
D
has
been
reached
or
exceeded.
EPA
proposes
that
producers
and
importers
be
allowed
to
produce
and
import
critical
use
methyl
bromide
for
contingent
uses
at
any
time
during
the
control
period.
However,
EPA
is
proposing
that
unused
methyl
bromide
produced
or
imported
for
such
contingent
purposes
will
be
deducted
from
the
total
number
of
CUAs
that
EPA
makes
available
for
the
following
control
period
(
it
would
become
stocks
available
for
the
use
in
the
subsequent
control
periods).
Below
EPA
describes
the
"
limiting
critical
conditions"
for
each
of
the
agreed
critical­
use
categories
in
Decision
Ex
I/
3.
EPA
seeks
comment
on
these
"
limiting
critical
conditions"
proposed
for
each
agreed
critical­
use
category
in
Decision
Ex
I/
3.
EPA
seeks
comment
on
the
uses
of
methyl
bromide
and
the
limiting
critical
conditions
the
Agency
has
determined
meet
the
criteria
for
a
critical
use
exemption
and
refers
commenters
to
the
E­
Docket
where
the
U.
S.
nominations,
additional
responses
to
MBTOC,
and
a
memo
describing
the
determination
process
are
available.
EPA
wishes
to
note
that
while
we
may,
in
response
to
comments,
reduce
the
types
and
conditions
of
a
critical
use
compared
to
what
has
been
authorized
by
the
Parties,
EPA
will
not
increase
the
quantities,
and
sectors,
beyond
those
authorized
by
the
Parties.
Section
2H(
5)
of
the
DRAFT
EPA
DOCUMENT
­
35­
Protocol
limits
the
critical
use
exemption
to
those
uses
agreed
upon
by
the
Parties.
The
agreed
critical
uses
for
2005
are
reflected
in
Decision
Ex.
I/
3.
EPA
based
the
proposed
"
limiting
critical
conditions"
on
the
data
submitted
by
critical
use
exemption
applicants,
as
well
as
public
and
propriety
data
sources.
The
U.
S.
government,
in
developing
the
nomination,
defined
the
limiting
critical
conditions
for
which
exempted
methyl
bromide
was
being
sought.
The
U.
S.
government
used
this
data
to
determine
if
(
a)
the
lack
of
availability
of
methyl
bromide
for
a
particular
use
would
result
in
significant
market
disruption,
and
(
b)
if
there
were
any
technically
and
economically
feasible
methyl
bromide
substitutes
available
to
the
user.
The
analysis
was
conducted
and
described
in
the
U.
S.
nomination
of
critical
uses.
This
nomination
was
then
sent
to
the
Parties
to
the
Protocol,
and
the
Parties
used
this
information
as
the
basis
for
the
decision
which
authorized
critical
uses.
Based
on
the
data
described
above,
EPA
determined
that
the
following
uses
with
the
limiting
critical
conditions
specified
below
qualify
to
obtain
and
use
critical
use
methyl
bromide.
EPA
proposes,
based
on
the
determination
described
in
the
U.
S.
nomination
and
its
supporting
documents,
that
users
who
are
in
a
specific
geographic
location,
identified
below,
or
who
are
members
of
a
specific
industry
consortia,
identified
below,
or
companies
specifically
identified
below,
are
approved
critical
users
provided
that
such
users
are
subject
to
the
specified
limiting
critical
condition.

PRE­
PLANT
USES
Cucurbits
a)
Michigan
growers
with
moderate
to
severe
fungal
pathogen
infestation;
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
and
Virginia
growers
with
moderate
to
severe
yellow
or
purple
nutsedge
infestation;
Eggplant
a)
Georgia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
fungal
pathogen
infestation;
b)
Florida
growers
with
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation
and/
or
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
fungal
pathogen
infestation
and/
or
karst
topography;
Forest
Seedlings
Approved
critical
users
listed
below
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
moderate
to
severe
disease
infestation.
a)
Members
of
the
Auburn
University
Southern
Forest
Nursery
Management
Cooperative
limited
to
growing
locations
in
Alabama,
Arkansas,
Florida,
Georgia,
Louisiana,
Mississippi,
North
Carolina,
Oklahoma,
South
Carolina,
Tennessee,
Texas,
and
Virginia;
b)
International
Paper
and
its
subsidiaries
limited
to
growing
locations
in
Arkansas,
Alabama,
Georgia,
South
Carolina
and,
Texas;
c)
Weyerhaeuser
Company
and
its
subsidiaries
limited
to
growing
locations
in
Alabama,
DRAFT
EPA
DOCUMENT
­
36­
Arkansas,
North
Carolina,
South
Carolina,
Oregon
and,
Washington;
d)
Public
(
government
owned)
seedling
nurseries
in
the
states
of
California,
Idaho,
Illinois,
Indiana,
Kansas,
Kentucky,
Maryland,
Missouri,
Nebraska,
New
Jersey,
Ohio,
Oregon,
Pennsylvania,
Utah,
Washington,
West
Virginia
and,
Wisconsin;
e)
Members
of
the
Nursery
Technology
Cooperative
limited
to
growing
locations
in
Oregon
and
Washington;
and
f)
Michigan
seedling
nurseries
Ginger
a)
Hawaii
growers
with
the
limiting
critical
condition
of
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
bacterial
wilt
infestation;
Orchard
Nursery
Seedlings
Approved
critical
users
listed
below
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
nematode
infestation,
medium
to
heavy
clay
soils,
and/
or
a
prohibition
of
on
the
use
of
1,3­
dichloropropene
products
due
to
reaching
local
township
limits
on
the
use
of
this
alternative;
a)
Members
of
the
Western
Raspberry
Nursery
Consortium
limited
to
growing
locations
in
California
and
Oregon
(
Driscoll's
raspberries
and
their
contract
growers
in
California
and
Oregon)
b)
Members
of
the
California
Association
of
Nurserymen­
Deciduous
Fruit
and
Nut
Tree
Growers
c)
Members
of
theCalifornia
Association
of
Nurserymen­
Citrus
and
Avocado
Growers
Orchard
Replant
Approved
critical
users
listed
below
with
one
or
more
of
the
following
limiting
critical
conditions:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
and/
or
medium
to
heavy
soils,
and/
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.
a)
California
stone
fruit
growers
b)
California
table
and
raisin
grape
growers
c)
California
walnut
growers
d)
California
Almond
growers
Ornamentals
a)
Yoder
Brothers
Inc.
for
use
in
chrysanthemum
production.
b)
California
rose
nurseries
prohibited
from
using
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
Peppers
a)
California
growers
with
the
limiting
critical
conditions
of
moderate
to
severe
fungal
pathogens,
and/
or
moderate
to
sever
disease
infestation,
and/
or
moderate
to
sever
nematode
infestation,
and/
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached;
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
DRAFT
EPA
DOCUMENT
­
37­
yellow
or
purple
nutsedge
infestation,
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less;
c)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
karst
topography;
Strawberry
Nurseries
a)
California
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
black
root
rot
or
crown
rot,
moderate
to
severe
nematode
infestation,
and/
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation;
b)
North
Carolina
and
Tennessee
growers
with
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less;
Strawberry
Fruit
a)
California
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
black
root
rot
or
crown
rot,
moderate
to
severe
nematode
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
a
prohibition
of
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached;
b)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge,
and/
or
karst
topography;
c)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
Virginia,
Ohio
and,
New
Jersey
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge,
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less;
Sweet
Potatoes
a)
California
growers
with
the
contingent
limiting
critical
condition
of
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached;
Tomatoes
a)
Michigan
growers
with
moderate
to
severe
disease
and/
or
fungal
pathogens;
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less;
c)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
karst
topography;
Turfgrass
a)
U.
S.
turfgrass
sod
nursery
producers
for
the
production
of
industry
certified
pure
sod
b)
U.
S.
golf
courses
establishing
sod
in
the
construction
of
new
golf
courses
or
the
renovation
of
putting
greens,
tees,
and
fairways.

POST­
HARVEST
USES
Food
Processing
Approved
critical
users
listed
below
with
one
or
more
of
the
following
limiting
DRAFT
EPA
DOCUMENT
­
38­
critical
conditions:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
and/
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity;
a)
Rice
millers
in
Arkansas,
California
Louisiana,
Florida,
Missouri,
and
Mississippi
b)
Pet
food
manufacturing
facilities
in
the
U.
S.
c)
Kraft
Foods
d)
Members
of
the
North
American
Millers'
Association
Commodity
Storage
a)
Smokehouse
ham
curing
in
facilities
owned
by
Gwaltney
of
Smithfield.
b)
Entities
storing
walnuts,
beans,
dried
plums,
and
pistachios
in
California
with
one
or
more
of
the
following
limiting
critical
conditions:
rapid
fumigation
is
required
to
meet
a
critical
market
window,
such
as
during
the
holiday
season,
rapid
fumigation
is
required
when
a
buyer
provides
short
(
2
days
or
less)
notification
for
a
purchase,
and/
or
there
is
a
short
period
after
harvest
in
which
to
fumigate
and
there
is
limited
silo
availability
for
using
alternatives.

L.
What
are
the
Reporting
Requirements?
In
today's
action,
EPA
is
proposing
that
producers
and
importers
of
critical
use
methyl
bromide
submit
quarterly
reports
to
EPA
on
the
number
of
kilograms
of
critical
use
allowances
(
CUAs)
expended
and
unexpended.
In
addition,
those
entities
that
sell
critical
use
methyl
bromide
to
end
users
shall
report
to
EPA
on
an
annual
basis,
the
total
amount
of
methyl
bromide
produced
or
imported
with
CUAs
during
the
control
period
for
each
sector.
For
example,
a
distributor
would
submit
an
annual
report
to
EPA
that
he
sold
1,000
kilograms
of
critical
use
methyl
bromide
for
pre­
plant
tomato
fumigation
and
500
kilograms
of
critical
use
methyl
bromide
for
pre­
plant
strawberry
fumigation.
EPA
is
further
proposing
that
producers,
importers,
distributors
and
applicators
allocated
critical
stock
allowances
(
CSAs)
file
quarterly
reports
to
EPA
on
the
number
of
expended
and
unexpended
CSAs
based
on
the
amount
of
methyl
bromide
stocks
sold
during
the
quarter
to
an
approved
critical
user
(
from
whom
a
self­
certification
was
received).
Information
collection
as
proposed
above
is
authorized
under
Sections
603(
b),
603(
d)
and
614(
b)
of
the
CAA.
EPA
believes
the
reporting
requirements
outlined
above
are
necessary
in
order
to
meet
U.
S.
reporting
obligations
under
Article
7
of
the
Protocol
and
CAA
reporting
requirements
to
Congress
under
Section
603(
d).

M.
What
are
the
Record­
Keeping
Requirements?
EPA
proposes
that
producers,
importers,
and
distributors
of
critical
use
methyl
bromide
maintain
self
certification
records
from
buyers
(
typically
wholesale
buyers)
for
3
years,
along
with
other
transactional
records
such
as
invoices
and
order
forms.
EPA
proposes
that
distributors,
third
party
applicators,
and
any
other
entities
that
directly
sell
critical
use
methyl
bromide
or
fumigation
services
to
approved
critical
users,
keep
self­
certification
records
signed
by
the
buyer
of
the
critical
use
methyl
bromide
(
whether
from
expended
CUAs
or
from
expended
CSAs)
on
file
for
3
years,
along
with
other
transactional
records
such
as
invoices
and
order
forms.
DRAFT
EPA
DOCUMENT
­
39­
N.
How
Often
will
Critical
Use
Allowances
(
CUAs)
be
Distributed
and
How
are
Allowances
Expended?
Through
a
notice­
and­
comment
rulemaking,
EPA
proposes
to
allocate
critical
use
allowances
(
CUAs)
on
an
annual
basis
consistent
with
authorizations
by
the
Parties
and
Section
604(
d)(
6)
of
the
CAA.
To
the
extent
that
the
Parties
continue
to
authorize
controls
on
available
stocks,
the
Agency
will
also
allocate
critical
stock
allowances
(
CSAs)
on
an
annual
basis.
EPA
proposes
to
allow
producers
and
importers
to
expend
their
critical
use
allowances
(
CUAs)
for
production
and
import
of
methyl
bromide
at
any
time
during
the
control
period
so
as
to
avoid
disruptions
in
the
supply
of
methyl
bromide.
However,
as
with
other
allowances
under
EPA's
phaseout
program
for
ozone­
depleting
substances,
EPA
is
proposing
that
companies
would
only
be
able
to
expend
CUAs
during
the
specified
control
period
(
calendar
year)
 
for
today's
proposed
action
that
would
be
during
2005.
In
other
words,
there
would
not
be
any
banking
of
unused
critical
use
allowances
(
CUAs)
from
control
period
to
control
period.
If
the
Parties'
decision
authorizing
2006
critical
use
exemptions
is
specific
about
controls
of
available
stocks,
then
the
Agency
would
discuss
such
a
control
in
its
notice­
and­
comment
rulemaking
for
the
2006
allocations.
In
developing
today's
action,
EPA
also
takes
comment
on
the
option
of
issuing
half
of
the
allowances
at
the
beginning
of
the
control
period
and
then
the
remainder
of
the
allowances
six
months
into
the
control
period.
Under
this
option,
EPA
would
publish
an
annual
rulemaking
before
the
start
of
the
control
period
indicating
how
many
allowances
of
each
type
could
be
expended
in
the
first
two
quarters
of
the
year
and
how
many
allowances
of
each
type
could
be
expended
in
the
later
two
quarters
of
the
year.
EPA
notes
there
are
many
steps
in
publishing
rulemakings,
many
of
which
can
be
timeconsuming.
Publishing
two
rulemakings
to
allocate
critical
use
allowances
for
a
given
year,
if
it
were
an
annual
process,
might
result
in
a
lapse
in
available
allowances
and
therefore
a
disruption
in
supply.
EPA
requests
comment
on
whether
this
option
addresses
concerns
regarding
the
availability
of
sufficient
critical
use
methyl
bromide
that
were
raised
by
entities
in
sectors
who
fumigate
later
in
the
calendar
year.
EPA
proposes
to
allow
producers
and
importers
to
expend
(
use)
their
allowances
for
production
and
import
of
methyl
bromide
at
any
time
during
the
control
period
so
as
to
avoid
disruptions
in
the
supply
of
methyl
bromide
(
See
Section
VI
B.
above
regarding
"
expending"
allowances).
However,
EPA
also
requests
comment
on
an
option
that
would
permit
allowances
to
be
expended
only
when
an
order
for
methyl
bromide
had
been
placed
by
a
distributor
or
some
other
purchaser
of
methyl
bromide,
making
a
so­
called
"
redeemable"
allowance
system
(
see
Section
VII.
on
a
redeemable
allowance
system).
EPA
believes
that
there
may
be
some
environmental
benefit
of
only
allowing
production
and
import
to
take
occur
once
an
order
is
placed.
However,
EPA
believes
that
such
an
approach
is
unlikely
to
result
in
significantly
less
critical
use
methyl
bromide
production,
importation
and
stockpile
draw
down,
and
would
be
more
disruptive
to
the
methyl
bromide
market.
EPA
is
proposing
to
allow
producers,
importers,
distributors,
applicators,
and
other
entities
that
hold
critical
stock
allowances
(
CSAs)
to
expend
their
stockpile
allowances
by
selling
a
corresponding
amount
of
methyl
bromide
stocks,
at
any
point
during
the
control
period.
Likewise,
the
Agency
is
proposing
that
producers
and
importers
allocated
critical
use
allowances
DRAFT
EPA
DOCUMENT
­
40­
(
CUAs)
would
be
able
to
expend
their
allowances
to
produce
or
import
methyl
bromide
for
the
agreed
critical­
use
categories
at
any
time
during
the
control
period
(
calendar
year).
This
approach
is
preferred
because
producers
and
importers
need
a
certain
amount
of
time
to
actually
manufacture,
and
bring
to
market,
quantities
of
methyl
bromide.
Furthermore,
producers
and
importers
need
to
make
business
decisions
regarding
manufacturing
and
marketing
well
before
an
order
is
actually
placed
in
order
to
efficiently
batch
their
production
and
import
operations.
EPA
will
allocate
CUAs
and
CSAs
before
the
control
period
and
the
allowances,
under
today's
proposal,
may
be
expended
at
any
point
during
the
one
year
control
period.
EPA
seeks
comments
on
today's
proposal
and
the
other
options
described
above
regarding
when
allowances
are
allocated
and
when
allowances
can
be
expended.

O.
Can
Allowances
be
Traded?
In
accordance
with
CAA
Section
607,
EPA
proposes
to
that
producers
and
importers
allocated
critical
use
allowances
(
CUAs)
be
permitted
to
trade
or
transfer
those
allowances.
EPA
is
proposing
that
CUAs
would
be
transferable
as
other
allowances
for
controlled
ozone­
depleting
substances
can
be
traded
under
existing
regulatory
provisions
of
the
40
CFR
Part
82,
Subpart
A.
Critical
stock
allowances
(
CSAs)
are
not
used
in
order
to
produce
or
import
methyl
bromide
but
rather
are
rights
to
allowance
holders
to
sell
pre­
existing
supplies
of
methyl
bromide
to
the
critical
use
market.
If
the
holder
of
a
CSA
does
not
wish
to
sell
his
inventoried
methyl
bromide
to
the
critical
use
market,
he
may
sell
his
critical
stock
allowances
(
CSAs)
to
another
CSA
holder.
The
second
CSA
holder
may
then
sell
additional
amounts
of
his
methyl
bromide
inventory
to
the
agreed
critical­
use
categories
specified
in
the
rulemaking.
As
noted
earlier,
a
CSA
is
only
expended
when
methyl
bromide
stocks
are
sold
to
an
approved
critical
user.
Thus,
normal
distribution
of
stocks
of
methyl
bromide
from
a
producer
or
importer
to
a
distributor
does
not
require
a
CSA..
For
example,
if
a
producer
sends
a
distributor
10,000
kilograms
of
methyl
bromide
stocks
for
sale
to
approved
critical
users,
the
producer
would
not
need
to
expend
CSAs
to
sell
methyl
bromide
to
a
distributor.
However,
if
the
distributor
intended
to
sell
the
methyl
bromide
to
an
approved
critical
user,
the
distributor
would
need
to
have
sufficient
CSAs
to
sell
to
a
self­
certifying
approved
critical
user.
If
the
distributor
did
not
have
sufficient
CSAs,
it
might
request
that
the
producer
transfer
CSAs
to
the
distributor
as
part
of
the
transfer
transaction
of
stocks
manufactured
prior
to
January
1,
2005.
EPA
is
proposing
that
the
transfers
of
methyl
bromide
stocks
manufactured
or
imported
with
expended
production
and
consumption
allowances
prior
to
January
1,
2005,
would
not
constitute
a
transfer
(
trade)
under
this
proposed
rulemaking,
unless
the
transfer
(
sale)
is
to
an
approved
critical
user.
In
accordance
with
the
requirements
of
Section
607
of
the
CAA,
EPA
is
proposing
an
offset
of
one
percent
of
the
amount
of
CUAs
being
traded
that
would
be
deducted
from
the
transferor's
allowance
balance
at
the
time
of
a
trade.
Section
607
of
the
CAA
governs
the
allocation
of
allowances
for
the
production
and
consumption
of
class
I
and
class
II
ozone
depleting
substances
and
the
transfers
(
trades)
of
such
allowances.
Paragraph
(
c)
of
Section
607
requires
that
such
transfers
of
allowances
result
in
a
lower
level
of
production
than
if
the
trade
had
not
occurred.
To
provide
less
production
after
every
trade,
EPA
is
proposing
a
one
percent
offset
of
the
amount
of
CUAs
being
transferred
be
deducted
from
the
transferors
balance.
A
one
DRAFT
EPA
DOCUMENT
­
41­
percent
offset
is
consistent
with
the
offset
required
for
the
transfer
of
production
and
consumption
allowances
under
other
parts
of
the
phaseout
program
for
class
I
controlled
ozone­
depleting
substances,
including
the
transfer
of
methyl
bromide
production
allowances
and
consumption
allowances.
EPA
is
seeking
comment
on
the
appropriateness
of
the
proposed
offset.
Trades
of
production
and
consumption
allowances
for
class
I
controlled
ozone­
depleting
substances,
including
methyl
bromide,
have
had
a
one
percent
offset.
For
consistency
with
the
requirements
governing
other
types
of
allowance
transfers
under
the
phaseout
regulations,
EPA
proposes
that
the
entity
that
is
selling
or
giving
allowances
to
another
entity
must
file
an
allowance
transfer
form
with
EPA,
which
the
existing
regulation
requires
that
EPA
process
within
3
business
days
of
receipt.
The
current
regulation
states
that
trades
that
are
not
processed
by
EPA
in
3
working
days
are
automatically
approved.
EPA
established
this
short
review
period
to
encourage
trading
and
ensure
the
Agency
does
not
impede
a
fluid
market.
Today's
action
proposes
that
the
information
to
be
provided
to
EPA
would
include
the
total
number
of
CUAs
to
be
transferred
and
the
name
of
the
entity
who
is
acquiring
the
allowances.
See
40
CFR
Sections
82.9,
82.10
and
82.12
under
the
current
regulations
and
below
in
the
proposed
regulatory
text.
EPA
is
proposing
an
additional,
special
type
of
transfer
for
the
methyl
bromide
critical
use
exemption
program.
EPA
is
proposing
that
a
person
holding
critical
use
allowances
(
CUAs)
could
exchange
them
for
additional
critical
stock
allowances
(
CSAs)
and
this
exchange
would
not
require
an
offset.
Under
this
option,
the
CUAs
would
be
retired
and
EPA
would
issue
additional
CSAs
in
an
amount
equal
to
the
amount
of
retired
CUAs.
This
type
of
an
exchange
is
consistent
with
Decision
IX/
6
and
section
607
of
the
Clean
Air
Act
because
it
results
in
use
of
more
stocks
and
less
production
in
a
given
control
period.
If
the
companies
involved
understand
the
market
and
believe
additional
quantities
can
be
provided
from
stocks
rather
than
new
production
or
import
in
a
given
year,
the
Agency
does
not
want
to
interfere
in
the
market.
Because
the
Parties
specified
the
maximum
amount
of
critical
use
methyl
bromide
that
may
be
derived
from
new
production
or
import
in
Decision
Ex
I/
3,
EPA
is
proposing
that
CUAs
may
be
converted
into
CSAs
in
this
manner,
but
not
vice
versa.
The
Protocol
and
CAA
have
no
restriction
on
meeting
more
critical
use
needs
from
stocks.
However,
because
Decision
Ex
I/
3
limits
the
total
amount
of
new
production
or
import
in
2005,
there
cannot
be
an
exchange
that
would
increase
the
number
of
CUAs.
EPA
seeks
comments
on
the
proposed
exchange
of
CUAs
for
CSAs.
EPA
is
seeking
comments
on
the
programs
proposed
for
trading
allowances
and
the
options
that
are
described
above.

P.
Are
Allowances
Bankable
from
One
Year
to
the
Next?
EPA
proposes
to
prohibit
banking
of
allowances
from
one
year
to
the
next
because
the
controls
under
the
Montreal
Protocol
and
the
Clean
Air
Act
are
calendar
year
"
control
periods".
The
U.
S.
has
obligations
under
the
Montreal
Protocol
and
the
Clean
Air
Act
to
control
the
production
and
consumption
of
ozone­
depleting
"
controlled
substances"
on
an
annual,
calendar
year
basis.
To
date,
the
authorization
for
exempted
production
and
import
of
methyl
bromide
for
agreed
critical­
use
categories
(
Decision
Ex
I/
3)
is
only
for
the
2005
calendar
year.
For
the
2005
calendar
year
(
control
period),
methyl
bromide
production
and
import
is
prohibited,
except
where
DRAFT
EPA
DOCUMENT
­
42­
otherwise
exempted.
The
Parties
may
allow
for
multiple
year
exemptions
in
the
future
which
may
possibly
allow
for
banking
of
allowances
from
one
year
to
the
next
so
long
as
it
is
within
the
duration
of
the
exemption
authorized
by
the
Parties.
EPA
will
revisit
the
issue
of
banking
allowances
under
a
multi­
year
scenario
to
reflect
any
framework
changes
agreed
to
by
the
Parties
in
future
decisions.

Q.
How
is
Unused
Critical
Use
Methyl
Bromide
Treated
at
the
End
of
the
Compliance
Period?
The
critical
use
exemption
is
currently
an
annual
exemption
program.
Critical
use
methyl
bromide
authorized
by
the
Parties
for
2005
critical
uses
must
be
used
during
that
calendar
year.
However,
methyl
bromide
created
under
the
exemption
in
one
year
may
not
be
fully
used
before
the
end
of
the
compliance
control
period.
In
the
event
that
there
are
inventories
of
critical
use
methyl
bromide
at
the
end
of
the
control
period,
EPA
proposes
to
deduct
the
difference
from
the
total
number
of
CUAs
made
available
in
the
next
year.
EPA
is
proposing
that
if
critical
use
allowances
(
CUAs)
are
allocated
on
a
sector­
specific
basis,
and
the
methyl
bromide
is
produced
or
imported
but
unused
in
the
control
period,
the
material
could
be
used
only
for
the
approved
critical
uses
in
the
subsequent
control
period.
This
proposal
would
mean
quantities
produced
or
imported
with
expended
CUAs
not
used
in
the
relevant
control
period
would,
as
stated
in
today's
proposal,
be
deducted
from
the
amount
of
new
production
or
import
authorized
by
the
Parties
for
the
subsequent
control
period.
EPA
would
include
unused
critical
use
methyl
bromide
in
the
calculation
of
available
stocks
for
the
subsequent
year.
EPA
also
seeks
comment
on
restricting
the
use
of
sector­
specific
critical
use
methyl
bromide
to
only
the
sector
for
which
it
was
allocated.
For
example,
if
methyl
bromide
was
produced
in
year
x
with
expended
eggplant
CUAs,
EPA
would
limit
the
use
of
unused
quantities
to
only
approved
critical
use
eggplant
uses
in
the
subsequent
control
period.
EPA
also
requests
comment
on
an
option
of
allowing
critical
use
methyl
bromide
that
is
unused
in
the
relevant
control
period
to
be
available
for
any
use
in
the
subsequent
control
period,
but
the
Agency
believes
this
option
would
run
contrary
tothe
Protocol,
as
the
material
was
explicitly
produced
or
imported
beyond
the
phaseout
for
a
critical
use
exemption.
EPA
seeks
comments
on
the
proposed
method
for
accounting
for
unused
critical
use
methyl
bromide
and
the
other
options
discussed
above.

R.
What
are
the
Enforcement
Provisions
Governing
Critical
Uses?
Section
113
of
the
CAA
controls
enforcement
activities
for
violations
of
requirements
under
Title
VI.
Under
the
Stratospheric
Ozone
Program
regulations,
EPA
has
historically
defined
each
kilogram
of
unauthorized
production
or
importation
of
controlled
substances
to
be
a
separate
violation
of
its
regulations.
See
e.
g.
40
C.
F.
R.
§
82.4(
a)(
1)
("
Every
kilogram
of
excess
production
constitutes
a
separate
violation
of
this
subpart.").
Likewise,
for
the
restricted
distribution
under
exemption
programs
of
controlled
substances,
the
Stratospheric
Ozone
Program
has
also
considered
each
kilogram
of
inappropriate
sale
for
a
use
other
than
the
designated
specific
exempted
purpose
to
be
a
separate
violation.
To
ensure
U.
S.
compliance
under
the
Montreal
Protocol,
EPA
believes
this
approach
remains
justified
for
enforcement
DRAFT
EPA
DOCUMENT
­
43­
against
producers,
importers,
and
distributors
of
methyl
bromide
because
these
are
large
companies
that
have
an
ability
to
pay
higher
penalties
and
should
face
a
substantial
deterrent
against
producing,
importing,
and
selling
large
quantities
of
controlled
substances
in
excess
of
allowances
or
application
limitations.
In
addition,
these
producers,
importers
and
distributors
are
larger
companies
that
typically
have
government
affairs
staff
and
retain
legal
counsel
to
advise
them
on
their
regulatory
requirements.
Thus,
EPA
will
continue
to
define
violations
involving
the
unauthorized
production,
import,
or
sale
of
critical
use
methyl
bromide
on
a
per
kilogram
basis.
In
the
case
of
methyl
bromide
end­
users,
defining
each
violation
on
a
per
kilogram
basis
could
mean
a
small
farmer
might
face
the
potential
of
a
very
high
penalty
if
she
applied
critical
use
methyl
bromide
in
an
unauthorized
fashion.
However,
in
assessing
penalties
under
any
enforcement
action,
the
Agency
takes
into
consideration
the
size
of
the
violator
and
the
ability
of
the
violator
to
pay
a
penalty.
Farmers
in
many
of
the
agreed
critical
use
categories
typically
use
several
hundred
kilograms
of
methyl
bromide
to
treat
a
single
acre.
If
the
Agency
were
to
maintain
that
each
kilogram
that
is
wrongly
used
is
a
separate
violation,
then
a
farmer
ordering
and
applying
3,000
kilogram
in
error
to
her
10
acre
farm
would
face
a
potential
maximum
penalty
of
more
than
$
97
million.
EPA
recognizes
that
there
is
a
difference
in
scale
of
possible
violations
and
impact
on
compliance
with
U.
S.
obligations
under
the
Protocol
and
is
therefore
proposing
to
define
each
single
violation
for
the
mis­
use
of
critical
use
methyl
bromide
by
an
end­
user
differently
than
a
violation
by
a
holder
of
a
CUA
or
CSA
so
it
reflects
the
typical
farm
size
and
application
rate
of
a
person
in
the
approved
critical­
use
categories.
EPA
is
proposing
to
define
each
violation
associated
with
the
improper
use
of
critical
use
methyl
bromide
in
increments
of
50
kilograms.
Taking
the
example
of
the
farmer
described
above,
who
ordered
and
submitted
a
self­
certification
to
use
3,000
kilograms
of
critical
use
methyl
bromide
in
accordance
with
today's
proposed
restrictions,
but
then
wrongfully
applied
the
material,
she
would
face
60
separate
violations
for
this
mis­
use
with
a
potential
maximum
penalty
of
$
1.95
million.
EPA
wishes
to
note
again
that
in
assessing
penalties,
the
Agency
takes
into
account
the
circumstances
of
the
violation,
the
size
of
the
violator
and
their
ability
to
pay.
EPA
believes
it
is
important
to
retain
a
sizable
potential
maximum
penalty
so
there
is
a
deterrent
against
abuse
of
this
exemption
from
the
phaseout.
EPA
also
notes
that
larger
farms
(
that
might
be
operated
by
sizable
agricultural
corporations)
will
also
be
ordering
and
certifying
the
proper
use
of
large
quantities
of
critical
use
methyl
bromide
and
if
the
material
were
to
be
mis­
used
they
should
continue
to
face
large
potential
maximum
penalties
to
deter
them
from
simply
incorporating
the
penalty
(
and
the
mis­
use
of
exempted
methyl
bromide)
into
their
business
plans.
EPA
requests
comments
on
whether
the
proposed
definition
for
an
end­
user's
violation
is
appropriate
for
enforcement,
especially
in
light
of
the
fact
that
the
person
is
self­
certifying
they
will
use
the
critical
use
methyl
bromide
in
accordance
with
today's
proposed
restrictions
for
the
exemption.
Under
today's
action,
EPA
is
not
proposing
to
use
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act
(
FIFRA)
authorities
or
mechanisms
to
implement
or
enforce
the
critical
use
exemption.
However,
under
today's
action,
nothing
precludes
parallel
implementation
and
enforcement
under
FIFRA
and
other
federal,
state,
and
local
pesticide
regulations.
DRAFT
EPA
DOCUMENT
­
44­
VII.
What
are
Other
Options
on
which
EPA
Seeks
Comment?
EPA
also
requests
comment
on
other
options
for
allocating
critical
use
exemption
allowances.
In
addition
to
the
proposed
option
described
above
which
entails
the
distribution
of
critical
use
allowances
to
producers
and
importers,
EPA
is
requesting
comment
on
an
additional
regulatory
framework
that
would
give
critical
use
exemption
permits
to
the
end
users
of
methyl
bromide.
These
permits,
hereafter
referred
to
as
"
critical
user
permits"
would
differ
from
the
critical
use
allowances
in
the
following
manner.
Critical
user
permits
would
be
redeemed
to
buy
1kilogram
of
methyl
bromide
for
an
approved
critical
use
whereas
a
critical
use
allowance
would
be
an
allowance
for
the
production
and
import
of
1
kilogram
of
methyl
bromide
by
a
manufacturer
or
importer
of
methyl
bromide.
EPA
believes
that
the
options
described
in
Section
VII
of
this
proposed
rulemaking
would
create
a
new
burden
on
approved
critical
users
of
methyl
bromide.
A
full
analysis
of
the
burden
associated
with
providing
permits
to
end
users
is
described
in
the
supporting
analytical
documents
that
accompany
this
rule.
The
supporting
analysis
primarily
analyzed
two
options
for
who
could
hold
critical
use
allowances,
producers
and
importers
or
end
users.
Under
a
system
that
creates
permits
distributed
to
end
users,
EPA
estimated
that
the
annual
burden
on
industry
would
be
about
$
6.4
million
per
year.
In
contrast,
a
system
designed
to
provide
allowances
only
to
producers
and
importers
would
cost
industry
about
$
2.2
million.
For
a
more
complete
discussion
of
the
supporting
analysis,
please
see
Section
VIII.
A
of
this
proposal.
In
some
instances,
EPA
made
only
a
qualitative
assessment
due
to
uncertainty
about
the
future
price
of
methyl
bromide
and
other
unknown
factors.
In
other
instances,
it
was
difficult
to
create
a
direct
quantitative
comparison
on
the
de­
regulatory
benefit
of
one
option
compared
to
the
next.
EPA
believes
that
the
options
described
in
Section
VII
would
be
substantially
more
burdensome
in
terms
of
regulatory
requirements
on
approved
critical
users
of
methyl
bromide
than
the
proposed
option
would
be.
EPA
received
public
comment
to
this
effect
at
the
stakeholder
meetings
held
over
the
previous
year.
To
the
degree
that
not
all
potentially
interested
parties
were
able
to
attend
these
stakeholder
meetings,
EPA
specifically
requests
comment
on
the
tradeoffs
involved
in
these
options
that
may
not
have
been
represented
in
previous
public
fora.
EPA
seeks
comment
on
these
options
to
better
understand
if
the
benefits
of
these
options
outweigh
the
additional
regulatory
burden.

A.
What
Other
Allowance
Systems
is
EPA
Taking
Comment
On?
EPA
seeks
comment
on
other
types
of
allowance
systems.
In
addition
to
the
upstream
allowance
trading
system
described
above
that
would
regulate
the
supply
and
suppliers
of
methyl
bromide,
EPA
seeks
comment
on
a
downstream
system
that
involves
issuing
tradable
permits
to
end
users
of
methyl
bromide.
EPA
requests
comment
on
an
allowance
system
that
would
distribute
permits
to
approved
critical
users
of
methyl
bromide
who
would
have
to
demonstrate
ownership
of
sufficient
permits
in
order
to
then
purchase
methyl
bromide
from
their
supplier.
Under
this
type
of
system,
approved
critical
users
would
have
a
permit
that
could
be
traded
to
other
approved
critical
users.
This
permit
would
presumably
have
a
value
and
if
a
user
decided
not
to
redeem
it
for
methyl
bromide,
the
user
could
sell
the
permit
and
obtain
revenue
from
this
action.
EPA
is
currently
DRAFT
EPA
DOCUMENT
­
45­
concerned
that
the
regulatory
burden
involved
in
issuing
permits
to
end
users
of
methyl
bromide
may
be
very
high,
primarily
because
of
the
additional
data
submission
requirements
to
establish
a
baseline
against
which
pro­
rated
permits
would
be
distributed
and
due
to
the
reporting
and
recordkeeping
requirements
which
would
be
placed
on
approximately
2,000
additional
entities.

B.
Distribution
of
Critical
User
Permits
to
End
Users
of
Methyl
Bromide?
EPA
is
taking
comment
on
options
regulating
downstream
distribution
of
methyl
bromide
through
the
use
of
critical
user
permits
or
CUPs.
EPA
seeks
comment
on
two
options
for
initially
distributing
the
permits.
One
option,
similar
to
the
method
used
in
Canada
under
their
phaseout
of
methyl
bromide,
would
involve
the
distribution
of
permits
to
end
users.
The
second
option
would
employ
an
auction
system
whereby
the
allowances
would
be
sold
to
the
user
with
the
highest
bid.
A
CUP
system
involving
the
distribution
of
permits
to
end
users
would
require
individual
farms
and
companies
to
provide
data
to
EPA
(
see
Section
VIII.
E
for
more
detail
on
distribution
of
permits).
EPA
would
then
examine
the
data
and
would
write
an
additional
notice­
andcomment
rulemaking
to
distribute
permits
to
each
entity.
This
process
would
take
between
one
and
two
years
to
complete,
so
permits
would
not
be
available
to
end
users
until
after
the
phaseout
takes
effect.
In
such
a
scenario,
EPA
would
implement
the
CUPs
beginning
in
2007
and
rely
on
an
upstream
system
as
described
in
Section
VI
as
an
interim
control
measure
until
2007.
EPA
is
accepting
comments
on
employing
an
auction
as
one
method
to
circumvent
the
burden
and
time
involved
with
permit
distribution.
However,
the
auction
of
CUPs,
similar
to
a
method
where
EPA
uses
data
to
distribute
CUPs,
would
impose
more
requirements
on
end
users
than
the
proposed
option.
End
users
under
the
auction
would
be
required
to
familiarize
themselves
with
auction
procedures,
participate
in
the
auction,
keep
records
of
all
auction
and
CUP
activities
for
three
years,
and
report
to
EPA
annually
on
the
use
of
CUPs
acquired.
Under
the
proposed
option,
end
users
would
not
have
any
reporting
or
recordkeeping
obligations.
Again,
similar
to
using
data
to
distribute
CUPs,
there
are
timing
concerns
regarding
the
auction.
It
would
take
time
for
EPA
to
create
the
infrastructure
to
implement
an
auction,
likely
causing
an
implementation
delay
past
January
2005.
In
stakeholder
meetings
held
by
EPA
over
the
summer
of
2003,
stakeholders
universally
commented
that
they
wanted
a
simple
regulation
and
one
that
would
impose
minimum
burden
on
end
users.
This
comment
was
regularly
made
in
association
with
the
two
end­
user
permit
options,
which
stakeholders
viewed
as
presenting
significant
burden
on
end­
users
without
sufficient
accompanying
benefits.
Under
either
CUP
scenario,
EPA
would
abide
by
the
parameters
set
by
the
Parties
in
the
authorization
of
critical
use
exemptions.
Decision
Ex
I/
3
requests
Parties
to
endeavor
to
allocate
critical
use
permits
according
to
the
use
categories
recommended
by
the
TEAP.
Thus,
EPA
requests
comment
on
whether
it
could
create
one
auction
where
all
critical
users
would
vie
for
permits
or
should
create
sector
level
auctions
instead.
EPA
may
propose
to
be
more
restrictive
than
required
under
the
Protocol,
as
interpreted
by
the
Parties,
but
not
less.
DRAFT
EPA
DOCUMENT
­
46­
C.
What
is
a
Critical
User
Permit
and
Can
it
Be
Traded?
A
critical
user
permit
(
CUP)
is
a
permit
which
would
entitle
the
holder
to
obtain
one
kilogram
of
methyl
bromide
for
use
for
approved
critical
uses.
A
different
type
of
CUP
could
be
designated
for
each
critical
use
category
in
Decision
Ex
I/
3.
Once
a
user
acquires
an
initial
allocation
of
permits,
whether
through
rulemaking
or
auction,
EPA
would
allow
the
user
to
either
redeem
the
permit
to
buy
methyl
bromide,
hold
that
permit
unredeemed
until
the
end
of
the
control
period
when
it
would
expire,
or
sell
the
permit
to
another
entity.
Although
only
approved
critical
users
would
be
given
permits
initially,
EPA
requests
comment
on
whether
it
should
restrict
the
type
of
entity
to
whom
approved
critical
users
could
sell
permits.
EPA
believes
that
allowing
trading
in
this
fashion
would
create
opportunity
for
brokers,
trading
firms,
citizen
groups
and
others
to
participate
in
the
market
and
thereby
increase
the
liquidity
of
the
market.
EPA
is
also
considering
not
allowing
users
to
trade
their
CUPs
after
the
initial
allocation
(
i.
e.
a
command
and
control
approach),
allowing
CUP
holders
to
trade
permits
with
other
CUP
holders
across
sectors
(
e.
g.
a
user
could
trade
a
tomato
CUP
to
a
strawberry
grower)
or
allowing
trades
only
within
a
sector
(
only
allowing
a
tomato
trade
with
a
tomato
grower).

D.
Who
is
Eligible
to
Receive
an
Initial
Allocation
of
CUPs
and
Who
May
Use
CUPs?
EPA
requests
comment
on
two
options
for
who
can
receive
an
initial
allocation
of
CUPs.
The
first
option
would
only
allow
those
entities
included
in
an
application
to
EPA
to
receive
an
initial
allocation
of
CUPs.
The
second
option
would
allow
those
users
not
explicitly
covered
by
an
application
but
who
have
the
limiting
critical
condition
to
receive
an
initial
allocation.
Once
an
entity
receives
its
CUP
allocation,
it
can
either
use
it
to
acquire
critical
use
methyl
bromide,
or
it
can
simply
hold
it
(
holding
a
CUP
is
addressed
in
Section
VII.
D
below).
There
are
also
two
options
for
who
can
use
a
CUP
to
acquire
critical
use
methyl
bromide,
namely
only
allowing
those
entities
included
in
an
application
to
EPA
to
participate,
or
allowing
those
users
not
explicitly
covered
by
an
application
but
who
have
the
limiting
critical
condition
to
redeem
a
CUP
for
methyl
bromide.
EPA
believes
that
it
would
be
unfair
to
those
groups
that
invested
the
resources
in
applying
to
EPA
for
an
exemption
if
EPA
adopted
an
option
that
would
make
an
initial
allocation
of
permits
available
to
users
who
meet
the
limiting
critical
condition
but
are
not
covered
by
an
application.
However,
EPA
believes
that
a
hybrid
approach
which
allows
any
user
who
meets
the
limiting
critical
condition
to
buy
permits
after
the
initial
allocation
is
fair
in
that
the
right
of
first
refusal
has
already
been
given
to
those
that
applied
for
the
exemption.
EPA
requests
comment
on
this
issue.

E.
Who
May
Hold
a
CUP?
Even
though
only
approved
critical
users
would
be
able
to
obtain
methyl
bromide
under
the
critical
use
exemption,
EPA
would
allow
any
entity
to
hold
permits
in
order
to
enhance
market
liquidity.
For
example,
EPA
is
considering
allowing
citizen
groups
and
brokers
to
hold
permits,
but
not
giving
such
entities
an
initial
allocation
and
not
allowing
them
to
use
or
redeem
the
CUPs.
EPA
seeks
comment
on
who
may
receive
an
initial
allocation
of
CUPs,
who
may
hold
DRAFT
EPA
DOCUMENT
­
47­
CUPs,
and
who
may
redeem
CUPs
for
critical
use
methyl
bromide.

F.
Methods
for
Distribution
of
Critical
User
Permits:
Distribution
Based
on
Data
EPA
requests
comment
on
several
methods
for
distributing
CUPs
to
the
end
user
community
using
entity­
level
historic
use
and/
or
operational
information.
One
method
would
use
entity­
level
historic
methyl
bromide
use
data
to
create
a
baseline
against
which
CUPs
would
be
allocated.
Under
this
option,
individual
end
users
would
have
to
provide
3
years
of
historic
use
data
and
documentation
to
EPA
which
would
include
total
quantity
(
kilograms)
of
methyl
bromide
used
in
each
year,
the
hectares
or
cubic
meters
treated
annually,
the
formulation
rates,
and
data
on
efforts
to
minimize
use
and
emissions.
Using
these
data,
EPA
would
establish
a
straight
average
baseline
and
would
pro­
rate
amounts
of
methyl
bromide
available
to
the
sector
by
the
total
treated
area
requested
by
entities
that
submitted
the
additional
data.
Because
the
exemption
is
contingent
upon
first
demonstrating
that
the
user
is
using
methyl
bromide
in
a
manner
of
maximum
efficiency,
best
practice
information
on
the
minimization
of
use
and
emissions
would
be
applied
to
all
users
within
the
category
and
could
reduce
the
amount
of
methyl
bromide
incorporated
into
the
baseline
of
a
specific
operation.
If
a
user
has
not
been
a
historic
grower
or
owner
of
the
commodity
for
which
he
seeks
an
exemption
but
is
now
a
member
of
a
covered
consortium,
EPA
is
considering
having
that
user
submit
documentation
to
support
his
plans
to
treat
the
specified
acreage/
volume.
Alternatively,
a
new
entrant
might
not
be
given
an
initial
allocation
but
be
allowed
to
buy
and
use
CUPs
from
a
willing
seller
so
long
as
the
entity
met
the
limiting
critical
condition.
Another
method
for
distributing
CUPs
would
involve
economic
considerations
for
each
entity.
For
example,
EPA
could
distribute
permits
to
those
users
with
the
highest
marginal
cost
of
substitution,
in
other
words
to
those
end
users
with
the
greatest
economic
need.
Alternatively,
EPA
is
considering
distributing
permits
to
end
users
with
the
lowest
marginal
cost
of
substitution
who
would
then
be
inclined
to
sell
their
permits
to
users
who
have
a
higher
substitution
cost.
In
order
for
EPA
to
make
a
determination
as
to
how
to
distribute
permits
under
a
scenario
using
economic
criteria,
individual
entities
would
have
to
submit
historic
use
data
to
EPA
and
individual
entity
economic
data
on
operational
costs
and
the
costs
of
alternatives.
EPA
seeks
comment
on
the
options
described
for
determining
baselines
and
distributing
CUPs.

G.
Submitting
Individual
Entity
Data
to
Obtain
Critical
User
Permits
(
CUPs)
Under
an
option
involving
the
distribution
of
CUPs,
users
would
be
required
to
submit
the
additional
data
for
baseline
determination
either
with
the
annual
critical
use
application
or
under
separate
cover
to
EPA.
Each
year,
beginning
in
2002,
users
interested
in
a
critical
use
exemption
have
been
required
to
submit
a
detailed
application
to
EPA
between
August
and
September.
A
small
number
of
users
applied
only
on
behalf
of
their
operations
alone
and
therefore
for
these
users,
EPA
has
sufficient
use
data
on
a
per
entity
basis
in
order
to
create
an
historic
baseline
of
methyl
bromide
use
for
a
few
entities.
Most
users
however
applied
for
a
critical
use
exemption
as
groups
of
similar
users
(
e.
g.
all
of
tomato
growers
in
Michigan).
In
these
instances,
EPA
does
not
have
the
bulk
of
the
baseline
DRAFT
EPA
DOCUMENT
­
48­
data
needed
to
create
per
entity
historic
baselines
of
methyl
bromide
use.
Due
to
the
amount
of
time
it
would
take
a)
for
users
to
submit
additional
data
and
documentation
to
EPA
and
b)
for
EPA
to
analyze
the
data
and
write
a
notice­
and­
comment
regulation
allocating
baseline
allocations,
EPA
would
implement
the
CUPs
beginning
in
2007
and
relying
on
an
upstream
system
as
described
in
Section
VI
of
this
proposal
an
interim
control
measure
until
2007.

H.
Methods
for
Distribution
of
Critical
User
Permits:
Distribution
Using
Auctions
EPA
takes
comment
on
using
an
auction
as
a
method
for
distributing
critical
use
permits
(
CUPs)
to
operations
(
users)
that
meet
the
critical
use
criteria.
EPA
understands
that
affected
entities
have
expressed
a
strong
preference
for
a
simple
regulatory
mechanism
for
the
critical
use
exemption.
EPA
believes
that
of
all
the
options,
an
auction
is
by
far
the
most
complex
to
design,
would
be
unlikely
to
be
in
place
in
time
for
the
beginning
of
the
critical
use
exemption,
and
would
impose
a
steep
learning
curve
on
affected
entities.
EPA
does
not
have
statutory
authority
to
set
a
price
for
methyl
bromide
under
the
Clean
Air
Act.
Therefore,
to
implement
an
auction,
EPA
could
only
consider
an
option
that
did
not
have
the
government
set
a
minimum
or
maximum
price
for
material
under
the
critical
use
exemption.
EPA
therefore
is
only
considering
auctions
using
a
sealed
bid
method
with
no
set
minimum
bid.
Other
bid
options
which
EPA
did
not
consider
include
the
ascending
bid
or
English
auction
and
the
declining
bid
or
Dutch
auction.
In
a
sealed
bid
auction,
each
bidder
discloses
the
maximum
bid
they
would
offer
and
the
number
of
permits
they
are
seeking.
The
auctioneer
then
opens
all
of
the
bids
and
awards
the
permits
to
the
highest
bidders
until
there
are
no
more
permits
left.
The
price
of
the
last
permit
awarded
could
be
used
to
set
the
price
of
all
of
the
bids
awarded
(
clearing
price)
or
the
price
could
be
determined
by
the
bid
set
by
the
bidder
("
pay
as
you
bid").
In
an
ascending
auction
bid,
the
auctioneer
offers
a
losing
bidder
the
chance
to
increase
his/
her
bid.
When
the
bidding
has
ended,
the
permits
are
distributed
to
the
highest
bidders.
In
a
declining
bid
auction,
the
auctioneer
sets
a
price
for
the
permit
at
the
high
end
of
the
spectrum.
Bidders
can
then
accept
the
price
and
buy
permits
or
can
wait
and
see
if
the
price
comes
down.
EPA
believes
that
it
only
has
authority
for
a
"
pay
as
you
bid"
auction.
To
submit
a
bid,
a
user
would
first
have
to
establish
an
account
via
a
letter
of
credit
or
similar
mechanism
with
the
auctioneer
or
would
have
to
submit
a
certified
check
for
their
maximum
bid
amount
with
their
bid
form.
Information
on
the
bid
form
would
include
name
of
bidder,
contact
information
for
bidder,
name
and
contact
information
of
the
authorized
representative
if
applicable,
number
of
kilograms
the
bidder
wishes
to
purchase
at
a
given
price,
type
of
permits
if
applicable,
location
to
be
fumigated,
a
description
of
other
crops
or
uses
that
would
benefit
from
the
fumigation
(
e.
g.
a
double
crop
of
peppers),
and
a
certification
form
that
any
methyl
bromide
obtained
will
be
used
only
for
critical
use
purposes.
The
bid
price
could
be
structured
to
include
just
the
cost
of
the
permit
(
the
bid
premium)
or
the
cost
of
the
permit
plus
the
price
of
the
actual
methyl
bromide
purchased.
In
the
former,
the
bidder
only
obtains
the
right
to
buy
methyl
bromide
at
a
price
to
be
set
by
the
supplier;
in
the
latter
option,
the
price
paid
by
the
successful
bidder
includes
the
right
to
buy
methyl
bromide
and
DRAFT
EPA
DOCUMENT
­
49­
the
cost
of
the
methyl
bromide.
However,
since
EPA
does
not
have
the
authority
to
redistribute
revenues
from
the
auction,
EPA
only
considered
a
bid
price
that
covers
the
cost
of
the
CUP
(
the
right
to
buy
methyl
bromide)
alone.
All
revenues
from
the
auction
would
be
sent
to
the
U.
S.
Treasury
since
EPA
does
not
have
statutory
authority
to
capture
the
revenue
for
other
purposes.
EPA
is
considering
running
the
auction
in
house,
having
another
federal
entity
run
the
auction,
or
allowing
a
third
party
to
administer
the
auction.
In
the
event
that
a
third
party
were
to
run
the
auction,
EPA
examined
the
options
of
having
the
party
run
the
auction
either
for
a
fee
or
as
a
gratuitous
service
to
the
government.
If
the
auction
would
be
run
as
the
latter,
the
thirdparty
would
then
be
able
to
charge
a
reasonable
administration
fee
from
those
in
the
user
community
that
elected
to
participate
in
the
auction.
EPA
seeks
comment
on
the
various
elements
of
the
auction
method
for
distributing
permits.

I.
Frequency
of
Auctions
and
Set
Asides
In
order
to
make
the
auction
feasible,
EPA
believes
that
two
auctions
a
year
would
be
required,
one
shortly
before
the
beginning
of
the
control
period
and
one
three
to
four
months
after
the
new
control
period
begins.
The
second,
later
auction
would
be
required
in
order
to
ensure
that
quantities
of
methyl
bromide
authorized
by
the
Parties
to
the
Protocol
in
their
meeting
only
two
months
before
the
control
period
and
approved
through
rulemaking
during
the
early
part
of
the
compliance
period
could
be
allocated
to
users
EPA
further
seeks
comment
on
creating
a
set­
aside
program
to
hold
back
permits
from
the
auction.
Under
such
a
program,
between
10%
and
50%
of
the
total
allowable
amount,
would
be
held
in
reserve
for
a
second
annual
auction
in
order
to
accommodate
those
users
who
typically
acquire
methyl
bromide
later
on
in
the
season.
EPA
seeks
comment
on
the
use
of
set­
asides,
the
amount
of
methyl
bromide
to
set
aside
for
a
second
auction,
and
the
number
of
times
a
year
EPA
should
conduct
an
auction.

J.
Other
Methods
for
Distributing
CUPs
EPA
also
requests
comments
on
other
options
for
distributing
critical
use
permits
(
CUPs)
that
would
not
entail
EPA
giving
permits
directly
to
end
users
of
methyl
bromide.
EPA
is
considering
giving
the
CUPs
to
the
consortium
that
applied
for
an
exemption.
The
consortium
could
then
determine
how
they
would
like
to
distribute
allowances
to
individual
users,
either
through
use
of
data
or
through
an
auction.
However,
there
are
several
consortia
that
do
not
have
any
infrastructure
to
receive
and
distribute
the
permits
and
some
consortia
are
not
even
legally
incorporated
entities.
Alternatively,
EPA
is
considering
giving
allowances
to
State
governments
to
re­
distribute
using
a
method
of
their
choosing.
However,
due
to
concerns
about
the
possibility
of
creating
an
unfunded
mandate,
EPA
has
decided
not
to
further
consider
such
an
option.

K.
Tracking
Permits
EPA
might
create
a
web­
enabled
database
program
to
allow
for
the
tracking
and
trading
of
CUPs.
Since
almost
10
million
CUPs
could
be
issued
based
on
the
number
of
kilograms
requested
by
the
U.
S.
government
for
critical
uses
in
the
2003
nomination,
EPA
believes
that
a
DRAFT
EPA
DOCUMENT
­
50­
new
tracking
system
would
have
to
be
developed
to
facilitate
the
trading
and
tracking
of
CUPs.
Each
entity
that
applies
for
an
initial
allocation
of
CUPs
would
be
required
to
create
an
account
in
the
web­
enabled
database
as
well
as
entities
that
sell
or
distribute
methyl
bromide
to
end
users
and
entities
who
acquire
permits
through
trading.
Once
allocated,
EPA
would
place
CUPs
in
the
account
of
the
end
user.
All
accounts
would
be
frozen
on
an
annual
basis
on
December
31st
for
the
annual
true­
up
period
during
which
time
no
transactions
could
take
place.

L.
Redeeming
CUPs
for
Methyl
Bromide
A
CUP
holder
may
redeem
his
permit
with
a
methyl
bromide
supplier
such
as
a
custom
applicator
or
distributor
by
transferring
his
permits
to
the
supplier's
account.
To
transfer
the
permits,
EPA
would
require
the
permit
holder
to
electronically
transfer
his
permits
to
the
supplier's
account
indicating
the
number
of
acres/
square
feet
to
be
treated,
location
of
area
to
be
treated
(
address,
coordinates,
parcel
ID
number)
and
whether
a
second
crop
will
benefit
from
the
fumigation.
The
permit
holder
would
then
transfer
the
permits
electronically
to
the
supplier's
account,
at
which
point
the
permits
would
be
deactivated
automatically
by
the
system.
Automatically,
an
electronic
mail
notification
would
be
sent
to
the
supplier
notifying
him
that
the
specified
CUPs
have
been
transferred
to
his
account.
The
user
would
then
print
out
a
certification
form
that
the
material
would
only
be
used
for
the
specific
critical
use,
sign
it
and
send
it
to
the
supplier
before
he
or
she
could
receive
the
methyl
bromide.
A
supplier
or
end
user
would
have
ten
business
days
to
dispute
the
transaction
with
EPA
in
the
event
that
an
error
was
made
by
the
permit
holder
in
the
transfer
of
permits.

M.
Reporting
Requirements
for
CUP
Holders
CUP
holders
would
be
required
to
annually
reconcile
their
accounts
by
submitting
a
written
form
to
EPA
no
later
than
15
days
after
the
end
of
the
control
period,
i.
e.
December
31st
or
the
date
when
all
unredeemed
permits
would
expire.
The
form
would
be
created
by
EPA
and
available
on
the
EPA's
methyl
bromide
website.
CUP
holders
would
be
required
to
indicate
how
much
critical
use
methyl
bromide
bought
during
the
year
has
not
been
used
and/
or
remains
held
in
inventory
for
future
use.

N.
Interaction
between
CUPs
and
CUAs
EPA
could
implement
the
CUP
program
as
a
stand
alone
program
or
in
conjunction
with
a
CUA
program.
If
the
CUP
program
were
to
be
implemented
as
a
stand
alone
program,
CUP
holders
would
sell
their
permits
to
producers
and
importers
of
methyl
bromide
at
a
time
of
their
choosing.
The
producers
and
importers
would
not
be
able
to
produce
or
import
methyl
bromide
until
they
held
sufficient
CUPs
to
match
their
production
or
import
decisions.
EPA
believes
that
under
such
a
system,
CUP
holders
would
have
an
incentive
to
sell
their
permits
to
producers
and
importers
early
in
the
year
in
order
to
obtain
revenues
as
quickly
as
possible.
Producers
and
importers
might
be
likely
to
pay
more
for
permits
they
obtain
early
in
the
year
since
they
seek
certainty
on
the
amounts
they
will
be
able
to
produce
and
import
during
the
year.
Under
the
stand
alone
CUP
program,
EPA
is
considering
two
options
for
how
permit
holders
would
obtain
methyl
bromide.
Under
the
first
option,
the
permit
holder
would
be
entitled
DRAFT
EPA
DOCUMENT
­
51­
to
receive
1
kilogram
of
methyl
bromide
for
each
permit
sold.
EPA
believes
that
under
this
scenario,
the
price
producers
and
importers
would
be
willing
to
pay
is
likely
to
be
lower
than
under
the
following
option.
Under
the
second
option,
a
permit
holder
would
sell
his
permit
to
a
producer
or
importer
and
would
then
purchase
methyl
bromide
at
a
later
date
through
his
normal
supplier
as
a
separate
transaction
following
the
procedures
proposed
in
today's
notice­
andcomment
rulemaking.
Under
the
stand
alone
CUP
program,
the
reporting
and
recordkeeping
requirements
for
producers,
importers,
distributors,
custom
applicators
and
fumigators
would
be
required
as
described
in
Sections
VI
of
this
preamble.
EPA
understands
that
creating
a
stand
alone
system
for
the
creation
of
exempted
methyl
bromide
could
place
some
strain
on
the
methyl
bromide
production
system
unless
producers
and
importers
were
able
to
buy
CUPs
from
permit
holders
several
months
in
advance
of
the
control
period.
However,
due
to
the
time
it
would
take
to
allocate
CUPs
through
a
notice­
and­
comment
rulemaking,
it
would
be
unlikely
that
sufficient
time
would
be
available
before
the
control
period
for
producers
and
importers
of
methyl
bromide
to
have
sufficient
certainty
to
make
production
decisions.
Therefore,
EPA
might
allocate
CUAs
in
addition
to
CUPs.
Under
this
combined
option,
the
CUA
program
described
in
Section
VI
of
today's
notice
would
be
implemented
side
by
side
with
a
CUP
system
described
in
this
Section.
Under
a
combined
system,
the
tracking
requirements
on
usage
and
restrictions
on
CUAs
by
sector
could
be
eliminated
since
these
requirements,
in
part,
are
designed
to
ensure
that
the
U.
S.
does
not
exceed
its
allowable
caps
for
each
sector.
EPA
seeks
comment
on
the
stand
alone
CUP
option
and
the
combined
CUP
and
CUA
options.

VIII.
What
Conforming
Amendments
Is
EPA
Proposing
With
Respect
to
Essential
Use
Allowances?
To
make
is
easier
for
the
public
to
read
and
EPA
to
update
the
allocation
of
critical
use
allowances
and
critical
stock
allowance
each
year,
EPA
proposes
to
create
a
new
regulation
at
40
C.
F.
R.
§
82.8.
This
section
number
is
currently
reserved.
EPA
proposes
to
place
the
list
of
critical
use
allowance
and
critical
stock
allowance
allocations
in
this
section.
In
addition,
to
be
consistent
with
this
improved
formatting
for
the
critical
use
exemption
regulations,
EPA
also
proposes
to
include
the
essential
use
allowance
allocations
in
section
82.8.
Moving
these
allocations
to
section
82.8
requires
certain
conforming
amendments
to
section
82.4(
n)
as
reflected
in
the
proposed
regulatory
text
below.
EPA
seeks
comment
on
whether
these
changes
make
both
the
critical
use
exemption
and
essential
use
exemption
regulations
more
clear.

IX.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
12866:
Regulatory
Planning
and
Review
Under
Executive
Order
12866,
(
58
FR
51735,
October
4,
1993)
the
Agency
must
determine
whether
the
regulatory
action
is
"
significant"
and
therefore
subject
to
OMB
review
and
DRAFT
EPA
DOCUMENT
­
52­
the
requirements
of
the
Executive
Order.
The
Order
defines
"
significant
regulatory
action"
as
one
that
is
likely
to
result
in
a
rule
that
may:
(
1)
have
an
annual
effect
on
the
economy
of
$
100
million
or
more
or
adversely
affect
in
a
material
way
the
economy,
a
sector
of
the
economy,
productivity,
competition,
jobs,
the
environment,
public
health
or
safety,
or
State,
local,
or
tribal
governments
or
communities;
(
2)
create
a
serious
inconsistency
or
otherwise
interfere
with
an
action
taken
or
planned
by
another
agency;
(
3)
materially
alter
the
budgetary
impact
of
entitlements,
grants,
user
fees,
or
loan
programs
or
the
rights
and
obligations
of
recipients
thereof;
or
(
4)
raise
novel
legal
or
policy
issues
arising
out
of
legal
mandates,
the
President's
priorities,
or
the
principles
set
forth
in
the
Executive
Order.
OMB
has
notified
EPA
that
it
considers
this
a
"
significant
regulatory
action"
under
Executive
Order
12866
and
EPA
has
submitted
it
to
OMB
for
review.
We
will
document
changes
made
in
response
to
OMB
suggestions
or
recommendations
in
the
public
record.
EPA
conducted
an
economic
impact
analysis
(
Economic
Impact
Analysis
for
Methyl
Bromide
Allocation
in
the
United
States,
hereafter
EIA)
that
looked
at
three
basic
options
for
implementing
the
critical
use
exemption:
1)
an
upstream
cap
and
trade
allowance
system
which
would
give
critical
use
allowances
to
producers
and
importers
of
methyl
bromide;
2)
an
upstream
cap
and
trade
system
with
a
downstream
permit
trading
system
where
the
permits
are
distributed
to
end
users
and;
3)
an
upstream
cap
and
trade
system
with
a
downstream
permit
trading
system
where
the
permits
are
initially
obtained
through
an
auction.
The
EIA
describes
the
impact
of
today's
proposed
regulation
with
regards
to
the
existing
methyl
bromide
requirements
which
call
for
a
complete
phaseout
of
methyl
bromide
production
and
consumption
by
2005
(
consumption
is
defined
as
production
plus
imports
minus
exports).
Therefore,
it
is
important
to
note
that
any
change
in
the
existing
regulations
that
allows
for
continued
production
and
import
of
methyl
bromide
is
de­
regulatory
in
nature
and
will
result
in
an
overall
cost
savings
to
society.
The
estimated
negative
costs
(
i.
e.
reduced
costs
resulting
from
the
establishment
of
this
exemption)
to
society
are
approximately
$
19
million
to
$
31
million
on
an
annual
basis
and
$
380
million
to
$
600
million
on
a
Net
Present
Value
basis
depending
on
the
particular
option
and
discount
rate
used
(
EIA,
p.
126).

Table
I:
Annualized
and
Net
Present
Value
of
Private
Sector
Compliance
Costs
Discount
Rate
Annualized
Costs
Net
Present
Value
Costs
Sector
Specific
Approach
Illustrative
Universal
Approach
Sector
Specific
Approach
Illustrative
Universal
Approach
3%
­$
19.5
million
­$
21.9
million
­$
616.6
million
­$
695.6
million
DRAFT
EPA
DOCUMENT
­
53­
7%
­$
26.8
million
­$
31.3
million
­$
382.7
million
­$
446.8
million
The
societal
cost
savings
vary
depending
on
the
discount
rate
used
and
the
approach
selected.
There
are
two
factors
which
affect
the
costs
of
compliance;
they
are
the
size
of
the
cap
(
i.
e.
the
amount
of
critical
use
methyl
bromide
exempted)
and
how
the
cap
is
constrained
(
i.
e.
if
there
is
one
"
universal"
amount
of
methyl
bromide
made
available
to
all
approved
critical
users
or
if
there
is
a
sub­
cap
for
each
sector/
commodity
group).
The
general
methodological
framework
of
the
model
used
for
the
analysis
of
the
2000
Phaseout
Rule
was
retained
to
calculate
the
costs
for
today's
proposed
rule.
The
phaseout
model
relies
on
an
engineering
approach
and
is
not
well
suited
to
predict
the
distribution
of
methyl
bromide
under
a
universal
approach.
Therefore,
while
EPA
had
a
significant
amount
of
data
on
certain
aspects
associated
with
the
analysis
of
today's
proposal
options,
such
as
data
on
methyl
bromide
use
and
substitutes
for
key
markets,
EPA
made
a
host
of
assumptions
regarding
the
future
amount
and
distribution
of
methyl
bromide
allowances.
These
assumptions
included
the
total
amount
of
critical
use
methyl
bromide
that
would
be
made
available,
the
distribution
of
methyl
bromide
allowances
to
various
sectors
under
each
option
analyzed,
and
the
schedule
for
the
methyl
bromide
critical
use
exemption
from
2005
to
2018.
For
example,
EPA
assumed
that
under
a
universal
approach,
80
percent
of
the
total
available
amount
of
methyl
bromide
would
go
to
the
two
largest
groups
of
end
users,
tomatoes
and
strawberries.
Eighty
percent
was
used
to
reflect
the
total
amount
of
methyl
bromide
originally
requested
by
these
applicants.
The
incremental
cost
savings
estimated
for
today's
proposed
rule
includes
two
general
components:
cost
savings
from
the
continued
use
of
methyl
bromide
as
compared
to
use
of
a
more
expensive
substitute
(
under
the
baseline),
and
the
economic
benefit
associated
with
the
increased
crop
yield
obtained
through
use
of
methyl
bromide
instead
of
a
less
effective
substitute
(
under
the
baseline).
The
analysis
also
estimates
the
administrative
costs
associated
with
each
option
(
e.
g.
reporting
and
record
keeping).
The
EIA
addresses
the
question
of
whether
or
not
a
framework
option
that
would
create
either
an
upstream
cap
and
trade
system
(
option
1)
or
a
downstream
tradable
permit
system
(
option
2)
is
more
economically
efficient
(
option
3,
the
auction
approach
for
allocating
allowances,
was
not
quantitatively
analyzed
in
this
EIA).
The
EIA
concluded
that
in
fact
who
holds
the
allowances
has
relatively
little
impact
on
the
efficiency
of
compliance
costs
per
se
and
that
such
costs
are
impacted
more
by
the
size
of
the
cap
and
constraints
on
the
cap
as
identified
in
the
preceding
paragraphs.
Under
both
options,
methyl
bromide
is
ultimately
purchased
by
the
user
of
methyl
bromide
with
the
highest
willingness
to
pay.
The
main
driver
of
efficiency
is
whether
or
not
methyl
bromide
goes
to
the
highest
value
use
within
a
commodity
sector
or
if
it
goes
to
the
use
with
the
highest
value
across
sectors.
According
to
chapter
5
of
the
EIA,
however,
there
are
some
factors
that
could
affect
whether
or
not
the
options
produce
the
same
result
in
terms
of
consumption
of
methyl
bromide
by
end
users
and
in
control
costs,
namely
how
smoothly
the
market
functions
under
either
option.
For
more
information
on
the
qualitative
factors
that
would
impact
either
option
for
who
holds
the
allowances,
as
well
as
a
discussion
of
DRAFT
EPA
DOCUMENT
­
54­
the
limitations
associated
with
the
analysis,
please
refer
to
the
EIA
available
in
docket
OAR­
2003­
0230.
While
option
two
is
better
than
option
one
in
compensating
end
users
who
give
up
their
"
rights"
to
methyl
bromide,
the
drawback
to
option
two
is
the
additional
complexity
in
both
administering
the
system
and
in
complying
with
the
system.
The
EIA
estimates
that
the
administrative
burden
for
the
regulated
community
and
EPA
under
options
one
and
two
as
follows:
Table
2:
Administrative
Burden
of
Options
1
and
2
EPA
Burden
Industry
Burden
Option
One
$
25
k
(
annual)
$
15
k
(
one
time)
$
2,200
k(
annual)
$
86
k
(
one
time)

Option
Two
$
2,100
k
(
annual)
$
53
k
(
one
time)
$
6,400
k
(
annual)
$
2,000
k
(
one
time)

Source:
EIA
pages
102
and
117
Further
details
regarding
the
de­
regulatory
benefits
of
the
proposed
critical
use
exemption
and
a
discussion
on
the
relative
merits
of
the
two
main
options
are
available
in
the
EIA
which
is
docketed
with
this
proposed
rulemaking.

B.
Paperwork
Reduction
Act
The
information
collection
requirements
in
this
rule
have
been
submitted
for
approval
to
the
Office
of
Management
and
Budget
(
OMB)
under
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et
seq.
The
information
collection
requirements
are
not
enforceable
until
OMB
approves
them.
EPA
submitted
an
ICR
to
OMB
concurrent
with
today's
proposed
rule.
In
the
ICR,
EPA
characterizes
the
paperwork
burden
that
industry
may
face
as
a
result
of
today's
proposed
action.
The
Information
Collection
Request
(
ICR)
document
prepared
by
EPA
has
been
assigned
EPA
ICR
number
1432.23.
The
information
collection
under
this
rule
is
authorized
under
Sections
603(
b),
603(
d)
and
614(
b)
of
the
Clean
Air
Act
(
CAA).
The
mandatory
reporting
requirements
included
in
this
rule
are
intended
to:
1)
Satisfy
U.
S.
obligations
under
the
international
treaty,
The
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer
(
Protocol),
to
report
data
under
Article
7;
2)
Fulfill
statutory
obligations
under
Section
603(
b)
of
Title
VI
of
the
Clean
Air
Act
Amendments
of
1990
(
CAA)
for
reporting
and
monitoring;
3)
Provide
information
to
report
to
Congress
on
the
production,
use
and
consumption
of
class
I
controlled
substances
as
statutorily
required
in
Section
603(
d)
of
Title
VI
of
the
CAA.
Information
will
be
collected
through
quarterly
reporting
by
producers
and
importers
and
annual
reporting
by
distributors
and
third
party
applicators
of
methyl
bromide.
In
addition,
distributors
and
third
party
applicators
would
be
required
to
provide
quarterly
updates
on
the
availability
of
critical
use
exempted
methyl
bromide.
DRAFT
EPA
DOCUMENT
­
55­
Collection
Activity
No.
of
respondents
Total
no.
of
responses
Hours
per
response
Total
hours
Rule
Familiarization
54
54
4
216
Data
Compilation
(
quarterly
basis)
4
16
4
64
Data
Compilation
(
annual
basis)
50
50
8
400
Data
Reporting
(
quarterly
basis)
4
16
.5
500
Data
Reporting
(
annual
basis)
50
50
.5
25
Reporting
on
Allowance
Trading
Activities
4
16
.5
8
Self
Certification
Activities
by
Producers,
Importers,
and
Distributors
54
100
.25
25
Self
Certification
Activities
by
End
Users
2,000
2,500
.25
625
Total
Burden
Hours
18
1,371
EPA
informs
respondents
that
they
may
assert
claims
of
business
confidentiality
for
any
of
the
information
they
submit.
Information
claimed
confidential
will
be
treated
in
accordance
with
the
procedures
for
handling
information
claimed
as
confidential
under
40
CFR
Part
2,
Subpart
B,
and
will
be
disclosed
only
to
the
extent,
and
by
means
of
the
procedures,
set
forth
in
that
subpart.
If
no
claim
of
confidentiality
is
asserted
when
the
information
is
received
by
EPA,
it
may
be
made
available
to
the
public
without
further
notice
to
the
respondents
(
40
CFR
2.203).
Burden
means
the
total
time,
effort,
or
financial
resources
expended
by
persons
to
generate,
maintain,
retain,
or
disclose
or
provide
information
to
or
for
a
Federal
agency.
This
includes
the
time
needed
to
review
instructions;
develop,
acquire,
install,
and
utilize
technology
and
systems
for
the
purposes
of
collecting,
validating,
and
verifying
information;
process
and
maintain
information;
disclose
and
provide
information;
adjust
the
existing
ways
to
comply
with
any
previously
applicable
instructions
and
requirements;
train
personnel
to
be
able
to
respond
to
a
collection
of
information;
search
data
sources;
complete
and
review
the
collection
of
information;
and
transmit
or
otherwise
disclose
the
information.
An
Agency
may
not
conduct
or
sponsor,
and
a
person
is
not
required
to
respond
to
a
collection
of
information
unless
it
displays
a
currently
valid
OMB
control
number.
The
OMB
control
numbers
for
EPA's
regulations
are
listed
in
40
CFR
Part
9
and
48
CFR
Chapter
15.
To
comment
on
the
Agency's
need
for
this
information,
the
accuracy
of
the
provided
burden
estimates,
and
any
suggested
methods
for
minimizing
respondent
burden,
including
the
use
of
automated
collection
techniques,
EPA
has
established
a
public
docket
for
this
rule,
which
includes
this
ICR,
under
Electronic
Docket
ID
number
OAR­
2003­
0230.
Submit
any
comments
related
to
the
rule
ICR
for
this
proposed
rule
to
EPA
and
OMB.
See
"
Addresses"
Section
at
the
DRAFT
EPA
DOCUMENT
­
56­
beginning
of
this
notice
for
where
to
submit
comments
to
EPA.
Send
comments
to
OMB
at
the
Office
of
Information
and
Regulatory
Affairs,
Office
of
Management
and
Budget,
725
17th
Street
NW,
Washington
D.
C.
20503
attn:
Desk
Officer
for
EPA.
Include
the
EPA
ICR
number
(
1432.23)
in
correspondence
related
to
this
ICR.

C.
Regulatory
Flexibility
Act
(
RFA)
The
RFA
generally
requires
an
agency
to
prepare
a
regulatory
flexibility
analysis
of
any
rule
subject
to
notice­
and­
comment
rulemaking
requirements
under
the
Administrative
Procedure
Act
or
any
other
statute
unless
the
agency
certifies
that
the
rule
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities.
Small
entities
include
small
businesses,
small
organizations,
and
small
governmental
jurisdictions.
For
purposes
of
assessing
the
impacts
of
today's
rule
on
small
entities,
small
entity
is
defined
as:
(
1)
a
small
business
that
is
identified
by
the
North
American
Industry
Classification
System
(
NAICS)
Code
in
the
Table
below;
(
2)
a
small
governmental
jurisdiction
that
is
a
government
of
a
city,
county,
town,
school
district
or
special
district
with
a
population
of
less
that
50,000;
and
(
3)
a
small
organization
that
is
any
not­
for­
profit
enterprise
which
is
independently
owned
and
operated
and
is
not
dominant
in
its
field.

Category
NAICS
code
SIC
code
NAICS
Small
business
size
standard
(
in
number
of
employees
or
millions
of
dollars)
DRAFT
EPA
DOCUMENT
­
57­
Agricultural
production
Storage
Uses
Distributors
and
Applicators
Producers
and
Importers
1112­
Vegetable
and
Melon
farming
1113­
Fruit
and
Nut
Tree
Farming
1114­
Greenhouse,
Nursery,
and
Floriculture
Production
115114­
Postharvest
Crop
activities
(
except
Cotton
Ginning)
311211­
Flour
Milling
311212­
Rice
Milling
493110­
General
Warehousing
and
Storage
493130­
Farm
Product
Warehousing
and
Storage
115112­
Soil
Preparation,
Planting
and
Cultivating
325320­
Pesticide
and
Other
Agricultural
Chemical
Manufacturing
0171­
Berry
Crops
0172­
Grapes
0173­
Tree
Nuts
0175­
Deciduous
Tree
Fruits
(
except
apple
orchards
and
farms)
0179­
Fruit
and
Tree
Nuts,
NEC
0181­
Ornamental
Floriculture
and
Nursery
Products
0831­
Forest
Nurseries
and
Gathering
of
Forest
Products
2041­
Flour
and
Other
Grain
Mill
Products
2044­
Rice
Milling
4221­
Farm
Product
Warehousing
and
Storage
4225­
General
Warehousing
and
Storage
0721­
Crop
Planting,
Cultivation,
and
Protection
2879­
Pesticides
and
Agricultural
Chemicals,
NEC
$
0.75
million
$
6
million
$
21.5
million
$
6
million
500
employees
Agricultural
producers
of
minor
crops
and
entities
that
store
agricultural
commodities
are
categories
of
affected
entities
that
contain
small
entities.
This
rule
only
affects
entities
that
applied
to
EPA
for
a
de­
regulatory
exemption.
In
most
cases,
EPA
received
aggregated
requests
for
exemptions
from
industry
consortia.
On
the
exemption
application,
EPA
asked
consortia
to
describe
the
number
and
size
distribution
of
entities
their
application
covered.
Based
on
the
data
provided,
EPA
estimates
that
there
are
3,218
entities
that
petitioned
EPA
for
an
exemption.
Since
many
applicants
did
not
provide
information
on
the
distribution
of
sizes
of
entities
covered
in
their
applications,
EPA
estimated
that
between
1/
4
to
1/
3
of
the
entities
may
be
small
DRAFT
EPA
DOCUMENT
­
58­
businesses
based
on
the
definition
given
above.
In
addition,
other
categories
of
affected
entities
do
not
contain
small
businesses
based
on
the
above
description.
After
considering
the
economic
impacts
of
today's
proposed
rule
on
small
entities,
EPA
certifies
that
this
action
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities.
In
determining
whether
a
rule
has
a
significant
economic
impact
on
a
substantial
number
of
small
entities,
the
impact
of
concern
is
any
significant
adverse
economic
impact
on
small
entities,
since
the
primary
purpose
of
the
regulatory
flexibility
analyses
is
to
identify
and
address
regulatory
alternatives
"
which
minimize
any
significant
economic
impact
of
the
proposed
rule
on
small
entities."
(
5
U.
S.
C.
§
§
603­
604).
Thus,
an
Agency
may
certify
that
a
rule
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities
if
the
rule
relieves
a
regulatory
burden,
or
otherwise
has
a
positive
economic
effect
on
all
of
the
small
entities
subject
to
the
rule.
Since
this
rule
will
make
methyl
bromide
available
for
approved
critical
uses
after
the
phaseout
date
of
January
1,
2005,
this
is
a
de­
regulatory
action
which
will
confer
a
benefit
to
users
of
methyl
bromide.
EPA
believes
the
estimated
de­
regulatory
value
for
users
of
methyl
bromide
is
between
$
20
million
to
$
30
million
annually.
We
have
therefore
concluded
that
today's
proposed
rule
will
relieve
regulatory
burden
for
all
small
entities.
We
continue
to
be
interested
in
the
potential
impacts
of
the
proposed
rule
on
small
entities
and
welcome
comments
on
issues
related
to
such
impacts.

D.
Unfunded
Mandates
Reform
Act
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
UMRA),
P.
L.
104­
4,
establishes
requirements
for
Federal
agencies
to
assess
the
effects
of
their
regulatory
actions
on
State,
local
and
tribal
governments
and
the
private
sector.
Under
Section
202
of
the
UMRA,
EPA
generally
must
prepare
a
written
statement,
including
a
cost­
benefit
analysis,
for
proposed
and
final
rules
with
"
Federal
mandates"
that
may
result
in
expenditures
by
State,
local
and
tribal
governments,
in
the
aggregate,
or
by
the
private
sector,
of
$
100
million
or
more
in
any
one
year.
If
a
written
statement
is
required
under
Section
202,
Section
205
of
the
UMRA
generally
requires
EPA
to
identify
and
consider
a
reasonable
number
of
regulatory
alternatives
and
adopt
the
least
costly,
most
cost­
effective
or
least
burdensome
alternative
that
achieves
the
objectives
of
the
rule,
unless
the
Agency
explains
why
this
alternative
is
not
selected
or
the
selection
of
this
alternative
is
inconsistent
with
law.
Section
203
of
the
UMRA
requires
the
Agency
to
establish
a
plan
for
obtaining
input
from
and
informing,
educating,
and
advising
any
small
governments
that
may
be
significantly
or
uniquely
affected
by
the
rule.
Section
204
of
the
UMRA
requires
the
Agency
to
develop
a
process
to
allow
elected
state,
local,
and
tribal
government
officials
to
provide
input
in
the
development
of
any
proposal
containing
a
significant
Federal
intergovernmental
mandate.
EPA
has
determined
that
this
rule
does
not
contain
a
Federal
mandate
that
may
result
in
expenditures
of
$
100
million
or
more
by
State,
local
and
tribal
governments,
in
the
aggregate,
or
by
the
private
sector,
in
any
one
year.
Today's
proposed
rule
seeks
to
obtain
comment
on
provisions
authorized
under
the
international
treaty,
The
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer,
as
well
as
authorizations
set
forth
by
Congress
in
Section
604
(
d)(
6)
of
the
Clean
Air
Act.
Viewed
as
a
whole,
all
of
today's
amendments
do
not
create
a
Federal
mandate
resulting
in
costs
of
$
100
million
or
more
in
any
one
year
for
State,
local
and
tribal
governments,
in
the
aggregate,
or
for
the
private
sector.
Thus,
today's
proposed
rule
is
not
subject
to
the
requirements
of
Sections
202
and
205
of
the
UMRA.
EPA
has
also
determined
that
this
proposed
DRAFT
EPA
DOCUMENT
­
59­
rule
contains
no
regulatory
requirements
that
might
significantly
or
uniquely
affect
small
governments;
therefore,
EPA
is
not
required
to
develop
a
plan
with
regard
to
small
governments
under
Section
203.
Finally,
because
this
proposal
does
not
contain
a
significant
intergovernmental
mandate,
the
Agency
is
not
required
to
develop
a
process
to
obtain
input
from
elected
State,
local,
and
tribal
officials
under
Section
204.

E.
Executive
Order
13132:
Federalism
Executive
Order
13132,
entitled
"
Federalism"
(
64
FR
43255,
August
10,
1999),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
State
and
local
officials
in
the
development
of
regulatory
policies
that
have
federalism
implications."
The
phrase
"
policies
that
have
federalism
implications"
is
defined
in
the
Executive
Order
to
include
regulations
that
have
"
substantial
direct
effects
on
the
States,
on
the
relationship
between
the
national
government
and
the
States,
or
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government."
Under
Section
6
of
Executive
Order
13132,
EPA
may
not
issue
a
regulation
that
has
federalism
implications,
that
imposes
substantial
direct
control
costs,
and
that
is
not
required
by
statute,
unless
the
Federal
government
provides
the
funds
necessary
to
pay
the
direct
control
costs
incurred
by
State
and
local
governments,
or
EPA
consults
with
State
and
local
officials
early
in
the
process
of
developing
the
regulation.
EPA
also
may
not
issue
a
regulation
that
has
federalism
implications
and
that
preempts
State
law,
unless
the
Agency
consults
with
State
and
local
officials
early
in
the
process
of
developing
the
regulation.
This
proposed
rule
does
not
have
federalism
implications.
It
will
not
have
substantial
direct
effects
on
the
States,
on
the
relationship
between
the
national
government
and
the
States,
or
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government,
as
specified
in
Executive
Order
13132.
Today's
proposed
rule
is
expected
to
primarily
affect
producers,
suppliers,
importers
and
exporters
and
users
of
methyl
bromide.
Thus,
the
requirements
of
Section
6
of
the
Executive
Order
do
not
apply
to
this
proposed
rule.

F.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
Executive
Order
13175,
entitled
"
Consultation
and
Coordination
with
Indian
Tribal
Governments"
(
65
FR
67249,
November
9,
2000),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
tribal
officials
in
the
development
of
regulatory
policies
that
have
tribal
implications."
This
proposed
rule
does
not
have
tribal
implications,
as
specified
in
Executive
Order
13175.
Today's
proposed
rule
does
not
significantly
or
uniquely
affect
the
communities
of
Indian
tribal
governments.
The
proposed
rule
does
not
impose
any
enforceable
duties
on
communities
of
Indian
tribal
governments.
Thus,
Executive
Order
13175
does
not
apply
to
this
proposed
rule.

G.
Executive
Order
13045:
Protection
of
Children
from
Environmental
Health
&
Safety
Risks
Executive
Order
13045:
"
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks"
(
62
FR
19885,
April
23,
1997)
applies
to
any
rule
that:
(
1)
is
determined
to
be
"
economically
significant"
as
defined
under
E.
O.
12866,
and
(
2)
concerns
an
environmental
health
or
safety
risk
that
EPA
has
reason
to
believe
may
have
a
disproportionate
effect
on
children.
If
the
regulatory
action
meets
both
criteria,
the
Agency
must
evaluate
the
environmental
health
or
DRAFT
EPA
DOCUMENT
­
60­
safety
effects
of
the
planned
rule
on
children,
and
explain
why
the
planned
regulation
is
preferable
to
other
potentially
effective
and
reasonably
feasible
alternatives
considered
by
the
Agency.
EPA
interprets
E.
O.
13045
as
applying
only
to
those
regulatory
actions
that
are
based
on
health
or
safety
risks,
such
that
the
analysis
required
under
Section
5­
501
of
the
Order
has
the
potential
to
influence
the
regulation.
This
proposed
rule
is
not
subject
to
E.
O.
13045
because
it
does
not
establish
an
environmental
standard
intended
to
mitigate
health
or
safety
risks.

H.
Executive
Order
13211:
Actions
that
Significantly
Affect
Energy
Supply,
Distribution,
or
Use
This
rule
is
not
a
"
significant
energy
action"
as
defined
in
Executive
Order
13211,
"
Actions
Concerning
Regulations
That
Significantly
Affect
Energy
Supply,
Distribution,
or
Use"
(
66
FR
28355
(
May
22,
2001))
because
it
is
not
likely
to
have
a
significant
adverse
effect
on
the
supply,
distribution,
or
use
of
energy.
This
rule
does
not
pertain
to
any
segment
of
the
energy
production
economy
nor
does
it
regulate
any
manner
of
energy
use.
Therefore,
we
have
concluded
that
this
rule
is
not
likely
to
have
any
adverse
energy
effects.

I.
The
National
Technology
Transfer
and
Advancement
Act
Section
12(
d)
of
the
National
Technology
Transfer
and
Advancement
Act
of
1995
("
NTTAA"),
Pub
L.
No.
104­
113,
§
12(
d)
(
15
U.
S.
C.
§
272
note)
directs
EPA
to
use
voluntary
consensus
standards
in
its
regulatory
activities
unless
to
do
so
would
be
inconsistent
with
applicable
law
or
otherwise
impractical.
Voluntary
consensus
standards
are
technical
standards
(
e.
g.,
materials
specifications,
test
methods,
sampling
procedures,
and
business
practices)
that
are
developed
or
adopted
by
voluntary
consensus
standards
bodies.
The
NTTAA
directs
EPA
to
provide
Congress,
through
OMB,
explanations
when
the
Agency
decides
not
to
use
available
and
applicable
voluntary
consensus
standards.
This
rulemaking
does
not
involve
technical
standards.
Therefore,
EPA
is
not
considering
the
use
of
any
voluntary
consensus
standards.

____________________
Date
______________________________________________
Michael
O.
Leavitt,
Administrator
PART
82­
PROTECTION
OF
STRATOSPHERIC
OZONE
1.
The
authority
citation
for
subpart
82
continues
to
read
as
follows:

Authority:
42
U.
S.
C.
7414,
7601,
7671­
7671q.

Subpart
A­
Production
and
Consumption
Controls
2.
Section
82.3
is
amended
by
adding
new
definitions
in
alphabetical
order
for
the
terms,
"
Approved
critical
use,"
"
Approved
critical
user,"
"
Consortium,"
"
Contingent
critical
use,"
"
Critical
need,"
"
Critical
stock
allowance,"
"
Critical
stock
allowance
holder,"
"
Critical
use
DRAFT
EPA
DOCUMENT
­
61­
allowance,"
"
Critical
use
allowance
holder,"
"
Critical
use
methyl
bromide,"
"
End
user,"
"
Limiting
critical
condition,"
"
Sector
cap,"
"
Self
applicators,"
"
Third
party
applicator,"
"
Unexpended
critical
stock
allowance,"
and
"
Unexpended
critical
use
allowance."

§
82.3
Definitions.
Approved
critical
use(
s)
means
those
uses
of
methyl
bromide
listed
in
Section
82.4(
p)
that
have
a
limiting
critical
condition.
*
*
*
*
*
Approved
critical
user(
s)
means
a
person
who:
(
1)
for
the
applicable
control
period,
applied
to
EPA
for
a
critical
use
exemption
or
is
a
member
of
a
consortium
that
applied
for
a
critical
use
exemption
for
a
use
that
was
included
in
the
U.
S.
nomination,
authorized
by
a
Decision
of
the
Parties
to
the
Montreal
Protocol,
and
then
finally
determined
by
EPA
in
a
notice­
and­
comment
rulemaking
to
be
a
critical
use,
and
(
2)
has
an
area
that
requires
methyl
bromide
fumigation
because
the
area
is
subject
to
a
limiting
critical
condition.
*
*
*
*
*
Consortium
means
an
organization
representing
a
group
of
methyl
bromide
users
that
has
collectively
submitted
an
application
for
a
critical
use
exemption
on
behalf
of
all
members
of
the
group.
The
members
of
a
consortium
shall
be
determined
on
the
basis
of
the
rules
established
by
the
organization.
Members
may
either
be
required
to
formally
join
the
consortium
(
i.
e.,
by
submitting
an
application
or
paying
dues)
or
may
automatically
become
members
upon
meeting
particular
criteria
(
i.
e.
a
grower
of
a
specific
crop
in
a
particular
region).
*
*
*
*
*
Critical
need
means
a
circumstance
in
which
(
1)
there
are
no
technically
and
economically
feasible
alternatives
to
using
methyl
bromide,
and
(
2)
a
prohibition
on
use
of
methyl
bromide
would
cause
significant
market
disruption
in
the
United
States.
*
*
*
*
*
Critical
stock
allowances
(
CSA)
means
the
privilege
granted
by
this
subpart
to
sell
one
(
1)
kilogram
of
methyl
bromide
to
an
approved
critical
user
during
the
specified
control
period.
A
person's
critical
stock
allowances
are
the
total
of
the
allowances
obtained
under
§
82.8(
c)
as
may
be
modified
under
§
82.12
(
transfer
of
allowances).
*
*
*
*
*
Critical
stock
allowance
(
CSA)
holder
means
an
entity
to
which
EPA
allocates
a
quantity
of
critical
stock
allowances
as
reflected
under
§
82.8(
c).
*
*
*
*
*
Critical
use
allowances
(
CUA)
means
the
privilege
granted
by
this
subpart
to
produce
or
import
one
(
1)
kilogram
of
methyl
bromide
for
an
approved
critical
user
during
the
specified
control
period.
A
person's
critical
use
allowances
are
the
total
of
the
allowances
obtained
under
§
82.8(
c)
as
may
be
modified
under
§
82.12
(
transfer
of
allowances).
*
*
*
*
*
Critical
use
allowance
(
CUA)
holder
means
an
entity
to
which
EPA
allocates
a
quantity
of
critical
use
allowances
as
reflected
in
§
82.8(
c).
*
*
*
*
*
Critical
use
methyl
bromide
means
the
class
I,
Group
VI
controlled
substance
produced
and
imported
through
expending
a
critical
use.
*
*
*
*
*
DRAFT
EPA
DOCUMENT
­
62­
End
user
means
a
person
that
treats
or
fumigates
commodities,
crops,
structures
or
land
in
his
possession
with
methyl
bromide
or
contracts
with
a
third
party
applicator
for
such
treatment
or
fumigation.
*
*
*
*
*
Limiting
critical
condition
means
the
regulatory,
technical,
and
economic
circumstances
listed
in
Appendix
L
to
this
subpart
that
establish
a
critical
need
for
methyl
bromide
in
a
fumigation
area.
Such
conditions
may
include,
but
are
not
limited,
to
(
1)
the
absence
of
any
alternative
to
methyl
bromide
for
a
specific
use;
(
2)
regulatory
restrictions
that
prohibit
the
use
of
available
alternatives
in
a
specific
fumigation
area;
(
3)
or
terrain,
soil,
or
climatological
conditions
that
render
use
of
available
alternatives
technically
or
economically
infeasible
in
a
specific
fumigation
area.
*
*
*
*
*
Sell
to
approved
critical
uses
means
to
sell
quantities
of
methyl
bromide
to
an
end
user
or
to
contract
with
an
end
user
to
provide
treatment
or
fumigation
services
on
commodities,
structures,
crops,
or
land
in
the
possession
of
the
end
user.
*
*
*
*
*
Third
party
applicator
means
an
applicator
of
critical
use
methyl
bromide
who
fumigates
or
treats
commodities,
structures,
crops,
or
land
in
the
possession
of
an
end
user.
*
*
*
*
*
Unexpended
critical
stock
allowances
(
CSA)
means
critical
stock
allowances
against
which
methyl
bromide
has
not
yet
been
sold
or
distributed
to
approved
critical
uses.
At
any
time
in
any
control
period
a
person's
unexpended
critical
stock
allowances
are
the
total
of
the
level
of
critical
stock
allowances
the
person
has
authorization
under
this
subpart
to
hold
at
that
time
for
that
control
period,
minus
the
level
of
class
I,
Group
VI
controlled
substances
that
the
person
has
sold
or
distributed
to
approved
critical
users
in
that
control
period
until
that
time.
*
*
*
*
*
Unexpended
critical
use
allowances
(
CUA)
means
critical
use
allowances
against
which
methyl
bromide
has
not
yet
been
produced
or
imported.
At
any
time
in
any
control
period
a
person's
unexpended
critical
use
allowances
are
the
total
of
the
level
of
critical
use
allowances
the
person
has
authorization
under
this
subpart
to
hold
at
that
time
for
that
control
period,
minus
the
level
of
class
I,
Group
VI
controlled
substances
that
the
person
has
produced
or
has
imported
solely
for
approved
critical
uses
in
that
control
period
until
that
time.
*
*
*
*
*

3.
Section
82.4
is
amended
by
revising
paragraph
(
b)
and
republishing
the
text,
revising
paragraph
(
d)
and
republishing
the
text,
by
revising
paragraph
(
n),
and
by
adding
paragraph
(
p)
as
follows:
§
82.4
Prohibitions.
*
*
*
*
*
(
b)(
1)
Effective
January
1,
1996,
for
any
class
I,
Group
I,
Group
II,
Group
III,
Group
IV,
Group
V,
or
Group
VII
controlled
substances,
and
effective
January
1,
2005,
for
any
class
I,
Group
VI
controlled
substance,
and
effective
August
18,
2003,
for
any
class
I,
Group
VIII
controlled
substance,
no
person
may
produce,
at
any
time
in
any
control
period,
(
except
that
are
transformed
or
destroyed
domestically
or
by
a
person
of
another
Party)
in
excess
of
the
amount
of
conferred
unexpended
essential
use
allowances
or
exemptions
under
this
subpart,
or
the
amount
of
unexpended
critical
use
allowances
allocated
under
this
subpart,
or
the
amount
of
unexpended
DRAFT
EPA
DOCUMENT
­
63­
Article
5
allowances
as
allocated
under
§
§
82.9,
for
that
substance
held
by
that
person
under
the
authority
of
this
subpart
at
that
time
for
that
control
period.
Every
kilogram
of
excess
production
constitutes
a
separate
violation
of
this
subpart.
(
2)
Production
and
import
of
class
I,
Group
VI
controlled
substances
is
not
subject
to
the
prohibitions
in
paragraph
(
c)(
1)
of
this
section
if
it
is
solely
for
quarantine
and
preshipment
applications
as
defined
in
this
subpart.
*
*
*
*
*
(
d)(
1)
Effective
January
1,
1996,
for
any
class
I,
Group
I,
Group
II,
Group
III,
Group
IV,
Group
V,
or
Group
VII
controlled
substances,
and
effective
January
1,
2005,
for
any
class
I,
Group
VI
controlled
substance,
and
effective
August
18,
2003,
for
any
class
I,
Group
VIII
controlled
substance,
no
person
may
import
(
except
for
transhipments
or
heels),
at
any
time
in
any
control
period,
(
except
for
controlled
substances
that
are
transformed
or
destroyed)
in
excess
of
the
amount
of
unexpended
essential
use
allowances
or
exemptions,
or
unexpended
critical
use
allowances,
as
allocated
in
this
subpart
for
that
substance
held
by
that
person
under
the
authority
of
this
subpart
at
that
time
for
that
control
period.
Every
kilogram
of
excess
importation
(
other
than
transhipments
or
heels)
constitutes
a
separate
violation
of
this
subpart.
It
is
a
violation
of
this
subpart
to
obtain
unused
class
I
controlled
substances
under
the
general
laboratory
exemption
in
excess
of
actual
need
and
to
recycle
that
material
for
sale
into
other
markets.
(
2)
Production
and
import
of
class
I,
Group
VI
controlled
substances
is
not
subject
to
the
prohibitions
in
paragraph
(
c)(
1)
of
this
section
if
it
is
solely
for
quarantine
and
preshipment
applications
as
defined
in
this
subpart.
*
*
*
*
*
(
n)
No
person
may
use
class
I
controlled
substances
produced
or
imported
under
the
essential
use
exemption
for
any
purpose
other
than
those
set
forth
in
this
paragraph.
Effective
January
1,
1996,
essential­
use
allowances
are
apportioned
to
a
person
under
Section
82.8(
a)
and
(
b)
for
the
exempted
production
or
importation
of
specified
class
I
controlled
substances
solely
for
the
purposes
listed
in
paragraphs
(
n)(
1)(
i)
through
(
iii)
of
this
section.
(
1)
Essential­
uses
for
the
production
or
importation
of
controlled
substances
as
agreed
to
by
the
Parties
to
the
Protocol
and
subject
to
the
periodic
revision
of
the
Parties
are:
(
i)
Metered
dose
inhalers
(
MDIs)
for
the
treatment
of
asthma
and
chronic
obstructive
pulmonary
disease
that
were
approved
by
the
Food
and
Drug
Administration
before
December
31,
2000.
(
ii)
Space
Shuttle
­
solvents.
(
iii)
Essential
laboratory
and
analytical
uses
(
defined
at
Appendix
G
of
this
subpart).
(
2)
Any
person
acquiring
unused
class
I
controlled
substances
produced
or
imported
under
the
authority
of
essential­
use
allowances
or
the
essential­
use
exemption
granted
in
Section
82.8
to
this
subpart
for
use
in
anything
other
than
an
essential­
use
(
i.
e.,
for
uses
other
than
those
specifically
listed
in
paragraph
(
n)(
1)
of
this
section)
is
in
violation
of
this
subpart.
Each
kilogram
of
unused
class
I
controlled
substance
produced
or
imported
under
the
authority
of
essential­
use
allowances
or
the
essential­
use
exemption
and
used
for
a
non­
essential
uses
is
a
separate
violation
of
this
subpart.
Any
person
selling
unused
class
I
controlled
substances
produced
or
imported
under
authority
of
essential­
use
allowances
or
the
essential­
use
exemption
for
uses
other
than
an
essential­
use
is
in
violation
of
this
subpart.
Each
kilogram
of
unused
class
I
controlled
substances
produced
or
imported
under
authority
of
essential­
use
allowances
or
the
essential­
use
exemption
and
sold
for
a
use
other
than
an
essential­
use
is
a
separate
violation
of
this
subpart.
It
is
a
DRAFT
EPA
DOCUMENT
­
64­
violation
of
this
subpart
to
obtain
unused
class
I
controlled
substances
under
the
exemption
for
laboratory
and
analytical
uses
in
excess
of
actual
need
and
to
recycle
that
material
for
sale
into
other
markets.
*
*
*
*
*
(
p)
For
critical
use
methyl
bromide,
for
the
relevant
control
period:
(
1)
No
person
shall
sell
critical
use
methyl
bromide
to
an
end
user
who
is
not
an
approved
critical
user.
Every
kilogram
of
critical
use
methyl
bromide
sold
to
an
end
user
that
is
not
an
approved
critical
use
constitutes
a
separate
violation
of
this
subpart.
(
2)
No
person
shall
sell
methyl
bromide
produced
or
consumed
before
the
phaseout
date
of
January
1,
2005,
to
any
approved
critical
use
unless
the
person
holds
a
critical
stock
allowance
(
CSA).
Every
kilogram
of
methyl
bromide
sold
to
an
approved
critical
user
for
critical
use
in
excess
of
the
number
of
critical
stock
allowances
held
by
the
seller
constitutes
a
separate
violation
of
this
subpart.
(
3)
No
person
who
acquires
critical
use
methyl
bromide
may
use
such
quantities
for
a
use
other
than
the
specified
critical
use
listed
in
Appendix
L
to
this
subpart.
No
person
who
acquires
critical
use
methyl
bromide
produced
under
an
allowance
for
a
specific
use
sector
listed
in
Appendix
L
to
this
subpart,
if
applicable,
may
use
such
quantities
in
a
different
use
sector.
No
person
who
acquires
critical
use
methyl
bromide
may
use
such
material
unless
he
meets
a
limiting
critical
condition
listed
in
Appendix
L
to
this
subpart.
No
approved
critical
user
shall
take
possession
of
quantities
of
critical
use
methyl
bromide
or
acquire
fumigation
services
using
quantities
of
critical
use
methyl
bromide
without
first
certifying
that
they
are
approved
critical
users
in
accordance
with
the
requirements
in
Section
82.13.
Every
50
kilograms
certified
by
an
end
user
to
be
for
an
approved
critical
use
that
is
not
then
used
for
that
approved
critical
use
listed
in
Appendix
L
to
this
subpart
constitutes
a
separate
violation
of
this
subpart.
(
4)
No
person
shall
sell
critical
use
methyl
bromide
to
an
approved
critical
user
without
first
obtaining
a
certification
form
from
the
approved
critical
user.
Every
kilogram
of
critical
use
methyl
bromide
sold
to
an
approved
critical
user
without
first
obtaining
certification
constitutes
a
separate
violation
of
this
subpart.

4.
Revise
the
title
of
82.8
to
read
as
follows,
and,
since
this
section
was
reserved,
add
text
to
read
as
follows:

§
82.8
Grant
of
essential
use
allowances
and
critical
use
allowances.
(
a)
Effective
January
1,
1996,
persons
in
the
following
list
are
allocated
essential­
use
allowances
or
exemptions
for
quantities
of
a
specific
class
I
controlled
substance
for
a
specific
essential­
use
(
the
Administrator
reserves
the
right
to
revise
the
allocations
based
on
future
decisions
of
the
Parties).

TABLE
I
­
Essential
Use
Allowances
for
Calendar
Year
2003
Company
Chemical
Quantity
(
metric
tonnes)

(
i)
Metered
dos
inhalers
(
for
oral
inhalation)
for
treatment
of
asthma
and
chronic
pulmonary
disease
Armstrong
Pharmaceuticals
DRAFT
EPA
DOCUMENT
­
65­
(
ii)
Cleaning,
bonding
and
surface
activation
application
for
the
Shuttle
Rockets
and
Titan
Rockets
(
b)
A
global
exemption
for
class
I
controlled
substances
for
essential
laboratory
and
analytical
uses
shall
be
in
effect
through
December
31,
2005
subject
to
the
restrictions
in
Appendix
G
of
this
subpart,
and
subject
to
the
recorkeeping
and
reporting
requirements
at
§
82.13(
u)
through
(
x).
There
is
no
amount
specified
for
this
exemption.
(
c)
Effective
January
1,
2005,
critical
use
allowances
are
apportioned
as
set
forth
in
paragraph
(
c)(
1)
of
this
Section
for
the
exempted
production
and
import
of
class
I,
Group
VI
controlled
substances
specifically
for
those
approved
critical
uses
listed
in
Appendix
L
to
this
subpart
for
the
applicable
control
period.
Every
kilogram
of
production
and
import
in
excess
of
the
total
number
and
type
of
unexpended
critical
use
allowances
held
for
a
particular
type
of
use
constitutes
a
separate
violation
of
this
subpart.
Effective
January
1,
2005,
critical
stock
allowances
of
a
specific
number
are
apportioned
as
set
forth
in
paragraph
(
c)(
2)
of
this
Section,
for
those
uses
listed
in
Appendix
L
to
this
subpart
for
the
applicable
control
period,
for
the
sale
to
approved
critical
users
of
class
I,
Group
VI
controlled
substances
held
in
inventory
that
were
produced
or
consumed
before
the
January
1,
2005
phaseout
date.
Every
kilogram
of
sale
to
approved
critical
users
in
excess
of
the
total
number
of
unexpended
critical
stock
allowances
held
constitutes
a
separate
violation
of
this
subpart.
(
1)
Allocated
critical
use
allowances
for
annual
control
period.
[
Reserved]
(
2)
Allocated
critical
stock
allowances
for
annual
control
period.
[
Reserved]

5.
Section
82.12
is
amended
by:
revising
paragraph
(
a)
and
republishing
the
text,
revising
paragraph
(
a)(
i)(
H)
and
republishing
the
text,
revising
paragraph
(
a)(
i)(
I)(
ii)
and
republishing
the
text
and,
revising
paragraph
(
a)(
i)(
I)(
iii)
and
republishing
the
text
as
follows.

§
82.12
Transfers
of
allowances
for
class
I
controlled
substances.
(
a)
Inter­
company
transfers.
(
1)
Until
January
1,
1996,
for
all
class
I
controlled
substances,
except
for
Group
VI,
and
until
January
1,
2005,
for
Group
VI,
any
person
(  
transferor'')
may
transfer
to
any
other
person
(  
transferee'')
any
amount
of
the
transferor's
consumption
allowances
or
production
allowances,
and
effective
January
1,
1995,
for
all
class
I
controlled
substances
any
person
(  
transferor'')
may
transfer
to
any
other
person
(  
transferee'')
any
amount
of
the
transferor's
Article
5
allowances.
DRAFT
EPA
DOCUMENT
­
66­
After
January
1,
2002,
any
essential­
use
allowance
holder
(
including
those
persons
that
hold
essential­
use
allowances
issued
by
a
Party
other
than
the
United
States)
(  
transferor'')
may
transfer
essential­
use
allowances
for
CFCs
to
a
metered
dose
inhaler
company
solely
for
the
manufacture
of
essential
MDIs.
After
January
1,
2005,
any
critical
use
allowance
holder
("
transferor")
may
transfer
critical
use
allowances
to
any
other
person
("
transferee").
After
January
1,
2005,
any
critical
stock
allowance
holder
("
transferor")
may
transfer
critical
stock
allowances
to
any
critical
stock
allowance
holder
("
transferee").
(
i)
*
*
*
(
H)
The
amount
of
the
one
percent
offset
applied
to
the
unweighted
amount
traded
will
be
deducted
from
the
transferor's
production
or
consumption
allowance
balance
(
except
for
trades
from
transformers
and
destroyers
to
producers
or
importers
for
the
purpose
of
allowance
reimbursement).
In
the
case
of
transferring
essential
use
allowances,
the
amount
of
one
tenth
of
one
percent
of
the
amount
traded
will
be
deducted
from
the
transferor's
allowance
balance.
In
the
case
of
transferring
critical
use
allowances,
the
amount
of
one
percent
of
the
amount
traded
will
be
deducted
from
the
transferor's
critical
use
allowance
balance.
(
I)
*
*
*
(
ii)
The
Administrator
will
determine
whether
the
records
maintained
by
EPA,
taking
into
account
any
previous
transfers
and
any
production,
allowable
imports
and
exports
of
controlled
substances
reported
by
the
transferor,
indicate
that
the
transferor
possesses,
as
of
the
date
the
transfer
claim
is
processed,
unexpended
allowances
sufficient
to
cover
the
transfer
claim
(
i.
e.,
the
amount
to
be
transferred
plus,
in
the
case
of
transferors
of
essential
use
allowances,
one
tenth
of
one
percent
of
the
transferred
amount,
and
in
the
case
of
transferors
of
critical
use
allowances,
one
percent
of
the
transferred
amount).
Within
three
working
days
of
receiving
a
complete
transfer
claim,
the
Administrator
will
take
action
to
notify
the
transferor
and
transferee
as
follows:
(
A)
*
*
*
(
B)
*
*
*
(
iii)
In
the
event
that
the
Administrator
does
not
respond
to
a
transfer
claim
within
the
three
working
days
specified
in
paragraph
(
a)(
1)(
ii)
of
this
Section,
the
transferor
and
transferee
may
proceed
with
the
transfer.
EPA
will
reduce
the
transferor's
balance
of
unexpended
allowances
by
the
amount
to
be
transferred
plus,
in
the
case
of
transfers
of
production,
consumption
or
critical
use
allowances,
one
percent
of
that
amount,
and
in
the
case
of
essential
use
allowances,
one
tenth
of
one
percent
of
that
amount.
However
if
EPA
ultimately
finds
that
the
transferor
did
not
have
sufficient
unexpended
allowances
to
cover
the
claim,
the
transferor
and
transferee
will
be
held
liable
for
any
violations
of
the
regulations
of
this
subpart
that
occur
as
a
result
of,
or
in
conjunction
with,
the
improper
transfer.
(
e)
Exchange
of
Critical
Use
Allowances
for
Critical
Stock
Allowances.
(
1)
Critical
use
allowance
holders
may
petition
the
Administrator
to
exchange
a
quantity
of
their
unexpended
critical
use
allowances
for
an
equivalent
amount
of
critical
stock
allowances
provided
they
hold
this
equivalent
amount
of
class
I,
Group
VI
controlled
substance
that
was
produced
or
imported
in
the
prior
control
period
either
with
production
allowances
and
consumption
allowances
or
critical
use
allowances.
A
person
allocated
critical
stock
allowances
may
not
petition
to
exchange
unexpended
critical
stock
allowances
for
critical
use
allowances.
(
2)
[
Reserved]

6.
Section
82.13
is
amended
by:
revising
paragraph
(
a),
adding
paragraphs
(
f)(
2)(
xx)
DRAFT
EPA
DOCUMENT
­
67­
through
(
f)(
2)(
xxi),
revising
paragraph
(
f)(
3)(
iv),
adding
paragraphs
(
f)(
3)(
xvi)
through
(
f)(
3)(
xix),
adding
paragraph
(
g)(
1)(
xx)
through
(
g)(
1)(
xxi),
revising
paragraph
(
g)(
4)(
vii),
adding
paragraphs
(
g)(
4)(
xviii)
through
(
g)(
4)(
xxi),
and
adding
paragraphs
(
ab)
through
(
ad).

§
82.13
Recordkeeping
and
reporting
requirements.
(
a)
Unless
otherwise
specified,
the
recordkeeping
and
reporting
requirements
set
forth
in
this
Section
take
effect
on
January
1,
1995.
For
class
I,
Group
VIII
controlled
substances,
the
recordkeeping
and
reporting
requirements
set
forth
in
this
Section
take
effect
on
August
18,
2003.
For
class
I,
Group
VI
critical
use
methyl
bromide,
the
recordkeeping
and
reporting
requirements
set
forth
in
this
Section
take
effect
January
1,
2005.
(
f)
*
*
*
(
2)
*
*
*
(
xx)
For
class
I,
Group
VI
controlled
substances,
dated
records
such
as
invoices
and
order
forms,
and
a
log
of
the
quantity
of
controlled
substances
produced
for
critical
use,
by
specified
critical
use
if
applicable
as
per
Appendix
L
of
this
subpart,
and
the
quantity
sold
for
critical
use,
by
specified
critical
use
if
applicable
as
per
Appendix
L
of
this
subpart,
and;
(
xxi)
Written
certifications
that
quantities
of
class
I,
Group
VI
controlled
substances
produced
for
critical
use
were
purchased
by
distributors,
applicators,
or
end
users
to
be
used
or
sold
only
for
critical
use
in
accordance
with
the
definitions
and
prohibitions
in
this
subpart.
(
3)
*
*
*
(
iv)
The
producer's
total
of
expended
and
unexpended
production
allowances,
consumption
allowances,
Article
5
allowances,
critical
use
allowances
by
specified
critical
use
if
applicable,
critical
stock
allowances,
and
amount
of
essential­
use
allowances
and
destruction
and
transformation
credits
conferred
at
the
end
of
that
quarter;
(
v)
*
*
*
(
vi)
*
*
*
(
vii)
*
*
*
(
viii)
*
*
*
(
ix)
*
*
*
(
x)
*
*
*
(
xi)
*
*
*
(
xii)
*
*
*
(
xiii)
*
*
*
(
xiv)
*
*
*
(
xv)
*
*
*
(
xvi)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
total
amount
of
critical
use
methyl
bromide
by
specified
critical
use,
if
applicable
as
per
Appendix
L
of
this
subpart,
that
was
produced,
bought,
and
sold
as
well
as
the
amounts
of
critical
use
methyl
bromide
held
in
inventory
by
the
reporting
entity
or
held
in
inventory
by
the
reporting
entity
on
behalf
of
another
entity.
(
g)
*
*
*
(
1)
*
*
*
(
xx)
For
class
I,
Group
VI
controlled
substances,
dated
records
such
as
invoices
and
order
forms,
of
the
quantity
of
controlled
substances
imported
for
critical
use,
by
specified
critical
use
if
applicable
per
Appendix
L
of
this
subpart,
and
the
quantity
sold
for
critical
use,
by
specified
DRAFT
EPA
DOCUMENT
­
68­
critical
use
if
applicable
as
per
Appendix
L
of
this
subpart,
and;
(
xxi)
Written
certifications
that
quantities
of
class
I,
Group
VI
controlled
substances
imported
for
critical
use
were
purchased
by
distributors,
applicators,
or
end
users
to
be
used
or
sold
only
for
critical
use
in
accordance
with
the
definitions
and
prohibitions
in
this
subpart.
(
4)
*
*
*
(
vii)
The
importer's
total
sum
of
expended
and
unexpended
consumption
allowances
by
chemical
as
of
the
end
of
that
quarter
and
the
total
sum
of
expended
and
unexpended
critical
use
allowances
by
specified
critical
use,
if
applicable,
as
per
Appendix
L
of
this
subpart;
(
2)
*
*
*
(
3)
*
*
*
(
4)
*
*
*
(
5)
*
*
*
(
6)
*
*
*
(
7)
*
*
*
(
8)
*
*
*
(
9)
*
*
*
(
10)
*
*
*
(
11)
*
*
*
(
12)
*
*
*
(
xviii)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
total
amount
of
critical
use
methyl
bromide
by
specified
critical
use
if
applicable,
as
per
Appendix
L
of
this
subpart,
that
was
imported,
bought,
and
sold
as
well
as
the
amounts
of
critical
use
methyl
bromide
held
in
inventory
by
the
reporting
entity
or
held
in
inventory
by
the
reporting
entity
on
behalf
of
another
entity.
*
*
*
*
*
(
ab)
Every
distributor
of
methyl
bromide
(
class
I,
Group
VI
controlled
substances)
who
purchases
or
receives
a
quantity
of
critical
use
methyl
bromide
must
comply
with
recordkeeping
and
reporting
requirements
specified
in
this
paragraph.
(
1)
Recordkeeping
 
Every
distributor
of
critical
use
methyl
bromide
must
certify
to
the
producer
or
importer
or
other
entity
from
which
they
are
acquiring
quantities
of
critical
use
methyl
bromide
that
such
quantities
received
will
be
sold
or
used
only
for
approved
critical
use(
s)
in
accordance
with
the
definitions
and
prohibitions
in
this
subpart.
(
i)
Every
distributor
of
a
quantity
of
critical
use
methyl
bromide
must
receive
from
an
applicator,
or
any
other
entity
to
whom
they
sell
critical
use
methyl
bromide,
a
certification
of
the
quantity
of
critical
use
methyl
bromide
ordered,
prior
to
delivery
of
the
quantity,
stating
that
the
quantity
will
be
sold
or
used
only
for
approved
critical
uses
in
accordance
with
definitions
and
prohibitions
in
this
subpart.
(
ii)
Every
distributor
of
methyl
bromide
who
receives
a
certification
from
an
applicator
or
any
other
entity
to
which
they
sell
critical
use
methyl
bromide
must
maintain
the
certifications
as
records
for
3
years.
(
iii)
Every
distributor
of
a
quantity
of
critical
use
methyl
bromide
must
maintain
invoice
and
order
records
related
to
the
sale
of
such
material
for
3
years.
(
2)
Reporting
 
Every
distributor
of
critical
use
methyl
bromide
must
report
to
the
Administrator
annually,
the
following
items:
(
i)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
DRAFT
EPA
DOCUMENT
­
69­
of
critical
use
methyl
bromide
bought,
organized
by
specified
critical
use
if
applicable
as
per
Appendix
L
of
this
subpart,
and;
(
ii)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
of
critical
use
methyl
bromide
sold
organized
by
specified
critical
use
and;
(
iii)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
of
critical
use
methyl
bromide
held
by
the
reporting
entity
or
held
by
the
reporting
entity
on
behalf
of
another
entity,
organized
by
specified
critical
use
if
applicable
as
per
Appendix
L
of
this
subpart.
(
ac)
Every
third
party
applicator
of
methyl
bromide
(
class
I,
Group
VI
controlled
substances)
that
purchases
or
receives
critical
use
methyl
bromide
must
comply
with
recordkeeping
and
reporting
requirements
specified
in
this
paragraph.
(
1)
Recordkeeping
 
Every
third
party
applicator
of
methyl
bromide
must
certify
to
the
producer
or
importer
or
other
entity
from
whom
they
are
acquiring
quantities
of
critical
use
methyl
bromide
that
such
quantities
received
will
be
sold
or
used
only
for
approved
critical
use
in
accordance
with
the
definitions
and
prohibitions
in
this
subpart.
(
i)
Every
third
party
applicator
of
a
quantity
of
critical
use
methyl
bromide
must
receive
from
an
end
user
or
any
other
entity,
to
whom
they
sell
critical
use
methyl
bromide,
or
for
whom
they
fumigate
an
area,
a
certification
that
the
quantity
of
class
I,
Group
VI
controlled
substances
ordered,
prior
to
delivery
of
the
quantity
or
prior
to
providing
fumigation
services,
will
only
be
sold
or
used
for
critical
uses
in
accordance
with
definitions
and
prohibitions
in
this
subpart.
(
ii)
Every
third
party
applicator
of
methyl
bromide
who
receives
a
certification
from
an
entity
to
which
they
sell
critical
use
methyl
bromide
must
maintain
the
certifications
as
records
for
3
years.
(
iii)
Every
third
party
applicator
of
a
quantity
of
critical
use
methyl
bromide
must
maintain
invoice
and
order
records
related
to
the
sale
of
such
material
for
three
years.
(
2)
Reporting
 
Every
third
party
applicator
of
critical
use
methyl
bromide
must
report
to
the
Administrator
annually,
the
following
items:
(
i)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
of
critical
use
methyl
bromide
bought,
and
from
whom,
organized
by
specified
end
use
if
applicable
as
per
Appendix
L
of
this
subpart
and;
(
ii)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
of
critical
use
methyl
bromide
sold
organized
by
specified
end
use
and;
(
iii)
For
critical
uses
of
class
I,
Group
VI
controlled
substances,
an
annual
list
of
the
amount
of
critical
use
methyl
bromide
held
for
the
reporting
entity
or
held
by
the
reporting
entity
on
behalf
of
another
entity,
organized
by
specified
end
use
if
applicable
as
per
Appendix
L
of
this
subpart.
(
ad)
Every
approved
critical
user
purchasing
an
amount
of
critical
use
methyl
bromide
or
purchasing
fumigation
services
with
critical
use
methyl
bromide
must,
for
each
request,
must
certify
knowledge
of
the
requirements
associated
with
the
exemption
for
critical
use
in
this
subpart
and
provide
such
information
that
identifies
the
use
as
a
critical
use
and
the
user
as
an
approved
critical
user.
The
certification
will
state,
in
part:
"
I
certify,
under
penalty
of
law,
knowledge
of
the
requirements
associated
with
the
exempted
critical
use
published
in
40
CFR
part
82,
including
the
requirement
that
this
letter
cite
basic
information
identifying
the
end
use
as
an
approved
critical
use
and
the
end
user
as
an
approved
critical
user."
*
*
*
*
*
DRAFT
EPA
DOCUMENT
­
70­
7.
Add
to
this
subpart
Appendix
L
that
reads
as
follows:

APPENDIX
L
TO
PART
82
SUBPART
A
 
APPROVED
CRITICAL
USES
AND
LIMITING
CRITICAL
CONDITIONS
FOR
THOSE
USES
FOR
THE
2005
CONTROL
PERIOD
Approved
Critical
Uses
Limiting
Critical
Conditions
PRE­
PLANT
USES
Cucurbits
a)
Michigan
growers
with
moderate
to
severe
fungal
pathogen
infestation
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
and
Virginia
growers
with
moderate
to
severe
yellow
or
purple
nutsedge
infestation
Eggplant
a)
Georgia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
fungal
pathogen
infestation
b)
Florida
growers
with
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation
and/
or
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
fungal
pathogen
infestation
and/
or
karst
topography
Forest
Seedlings
Approved
critical
users
listed
below
for
forest
seedlings
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
moderate
to
severe
disease
infestation.

a)
Members
of
the
Auburn
University
Southern
Forest
Nursery
Management
Cooperative
limited
to
growing
locations
in
Alabama,
Arkansas,
Florida,
Georgia,
Louisiana,
Mississippi,
North
Carolina,
Oklahoma,
South
Carolina,
Tennessee,
Texas,
and
Virginia
b)
International
Paper
and
its
subsidiaries
limited
to
growing
locations
in
Arkansas,
Alabama,
Georgia,
South
Carolina
and,
Texas
c)
Weyerhaeuser
Company
and
its
subsidiaries
limited
to
growing
locations
in
Alabama,
Arkansas,
North
Carolina,
South
Carolina,
Oregon
and,
Washington
d)
Public
(
government
owned)
seedling
nurseries
in
the
states
of
California,
Idaho,
Illinois,
Indiana,
Kansas,
Kentucky,
Maryland,
Missouri,
Nebraska,
New
Jersey,
Ohio,
Oregon,
Pennsylvania,
Utah,
Washington,
West
Virginia
and,
Wisconsin
e)
Members
of
the
Nursery
Technology
Cooperative
limited
to
growing
locations
in
Oregon
and
Washington
f)
Michigan
seedling
nurseries
Ginger
a)
Hawaii
growers
with
the
limiting
critical
condition
of
moderate
to
severe
nematode
infestation
and/
or
moderate
to
severe
bacterial
wilt
infestation
Orchard
Nursery
Seedlings
Approved
critical
users
listed
below
for
orchard
nursery
seedlings
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
nematode
infestation,
medium
to
heavy
clay
soils,
and/
or
a
prohibition
of
on
the
use
of
1,3­
dichloropropene
products
due
to
reaching
local
township
limits
on
the
use
of
this
alternative
DRAFT
EPA
DOCUMENT
­
71­
a)
Members
of
the
Western
Raspberry
Nursery
Consortium
limited
to
growing
locations
in
California
and
Oregon
(
Driscoll's
raspberries
and
their
contract
growers
in
California
and
Oregon)

b)
Members
of
the
California
Association
of
Nurserymen­
Deciduous
Fruit
and
Nut
Tree
Growers
c)
Members
of
theCalifornia
Association
of
Nurserymen­
Citrus
and
Avocado
Growers
Orchard
Replant
Approved
critical
users
listed
below
for
orchard
replant
with
one
or
more
of
the
following
limiting
critical
conditions:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
and/
or
medium
to
heavy
soils,
and/
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.

a)
California
stone
fruit
growers
b)
California
table
and
raisin
grape
growers
c)
California
walnut
growers
d)
California
almond
growers
Ornamentals
a)
Yoder
Brothers
Inc.
for
use
in
chrysanthemum
production
b)
California
rose
nurseries
prohibited
from
using
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
Peppers
a)
California
growers
with
the
limiting
critical
conditions
of
moderate
to
severe
fungal
pathogens,
and/
or
moderate
to
sever
disease
infestation,
and/
or
moderate
to
sever
nematode
infestation,
and/
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less
c)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
karst
topography
Strawberry
Nurseries
a)
California
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
black
root
rot
or
crown
rot,
moderate
to
severe
nematode
infestation,
and/
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation
b)
North
Carolina
and
Tennessee
growers
with
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less
Strawberry
Fruit
a)
California
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
black
root
rot
or
crown
rot,
moderate
to
severe
nematode
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
a
prohibition
of
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
b)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge,
and/
or
karst
topography
DRAFT
EPA
DOCUMENT
­
72­
c)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
Virginia,
Ohio
and,
New
Jersey
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge,
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less
Sweet
Potatoes
a)
California
growers
with
the
contingent
limiting
critical
condition
of
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
Tomatoes
a)
Michigan
growers
with
moderate
to
severe
disease
and/
or
fungal
pathogens
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
and/
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less
c)
Florida
growers
with
one
or
more
of
the
following
limiting
critical
conditions:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
and/
or
karst
topography
Turfgrass
a)
U.
S.
turfgrass
sod
nursery
producers
for
the
production
of
industry
certified
pure
sod
b)
U.
S.
golf
courses
establishing
sod
in
the
construction
of
new
golf
courses
or
the
renovation
of
putting
greens,
tees,
and
fairways
POST­
HARVEST
USES
Food
Processing
Approved
critical
users
listed
below
for
food
processing
with
one
or
more
of
the
following
limiting
critical
conditions:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
and/
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity
a)
Rice
millers
in
Arkansas,
California
Louisiana,
Florida,
Missouri,
and
Mississippi
b)
Pet
food
manufacturing
facilities
in
the
U.
S.

c)
Kraft
Foods
d)
Members
of
the
North
American
Millers'
Association
Commodity
Storage
a)
Smokehouse
ham
curing
in
facilities
owned
by
Gwaltney
of
Smithfield
b)
Entities
storing
walnuts,
beans,
dried
plums,
and
pistachios
in
California
with
one
or
more
of
the
following
limiting
critical
conditions:
rapid
fumigation
is
required
to
meet
a
critical
market
window,
such
as
during
the
holiday
season,
rapid
fumigation
is
required
when
a
buyer
provides
short
(
2
days
or
less)
notification
for
a
purchase,
and/
or
there
is
a
short
period
after
harvest
in
which
to
fumigate
and
there
is
limited
silo
availability
for
using
alternatives
DRAFT
EPA
DOCUMENT
­
73­
