
As one of the very few US manufacturers of R-22, we at MDA Manufacturing, Inc support action to restore Production Allowance allocation to 38 percent of baseline in 2011 and apply similarly proportionate levels to Production Allowance allocations for the years 2012-2014. Regarding the concerns raised in the Interim Final Rule as published on August 5, 2011:

   oo Increased US production of HCFCs. While R-22 production levels are also heavily influenced by demands for downstream products for which R-22 is used as a chemical intermediate, and by availability/cost of raw materials, this potential increase in Production Allowances could result in a slight relative increase in US R-22 production. However since the use of any such increased production in the US is controlled and capped within the total allocation of Consumption Allowances, all or part of the increase would be counterbalanced by a decrease in R-22 importation. Globally, this could provide a net environmental benefit given the known/low levels of byproduct emissions caused by US production and by reducing need for international transportation of R-22.
   oo Greater US production of R-22 for export. Given the factors mentioned above plus the fact that export opportunities would exist in any case for R-22 used in downstream chemical processes, it is unlikely that this increase in Production Allowances would lead to a significant increase in R-22 exports. Globally, total R-22 production will be driven by market factors including demands for downstream chemicals plus regulated uses and constrained by availability, pricing, and allocation of raw materials and by opportunities for conversion of R-22 production equipment for other uses. Relative to global production, any impact caused by the potential increase in Production Allowances would be very small.
   oo Hindrance of the 2015 "next step" in HCFC phase-out plan. The availability and pricing of R-22 in the US for regulated uses will continue to be influenced much more heavily by Consumption Allowances. An increase in available Production Allowances will provide broader options for expending those Consumption Allowances through US Production vs. Import of the associated R-22 material. 

To summarize, we believe that this action relative to R-22 Production Allowances entails little if any risk, while potentially providing benefits to US manufacturers and to the global environment.


