1
1ENVIRONMENTAL
PROTECTION
AGENCY
40
CFR
Part
82
[
FRL­]
RIN
­
[
]
Protection
of
Stratospheric
Ozone:
Process
for
Exempting
Critical
Uses
from
the
Phaseout
of
Methyl
Bromide
AGENCY:
Environmental
Protection
Agency
(
EPA)
ACTION:
Final
Rule
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

SUMMARY:
EPA
is
taking
final
action
to
exempt
production
and
import
of
methyl
bromide
for
critical
uses
from
the
accelerated
phaseout
regulations
that
govern
the
production,
import,
export,
transformation
and
destruction
of
substances
that
deplete
the
ozone
layer
under
the
authority
of
the
Clean
Air
Act
(
CAA).
Today's
amendments
establish
the
framework
for
an
exemption
permitted
under
the
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer
(
Protocol)
and
the
CAA
and
specify
the
amount
of
methyl
bromide
that
may
be
supplied
in
2005
from
available
stocks
and
new
production
and
consumption
to
meet
approved
critical
uses.
In
addition,
this
action
establishes
the
list
of
critical
uses
approved
by
EPA
for
2005.

EFFECTIVE
DATE:
This
final
rule
is
effective
on
January
1,
2005.

ADDRESSES:
EPA
has
established
a
docket
for
this
action
under
Docket
ID
No.
OAR­
2003­
0230.
All
documents
in
the
docket
are
listed
in
the
EDOCKET
index
at
http://
www.
epa.
gov/
edocket.
Although
listed
in
the
index,
some
information
is
not
publicly
available,
i.
e.,
CBI
or
other
information
whose
disclosure
is
restricted
by
statute.
Certain
other
material,
such
as
copyrighted
material,
is
not
placed
on
the
Internet
and
will
be
publicly
available
only
in
hard
copy
form.
Publicly
available
docket
materials
are
available
either
electronically
in
EDOCKET
or
in
hard
copy
at
the
Air
Docket,
EPA/
DC,
EPA
West,
Room
B102,
1301
Constitution
Ave.,
NW,
Washington,
DC.
This
Docket
Facility
is
open
from
8:
30
a.
m.
to
4:
30
p.
m.,
Monday
through
Friday,
excluding
legal
holidays.
The
Public
Reading
Room
is
open
from
8:
30
a.
m.
to
4:
30
p.
m.,
Monday
through
Friday,
excluding
legal
holidays.
The
telephone
number
for
the
Public
Reading
Room
is
(
202)
566­
1744,
and
the
telephone
number
for
the
Air
Docket
is
(
202)
566­
1742.

FOR
FURTHER
INFORMATION
CONTACT:
Hodayah
Finman,
U.
S.
Environmental
Protection
Agency,
Office
of
Air
and
Radiation,
Stratospheric
Protection
Division
(
6205J),
1200
Pennsylvania
Avenue,
N.
W.,
Washington,
D.
C.,
20460;
telephone
number:
(
202)
343­
9246;
fax
numbers:
(
202)
343­
2338;
finman.
hodayah@
epa.
gov.
You
may
also
visit
the
EPA's
Ozone
Depletion
web
site
at
www.
epa.
gov/
ozone
for
further
information
about
EPA's
Stratospheric
Ozone
Protection
regulations,
the
science
of
ozone
layer
depletion,
and
other
related
topics.

SUPPLEMENTARY
INFORMATION:
This
final
rule
concerns
Clean
Air
Act
restrictions
on
the
consumption,
production
and
on
2
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
critical
use
exemption
and
the
existing
quarantine
and
pre­
shipment
exemption.
With
today's
action,
EPA
is
establishing
a
framework
for
how
the
critical
use
exemption
will
operate
as
well
as
specific
amounts
of
methyl
bromide
to
be
made
available
for
approved
critical
uses
in
2005.
Section
553(
d)
of
the
Administrative
Procedure
Act
(
APA),
5
U.
S.
C.,
Chapter
5,
generally
provides
that
rules
may
not
take
effect
earlier
than
30
days
after
they
are
published
in
the
Federal
Register.
Today's
final
rule
is
issued
under
section
307(
d)
of
the
CAA,
which
states:
"
The
provisions
of
section
553
through
557
.
.
.
of
Title
5
shall
not,
except
as
expressly
provided
in
this
subsection,
apply
to
actions
to
which
this
subsection
applies."
CAA
§
307(
d)(
1).
Thus,
section
553(
d)
of
the
APA
does
not
apply
to
this
rule.
EPA
nevertheless
is
acting
consistently
with
the
policies
underlying
APA
section
553(
d)
in
making
this
rule
effective
January
1,
2005.
APA
section
553(
d)
provides
an
exception
for
any
action
that
grants
or
recognizes
an
exemption
or
relieves
a
restriction.
Today's
final
rule
grants
an
exemption
from
the
phaseout
of
production
and
import
of
methyl
bromide
for
critical
uses.
Because
the
complete
phaseout
takes
effect
January
1,
2005,
EPA
is
making
this
exemption
effective
on
the
same
date
to
ensure
the
availability
of
methyl
bromide
for
critical
uses.

Table
of
Contents
I.
General
Information
A.
Does
this
Action
Apply
to
Me?
II.
What
is
the
Background
of
the
Phaseout
Regulations
for
Ozone
Depleting
Substances?
III.
What
is
Methyl
Bromide?
IV.
What
is
the
Background
for
Today's
Action?
V.
What
are
the
Details
of
Today's
Action?
A.
Critical
Need
1.
Should
EPA
Establish
a
Critical
Use
Exemption
2.
Should
EPA
Further
Adjust
the
Amount
of
Methyl
Bromide
Under
the
Critical
Use
Exemption
B.
Amount
from
Stocks
C.
Access
to
Stocks
D.
Cap
on
Critical
Use
Methyl
Bromide
E.
Critical
Use
Allowance
Allocations
1.
Allocation
of
Critical
Use
Allowances
2.
Baseline
for
Critical
Use
Allowance
Distribution
3.
Frequency
of
Critical
Use
Allowance
Distribution
F.
Critical
Stock
Allowance
Allocations
G.
Trading
Allowances
H.
Acquiring
Critical
Use
Methyl
Bromide
I.
Who
is
an
Approved
Critical
User
1.
Users
and
Uses
2.
New
Market
Entrants
3
J.
Reporting
and
Recordkeeping
Requirements
1.
Reporting
2.
Recordkeeping
3.
Treatment
of
Unused
Critical
Use
Methyl
Bromide
K.
Enforcement
Provisions
L.
Export
Provisions
VI.
What
are
the
Other
Considerations
and
Situations
on
which
EPA
Received
Comments?
A.
Distribution
of
Permits
to
Approved
Critical
Users
B.
Comments
on
the
Burden
Associated
with
this
Regulatory
System
VII.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
No.
12866:
Regulatory
Planning
and
Review
B.
Paperwork
Reduction
Act
C.
Regulatory
Flexibility
Act
D.
Unfunded
Mandates
Reform
Act
E.
Executive
Order
No.
13132:
Federalism
F.
Executive
Order
No.
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
G.
Executive
Order
No.
13045:
Protection
of
Children
from
Environmental
Health
&
Safety
Risks
H.
Executive
Order
No.
13211:
Actions
that
Significantly
Affect
Energy
Supply,
Distribution,
or
Use
I.
National
Technology
Transfer
Advancement
Act
J.
Congressional
Review
Act
VIII.
General
Information
Does
this
Action
Apply
to
Me?

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,
fruits
and
seedlings;
and
owners
of
stored
food
commodities
and
structures
such
as
grain
mills
and
processors,
Government
and
nongovernment
researchers.
4
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.

II.
What
is
the
Background
of
the
Phaseout
Regulations
for
Ozone
Depleting
Substances?
The
current
regulatory
requirements
of
the
Stratospheric
Ozone
Protection
Program
that
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
and
subsequent
ratification
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
(
CAAA
of
1990)
which
included
Title
VI
on
Stratospheric
Ozone
Protection,
codified
as
42
U.
S.
C.
Chapter
85,
Subchapter
VI,
to
ensure
that
the
United
States
could
satisfy
its
obligations
under
the
Protocol.
EPA
issued
new
regulations
to
implement
this
legislation
and
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
Clean
Air
Act
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
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
www.
unep.
org/
ozone
or
by
contacting
the
Stratospheric
Ozone
Hotline
at
1­
800­
296­
1996.
Because
it
is
a
pesticide,
methyl
bromide
is
also
regulated
by
EPA
under
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act
(
FIFRA)
and
other
statutes
and
regulatory
authority
and
by
states
under
their
own
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
final
rule
5
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
provisions
of
this
final
rule
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
importing,
exporting,
acquiring,
selling,
distributing,
transferring,
or
using
methyl
bromide
for
critical
uses.
The
regulations
in
today's
action
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
Background
for
Today's
Action?
EPA
published
a
proposed
rule
in
the
Federal
Register
on
August
25,
2004
(
69
FR
52366)
proposing
an
exemption
to
the
phaseout
of
methyl
bromide
for
critical
uses,
an
allowance
allocation
system
for
critical
use
methyl
bromide,
and
a
list
of
approved
critical
uses.
EPA
received
15,231
on­
time
comments
related
to
Air
Docket
OAR­
2003­
0230
and
6
people
spoke
at
a
hearing
EPA
held
on
September
20,
2004
in
Washington
D.
C.
that
was
attended
by
20
individuals.
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,
when
the
complete
phaseout
would
occur
(
58
FR
65018).
This
phaseout
date
was
consistent
with
requirements
under
Section
602(
d)
of
the
1990
CAA
amendments
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."
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
amended
the
CAA
to
prohibit
the
termination
of
production
of
methyl
bromide
prior
to
January
1,
2005,
to
require
EPA
to
bring
the
U.
S.
phaseout
of
methyl
bromide
in
line
with
the
schedule
specified
under
the
Protocol,
and
to
authorize
EPA
to
provide
exemptions
for
critical
uses.
These
amendments
were
contained
in
Section
764
of
the
1999
Omnibus
Consolidated
and
Emergency
Supplemental
Appropriations
Act
(
PL
105­
277,
October
21,
1998)
and
were
codified
6
in
Section
604
of
the
CAA,
42
U.
S.
C.
§
7671c.
On
November
28,
2000,
EPA
issued
regulations
to
amend
the
phaseout
schedule
for
methyl
bromide
and
extend
the
complete
phaseout
of
production
and
consumption
to
2005
(
65
Fed
Reg.
70795).
Today,
in
accordance
with
the
1998
amendments
to
the
CAA,
EPA
is
further
amending
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
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.
§
7671c(
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."
Both
Section
604(
d)(
6)
and
Section
614(
b)
of
the
CAA
address
the
relationship
between
the
Montreal
Protocol
and
actions
taken
under
the
CAA's
stratospheric
ozone
provisions.
Section
604(
d)(
6)
addresses
critical
uses
specifically,
while
Section
614(
b)
is
more
general
in
scope.
Section
604(
d)(
6)
states
that
"
to
the
extent
consistent
with
the
Montreal
Protocol,"
the
Administrator
may
exempt
methyl
bromide
for
critical
uses.
Section
614(
b)
states:
"
This
title
as
added
by
the
Clean
Air
Act
Amendments
of
1990
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
the
case
of
conflict
between
any
provision
of
this
title
and
any
provision
of
the
Montreal
Protocol,
the
more
stringent
provision
shall
govern."
EPA
must
take
into
account
not
only
the
text
of
Article
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
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
paragraph
1
of
Decision
7
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
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
technical
panels
(
discussed
below)
that
reviews
nominations
and
makes
recommendations
to
the
Parties
regarding
approval
of
critical
use
exemptions,
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
this
technical
panel.
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
8
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;
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
will
ensure
consistency
with
the
Montreal
Protocol
and
satisfy
the
requirements
of
Section
604(
d)
(
6)
and
Section
614(
b)
of
the
CAA.

V.
What
are
the
Details
of
Today's
Action?

I.
Critical
Need
1.
Should
EPA
Establish
a
Critical
Use
Exemption?

With
today's
final
action,
EPA
is
establishing
the
critical
use
exemption
(
CUE)
by
amending
40
CFR
82
to
exempt
production
and
import
of
methyl
bromide
from
the
January
1,
2005
phaseout
to
meet
the
needs
of
users
who
do
not
have
technically
and
economically
feasible
alternatives
available
to
them.
In
today's
rulemaking,
EPA
is
describing
the
framework
for
the
critical
use
exemption,
assigning
allowances
for
critical
use
methyl
bromide,
and
determining
the
quantities
of
exempted
methyl
bromide
allowable
under
the
Clean
Air
Act
and
the
Montreal
Protocol.
EPA
received
15,176
on
time
comments
requesting
the
Agency
not
to
exempt
any
methyl
bromide
for
critical
uses.
The
Clean
Air
Act
allows
the
Agency
to
create
an
exemption
for
critical
uses
to
the
extent
consistent
with
the
Protocol.
The
Protocol
authorizes
an
exemption
to
the
extent
decided
by
the
Parties.
In
Decision
Ex.
I/
3,
the
Parties
decided
to
permit
a
limited
exemption
for
specified
uses
nominated
by
the
United
States.
EPA,
in
conjunction
with
other
U.
S.
government
entities,
spent
substantial
time
reviewing
applications
for
critical
use
exemptions
and
preparing
a
nomination
based
on
the
lack
of
technically
and
economically
feasible
alternatives
for
the
nominated
uses.
As
discussed
below,
EPA
does
not
have
new
information
that
would
change
the
basis
for
the
nomination.
Although
the
Act
does
not
require
EPA
to
establish
an
exemption,
EPA
believes
that
the
lack
of
suitable
alternatives
for
the
uses
listed
as
approved
9
critical
uses
in
today's
rulemaking
warrants
the
establishment
of
an
exemption.
The
history
of
the
ozone
protection
programs
has
been
the
transition
of
industries
away
from
production,
import,
and
use
of
ozone
depleting
chemicals
to
ozone
friendly
alternatives.
In
some
instances
a
successful
transition
was
possible
within
the
allotted
time.
In
other
instances,
additional
time
has
been
required
to
allow
for
the
development
and
market
penetration
of
ozone
friendly
alternatives.
In
fact,
more
than
ten
years
after
the
phaseout
of
chloroflurocarbons
(
CFCs),
the
U.
S.
government
is
still
exempting
the
production
of
CFCs
for
essential
uses
in
metered
dose
inhalers.
In
the
instance
of
critical
uses
where
suitable
alternatives
are
not
yet
available
for
all
uses,
EPA
believes
it
would
be
inconsistent
with
the
history
and
the
goals
of
the
ozone
protection
program
to
not
allow
for
a
safety
valve
in
accordance
with
the
provisions
of
both
international
and
domestic
law.

2.
Should
EPA
Further
Adjust
the
Amount
of
Methyl
Bromide
Available
Under
the
Critical
Use
Exemption?

Similar
to
CFCs
which
were
used
in
varied
applications,
methyl
bromide
as
a
highly
effective
general
biocide
is
used
in
a
wide
variety
of
distinctly
different
pest
control
operations.
Many
of
the
effective
treatments
which
are
available
as
alternatives
to
methyl
bromide
may
work
in
certain
niche
applications
or
under
specific
conditions.
Other
alternatives
that
have
a
wider
spectrum
of
activity
may
not
yet
be
licenced
for
use
or
may
be
economically
infeasible.
EPA
conducted
a
thorough
analysis
on
the
technical
and
economic
feasibility
of
available
alternatives
for
each
critical
use
and
the
potential
for
significant
market
disruption
in
the
event
that
methyl
bromide
were
not
available
for
a
particular
use.
The
analysis,
in
the
form
of
the
U.
S.
nomination
of
critical
uses
and
answers
to
clarifying
questions
on
those
documents,
is
available
in
the
docket
OAR­
2003­
0230.
A
memorandum
describing
the
review
process,
titled
"
Memorandum:
2003
Nomination
Process"
is
also
available
in
the
docket.
In
the
notice
of
proposed
rulemaking,
EPA
solicited
comments
on
the
technical
and
economic
assessment
conducted
on
the
alternatives
to
methyl
bromide.
EPA
received
14
comments
on
the
technical
and
economic
assessment
of
alternatives
to
methyl
bromide.
These
comments
did
not
provide
the
Agency
with
any
new
information
for
EPA's
consideration
on
the
efficacy
and
cost
of
alternatives.
Therefore,
EPA
is
not
further
adjusting
the
amount
of
methyl
bromide
available
under
the
critical
use
exemption.
One
commenter
stated
that
their
products,
1,3­
dichloropropene
(
1,3­
D)
and
sulfuryl
flouride
(
SF)
can
displace
a
significant
portion
of
the
critical
use
market,
40%
of
the
authorized
amount,
but
they
recognize
that
from
a
practical
transition
perspective,
such
reductions
will
not
easily
happen
in
the
next
year.
The
commenter
provided
a
table
indicating
that
these
two
products
could
be
technical
and
economical
substitutes
in
every
critical
use
category
for
which
their
products
are
registered.
In
the
U.
S.
nomination,
the
government
took
great
pains
to
describe
the
specific
circumstances
that
make
1,3­
D,
which
may
be
otherwise
technically
and
economically
feasible,
not
feasible
for
a
certain
portion
of
total
domestic
use.
The
U.
S.
believes
that
1,3­
D
products
can
be
used
in
a
variety
of
circumstances
but
there
are
some
factors,
such
as
regulatory
limits
on
the
use
of
1,3­
D
or
the
presence
of
heavy
nutsedge
weed
populations
make
the
1,3­
D
products
not
10
technically
and
economically
feasible.
Over
the
portion
of
the
crop
there
may
be
technical
limitations
to
the
use
of
1,3­
D
treatments
or
economic
losses
associated
with
the
use
of
this
fumigant.
[
Is
it
US's
belief
or
EPA's
belief?]
The
commenter
specifically
pointed
to
comments
made
in
the
2004
MBTOC
report
where
the
committee
indicated
that
there
are
technically
feasible
herbicides
available
to
control
nutsedge,
specifically
halosulfuron
for
peppers
and
halosulfuron
and
triflxysulfuron
for
tomatoes,
that
can
be
used
in
combination
with
1,3­
D
products
to
provide
complete
spectrum
pest
control.
As
described
in
the
nomination,
both
of
these
herbicides
have
been
recently
registered
and
can
provide
effective
control
of
nutsedge
populations,
however
certain
regulatory
restrictions
exist
on
the
use
of
these
products
causing
them
to
be
not
technically
available
within
current
cropping
systems
for
the
exempted
portion
of
production.
For
example,
both
products
have
plant
back
restrictions
which
limit
the
ability
of
growers
to
plant
a
second
crop.
Almost
without
exception,
U.
S.
pepper
and
tomato
farmers
plant
more
than
one
crop
on
the
same
acreage.
The
U.
S.
nominations
additionally
analyzed
the
feasibility
of
using
1,3­
D
products
without
the
herbicides
and
finds
that
the
treatment
is
not
economically
feasible.
For
example,
a
typical
tomato
farm
in
the
southeastern
U.
S.
would
experience
approximately
$
5,700
$
5,708
in
losses
per
acre
using
1,3­
D
products
compared
to
using
methyl
bromide.
The
commenter
indicated
the
use
of
alternatives,
specifically
an
emulsified
formulation
of
chloropicrin
(
Pic
EC)
and
metham
sodium
in
combination
with
chloropicrin
is
technically
feasible
for
strawberry
production
in
California
according
to
the
2004
MBTOC
report.
Again,
the
U.
S.
nomination
describes
the
limitations
of
these
alternatives
for
the
specific
circumstance
of
the
nominated
acreage.
For
example,
15%
of
the
nominated
area
is
located
on
hilly
terrain
that
makes
the
use
of
drip
applied
fumigants
a
technically
infeasible
alternative.
Furthermore,
chloropicrin
is
not
a
full
spectrum
fumigant.
Chloropicrin
provides
good
control
of
disease
but
the
nomination
clearly
states
that
the
nominated
area
additionally
has
nematode
and
weed
pressures
as
well.
The
commenter
did
not
provide
a
copy
of
a
study
documenting
comparable
pet
control
and
yields
using
Pic
EC
for
areas
with
nematode,
weed,
and
disease
pressures.
Further
metham
sodium
used
with
chloropicrin
is
not
economically
feasible
according
to
the
nomination.
EPA
believes
that
yield
differences
could
result
in
24%
decline
in
gross
revenues
compared
to
methyl
bromide.
[
Is
it
US
or
EPA's
belief?]
Six
of
the
14
comments
indicted
above
that
the
Agency
should
reduce
the
amounts
the
methyl
bromide
exempted
from
the
phaseout
to
allow
for
the
uptake
of
a
newly
registered
alternative,
sulfuryl
fluoride,
for
mills
and
grains.
Sulfuryl
fluoride
(
SF)
was
registered
by
EPA
for
use
on
grains
and
flour
mills
on
January
23,
2004
under
the
trade
name
Profume.
The
SF
fumigant
has
been
available
in
the
U.
S.
since
1961under
the
trade
name
Vikane
for
non
food
uses
such
as
structural
termite
fumigation.
The
registrant,
Dow
Agrochemicals,
is
pursuing
registration
of
Profume
for
use
on
dried
fruit
and
tree
nuts
and
non
specific
food
handling
and
storage.
The
U.
S.
originally
nominated
536,328
kilograms
(
kg)
of
methyl
bromide
for
critical
uses
in
mills
and
processors
for
the
year
2005.
As
described
in
the
notice
of
proposed
rulemaking,
this
nomination
was
reduced
to
483,000
kgs
to
account
for
the
market
uptake
of
sulfuryl
fluoride.
This
reduction
is
a
10%
reduction
from
the
originally
nominated
amount.
The
2004
MBTOC
report
on
recommended
exemptions
for
next
year
(
2006)
states
that
a
further
10%
reduction
for
11
flour
mills
could
be
warranted
to
allow
for
the
adoption
of
a
number
of
alternatives,
of
which
sulfuryl
fluoride
is
one,
and
more
efficient
methyl
bromide
fumigation
techniques.
Given
that
EPA
has
already
reduced
the
2005
exemption
by
10%
for
sulfuryl
fluoride
and
that
10%
seems
to
be
a
reasonable
technical
adoption
rate
according
to
the
MBTOC
who
the
commenter
quoted,
and
given
the
lack
of
specific
market
penetration
data
provided
by
the
commenter
to
substantiate
assertions
for
a
larger
market
penetration
,
EPA
does
not
believe
further
reductions
for
2005
can
be
justified
at
this
time.
EPA
understands
that
Profume
can
be
effective
in
controlling
insects,
although
higher
rates
of
the
chemical
are
required
to
control
insect
eggs.
As
this
is
a
newly
registered
compound,
EPA
does
not
have
sufficient
data
at
this
time
to
conduct
a
technical
and
economic
analysis
to
determine
if
further
reductions
are
warranted.
One
key
uncertainty
regarding
the
market
penetration
and
economic
feasibility
of
Profume
is
the
cost
of
the
product
on
a
per
pound
basis
and
the
cost
of
a
typical
fumigation.
The
Agency
anticipates
that
as
trial
fumigations
or
commercial
fumigations
take
place,
that
the
registrant
will
be
able
to
compile
technical
and
economic
data
to
EPA
for
use
in
the
development
of
future
critical
use
nominations.
In
addition
to
the
technical
and
economic
data
required
to
conduct
a
critical
use
assessment,
as
note
d
by
the
Technology
and
Economic
Assessment
Panel
(
TEAP)
a
scientific
panel
that
advises
the
Parties
to
the
Montreal
Protocol,
a
specific
alternative
may
take
up
to
5
fumigation
cycles
of
use
before
efficacy
can
be
determined
in
the
specific
circumstances
of
the
user.
This
would
mean
that
several
repeat
fumigations
would
be
needed
before
determining
the
technical
feasibility
of
an
alternative.
An
additional
limitation
to
SF
uptake
at
this
time
is
that
many
mills
in
the
U.
S.
produce
partial
recipe
products
that
contain
ingredients
such
as
sugar
or
baking
soda.
The
registration
of
SF
does
not
include
tolerances
for
these
ingredients
this
limiting
the
use
of
this
alternative
for
a
certain
portion
of
the
sector.
Finally
SF
does
not
have
state
level
registration
in
California
and
therefore
can
not
be
used
by
mills
in
that
state.

J.
Amount
from
Stocks
EPA
is
allowing
up
to
1,283,214
kilograms
of
methyl
bromide
from
inventories
stockpiled
before
the
phaseout
date
of
January
1,
2005
to
be
sold
for
approved
critical
uses
based
on
a
certification
by
an
approved
critical
user.
In
evaluating
the
issue
of
what
amount
of
the
critical
use
level
for
2005
should
be
met
from
stocks,
EPA
considered
comments
received
and
the
following
statements
in
Decision
Ex
I/
3.
Decision
Ex
I/
3(
1)
permits
a
level
of
production
and
consumption
equal
to
30%
of
the
1991
baseline
and
establishes
an
agreed
critical
use
level
equal
to
35%
of
the
1991
baseline.
With
regard
to
drawdown
from
existing
inventory,
Decision
Ex
I/
3(
2)
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."
The
availability
of
stocks
is
also
addressed
in
Decision
Ex
I/
3(
5),
which
states:
"
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."
Additional
references
to
Decision
IX/
6
appear
in
preambular
language
("
Mindful
that
exemptions
must
fully
comply
with
decision
IX/
6
.
.
.
",
"
Mindful
also
that
decision
IX/
6
permits
the
production
and
consumption
of
methyl
bromide
12
for
critical
uses
only
if
it
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide.")
EPA
concludes
that
the
question
of
what
amount
of
the
critical
use
level
for
2005
should
be
met
from
stocks
is
answered
in
paragraph
(
1)
of
Decision
Ex.
I/
3,
read
in
conjunction
with
paragraph
(
2)
of
the
same
Decision.
Paragraph
(
1)
establishes
a
critical
use
level
of
35%
of
baseline
but
permits
production
and
consumption
of
only
30%.
Paragraph
(
2)
explains
that
the
difference
is
to
made
up
by
using
available
stocks.
Thus,
the
Parties
collectively
determined
that
the
amount
of
the
United
States'
2005
critical
use
level
that
should
be
met
from
stocks
was
1,283,214
kilograms,
i.
e.,
an
amount
equivalent
to
5%
of
baseline.
The
Parties'
determination
that
a
specific
amount
of
the
critical
use
level
should
be
met
from
stocks
is
in
accord
with
the
preambular
language
quoted
above.
That
language
explains
why
the
Parties
chose
to
permit
a
level
of
production
and
consumption
that
is
less
than
the
critical
use
level.
Paragraph
(
5)
of
Decision
Ex.
I/
3
admonishes
each
Party
with
an
agreed
critical
use
to
take
into
account
available
stocks
when
authorizing
the
use
of
methyl
bromide..
Given
that
the
Parties
have
already
determined
the
amount
to
come
from
stocks,
EPA
interprets
this
language
as
meaning
that
the
U.
S.
should
not
authorize
critical
use
exemptions
without
including
provisions
addressing
drawdown
from
stocks
for
critical
uses.
EPA
is
acting
consistently
with
paragraph
(
5)
by
establishing
requirements
governing
the
sale
of
pre­
phaseout
inventories
for
approved
critical
uses.
In
section
V.
F
of
today's
rulemaking,
EPA
describes
the
mechanism
by
which
the
Agency
is
allowing
stocks
of
methyl
bromide
to
be
sold
for
approved
critical
uses.
EPA
had
proposed
to
undertake
an
independent
analysis
of
the
amount
to
come
from
stocks
and
to
adjust
the
authorized
level
of
new
production
and
consumption
for
critical
uses
by
the
amount
of
"
available"
stocks
determined
through
this
analysis.
Under
this
approach,
EPA
would
have
assessed
how
much
methyl
bromide
is
available
from
existing
inventories
and
then
determine
how
much
is
available
to
meet
market
demand
for
critical
uses.
The
proposed
methodology
can
be
represented
as
follows:
AS
=
(
ES
+
B)
­
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
in
2004;
B
=
banked
stocks
of
methyl
bromide
that
were
produced
or
imported
with
expended
critical
use
allowances
in
a
given
year
that
were
unused
during
that
year;
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.
In
this
methodology,
existing
stocks
(
ES)
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.
The
information
EPA
used
to
quantify
each
of
the
factors
in
the
methodology
described
above
was
elaborated
in
the
NPRM
and
also
in
a
Technical
Support
Document
that
can
be
obtained
from
the
rulemaking
docket.
In
the
NPRM,
EPA
also
sought
comment
on
an
alternative
approach:
"
For
the
2005
calendar
year,
the
Agency
could
make
a
determination
that
the
amount
of
methyl
bromide
available
from
existing
stocks
is
simply
based
on
the
difference
between
the
limit
on
methyl
bromide
for
critical
uses
(
8,942
metric
tons)
and
the
limit
on
new
production
and
import
(
7,659
13
metric
tons)
in
the
Decision
Ex.
I/
3."
69
FR
52375.
This
is
essentially
the
approach
adopted
in
today's
final
rule.
However,
we
are
clarifying
that
because
Because
the
Parties
already
determined
the
amount
of
the
critical
use
level
to
be
met
from
stocks,
it
is
not
necessary
for
EPA
to
independently
determine
the
amount
of
stocks
available
for
critical
uses
in
2005.
EPA
received
10
comments
on
this
issue
the
methodology
for
determining
available
stocks.
Five
comments
in
favor
of
the
independent
assessment
approachmethodology
and
nine
comments
suggesting
refinements
to
the
approachmethodology.
However,
since
EPA
is
not
using
the
methodology
to
determine
available
stocks
but
is
instead
accepting
the
Parties'
determination,
the
Agency
is
not
responding
to
the
details
of
the
comments
in
today's
rulemaking.
[
One?]
commenter
stated
that
EPA
should
use
a
"
mathematical"
approach,
under
which
the
amount
from
stocks
would
equal
the
different
between
the
limit
on
methyl
bromide
for
critical
uses
and
the
limit
on
new
production
and
import.
EPA
believes
that
the
approach
adopted
in
this
final
rule
is
consistent
with
these
commenters'
recommendation.
Two
commenters
stated
that
all
stocks
must
be
used
before
any
new
production
is
permitted
and
that
all
stocks
other
than
those
for
export
to
developing
countries
should
be
considered
"
available"
for
critical
uses.
One
commenter
refers
to
Decision
IX/
6,
paragraph
(
1)(
b),
in
which
the
Parties
agreed:
"
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,
also
bearing
in
mind
the
developing
countries'
need
for
methyl
bromide."
However,
as
stated
above,
EPA
reads
Decision
Ex
I/
3
as
a
collective
determination
by
the
Parties
regarding
the
amount
of
methyl
bromide
that
is
available
from
stocks
for
critical
uses
in
2005.
Given
the
express
statement
regarding
stocks
in
paragraph
(
2)
of
the
Decision,
and
preambular
language
indicating
that
the
Parties
were
"
mindful"
of
Decision
IX/
6,
we
can
assume
that
the
Parties
permitted
production
and
consumption
because
"[
m]
ethyl
bromide
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
methyl
bromide."
Therefore,
it
is
not
necessary
for
EPA
to
revisit
this
criterion.
In
addition,
EPA
disagrees
with
the
commenter's
assumption
that
all
stocks
that
are
not
specifically
designated
for
export
to
developing
countries
are
available
for
critical
uses.
For
example,
there
may
be
stocks
in
the
U.
S.
produced
specifically
for
quarantine
and
preshipment
uses
or
stocks
held
on
behalf
of
another
entity
for
a
non­
critical
use
during
their
transition
to
alternatives.
In
addition,
the
U.
S.
is
a
global
supplier
of
methyl
bromide
and
existing
inventories
may
be
tagged
for
critical
uses
in
other
developed
countries.

C.
Access
to
Stocks[
need
to
clarify
CUE
stock
vs.
non­
CUE
stock]
In
the
proposed
rule
EPA
described
several
different
approaches
to
controlling
access
to
stocks
of
methyl
bromide
produced
or
imported
before
the
phaseout
date
of
January
1,
2005.
EPA
proposed
a
limit
on
the
sale
of
stocks
to
approved
critical
users
permitted
to
obtain
new
production
and
import
for
their
critical
uses.
In
addition,
EPA
proposed
to
prohibit
sale
of
prephaseout
stocks
to
end
users
in
nominated
sectors
who
lacked
the
limiting
critical
conditions
that
make
methyl
bromide
use
critical
for
the
categories
listed
in
Decision
Ex.
I/
3.
EPA
sought
comment
on
whether
to
apply
use
restrictions
to
other
groups.
In
today's
final
rule,
EPA
is
restricting
access
to
stocks
only
for
the
entities
that
benefit
by
being
permitted
to
obtain
new
production
and
consumption.
The
Agency
recognizes
that
a
person
who
qualifies
as
an
approved
14
critical
user
may
have
both
approved
critical
uses
and
other
uses.
Approved
critical
uses
are
listed
in
Appendix
L
to
40
CFR
Part
82,
Subpart
A.
The
stock
restrictions
apply
to
uses
the
approved
critical
user
certifies
as
approved
critical
uses.
Today's
rule
does
not
prevent
an
approved
critical
user
from
obtaining
unrestricted
stocks
for
other
uses.
The
Agency
also
recognizes
the
possibility
that
an
approved
critical
user
could
grow
two
distinct
crops
or
fumigate
two
distinct
commodities
in
the
same
field
or
structure
during
a
single
control
period.
Obtaining
critical
use
methyl
bromide
for
the
crop
or
commodity
that
qualifies
as
an
approved
critical
use
does
not
preclude
the
user
from
obtaining
unrestricted
stocks
for
a
different
crop
or
commodity.
For
example,
a
grower
who
purchases
critical
use
methyl
bromide
for
tomatoes
may
purchase
unrestricted
stocks
for
broccoli
grown
in
the
same
field,
although
this
is
an
unlikely
scenario
because
most
growers
plant
more
than
one
crop
per
fumigation
cycle.
EPA
is
not
restricting
access
to
stocks
for
the
remaining
users
including
users
who
applied
for
an
exemption
but
whose
uses
were
rejected
by
the
U.
S.
government
because
they
did
not
have
any
limiting
critical
condition
or
whose
category
of
use
would
not,
under
any
limiting
critical
condition,
meet
the
conditions
necessary
to
be
included
in
the
U.
S.
nomination,
those
whose
uses
were
rejected
internationally,
and
those
who
did
not
apply
for
an
exemption
for
their
uses
for
2005.
EPA
is
not
restricting
access
to
stocks
for
those
uses
because,
as
explained
in
more
detail
below,
EPA
reads
Decision
Ex
I/
3
as
requiring
limitations
on
the
use
of
stocks
only
with
respect
to
uses
agreed
by
the
Parties
to
be
critical,
and
these
uses
are
not
critical
uses.
The
total
amount
of
pre­
phaseout
inventory
that
may
be
sold
as
critical
use
methyl
bromide
is
equivalent
to
5%
of
the
1991
baseline.
As
discussed
below,
this
rule
creates
critical
stock
allowances
(
CSAs)
in
this
amount.
A
CSA
holder
must
expend
one
CSA
for
each
kilogram
of
methyl
bromide
sold
from
pre­
phaseout
inventories
as
critical
use
methyl
bromide.
In
finalizing
the
provisions
on
access
to
stocks,
EPA
considered
comments
received
and
the
language
of
Decision
Ex
I/
3(
3),
which
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
for
critical
uses
exceed
the
total
level
for
that
Party
set
forth
in
annex
II
A
to
the
present
report."
EPA
received
four
comments
supporting
unlimited
access
to
stocks
for
approved
critical
uses
and
24
additional
comments
supporting
unlimited
access
to
stocks
for
all
uses.
EPA
also
received
1
comment
stating
that
there
is
no
legal
basis
for
allowing
use
of
stocks
by
users
that
did
not
apply
for
or
did
not
qualify
for
critical
use
status,
and
no
basis
for
the
Agency's
supposition
that
some
users
did
not
apply
for
CUE
status
because
they
were
counting
on
use
of
stocks.
EPA
reads
Decision
Ex
I/
3(
3)
as
requiring
limitations
on
the
use
of
stocks
only
with
respect
to
uses
agreed
by
the
Parties
to
be
critical.
Annex
II
A
to
the
report
of
the
First
Extraordinary
Meeting
is
titled
"
Agreed
critical­
use
categories."
Paragraph
(
1)
of
Decision
Ex.
I/
3
permits
limited
production
and
consumption
"[
f]
or
the
agreed
critical
uses
set
forth
in
annex
II
A."
Because
paragraph
(
3)
of
Decision
Ex
I/
3
also
refers
to
Annex
II
A,
EPA
concludes
that
the
Parties
intended
the
burden
of
the
stock
restriction
to
be
coextensive
with
the
benefit
of
the
new
production
and
import.
EPA
does
not
believe
that
Decision
Ex
I/
3(
3)
can
be
read
to
allow
unlimited
access
to
stocks
for
approved
critical
uses
because
the
prohibition
is
directly
linked
to
"
the
categories
set
forth
in
annex
II
A,"
which
are
the
categories
of
critical
uses
agreed
to
by
the
15
Parties.
Nor
can
the
Decision
be
read
to
allow
unlimited
access
to
stocks
for
all
uses:
that
would
fail
to
give
any
effect
to
the
phrase
"
shall
prohibit
the
use
of
stocks."
EPA
disagrees
with
the
comment
that
there
is
no
legal
basis
for
allowing
use
of
stocks
by
users
that
did
not
apply
for
or
did
not
qualify
for
critical
use
status.
Decision
Ex
I/
3(
3)
does
not
require,
or
even
suggest,
that
individual
Parties
prohibit
use
of
stocks
by
users
whose
uses
fall
outside
the
categories
of
agreed
critical
uses.
Nothing
in
the
Protocol
or
the
CAA
mandates
that
EPA
limit
drawdown
from
stocks
for
such
uses.
The
commenter
did
not
state
what
authority
EPA
might
use
to
impose
such
a
limitation.
In
supposing
that
some
users
did
not
apply
for
CUE
status
because
they
were
counting
on
use
of
stocks,
the
Agency
did
not
assume
that
any
user
had
special
knowledge
of
the
total
amount
of
stocks
available
but
rather
that
an
individual
user
might
have
confirmed
with
its
supplier
that
enough
methyl
bromide
would
be
available
from
that
supplier's
inventory
to
meet
the
individual
user's
limited
transitional
needs.
For
example,
many
small
onion
growers
in
the
southeastern
U.
S.
informed
EPA
in
their
comments
on
the
rulemaking
they
did
not
apply
for
an
exemption
because
they
intend
to
avail
themselves
of
existing
stocks
Nine
commenters
stated
that
EPA
does
not
have
legal
authority
to
restrict
the
use
of
methyl
bromide
stocks.
These
commenters
argue
that
no
provision
of
the
CAA
authorizes
EPA
to
impose
such
restrictions.
Specifically,
they
state
that
section
604(
d)(
6)
refers
only
to
production,
importation,
and
consumption,
and
that
by
addressing
use
in
other
sections
of
the
CAA,
Congress
demonstrated
its
intent
to
deny
EPA
authority
to
regulate
stocks
under
604(
d)(
6).
However,
section
604(
d)(
6)
directly
relates
to
use:
the
exempted
production,
importation
and
consumption
is
for
critical
"
uses."
While
Congress,
in
the
Clean
Air
Act,
generally
mandated
that
production
and
consumption
of
ozone­
depleting
substances
be
phased
out
across
the
board,
regardless
of
use,
the
Act
does
contain
certain
provisions,
including
section
604(
d)(
6),
that
authorize
EPA
to
provide
exceptions
on
the
basis
of
use.
Thus,
section
604(
d)(
6)
is
one
of
the
provisions
of
the
Clean
Air
Act
where
use
is
clearly
at
issue.
In
today's
final
rule,
EPA
is
imposing
narrowly
tailored
use
restrictions
as
a
condition
of
obtaining
new
production
and
import.
EPA
believes
that
section
604(
d)(
6)
mandates
this
result.
In
section
604(
d)(
6),
Congress
provided
EPA
authority
to
exempt
production
and
import
of
methyl
bromide
for
critical
uses,
but
only
"
to
the
extent
consistent
with
the
Protocol."
The
use
restrictions
in
today's
final
rule
are
necessary
to
ensure
that
total
usage
for
critical
uses
does
not
exceed
the
limit
agreed
to
by
the
Parties
in
implementing
the
critical
use
provision
in
Article
2H
of
the
Protocol.
The
relationship
between
sections
604(
d)(
6)
and
614(
b)
of
the
CAA
and
the
Protocol
and
its
Decisions
is
discussed
in
detail
in
the
NPRM
and
in
the
background
section
of
this
preamble.
The
commenters
further
argue
that
EPA
cannot
rely
on
Decision
Ex
I/
3
to
justify
restrictions
on
use
of
stocks.
They
state
that
while
Decisions
may
be
used
to
interpret
existing
requirements
in
the
Protocol,
they
cannot
be
used
to
substantively
change
those
requirements.
However,
EPA
is
not
suggesting
that
Decision
Ex
I/
3
substantively
changed
the
requirements
of
Article
2H.
Article
2H
establishes
a
prohibition
on
the
production
and
consumption
of
methyl
bromide,
but
states
that
the
prohibition
shall
not
apply
"
to
the
extent
the
Parties
decide
to
permit
the
level
of
production
and
consumption
that
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses."
Thus,
in
ratifying
Article
2H,
the
U.
S.
agreed
to
accept
the
Parties'
decisions
regarding
what
uses
were
critical
and
what
level
of
production
and
consumption
was
necessary
to
16
satisfy
those
uses.
In
Decision
Ex.
I/
3,
the
Parties
decided
to
permit
a
specific
level
of
production
and
consumption
but
instructed
each
Party
with
a
critical
use
level
that
exceeded
the
permitted
production
and
consumption
to
abide
by
certain
restrictions
on
the
use
of
stocks.
It
is
likely
that
the
Parties
would
have
approved
a
different
level
of
production
and
consumption
in
the
absence
of
the
stock
restrictions.
Therefore,
the
stock
restrictions
are
an
integral
part
of
the
Parties'
decision
regarding
the
level
of
production
and
consumption
necessary
to
satisfy
critical
uses.
To
ignore
the
stock
restrictions
would
be
to
risk
running
afoul
of
the
production
and
consumption
ban
in
Article
2H.
The
commenters
further
characterize
the
restrictions
on
access
to
stocks
proposed
in
the
NPRM
as
"
an
attempt
by
the
Agency
to
bypass
the
Treaty
Clause
of
the
U.
S.
Constitution
by
unilaterally
amending
the
Montreal
Protocol
through
a
rulemaking,
without
the
advice
and
consent
of
the
Senate."
EPA
rejects
this
characterization.
Article
2H
explicitly
assigns
to
the
Parties
the
task
of
deciding
what
level
of
production
and
consumption
"
is
necessary
to
satisfy
uses
agreed
by
them
to
be
critical
uses..."
Therefore,
EPA
looks
to
the
Parties'
Decisions
to
provide
the
details
of
the
exemption
authorized
in
Article
2H.
In
Decision
Ex
I/
3,
the
Parties
decided
what
level
of
production
and
consumption
was
necessary
given
certain
assumptions
about
stocks.
Accordingly,
in
compliance
with
Article
2H,
this
final
rule
addresses
both
production
and
consumption
and
the
use
of
stocks.

D.
Cap
on
Critical
Use
Methyl
Bromide
Based
on
the
EPA's
assessment
of
the
technical
and
economic
feasibility
of
alternatives
and
the
potential
for
a
significant
market
disruption
if
methyl
bromide
were
not
available
for
the
uses
listed
in
Appendix
L,
and
the
lack
of
any
new
information
that
would
change
EPA's
assessment,
EPA
is
establishing
the
following
amounts
of
methyl
bromide
as
critical
use
methyl
bromide
available
only
for
approved
critical
uses
as
described
in
section
V.
H
of
this
preamble
for
the
control
period
of
the
year
of
2005.
With
today's
action,
EPA
is
finalizing
a
determination
that
9,777,288
kgs
of
methyl
bromide
are
required
to
satisfy
critical
uses
for
2005.
EPA
intends
to
address
supplemental
and
new
CUE
allocations
in
a
subsequent
rulemaking
following
the
16th
Meeting
of
the
Parties
to
the
Montreal
Protocol.
EPA
is
authorizing
the
full
amount
of
new
production/
import
allowable
under
Decision
Ex
I/
3,
a
total
of
8,942,214
kgs,
and
is
authorizing
those
entities
that
hold
inventories
of
methyl
bromide
to
sell
1,283,214
kgs
for
approved
critical
uses
during
2005.
The
details
of
allowance
allocation
for
both
critical
production/
import
and
critical
stocks
are
described
in
sections
V.
E
and
V.
F
of
this
preamble.
EPA
co­
proposed
two
options
for
the
cap
on
critical
use
methyl
bromide:
a
universal
cap
where
all
approved
critical
uses
would
purchase
critical
use
methyl
bromide
under
the
same
cap
and
a
sector
specific
cap
where
each
of
the
16
critical
use
sectors
would
have
their
own
cap
of
reserved
material.
EPA
also
solicited
comment
on
an
applicant­
specific
cap
and
on
several
hybrid
options.
In
preparing
this
final
rule,
EPA
considered
comments
received
and
Decision
Ex
I/
3(
4),
which
states:
"
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."
EPA
received
28
comments
supporting
the
fully
flexible
universal
cap.
Commenters
17
supported
this
option
for
several
reasons:
ease
of
implementation,
cost
savings
and
efficiencies
to
the
regulated
community
and,
the
inability
of
EPA
to
predict
with
precision
the
exact
market
demand
for
methyl
bromide
on
a
sector
basis.
EPA
received
four
comments
supporting
a
sector
specific
cap
to
ensure
that
smaller
uses,
less
frequent
uses,
and
uses
that
occur
towards
the
end
of
the
control
period
are
guaranteed
access
to
some
minimum
supply.
EPA
received
one
comment
supporting
an
applicant
specific
approach
so
that
the
Agency
can
track
use
of
methyl
bromide
at
a
more
specific
level.
EPA
also
received
one
comment
supporting
a
hybrid
option
that
would
separate
pre­
plant
uses
of
methyl
bromide
from
post­
harvest
uses.
Additional
comments
received
by
EPA
on
other
hybrids
are
addressed
in
the
response
to
comment
(
RTC)
document
available
in
the
docket
for
today's
rule.
In
today's
rulemaking,
EPA
is
establishing
two
types
of
critical
use
allowances
(
CUAs)
for
the
production/
import
of
methyl
bromide:
CUAs
for
pre­
plant
soil
uses
and
CUAs
for
postharvest
and
structural
uses.
The
portion
of
the
critical
use
methyl
bromide
supplies
obtained
from
available
stocks
however
will
be
allocated
as
a
universal
cap
as
proposed.
EPA
did
not
receive
any
adverse
comment
on
the
proposal
to
make
the
quantities
from
stocks
available
in
a
universal
fashion.
EPA
agrees
with
the
comments
made
by
entities
supporting
the
universal
option
and
believes
that
such
a
system
would
in
fact
lead
to
the
most
economically
efficient
outcome
and
impose
the
least
burden
on
industry.
However,
to
address
concerns
raised
by
smaller,
less
frequent
and
end
of
year
uses,
EPA
is
separating
out
the
post­
harvest
uses
of
methyl
bromide,
who
can
typically
pay
more
per
fumigation,
from
pre­
plant
uses.
Noting
that
Decision
Ex
I/
3
(
4)
states
that
Parties
"
should
endeavor"
to
allocate
"
as
listed
in
annex
II
A,"
EPA
examined
our
ability
to
implement
a
sector
specific
system.
However,
there
are
several
practical
impediments
to
implementing
such
a
system.
EPA
does
not
have
precise
data
on
use
of
methyl
bromide
because
the
current
regulations
on
methyl
bromide
require
reporting
of
production,
imports,
and
exports
of
methyl
bromide,
not
use.
The
more
specific
the
categories
for
which
EPA
is
estimating
use,
the
less
precise
the
estimate
becomes.
Therefore,
EPA
is
reluctant
to
create
sector
or
applicant
specific
limits
because
of
the
inherent
uncertainty
of
the
data
at
that
detailed
level.
With
the
establishment
of
the
critical
use
exemption,
EPA
will
begin
to
track
sector
level
use
data
and
therefore
the
concern
about
data
viability
should
diminish
over
time
giving
the
Agency
the
ability
to
implement
a
more
specific
allocation
framework
in
the
future.
Another
limitation
to
the
sector
or
applicant
specific
approach
is
the
upstream
allowance
allocation
system
itself
where
EPA
issues
allowances
to
producers
and
importers
and
not
end
users.
Using
an
upstream
allowance
allocation
system
as
proposed,
EPA
would
be
unable
to
adjust
amounts
of
methyl
bromide
from
one
sector
to
another
after
the
allowance
was
expending
expended.
This
artefact
of
the
allocation
framework
would
deny
the
marketplace
any
flexibility
to
meet
unforseen
demand
in
a
particular
use.
For
example,
under
a
sector
specific
system,
if
a
pest
outbreak
were
to
occur
in
the
peppers
sector
no
additional
material
could
be
made
available
to
peppers
even
if
there
were
an
unanticipated
surplus
in
a
different
sector.
For
these
reasons,
EPA
believes
it
is
not
practicable
to
implement
a
sector
specific
system.
The
Agency
believes,
and
has
received
comment
to
that
effect,
that
the
pre­
plant
and
postharvest
markets
operate
as
significantly
different
markets
under
the
phaseout
for
several
reasons.
The
post
harvest
sector
has
more
purchasing
power
than
the
pre­
plant
sector
and
is
therefore
18
willing
to
pay
more
for
methyl
bromide.
Under
the
phaseout,
the
price
of
methyl
bromide
for
post
harvest
uses
is
typically
double
the
price
of
methyl
bromide
sold
to
pre­
plant
uses.
The
timing
and
cycles
of
fumigations
for
the
two
sectors
are
different
as
well.
Pre­
plant
fumigations
typically
occur
once
a
year
about
a
month
before
planting
the
first
crop
whereas
fumigations
for
postharvest
uses
occur
routinely
throughout
the
year
to
control
ongoing
insect
pressures.
Lastly,
the
standard
product
formulations
for
pre­
plant
and
post
harvest
uses
substantially
differ.
Postharvest
uses
rely
on
pure
methyl
bromide
or
methyl
bromide
mixed
with
minimal
amounts
of
chloropicrin
as
a
warning
agent.
In
the
pre­
plant
uses
the
formulations
of
methyl
bromide
contain
substantially
more
chloropicrin,
as
much
as
50%.
For
all
of
these
reasons,
EPA
believes
that
these
two
use
categories
already
function
as
independentseparate
markets
and
therefore
the
hybrid
option
would
not
result
in
substantial
inefficiencies
or
regulatory
burden
but
would
achieve
a
careful
balance
between
flexibility
and
greater
assurance
certainty
while
recognizing
the
limitations
of
data
available
at
the
present
time.
Furthermore,
given
the
impediments
to
adopting
a
more
detailed
sector­
specific
approach
at
this
time,
EPA
believes
that
establishing
distinct
caps
for
pre­
plant
and
post­
harvest
uses
is
consistent
with
gives
the
greatest
possible
effect
to
the
Parties'
statement
in
Decision
Ex
I/
3(
4)
that
each
Party
"
should
endeavor"
to
allocate
"
as
listed
in
annex
II
A."

E.
Critical
Use
Allowance
Allocations
1.
Allocation
of
Critical
Use
Allowances
EPA
is
allocating
the
following
number
of
pre­
plant
and
post­
harvest
critical
use
allowances
(
CUAs)
to
the
entities
listed
below
subject
to
the
trading
provisions
discussed
in
section
V.
G
of
the
preamble.
Through
this
rulemaking,
EPA
is
notifying
entities
in
Table
I
that
they
have
an
allocation
of
the
number
of
critical
use
allowances
specified
in
the
table
for
2005.
Depending
on
the
agreement
of
the
Parties
to
the
Protocol,
EPA
may
engage
in
a
subsequent
rulemaking
to
allocate
supplemental
methyl
bromide
for
2005.
Each
allowance
is
equivalent
to
1
kg
of
critical
use
methyl
bromide.
These
allowances
expire
at
the
end
of
the
control
period
and,
consistent
with
the
proposed
rule
and
comments
received,
are
not
bankable
from
one
year
to
the
next.

Table
I:
Allocation
of
Critical
Use
Allowances
Company
2005
Critical
Use
Allowances
for
Pre­
Plant
Uses*
(
kilograms)
2005
Critical
Use
Allowances
for
Post­
Harvest
Uses*
(
kilograms)

Great
Lakes
Chemical
Corp.
5,087,792
346,817
Albemarle
Corp.
2,092,180
142,617
Ameribrom,
Inc.
1,155,764
78,784
TriCal,
Inc.
35,818
2,442
19
Total
8,371,554
570,660
*
for
production
or
import
of
class
I,
Group
VI
controlled
substance
exclusively
for
the
Pre­
Plant
or
Post­
Harvest
uses
specified
in
Appendix
L
to
40
CFR
82.

2.
Baseline
for
Critical
Use
Allowance
Distribution
EPA
is
using
the
1991
methyl
bromide
consumption
baseline
for
distribution
of
critical
use
allowances
because
this
is
the
best
data
available
to
the
Agency
at
the
current
time.
EPA
used
the
1991
baseline
to
distribute
allowances
to
the
companies
listed
above
during
the
phaseout
of
methyl
bromide.
The
1991
baseline
is
therefore
familiar
to
the
regulated
community
and
poses
the
least
steep
learning
curve
on
industry
of
all
the
options
discussed
in
the
proposed
rule.
EPA
received
four
comments
supporting
use
of
the
1991
baseline
for
distribution
of
allowances
and
two
comments
favoring
a
baseline
that
uses
the
volume
of
methyl
bromide
marketed
over
the
past
three
years.
EPA
does
not
have
the
necessary
data
to
implement
a
marketed
volume
baseline
representing
the
past
three
years
and
the
time
required
to
gather,
verify,
and
make
publically
available
such
data
would
prohibit
the
Agency
from
implementing
this
exemption
before
the
beginning
of
the
control
period.
Such
a
baseline
is
therefore
not
practical
to
implement.

3.
Frequency
of
Critical
Use
Allowance
Distribution
EPA
will
issue
critical
use
allowances
once
a
year
through
an
annual
rulemaking
as
proposed,
with
one
important
exception
noted
below.
EPA
described
scenarios
where
the
Agency
would
distribute
allowances
more
than
once
a
year
but
did
not
receive
any
comments
in
favor
of
such
options.
The
exception
to
the
once
a
year
allocation
of
allowances
applies
when
the
Parties
authorize
supplemental
critical
use
exemptions
for
a
given
control
period
after
EPA
has
already
initiated
the
notice
and
comment
rulemaking
process
for
the
original
authorized
exemptions.
For
example,
the
Parties
authorized
exemptions
for
2005
at
their
First
Extraordinary
Meeting
of
the
Parties
in
March
2004.
The
Parties
are
considering
additional
exemptions
for
2005
at
the
Sixteenth
Meeting
of
the
Parties
to
be
held
November
2004.
EPA
would
propose
additional
exemptions
as
a
result
of
additional
authorizations
made
by
the
Parties.
In
this
situation,
EPA
could
in
fact
issue
allowances
twice
for
a
single
control
period.

F.
Critical
Stock
Allowance
Allocations
EPA
is
allocating
critical
stock
allowances
(
CSAs)
to
the
entities
listed
below
in
Table
II
for
the
control
period
of
2005.
CSAs
are
being
issued
on
a
pro­
rata
basis
according
to
the
amount
of
stocks
owned
by
the
entity
because
only
that
entity
has
the
ability
to
sell
the
quantities
of
material
associated
with
the
CSAs
on
a
kilogram
basis,
regardless
of
which
company
is
physically
holding
the
stocks.
Similar
to
CUAs,
CSAs
can
not
be
banked
from
one
control
period
to
the
next.
Critical
stock
allowances
(
CSAs)
are
not
used
to
produce
or
import
methyl
bromide
but
are
rights
that
enable
the
holder
to
sell
pre­
phaseout
inventories
of
methyl
bromide
for
use
in
20
approved
critical
uses.
A
CSA
is
expended
when
the
entity
selling
methyl
bromide
sells
the
material,
or
fumigation
services
with
the
material,
to
an
approved
critical
user
who
certifies
that
the
material
is
for
an
approved
critical
use.
Thus,
the
The
movement
of
pre­
phaseout
inventories
of
methyl
bromide
among
suppliers
of
methyl
bromide
along
the
supply
chain
does
not
require
expenditure
of
a
CSA.
EPA
has
determined
that
the
individual
holdings
of
stocks
of
methyl
bromide
are
confidential
business
information.
The
amount
of
CSAs
allocated
to
each
company
could
be
used
to
calculate
the
individual
stock
holdings
if
information
on
aggregate
stock
holdings
were
released.
EPA
has
determined
that
the
aggregate
stock
information
is
not
confidential
business
information
but
is
currently
withholding
that
information
due
to
the
filing
of
complaints
seeking
to
enjoin
the
Agency
from
its
release.
Because
release
could
occur
depending
on
the
outcome
of
that
litigation,
EPA
is
not
listing
the
number
of
allowances
distributed
to
each
entity.
Concurrent
with
today's
rule,
EPA
is
sending
letters
to
each
entity
to
inform
them
of
the
number
of
critical
stock
allowances
EPA
has
issued
them.
In
addition,
EPA
is
placing
a
document
listing
the
allocations
and
distribution
basis
of
critical
stock
allowances
for
each
entity
in
the
confidential
portion
of
the
docket.

Table
II:
Allocation
of
Critical
Stock
Allowances
[
to
be
amended
before
publication
with
names
of
additional
companies]

Company
Company
Ameribrom,
Inc.
Pest
Fog
Blair
Soil
Fumigation
Reddick
Fumigants
Cardinal
Professional
Products
Royster­
Clark
Ehrlich
Southern
State
Cooperative
Great
Lakes
Chemical
Corp
Trical
Inc.

Hendrix
&
Dail
Trident
Agricultural
Products
Helena
Chemical
Co.
UAP
Southeast
Hy
Yield
Bromine
Univar
Industrial
Fumigation
Company
Western
Fumigation
TOTAL
1,283,214
kilograms
G.
Trading
Allowances
In
accordance
with
Section
607
of
the
Clean
Air
Act
Amendments
(
CAAA),
EPA
is
allowing
producers
and
importers
of
methyl
bromide
to
trade
or
transfer
critical
use
allowances
to
one
another,
subject
to
the
provisions
of
40
CFR
part
82.
In
accordance
with
paragraph
(
c)
of
Section
607
of
the
CAAA,
EPA
is
establishing
an
offset
of
one
tenth
of
one
percent
of
the
amount
of
the
CUAs
transferred
consistent
with
proposed
rule.
The
Act
requires
that
transfers
of
21
allowances
result
in
lower
production
than
if
the
trade
had
not
occurred.
The
offset
will
be
deducted
from
the
transferor's
allowance
balance
at
the
time
of
a
trade.
A
one
tenth
of
one
percent
offset
is
consistent
with
the
offset
required
for
the
transfer
of
essential
use
allowances
under
the
phaseout
program
for
class
I
controlled
ozone­
depleting
substances
(
ODS),
which,
like
critical
use
allowances
permit
the
exempted
production
or
import
of
ODS
beyond
a
phaseout
date.
Because,
CSAs
govern
the
amount
of
existing
material
that
can
be
sold,
EPA
is
not
implementing
an
offset
for
the
transfer
of
CSAs.
If
the
holder
of
a
CSA
does
not
wish
to
sell
his
inventories
of
methyl
bromide
to
the
critical
use
market,
he
(
the
transferor)
may
sell
his
allowances
to
another
methyl
bromide
producer,
importer,
distributer,
or
applicator
(
the
transferee).
EPA
received
seven
comments
supporting
the
ability
of
allowance
holders
to
trade
allowances.
EPA
did
not
receive
any
adverse
comments
on
the
one
tenth
of
one
percent
offset
that
is
similarly
applied
to
the
essential
use
exemption
and
is
implementing
this
offset
in
today's
rule.
EPA
received
one
comment
suggesting
that
the
Agency
should
modify
its
proposed
CSA
trading
framework
to
allow
anyone
who
wishes
to
sell
inventories
of
critical
use
methyl
bromide
to
buy
CSAs,
not
just
initial
CSA
recipients.
EPA
modified
its
proposal
to
allow
for
any
entity
in
the
methyl
bromide
supply
chain
to
acquire
CSAs
even
if
they
did
not
receive
an
initial
CSA
allocation
from
EPA.
EPA
agrees
that
the
Agency
should
not
restrict
the
normal
flow
of
commerce
and
in
fact
there
may
be
some
entities
at
the
time
of
the
rulemaking
who
did
not
happen
to
have
pre­
phaseout
inventories
of
methyl
bromide
but
who
are
likely
to
acquire
such
material
during
the
control
period.
Lastly,
the
Agency
is
allowing
for
trades
of
CUAs
into
CSAs
and
is
not
requiring
an
offset
to
accompany
such
transactions.
A
CUA
holder
would
retire
a
number
of
allowances
to
EPA
and
EPA
would
then
issue
additional
CSAs
to
the
allowance
holder.
EPA
is
allowing
this
type
of
allowance
trade
to
accommodate
an
entity
who
wishes
to
forgo
exempted
production
or
import
of
new
methyl
bromide
to
make
more
of
pre­
phaseout
inventories
available
for
approved
critical
uses.
EPA
believes
that
an
environmental
benefit
would
be
derived
in
this
type
of
exchange
since
the
result
is
less
new
production
or
import.
As
described
in
the
proposed
rule,
EPA
is
not
allowing
the
reverse
transaction,
exchange
of
CSAs
for
CUAs,
because
Decision
Ex
I/
3
imposes
a
cap
of
no
more
than
30%
production
and
import
for
critical
uses
in
2005.
If
the
Agency
were
to
allow
CSAs
to
become
additional
rights
to
production
or
import,
the
U.
S.
would
potentially
run
into
non­
compliance
with
the
30%
production
cap.
For
consistency
with
the
requirements
governing
other
types
of
allowance
transfers
in
the
ozone
protection
program,
EPA
is
requiring
that
an
entity
who
sells
allowances
must
file
an
allowance
transfer
form
with
EPA.
Existing
regulations
require
EPA
to
process
these
forms
within
3
business
days
of
receipt.
The
Agency
believes
that
trading
critical
use
allowances
and
critical
stock
allowances
will
allow
entities
to
make
rational
business
decisions
as
to
the
amount
of
critical
use
methyl
bromide
to
produce
or
import
in
a
given
control
period
and
thus
supports
flexible
trading
provisions
with
appropriate
environmental
offsets
as
described
in
this
section
of
today's
rule.
22
H.
Acquiring
Critical
Use
Methyl
Bromide
Approved
critical
usersUsers
who
have
an
approved
critical
use
may
acquire
methyl
bromide,
as
described
in
the
proposal,
in
a
similar
manner
to
which
they
acquire
methyl
bromide
exempted
for
quarantine
and
pre­
shipment
uses
(
68
FR
237,
January
2,
2003).
EPA
received
eight
comments
supporting
the
"
QPS­
like"
approach
because
it
is
familiar
to
the
regulated
community.
Approved
critical
users
who
have
an
approved
critical
use
may
acquire
critical
use
methyl
bromide,
or
fumigation
services
with
critical
use
methyl
bromide,
by
certifying
at
the
point
of
purchase
that
they
are
in
fact
approved
critical
users
and
that
they
will
use
the
methyl
bromide
for
an
approved
critical
use.
The
certifications
shall
be
retained
by
the
supplier
for
a
minimum
of
three
years
and
are
part
of
the
reporting
and
recordkeeping
requirements
set
forth
in
82.13
of
this
regulation.
Specifically,
the
certification
will
state,
in
part:
"
I
certify,
under
penalty
of
law,
I
am
an
approved
critical
user
and
I
will
use
this
quantity
of
methyl
bromide
for
an
approved
critical
use.
My
action
conforms
to
the
requirements
associated
with
the
critical
use
exemption
published
in
40
CFR
part
82.
I
am
aware
that
any
agricultural
commodity
within
a
treatment
chamber,
facility,
or
field
I
fumigate
with
critical
use
methyl
bromide
can
not
subsequently
or
concurrently
be
fumigated
with
non­
critical
use
methyl
bromide
during
the
same
control
period,
excepting
a
QPS
treatment
or
a
treatment
for
a
different
use
(
e.
g.,
a
different
crop
or
commodity).
I
will
not
use
this
quantity
of
methyl
bromide
for
a
treatment
chamber,
facility,
or
field
that
I
previously
fumigated
with
non­
critical
use
methyl
bromide
purchased
during
the
same
control
period,
excepting
a
QPS
treatment
or
a
treatment
for
a
different
use
(
e.
g.,
a
different
crop
or
commodity),
unless
a
local
township
limit
now
prevents
me
from
using
methyl
bromide
alternatives."
The
form
will
further
require
users
to
provide
information
on
the
type
of
critical
use
methyl
bromide
purchased,
the
location
of
the
treatment,
the
crop
or
commodity
treated,
the
quantity
of
critical
use
methyl
bromide
purchased
and
the
acreage/
square
footage
treated.
This
information
is
required
so
that
distributers
and
applicators
are
able
to
meet
their
annual
reporting
obligations
to
EPA.
Providing
false
information
on
this
form
constitutes
a
violation.
EPA
is
prohibiting
suppliers
from
selling
critical
use
methyl
bromide
without
first
obtaining
a
signed
and
dated
certification
form.

I.
Who
is
an
Approved
Critical
User
1.
Users
and
Uses
An
approved
critical
user
obtains
access
to
the
benefit
of
exempted
production/
import
and
access
to
reserved
inventories
of
pre­
phaseout
methyl
bromide
stocks,
the
combination
of
which
constitute
the
supply
of
"
critical
use
methyl
bromide"
intended
to
meet
the
needs
of
agreed
critical
uses.
However,
a
condition
for
obtaining
this
benefit
is
a
limit
on
the
amount
of
stocks
that
can
be
purchased
in
the
control
period,
as
described
under
section
V.
D
of
this
rule.
An
approved
critical
user
is
a
self
identified
entity
who
meets
the
following
requirements:
(
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
and
location
of
use
that
was
23
included
in
the
U.
S.
nomination,
authorized
by
a
Decision
of
the
Parties
to
the
Montreal
Protocol,
and
the
finally
determined
by
EPA
in
a
notice
and
comment
rulemaking
to
be
a
critical
use
in
that
location,
AND
(
2)
has
an
area
in
the
applicable
location
of
use
that
requires
methyl
bromide
fumigation
because
the
person
reasonably
expects
that
the
area
will
be
subject
to
a
limiting
critical
condition
(
LCC)
during
the
applicable
control
period,
if
an
LCC
is
given
in
Appendix
L.
Using
these
criteria,
an
approved
critical
user
could
be
a
tomato
farmer
in
Florida
whose
farm
is
over
karst
topography
but
would
not
include
a
tomato
farmer
in
Oklahoma
even
if
he
too
has
a
farm
over
karst
topography
because
no
exemption
application
was
filed
on
behalf
of
Oklahoma
tomato
farmers.
Similarly,
a
Florida
tomato
farmer
who
did
not
have
a
field
with
karst
topography,
or
one
of
the
other
limiting
critical
conditions
specified
in
this
rule,
would
not
be
an
approved
critical
user
because
the
circumstance
of
the
use
is
not
an
approved
critical
use.
Approved
critical
uses
are
those
uses
of
methyl
bromide
listed
in
Appendix
L
to
40
CFR
82
for
the
use
listed
in
column
A
and
the
location
of
use
in
Column
B,
reproduced
from
the
regulatory
text
in
the
table
below.

Table
III:
Approved
Critical
Uses
[
to
be
modified
based
on
comments
received
and
addressed
in
this
section]

Column
A
Column
B
Column
C
Approved
Critical
Uses
End
User
and
Location
of
Use
Limiting
Critical
Conditions
PRE­
PLANT
USES
Cucurbits
(
a)
Michigan
growers
with
a
reasonable
expectation
that
moderate
to
severe
fungal
pathogen
infestation
already
either
exists
or
could
occur
without
methyl
bromide
fumigation
(
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
and
Virginia
growers
with
a
reasonable
expectation
that
moderate
to
severe
yellow
or
purple
nutsedge
infestation
already
either
exists
or
could
occur
without
methyl
bromide
fumigation
Eggplant
(
a)
Georgia
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
either
already
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
moderate
to
severe
nematode
infestation,
or
moderate
to
severe
fungal
pathogen
infestation
24
(
b)
Florida
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
either
already
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation
,
or
moderate
to
severe
nematode
infestation
,
or
moderate
to
severe
fungal
pathogen
infestation
,
or
karst
topography
Forest
Seedlings
(
a)
Members
of
the
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
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.

(
b)
International
Paper
and
its
subsidiaries
limited
to
growing
locations
in
Arkansas,
Alabama,
Georgia,
South
Carolina
and,
Texas
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.

(
c)
Weyerhaeuser
Company
and
its
subsidiaries
limited
to
growing
locations
in
Alabama,
Arkansas,
North
Carolina,
South
Carolina,
Oregon,
and
Washington
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.
25
(
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
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.

(
e)
Members
of
the
Nursery
Technology
Cooperative
limited
to
growing
locations
in
Oregon
and
Washington
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.

(
f)
Michigan
seedling
nurseries
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
exist
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogen
infestation,
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
moderate
to
severe
disease
infestation.

Ginger
Hawaii
growers
with
a
reasonable
expectation
that
the
limiting
critical
condition
already
either
exists
or
could
occur
without
methyl
bromide
fumigation
of
moderate
to
severe
nematode
infestation
,
or
moderate
to
severe
bacterial
wilt
infestation
Orchard
Nursery
Seedlings
(
a)
Members
of
the
Western
Raspberry
Nursery
Consortium
limited
to
growing
locations
in
California
and
Washington
(
Driscoll's
raspberries
and
their
contract
growers
in
California
and
Washington)
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
nematode
infestation,
medium
to
heavy
clay
soils,
or
a
prohibition
of
on
the
use
of
1,3­
dichloropropene
products
due
to
reaching
local
township
limits
on
the
use
of
this
alternative
26
(
b)
Members
of
the
California
Association
of
Nurserymen­
Deciduous
Fruit
and
Nut
Tree
Growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
nematode
infestation,
medium
to
heavy
clay
soils,
or
a
prohibition
of
on
the
use
of
1,3­
dichloropropene
products
due
to
reaching
local
township
limits
on
the
use
of
this
alternative
(
c)
Members
of
the
California
Association
of
Nurserymen­
Citrus
and
Avocado
Growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
nematode
infestation,
medium
to
heavy
clay
soils,
or
a
prohibition
of
on
the
use
of
1,3­
dichloropropene
products
due
to
reaching
local
township
limits
on
the
use
of
this
alternative
Orchard
Replant
(
a)
California
stone
fruit
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
or
medium
to
heavy
soils,
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.

(
b)
California
table
and
raisin
grape
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
or
medium
to
heavy
soils,
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.
27
(
c)
California
walnut
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
or
medium
to
heavy
soils,
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.

(
d)
California
almond
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
replanted
(
non­
virgin)
orchard
soils
to
prevent
orchard
replant
disease,
or
medium
to
heavy
soils,
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached.

Ornamentals
(
a)
Yoder
Brothers
Inc.
in
Florida
for
use
in
all
chrysanthemum
production
(
b)
California
rose
nurseries
with
a
reasonable
expectation
that
the
user
may
be
prohibited
from
using
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
Peppers
(
a)
California
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
fungal
pathogens,
or
moderate
to
sever
disease
infestation,
or
moderate
to
sever
nematode
infestation,
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
a
prohibition
on
the
use
of
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
28
(
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
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
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
karst
topography
Strawberry
Nurseries
(
a)
California
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
black
root
rot
or
crown
rot,
moderate
to
severe
nematode
infestation,
or
moderate
to
severe
yellow
or
purple
nutsedge
infestation
(
b)
North
Carolina
and
Tennessee
growers
with
a
reasonable
expectation
that
the
use
will
occur
in
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
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
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,
time
to
transition
to
an
alternative
29
(
b)
Florida
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge,
or
karst
topography
(
c)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee,
Virginia,
Ohio
and,
New
Jersey
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge,
or
the
presence
of
an
occupied
structure
within
76
meters
of
a
grower's
field
the
size
of
100
acres
or
less
Sweet
Potatoes
California
growers
with
a
reasonable
expectation
that
the
user
may
be
prohibited
from
using
1,3­
dichloropropene
products
because
local
township
limits
for
this
alternative
have
been
reached
Tomatoes
(
a)
Michigan
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
disease
infestation,
fungal
pathogens
infestation
(
b)
Alabama,
Arkansas,
Georgia,
North
Carolina,
South
Carolina,
Tennessee
and
Virginia
growers
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
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
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
either
exists
or
could
occur
without
methyl
bromide
fumigation:
moderate
to
severe
yellow
or
purple
nutsedge
infestation,
or
karst
topography
30
Turfgrass
(
a)
U.
S.
turfgrass
sod
nursery
producers
for
the
production
of
industry
certified
pure
sod
(
b)
U.
S.
golf
courses
for
establishing
sod
in
the
construction
of
new
golf
courses
or
the
renovation
of
putting
greens,
tees,
and
fairways
POST­
HARVEST
USES
Food
Processing
(
a)
Rice
millers
in
Arkansas,
California
Louisiana,
Florida,
Missouri,
and
Mississippi
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
exists:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity,
time
to
transition
to
an
alternative
(
b)
Pet
food
manufacturing
facilities
in
the
U.
S.
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
exists:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity,
time
to
transition
to
an
alternative
(
c)
Kraft
Foods
in
the
U.
S.
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
exists:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity,
time
to
transition
to
an
alternative
(
d)
Members
of
the
North
American
Millers'
Association
in
the
U.
S.
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
already
exists
or
could
occur
without
methyl
bromide
fumigation:
older
structures
that
can
not
be
properly
sealed
to
use
an
alternative
to
methyl
bromide,
or
the
presence
of
sensitive
electronic
equipment
subject
to
corrosivity,
time
to
transition
to
an
alternative
Commodity
Storage
(
a)
Gwaltney
of
Smithfield
in
the
U.
S.
for
smokehouse
ham
curing
facilities
owned
by
the
company
31
(
b)
California
entities
storing
walnuts,
beans,
dried
plums,
and
pistachios
in
California
with
a
reasonable
expectation
that
one
or
more
of
the
following
limiting
critical
conditions
exists:
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,
or
there
is
a
short
period
after
harvest
in
which
to
fumigate
and
there
is
limited
silo
availability
for
using
alternatives
The
approved
critical
uses
and
limiting
critical
conditions
listed
in
the
above
table
have
been
modified
from
the
original
proposal
to
reflect
comments
provided
to
EPA.
EPA
received
clarifying
comments
from
four
commenters
that
EPA
mischaracterized
the
scope
of
their
application
or
misidentified
some
limiting
critical
conditions.
For
example,
the
Pet
Food
Institute
[
are
we
identifying
commenters
by
name?]
commented
to
EPA
that
their
application
only
covered
dog
and
cat
pet
food
facilities
whereas
EPA
listed
all
pet
food
facilities
as
part
of
the
consortium.
The
most
significant
change
to
this
section
involves
the
limiting
critical
conditions
(
LCC).
EPA
recieved
four
comments
with
concerns
about
the
LCCs
and
two
in
favor
of
the
LCCs.
The
concerns
raised
in
the
comments
is
that
these
conditions
are
difficult
to
understand
and
identify.
For
example,
one
commenter
asked
how
many
nutsedges
over
what
area
constitute
"
moderate
to
severe"
infestation.
The
same
commenter
also
indicated
that
at
the
time
of
fumigation,
nutsedges
would
not
be
visible.
EPA
recognizes
that
a
user
may
not
be
able
to
certify
that
certain
limiting
critical
conditions
will
definitely
occur.
For
example,
a
grower
may
not
know
with
one
hundred
percent
certainty
that
moderate
to
severe
nutsedge
infestation
would
occur
in
a
given
field
in
the
absence
of
methyl
bromide
fumigation.
However,
the
grower
should
be
able
to
form
a
reasonable
expectation
in
this
regard,
based
on
past
experience
and
the
information
included
in
the
application.
EPA
has
modified
the
definition
of
approved
critical
user
to
reflect
the
"
reasonable
expectation"
standard.
EPA
received
two
sets
of
comments
requesting
specific
modifications
to
the
LCCs.
Based
on
those
comments,
EPA
is
making
the
following
changes
in
today's
rule:
a)
eliminating
the
LCC
of
"
moderate
to
severe
nematode
pressure"
in
all
uses
except
Michigan
tomatoes
because
the
commenter
correctly
states
that
there
are
effective
alternatives
to
control
this
condition
when
it
occurs
alone;
b)
eliminating
"
moderate
to
severe
pathogens"
in
all
uses
except
Michigan
tomatoes
because
there
are
effective
alternatives
to
control
this
condition
when
it
occurs
alone
and;
c)
modifying
the
buffer
zone
LCC
to
reflect
recent
label
changes
that
reduce
the
buffer
to
100
feet
from
an
occupied
structure.
The
last
LCC
would
apply,
as
the
commenter
pointed
out,
only
in
situations
where
methyl
bromide
has
a
less
restrictive
buffer
zone.
EPA
is
eliminating
the
first
two
LCCs
on
nematode
and
pathogen
infestation
because
there
are
effective
alternatives
to
control
these
pests
when
they
happen
to
be
the
only
key
pest.
EPA
had
incorrectly
characterized
these
conditions
as
stand
alone
circumstances
that
would
allow
for
the
use
of
methyl
bromide
in
the
proposal
although
the
nomination
describes
these
situations
as
requiring
methyl
bromide
when
in
conjunction
with
another
circumstance.
EPA
did
not
eliminate
the
first
two
LCC
for
Michigan
32
tomatoes
because
severe
neamatode
or
pathogen
pressures
alone
make
the
alternatives
not
feasible.
This
is
because
Michigan
is
a
cold
climate
and
the
alternatives
which
would
otherwise
be
effective
can
not
properly
diffuse
in
the
cool
soils.

2.
New
Market
Entrants
EPA
received
two
favorable
comments
on
the
proposed
method
for
regulating
access
to
critical
use
methyl
bromide
by
new
market
entrants.
For
example,
a
new
market
entrant
may
be
a
new
farmer,
a
farmer
who
is
expanding
production
of
a
crop
that
is
an
approved
critical
use
or,
a
farmer
that
is
moving
production
from
one
location
to
a
new
location
that
has
the
limiting
critical
condition.
EPA
is
finalizing
a
framework
in
today's
rule
that
allows
a
new
market
entrant
who
is
a
member
of
a
consortium
that
applied
for
an
exemption
to
be
an
approved
critical
user
so
long
as
the
use
is
for
a
use
listed
in
column
A
and
a
location
listed
in
column
B
of
Appendix
L
to
40
CFR
82.
Therefore,
an
approved
critical
user
includes
those
users
who
are
members
of
a
consortium
that
applied
for
an
exemption,
even
if
the
user
was
not
a
member
of
the
consortium
at
the
time
the
application
was
filed.
As
described
in
the
proposal,
EPA
will
not
increase
the
amount
of
methyl
bromide
exempted
to
accommodate
new
market
entrants
without
first
seeking
authorization
from
the
Parties
through
the
nomination
and
then
engaging
in
a
notice
and
comment
rulemaking
process.
Therefore
any
increase
in
demand
for
methyl
bromide
due
to
new
market
entrants
must
be
met
under
the
cap
set
forth
in
today's
rule.
For
example,
the
Southern
Forest
Nursery
Management
Cooperative
consists
of
a
certain
number
of
forest
seedling
nursery
operators.
The
Cooperative
made
an
application
to
EPA
for
an
exemption
solely
on
behalf
of
their
membership.
If
a
company
that
is
a
member
of
the
Cooperative
otherwise
meets
the
definition
of
approved
critical
user,
the
company
can
access
critical
use
methyl
bromide
even
if
it
did
not
join
the
Cooperative
until
2004.
The
Agency
wishes
to
accommodate
the
ever
shifting
marketplace
to
allow
growers
to
increase
or
move
production
as
needed
provided
that
critical
use
methyl
bromide
only
goes
to
those
uses
and
locations
listed
in
Appendix
L
of
40
CFR
82.
EPA
received
three
comments
against
EPA's
definition
because
it
allows
for
users
to
join
a
consortium
in
2005
and
use
methyl
bromide
that
should
be
reserved
only
for
those
who
were
part
of
the
consortium
at
the
time
of
application
in
the
opinion
of
the
commenters.
One
commenter
provided
an
alternative
approach
that
would
have
EPA
disallow
all
new
market
entrants
for
the
first
year
they
enter
the
market.
EPA
considered
this
approach
but
EPA
does
not
have
information
on
every
company
that
is
part
of
a
given
consortium.
Therefore,
it
would
be
difficult
if
not
impossible
for
EPA
to
"
pre­
qualify"
some
companies
as
critical
uses
and
disqualify
others.
Instead,
EPA
is
finalizing
an
approach
that
leaves
it
up
to
each
consortium
to
define
their
membership
at
the
time
of
application
for
an
exemption
as
broadly
or
narrowly
as
they
choose.

J.
Reporting
and
Recordkeeping
Requirements
1.
Reporting
With
today's
action,
producers
and
importers
are
required
to
report
the
number
of
33
expended
and
unexpended
pre­
plant
CUAs
and
post­
harvest
CUAs
on
a
quarterly
basis
to
EPA.
On
an
annual
basis,
producers,
importers,
distributers,
and
third­
party
applicators
are
required
to
report
to
EPA
the
following
information:
the
number
of
expended
and
unexpended
CSAs;
a
list
of
the
total
amount
of
pre­
plant
methyl
bromide
bought
and
the
amount
sold
to
approved
critical
users
for
each
sector;
a
list
of
the
total
amount
of
post­
harvest
methyl
bromide
bought
and
the
amount
sold
to
approved
critical
users
for
each
sector;
the
amount
of
critical
use
methyl
bromide
that
has
not
been
sold
to
an
approved
critical
user
as
of
the
end
of
the
control
period
that
the
reporting
entity
owns;
the
amount
of
critical
use
methyl
bromide
that
has
not
been
sold
to
an
approved
critical
user
that
reporting
entity
is
holding
on
behalf
of
another
entity
along
with
the
name
of
the
entity
who
owns
the
material.
This
information
is
required
so
that
EPA
can
track
compliance
with
the
critical
use
allowance
and
critical
stock
allowance
caps,
determine
how
much
methyl
bromide
is
used
on
a
sector
(
crop
or
use)
basis,
and
determine
how
much
critical
use
methyl
bromide
remains
unused
at
the
end
of
the
compliance
period.
The
information
collected
for
this
exemption
is
authorized
under
Sections
603(
b),
603(
d)
and
614(
b)
of
the
CAAA.
EPA
believes
these
reporting
requirements
are
necessary
to
meet
U.
S.
reporting
obligations
under
Article
7
of
the
Protocol,
CAA
reporting
requirements
to
Congress
under
Section
603(
d),
and
implementation
of
the
exemption
from
one
control
period
to
the
next.
The
reporting
framework
that
EPA
is
implementing
with
today's
action
is
consistent
with
the
information
requirements
described
in
the
proposal
and
section
114
request
for
information
on
inventories
(
69
FR52366
and
69
FR
52403).
EPA
did
not
receive
any
adverse
comment
on
the
information
requirements
although
one
entity
indicated
that
EPA
underestimated
the
time
various
compliance
activities
would
take.
EPA
believes
that
today's
record
keeping
and
reporting
requirements
create
the
least
burden
while
still
ensuring
compliance
with
Protocol
requirements.
See
section
VI.
C
of
this
preamble
for
EPA's
response
to
those
comments.
EPA
also
received
comment
that
the
Agency
should
use
a
real
time
database
system
to
track
the
use
of
methyl
bromide.
A
system
similar
to
this
is
used
in
California
to
allow
regulators
to
prohibit
the
use
of
1,3­
D
products
when
the
local
township
cap
is
close
to
its
maximum
allowable
level.
As
described
in
the
proposal,
there
is
insufficient
time
for
EPA
to
contract,
design,
and
implement
such
a
tracking
system.
EPA
is
primarily
concerned
with
understanding
how
much
methyl
bromide
is
used
for
each
critical
use
sector
on
an
annual
basis.
Therefore,
a
real
time
tracking
system
is
not
warranted.
The
reporting
requirements
described
in
today's
action
are
sufficient
to
meet
the
information
requirements
under
the
Protocol
and
the
CAAA
and
to
ensure
that
EPA
can
implement
the
exemption
from
one
control
period
to
the
next.
However,
there
is
nothing
in
this
rule
to
prohibit
the
private
development
of
such
a
system
and
EPA
understands
that
one
such
database
company
has
had
conversations
with
methyl
bromide
registrants
about
developing
a
database
similar
to
the
one
described
in
the
proposal.
EPA
received
one
comment
that
the
Agency
should
develop
a
better
understanding
on
use
of
methyl
bromide
and
to
facilitate
that
understanding,
EPA
should
require
direct
reporting
on
methyl
bromide
use
by
all
large
users,
defined
as
those
who
use
more
than
10,000
kgs
of
methyl
bromide
a
year.
While
EPA
understands
that
at
some
point
during
the
exemption
program
it
may
be
helpful
to
understand
use
trends
for
major
individual
users,
the
Agency
does
not
believe
that
it
will
derive
any
additional
benefit
from
requiring
annual
reporting
of
the
data.
In
addition
this
34
would
impose
additional
burden
on
users
and
potentially
on
producers,
importers,
and
distributers.
In
the
event
that
EPA
does
need
this
data
at
some
point,
the
Agency
could
use
section
114
of
the
Clean
Air
Act
to
require
distributers
and
third­
party
applicators
to
provide
individual
user
data
to
EPA
based
on
the
recordkeeping
requirements
laid
out
in
today's
rule.

2.
Recordkeeping
Producers,
importers,
distributers,
and
third­
party
applicators
are
required
to
maintain
self
certification
records
for
three
years
along
with
other
transactional
records
such
as
invoices
and
order
forms.
EPA
did
not
receive
any
adverse
comments
on
the
recordkeeping
requirements
described
in
the
proposal
and
is
implementing
the
recordkeeping
requirements
without
modification.

3.
Treatment
of
Unused
Critical
Use
Methyl
Bromide[
please
rewrite;
very
awkward]

EPA
will
use
the
information
collected
through
the
annual
reporting
requirement
to
determine
how
much
unused
critical
use
methyl
bromide
is
available,
or
not
already
sold
to
an
approved
critical
user,
at
the
end
of
the
calendar
year.
EPA
proposed
deducting
the
corresponding
amount
from
the
total
number
of
critical
use
allowances
the
Agency
would
make
available
for
the
following
control
period.
A
number
of
commenters
correctly
indicated
that
EPA
would
not
have
the
data
on
the
amount
of
critical
use
methyl
bromide
unused
at
the
end
of
the
year
until
the
March
of
the
following
year
when
the
last
report
is
due.
EPA
is
only
issuing
allowances
once
a
year
and
such
allowance
allocations
are
likely
to
take
place
well
before
EPA
has
the
required
data
on
unused
methyl
bromide.
Therefore,
with
today's
action,
EPA
is
creating
a
system
for
deducting
the
amount
of
unused
methyl
bromide
from
the
total
number
of
allowances
issued
for
the
control
period
following
the
control
period
immediately
after
the
control
period
when
the
methyl
bromide
was
unused
for
critical
uses.
For
example,
any
unused
critical
use
methyl
bromide
at
the
end
of
2005
will
not
be
deducted
from
the
number
of
CUAs
made
available
for
2006,
but
rather
will
be
deducted
from
the
CUAs
made
available
in
2007.
For
the
year
2006,
this
will
result
in
no
reductions
made
however
all
years
after
2006
will
experience
a
reduction
should
there
be
any
unused
methyl
bromide.
Unused
critical
use
methyl
bromide,
as
described
in
the
proposal,
would
be
made
available
in
the
following
control
period
in
the
same
manner
in
which
it
was
produced.
For
example,
all
All
pre­
plant
critical
use
methyl
bromide
produced
in
2005
but
unused
at
the
end
of
the
year
would
remain
pre­
plant
critical
use
methyl
bromide
in
2006
available
for
all
2006
pre­
plant
approved
critical
uses.
EPA
received
comment
that
the
Agency
should
account
for
the
time
lag
between
reporting
and
issuing
of
allowances
for
the
following
control
period
using
an
estimated
approach.
For
example,
the
Agency
could
estimate
how
much
critical
use
methyl
bromide
would
be
unused
and
then
EPA
would
deduct
that
amount
from
the
number
of
allowances
issued
for
the
following
year.
EPA
is
only
requiring
reporting
of
the
required
data
once
a
year
and
so
the
Agency
would
have
little
basis
for
making
realistic
estimates
of
this
nature.
Although
EPA
could
require
more
frequent
data
reports,
EPA
would
still
have
to
estimate
year
end
data
because
of
the
large
number
35
of
fumigations
that
occur
late
in
the
control
period.
EPA
would
prefer
to
use
actual
data
even
if
there
is
a
time
lag
to
ensure
that
those
who
need
critical
use
methyl
bromide
have
access
to
it
and
that
future
production
can
be
adjusted
to
reflect
the
actual
carryover.

K.
Enforcement
Provisions
Unauthorized
production,
import,
or
sale
of
critical
use
methyl
bromide
will
incur
a
violations
on
a
per
kilogram
basis
identical
to
nearly
all
other
aspects
of
the
ozone
protection
program.
Section
113
of
the
CAAA
governs
enforcement
activities
for
violations
of
requirements
under
Title
VI.
One
commenter
supported
the
size
of
violations
EPA
proposed
for
allowance
holders.
There
were
no
dissenting
comments
on
this
point.
EPA
proposed
adjusting
the
maximum
potential
fine
applied
to
end
users
of
methyl
bromide
because
users
typically
operate
on
a
smaller
scale
and
have
less
ability
to
pay
than
chemical
companies.
EPA
proposed
defining
a
violation
for
improper
use
of
critical
use
methyl
bromide
as
one
violations
for
every
200
kilograms
of
misuse.
EPA
received
several
comments
that
the
Agency
should
further
lower
the
penalties
to
be
identical
to
those
applied
under
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act
(
FIFRA),
the
statute
that
usually
governs
use
of
fumigants.
Today
those
penalties
are
$
1,200
per
violation,
and
a
violation
is
the
occurrence
of
misuse.
EPA
also
received
two
comments
supporting
a
maximum
penalty
of
$
25,000
per
violation,
and
a
violation
is
the
occurrence
of
misuse
and
nine
comments
that
end
user
penalties
should
be
identical
to
those
under
FIFRA
or
should
be
handled
exclusively
under
FIFRA
authorities.
With
today's
rule,
EPA
is
defining
a
violation
with
respect
to
improper
use
by
a
user
as
one
violation
for
every
200
kilograms
noting
that
EPA
typically
uses
discretion
in
assessing
penalties
and
takes
into
account
such
things
as
the
size
of
the
operation
and
ability
to
pay
as
well
as
the
circumstances­
such
as
whether
the
misuse
was
self­
reported.
Today's
rule
lowers
the
basis
for
calculating
a
maximum
penalty
and
the
Agency
notes
there
is
discretion
to
apply
less
than
the
maximum
fine
per
each
violation.
Today's
rule
is
providing
assurances
to
the
end
user
regulated
community
that
they
will
not
face
the
same
level
of
fines
as
a
chemical
producer
and
codifies
flexibility
for
the
Agency
to
apply
less
than
the
maximum
penalty
for
this
type
of
violation.
In
assessing
penalties,
the
Agency
takes
into
consideration
the
size
of
the
violator,
the
economic
benefit
or
advantage
achieved
from
the
violation
and
the
ability
of
the
violator
to
pay
a
penalty.
Thus,
the
concerns
raised
by
commenters
regarding
the
ability
of
methyl
bromide
users
to
pay
the
maximum
allowable
fine
proposed
by
the
Agency
are
addressed
through
the
flexibility
EPA
provides
to
enforcement
officers
in
assessing
penalties.
Because
it
is
a
pesticide,
methyl
bromide
is
also
regulated
by
EPA
under
FIFRA
and
under
other
statutes
and
regulatory
authority
and
by
states
under
their
own
statutes
and
regulatory
authority.
Nothing
in
today's
rule
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.

L.
Exporting
Provisions
36
We
received
two
comments
that
noted
the
need
for
regulatory
provisions
that
would
permit
U.
S.
producers
of
methyl
bromide
to
manufacture
material
for
other
countries
with
critical
uses
authorized
by
the
Parties.
In
today's
action,
the
regulatory
text
includes
provisions
that
permit
methyl
bromide
production
explicitly
and
solely
to
meet
the
needs
of
other
countries
that
have
been
authorized
critical
use
exemptions
for
the
specific
control
period.
The
producers
will
be
required
to
report
quarterly
on
quantities
produced
solely
for
export
to
meet
orders
placed
by
other
countries
with
authorized
critical
needs.
The
proposal
noted
that
the
U.
S.
is
the
largest
world
manufacturer
of
methyl
bromide
and
that
U.
S.
manufacturers
will
likely
produce
to
meet
the
needs
of
other
non­
Article
5(
1)
countries
that
have
critical
uses
authorized
by
the
Parties,
such
as
Canada,
Australia
or
Italy.
In
creating
the
regulatory
provisions
in
today's
rule
to
permit
production
beyond
the
phaseout
explicitly
for
export
to
other
countries
with
critical
uses
authorized
by
the
Parties,
we
are
also
correcting
an
oversight
that
was
discussed
in
the
final
rule
published
in
the
Federal
Register
on
January
2,
2003,
(
68
FR
238)
regarding
production
beyond
the
phaseout
for
quarantine
and
preshipment
applications.
In
that
prior
final
rule
(
68
FR
238)
as
well
as
in
the
proposal,
we
discuss
the
fact
that
exempt
production
for
quarantine
and
preshipment
applications
is
above
and
beyond
the
reduction
steps
prior
to
the
phaseout,
and
continues
after
the
phaseout.
The
addition
of
provisions
regarding
the
quarantine
and
preshipment
exemption
is
to
correct
the
absence
of
the
intended
exemption
beyond
the
phaseout.

VI.
What
are
the
Other
Considerations
and
Situations
on
which
EPA
Received
Comments?

A.
Distribution
of
Permits
to
Approved
Critical
Users
In
today's
rule,
EPA
is
creating
an
exemption
program
that
emphasizes
direct
regulation
of
the
supply
chain
of
methyl
bromide
through
an
allowance
allocation
system
that
distributes
allowances
to
producers,
importers,
distributers,
and
third­
party
applicators
of
methyl
bromide
as
described
in
section
V
of
this
preamble.
EPA
did
receive
two
comments
supporting
a
system
that
emphasizes
direct
regulation
of
the
user
community
whereby
EPA
would
issue
critical
use
permits
to
end
users
of
methyl
bromide
in
order
to
direct
critical
use
methyl
bromide
to
the
appropriate
uses.
One
commenter
supported
the
user
oriented
approach
because
the
administrative
burden
of
such
a
system
would
act
as
a
deterrent
to
the
use
of
methyl
bromide
and
would
lead
to
greater
efficiencies.
As
EPA
described
in
the
proposal,
the
CUP[
spell
out]
system
would
impose
additional
costs
and
burden
on
industry
compared
to
the
proposed
option.
Although
these
costs
could
be
a
deterrent
to
the
use
of
methyl
bromide
and
thus
achieve
an
environmental
objective
of
reducing
methyl
bromide
use,
EPA
is
committed
to
a
regulatory
approach
that
relies
on
existing
market
mechanisms.
Certain
critical
uses
were
agreed
to
and
determined
through
an
extensive
domestic
and
international
review
based
on
the
technical
and
economic
feasibility
of
alternatives.
EPA
does
not
want
to
impose
a
regulatory
framework
with
the
goal
of
establishing
high
administrative
costs
to
force
growers
who
do
not
have
any
alternative
available
to
them
out
of
the
market.
Doing
so
would
obviate
the
purpose
of
an
exemption
altogether.
EPA
believes
the
timing
of
the
domestic
and
international
authorization
process
would
not
37
allow
for
the
creation
of
a
end
user
allocation
scheme
on
a
yearly
basis.
In
addition
the
learning
and
transaction
costs
of
changing
the
whole
market
structure
in
the
face
of
the
phaseout
could
adversely
impact
in
U.
S.
agricultural
sectors.
For
a
more
detailed
description
of
the
economic
consideration
of
the
user
based
system,
please
refer
to
the
Regulatory
Impact
Assessment
conducted
for
the
proposed
rulemaking
available
at
EPA's
e­
docket
number
OAR­
2003­
0230.
EPA
received
two
comments
on
using
an
auction
to
distribute
permits
to
users
of
methyl
bromide,
one
in
favor
and
one
opposed.
The
commenter
in
favor
of
the
auction
indicated
that
the
revenues
derived
from
an
auction
could
be
used
to
fund
transition
activities.
The
other
commenter
indicated
that
the
auction
approach
would
take
a
significant
amount
of
time
to
develop
and
methyl
bromide
would
be
directed
to
the
highest
value
uses
disadvantaging
other
important
uses
of
methyl
bromide.
This
commenter
disputes
EPA's
assertion
that
an
auction
would
serve
to
redistribute
windfall
profits.
Economic
theory
suggests
that
an
auction
would
impact
windfall
profits
because
users
would
pay
a
price
premium
in
the
form
of
their
bid
for
rights
to
methyl
bromide
thus
lowering
the
amount
they
are
willing
to
pay
to
chemical
companies
for
the
material
itself.
In
a
fluid
setting,
the
revenues
generated
or
surplus
captured
from
the
auction
could
then
be
directed
to
transition
activities
administered
by
the
government
or
a
third
party.
It
is
a
theoretically
elegant
policy
solution
but
one
with
significant
logistical
barriers
to
implementation.
[
an
alternative
to
deleting
is
put
forth
a
correct
discussion
on
the
auction
mechanism
that
includes
what
happens
when
the
revenue
is
recycled
 
theory
of
the
2nd
best]
EPA
did
not
propose
and
is
not
finalizing
this
option
due
to
the
lack
of
clear
statutory
guidance
on
some
of
the
details
of
this
approach,
the
time
it
would
take
to
develop
this
program,
and
the
relatively
small
size
of
the
market
compared
to
the
burden
associated
with
this
approach.

B.
Comments
on
the
Burden
Associated
with
this
Regulatory
System
EPA
received
one
comment
on
the
estimated
burden
hours
associated
with
this
regulatory
system.
One
commenter
indicated
that
EPA
grossly
underestimated
the
time
required
for
data
compilation
and
reporting
and
suggested
that
it
is
at
least
two
times
greater
than
what
EPA
estimated
in
the
Paperwork
Reduction
Analysis.
This
commenter
did
not
provide
additional
comment
to
explain
specifically
how
or
why
the
EPA
estimate
was
incorrect
nor
did
they
indicate
which
particular
activities
should
be
adjusted.
Therefore,
EPA
has
not
adjusted
the
estimated
burden
hours.

VII.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
No.
12866:
Regulatory
Planning
and
Review
Under
Executive
Order
No.
12866,
(
58
FR
51735,
October
4,
1993)
the
Agency
must
determine
whether
the
regulatory
action
is
"
significant"
and
therefore
subject
to
OMB
review
and
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
38
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
No.
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
that
attempts
to
assess
the
likely
effect
of
allowing
critical
use
exemptions
on
the
regulated
entities
using
three
illustrative
alternatives.
The
estimated
cost
savings
are
approximately
$
19
million
to
$
31
million
on
an
annual
basis.
The
two
factors
that
affect
these
estimates
are
the
size
of
the
cap
and
how
freely
critical
use
methyl
bromide
is
allocated.
Since
the
assumed
cap
in
the
analysis
is
39%
of
the
1991
baseline
consumption,
and
the
allocation
system
chosen
for
the
final
rule
is
not
a
full
universal
cap
system,
the
likely
cost
savings
that
should
result
from
this
rule
is
lower
than
the
estimates
presented
in
the
analysis.

B.
Paperwork
Reduction
Act
[
template
for
final
rule
with
an
approved
ICR]
The
Office
of
Management
and
Budget
(
OMB)
has
approved
the
information
collection
requirements
contained
in
this
rule
under
the
provisions
of
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et
seq.
and
has
assigned
OMB
control
number
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
(
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
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.
EPA
estimates
the
total
burden
associated
with
today's
action
to
be
1,505
hours
annually.
EPA
does
not
estimate
any
start­
up
or
capital
costs
associated
with
today's
action.

Collection
Activity
No.
of
respondents
Total
no.
of
responses
Hours
per
response
Total
hours
Rule
Familiarization
54
54
4
216
39
Report
Inventory
Data
(
one
time)
54
54
2.5
135
Data
Compilation
(
quarterly
basis)
4
16
4
64
Data
Compilation
(
annual
basis)
50
50
8
400
Data
Reporting
(
quarterly
basis)
4
16
.5
8
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
1,505
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,
processing
and
maintaining
information,
and
disclosing
and
providing
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
in
40
CFR
are
listed
in
40
CFR
part
9.
In
addition,
EPA
is
amending
the
table
in
40
CFR
part
9
of
currently
approved
OMB
control
numbers
for
various
regulations
to
list
the
regulatory
citations
for
the
information
requirements
contained
in
this
final
rule.

C.
Regulatory
Flexibility
Act
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
than
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.
40
Category
NAICS
code
SIC
code
NAICS
Small
business
size
standard
(
in
number
of
employees
or
millions
of
dollars)

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
After
considering
the
economic
impacts
of
today's
final
rule
on
small
entities,
EPA
has
concluded
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
41
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.
Sections
603
and
604.
Thus,
an
agency
may
conclude
that
a
rule
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities
if
the
rule
relieves
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
final
rule
will
relieve
regulatory
burden
for
all
small
entities.

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
to
State,
local,
and
tribal
governments,
in
the
aggregate,
or
to
the
private
sector,
of
$
100
million
or
more
in
any
one
year.
Before
promulgating
an
EPA
rule
for
which
a
written
statement
is
needed,
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.
The
provisions
of
section
205
do
not
apply
when
they
are
inconsistent
with
applicable
law.
Moreover,
section
205
allows
EPA
to
adopt
an
alternative
other
than
the
least
costly,
most
cost­
effective
or
least
burdensome
alternative
if
the
Administrator
publishes
with
the
final
rule
an
explanation
why
that
alternative
was
not
adopted.
Before
EPA
establishes
any
regulatory
requirements
that
may
significantly
or
uniquely
affect
small
governments,
including
tribal
governments,
it
must
have
developed
under
section
203
of
the
UMRA
a
small
government
agency
plan.
The
plan
must
provide
for
notifying
potentially
affected
small
governments,
enabling
officials
of
affected
small
governments
to
have
meaningful
and
timely
input
in
the
development
of
EPA
regulatory
proposals
with
significant
Federal
intergovernmental
mandates,
and
informing,
educating,
and
advising
small
governments
on
compliance
with
the
regulatory
requirements.
EPA
has
determined
that
this
rule
does
not
contain
a
Federal
mandate
that
may
result
in
expenditures
of
$
100
million
or
more
for
State,
local,
and
tribal
governments,
in
the
aggregate,
or
the
private
sector
in
any
one
year.
Today's
rule
creates
a
record­
keeping
and
reporting
burden
on
the
private
sector
that
is
estimated
to
be
under
$
200,000
on
an
annual
basis.
Thus,
today's
rule
is
not
subject
to
the
requirements
of
sections
202
and
205
of
the
UMRA.
Further,
EPA
has
determined
that
this
rule
contains
no
regulatory
requirements
that
might
significantly
or
uniquely
affect
small
governments
because
it
does
not
create
any
requirements
on
any
State,
local,
or
tribal
government.
42
E.
Executive
Order
No.
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."
"
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."
This
final
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
rule
is
expected
to
primarily
affect
producers,
suppliers,
importers
and
exporters
and
users
of
methyl
bromide.
Thus,
Executive
Order13132
does
not
apply
to
this
rule.

F.
Executive
Order
No.
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
Executive
Order
No.
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
final
rule
does
not
have
tribal
implications,
as
specified
in
Executive
Order
No.
13175.
Today's
final
rule
does
not
significantly
or
uniquely
affect
the
communities
of
Indian
tribal
governments.
The
final
rule
does
not
impose
any
enforceable
duties
on
communities
of
Indian
tribal
governments.
Thus,
Executive
Order
No.
13175
does
not
apply
to
this
final
rule.

G.
Executive
Order
No.
13045:
Protection
of
Children
from
Environmental
Health
&
Safety
Risks
Executive
Order
No.
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
Executive
Order
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
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
Executive
Order
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
final
rule
is
not
subject
to
Executive
Order
13045
because
it
does
not
establish
an
environmental
standard
intended
to
mitigate
health
or
safety
risks.

H.
Executive
Order
No.
13211:
Actions
that
Significantly
Affect
Energy
Supply,
43
Distribution,
or
Use
This
rule
is
not
a
"
significant
energy
action"
as
defined
in
Executive
Order
No.
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.
National
Technology
Transfer
Advancement
Act
As
noted
in
the
proposed
rule,
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
action
does
not
involved
technical
standards.
Therefore,
EPA
did
not
consider
the
use
of
any
voluntary
consensus
standards.

J.
Congressional
Review
Act
The
Congressional
Review
Act,
5
U.
S.
C.
§
801
et
seq.,
as
added
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996,
generally
provides
that
before
a
rule
may
take
effect,
the
agency
promulgating
the
rule
must
submit
a
rule
report,
which
includes
a
copy
of
the
rule,
to
each
House
of
the
Congress
and
to
the
Comptroller
General
of
the
United
States.
EPA
will
submit
a
report
containing
this
rule
and
other
required
information
to
the
U.
S.
Senate,
the
U.
S.
House
of
Representatives,
and
the
Comptroller
General
of
the
United
States
prior
to
publication
of
the
rule
in
the
Federal
Register.
A
Major
rule
cannot
take
effect
until
60
days
after
it
is
published
in
the
Federal
Register.
This
action
is
not
a
"
major
rule"
as
defined
by
5
U.
S.
C.
§
804(
2).
This
rule
will
be
effective
on
January
1,
2005.

Dated:
December
17,
2004
Michael
O.
Leavitt,
Administrator
For
the
reasons
stated
in
the
preamble,
40
CFR
part
82
is
amended
as
follows:

PART
82­
PROTECTION
OF
STRATOSPHERIC
OZONE
[
insert
finalized
reg
text
here]
