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Protection of Stratospheric Ozone: Allocation of Essential Use Allowances for Calendar Year 2002; and Extension of the De Minimis Exemption for Essential Laboratory and Analytical Uses through Calendar Year 2005
Related Material
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: November 1, 2001 (Volume 66, Number 212)]
[Proposed Rules]
[Page 55145-55157]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no01-36]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[FRL-7096-8]
RIN 2060-AJ81
Protection of Stratospheric Ozone: Allocation of Essential Use
Allowances for Calendar Year 2002; and Extension of the De Minimis
Exemption for Essential Laboratory and Analytical Uses through Calendar
Year 2005
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: With this action, EPA is proposing to allocate essential-use
allowances for import and production of class I stratospheric ozone
depleting substances (ODSs) for calendar year 2002. Essential use
allowances permit a person to obtain controlled ODSs as an exemption to
the January 1, 1996 regulatory phase-out of production and import of
these chemicals. EPA allocates essential-use allowances for exempted
production or import of a specific quantity of class I ODS solely for
the designated essential purpose. Today, EPA is proposing to allocate
essential-use allowances for production and import of ODSs for use in
medical devices and the Space Shuttle and Titan Rockets, and to extend
the general exemption for laboratory and analytical applications
through the year 2005 as consistent with the Montreal Protocol. EPA is
also proposing regulatory changes to ensure consistency with Decisions
XI/15 and XII/2 of the Montreal Protocol. Decision XI/15 states that
use of class I ODS for the testing of ``oil and grease,'' and ``total
petroleum hydrocarbons'' in water; testing of tar in road-paving
materials; and forensic finger printing are not considered essential
under the exemption for laboratory and analytical uses beginning
January 1, 2002. Decision XII/2 states that any CFC MDIs approved after
December 31, 2000, are not essential unless the product meets the
criteria in paragraph 1(a) of Decision IV/25. Decision XII/2 also
authorizes Parties to the Montreal Protocol to allow transfers of CFCs
produced with essential-use allowances among MDI companies. Finally,
EPA is proposing to add a prohibition to the regulations at 82.4 that
would clarify that using virgin class I ODS produced under the
authority of essential-use allowances or the exemption for laboratory
and analytical uses for non-essential purposes is a violation of the
CAA.
DATES: Written comments on this proposed rule must be received on or
before December 3, 2001, unless a public hearing is requested. Comments
must then be received on or before 30 days following the public
hearing. Any party requesting a public hearing must notify the
Stratospheric Ozone Protection Hotline listed below by 5 p.m. Eastern
Standard Time on November 13, 2001. If a hearing is held, EPA will
publish a document in the Federal Register announcing the hearing
information. Inquiries regarding a public hearing should be directed to
the Stratospheric Ozone Protection Hotline at 1-800-269-1996.
ADDRESSES: Comments on this rulemaking should be submitted in duplicate
to: Erin Birgfeld, Essential Use Program Manager, U.S. Environmental
Protection Agency (6205J), 1200 Pennsylvania Avenue, NW., Washington,
DC 20460. If you plan to send comments using courier services or
overnight express, please address comments to 501 3rd Street NW.,
Washington DC 20001. Comments will be filed in EPA Air docket number A-
93-39. Comments that contain confidential business information should
be submitted in two versions, one clearly marked ``Public'', to be
filed in the public docket, and the other clearly marked
``Confidential'' to be reviewed by authorized government personnel
only. If the comments are not marked, EPA will assume they are public
and contain no confidential information.
Materials relevant to this rulemaking are contained in Docket No.
A-93-39. The Docket is located in Waterside Mall Room M-1500, 401 M
Street, SW., Washington, DC 20460. The materials may be inspected from
8 a.m. until 5:30 p.m. Monday through Friday. EPA may charge a
reasonable fee for copying docket materials.
FOR FURTHER INFORMATION CONTACT: The Stratospheric Ozone Protection
Hotline at 1-800-296-1996 or Erin Birgfeld, U.S. Environmental
Protection Agency, Global Programs Division, Office of Atmospheric
Programs, 6205J, 1200 Pennsylvania Avenue, Washington, DC 20460, 202-
564-9079.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Essential Use Allowances for Medical Devices
A. How were essential-use allowances for medical devices
nominated and approved by the Parties to the Montreal Protocol?
B. How does the Clean Air Act authorize essential-use
allowances?
C. What was the allocation process for essential-use allowances
for medical devices?
D. How were the decisions on the amounts of essential-use
allowances for each company made?
E. Will the amounts actually allocated in the final rule be the
same as the amounts listed in this proposed rule?
F. How does Decision XII/2 of the Parties to the Montreal
Protocol affect this year's regulation?
III. Exemption for methyl chloroform for use in the Space Shuttle
and Titan Rockets.
IV. Allocation of essential-use allowances for medical devices and
the Space Shuttle and Titan Rockets for calendar year 2002.
V. General laboratory exemption for class I ozone depleting
substances.
VI. Clarification regarding use of material produced under
essential-use allowances for non-essential-uses.
VII. Administrative requirements
A. Unfunded Mandates Reform Act
B. Executive Order 12866
C. Paperwork Reduction Act (PRA)
D. Executive Order 13175 (Consultation and Coordination with
Indian Tribal Governments)
[[Page 55146]]
E. Regulatory Flexibility Act (RFA) as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 USC
601 et seq.
F. Applicability of Executive Order 13045: Protection of
Children from Environmental Health Risks and Safety Risks
G. National Technology Transfer and Advancement Act
H. Executive Order 13132 (Federalism)
I. Executive Order 13211 (Energy Effects)
I. Background
The Montreal Protocol on Substances that Deplete the Ozone Layer
(Protocol) is the international agreement to reduce and eventually
eliminate production and consumption \1\ of all stratospheric ozone
depleting substances (ODSs). The elimination of production and
consumption is accomplished through adherence to phase-out schedules
for production and consumption of specific class I ODSs including
chlorofluorocarbons (CFCs), halons, carbon tetrachloride, methyl
chloroform, hydrochlorofluorocarbons, and methyl bromide. As of January
1996, production and import of class I ODSs \2\ were phased out in all
developed countries including the United States. However, the Protocol
and the Clean Air Act (CAA or Act) provide exemptions which allow for
the continued import and/or production of class I ODS for specific
uses. Under the Montreal Protocol, exemptions are granted for uses that
are determined by the Parties to be ``essential.'' Decision IV/25,
taken by the Parties in 1992, established criteria for determining
whether a specific use should be approved as essential, and set forth
the international process for making determinations of essentiality.
The criteria for an essential-use as set forth in paragraph 1 of
Decision IV/25 are the following:
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\1\ ``Consumption'' is defined as the amount of a substance
produced in the United States, plus the amount imported, minus the
amount exported to Parties to the Montreal Protocol (see Section
601(6) of the Clean Air Act). Stockpiles of class I ODSs produced or
imported prior to the 1996 phaseout can continue to be used for
purposes not expressly banned at 40 CFR part 82.
\2\ Class I ozone depleting substances are defined at 40 CFR
Part 82 subpart A, appendix A.
``(a) that a use of a controlled substance should qualify as
``essential'' only if:
(i) it is necessary for the health, safety or is critical for
the functioning of society (encompassing cultural and intellectual
aspects); and
(ii) there are no available technically and economically
feasible alternatives or substitutes that are acceptable from the
standpoint of environment and health; (b) that production and
consumption, if any, of a controlled substance for essential-uses
should be permitted only if:
(i) all economically feasible steps have been taken to minimize
the essential-use and any associated emission of the controlled
substance; and
(ii) the controlled substance is not available in sufficient
quantity and quality from existing stocks of banked or recycled
controlled substances, also bearing in mind the developing
countries' need for controlled substances.''
The procedure set out by Decision IV/25 first calls for individual
Parties to nominate essential-uses, and the amount of ODS needed for
that essential-use on an annual basis. The Protocol's Technology and
Economic Assessment Panel evaluates the nominated essential-uses and
makes recommendations to the Protocol Parties. The Parties make the
final decisions on whether to approve a Party's essential-use
nomination at their annual meeting.
Once the U.S. nomination is approved by the Parties, EPA allocates
essential-use exemptions to specific entities through notice-and-
comment rulemaking in a manner consistent with the CAA. Under the CAA
and the Montreal Protocol, EPA is authorized to allocate essential-use
allowances in quantities below or equal to the amounts approved by the
Parties. EPA cannot allocate essential-use allowances in amounts higher
than is approved by the Parties.
II. Essential Use Allowances for Medical Devices
A. How Were Essential-Use Allowances for Medical Devices Nominated and
Approved by the Parties to the Montreal Protocol?
On September 15, 1999, EPA issued a Federal Register notice (64 FR
50083) requesting applications for essential-use allowances for the
year 2002. The applications EPA received requested exemptions for the
production and import of specific quantities of CFCs (CFC-11, CFC-12,
and CFC-114) for use in MDIs, and provided information in accordance
with the criteria set forth in Decision IV/25 of the Protocol and the
procedures outlined in the ``1997 Handbook on Essential Use
Nominations.'' Based on the information provided in these applications,
and after consultation with the Food and Drug Administration (FDA), the
U.S. forwarded a request for 2,900 metric tons of CFCs for use in
metered dose inhalers to the Ozone Secretariat for consideration by the
Technical and Economic Assessment Panel (TEAP) and the Aerosol
Technical Options Committees (ATOC). The Parties approved the U.S.
request for 2,900 metric tons of CFCs for essential-uses in Decision
XII/9 taken at the December 2000 Meeting of the Parties.
On November 1, 2000, EPA issued a notice in the Federal Register
that requested applications for supplemental essential-use allowances
for the year 2002. Based on the information received as a part of these
applications, EPA and FDA determined that a supplemental quantity of
CFCs would be necessary to provide the U.S. with sufficient CFCs for
the manufacture of MDIs to meet patient needs in the year 2002. As a
result, the U.S. forwarded a supplemental request of 550 metric tons of
CFCs for the year 2002 to the Ozone Secretariat for consideration by
the TEAP and the Aerosol Technical Options Committee (ATOC) bringing
the total quantity requested to 3,450 metric tons for calendar year
2002. The ATOC reviewed the U.S. supplemental request at their meeting
in April of this year, and recommended that the Parties approve the
U.S. supplemental request at the meeting of the Parties to be held in
October 2001.
Today's action proposes to allocate essential-use allowances
assuming that the Parties approve the U.S. supplemental request of 550
metric tons of CFCs for 2002. In the event that the Parties break with
the ATOC recommendation, and do not approve the supplemental request,
EPA would issue a final rule, in consultation with FDA, which would
allocate essential-use allowances to U.S. companies based on the total
amount approved by the Parties.
B. How Does the Clean Air Act Authorize Essential-Use Allowances?
The CAA provides exemptions under section 604(d) to the phase-out
of class I ODSs. With today's action, EPA is proposing to implement the
exemption at 604(d)(2) of the Act which states that ``notwithstanding
the phase-out, EPA shall, to the extent consistent with the Montreal
Protocol, authorize production of limited quantities of class I ODSs
for use in medical devices, if FDA, in consultation with EPA,
determines that such production is necessary for use in medical
devices''. The term ``medical device'' is defined in section 601(8) of
the Clean Air Act as follows:
``[A]ny device (as defined in the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321)), diagnostic product, drug (as defined
in the Federal Food, Drug, and Cosmetic Act), and drug delivery
system
(A) if such device, product, drug, or drug delivery system
utilizes a class I or class II substance for which no safe and
effective alternative has been developed, and where necessary,
approved by the Commissioner [of FDA]; and
[[Page 55147]]
(B) if such device, product, drug, or drug delivery system, has,
after notice and opportunity for public comment, been approved and
determined to be essential by the Commissioner [of FDA]
in
consultation with the Administrator [of EPA].''
With today's action, EPA is allocating essential-use allowances for
use in MDIs that have previously been determined to fit the definition
of medical device above. For a full discussion of the definition of
``medical device'', and how it has been interpreted and applied in
today's rulemaking please refer to the interim final rule for the year
2000 allocation of essential-use allowances (65 FR 716).
C. What Was the Allocation Process for Essential-Use Allowances for
Medical Devices?
The following is a step-by-step list of actions EPA and FDA have
taken thus far to implement the exemption for medical devices found at
section 604(d)(2) of the Act for the 2002 control period.
1. EPA collaborated with FDA to identify what information would be
required from companies in order for FDA to make a determination, in
consultation with EPA, on the amount of CFCs necessary for use in MDIs.
EPA and FDA determined that the following data were needed to make this
determination:
The specific MDI products to be produced in 2002
The number of units of each product produced in the year
2000
Number of units produced in the first quarter of 2001
Number of units anticipated to be produced in 2002
Gross target fill weight per unit (grams)
Total amount of CFC to be contained in product for 2002
(metric tons)
Additional amounts of CFCs necessary for production of
MDIs in 2002
Total CFC request per product for 2002
2. On April 12, 2002, EPA sent letters to MDI manufacturers
requesting the information outlined above. The letters that EPA sent
each company are available for review in the Air Docket No. A-93-39.
The company's responses, however, are considered confidential business
information and are not publicly available. Table Ia is an example of
the reporting form EPA asked companies to fill out under the authority
of section 114 of the Act (114 letters).
Table Ia.--Year 2002 Essential Use Allocation: CFC Reporting Form
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Total CFC to be
Number of units Number of units Number of units Gross Target contained in Additional Total request
Product produced from 1/ produced from 1/ anticipated to fill weight per product for amount per product for
1/00 to 12/31/ 1/01 to 3/31/01 be produced in unit (grams) 2002 (metric necessary for 2002
00 2002 tons) production \3\
A B C D E F G H
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Example Product.................. 1,327,456 352,101 1,500,000 22 33.00 3.3 36.30
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3. In a letter dated June 14, 2001, EPA requested that FDA make a
determination regarding the amount of CFCs necessary for use in MDIs
for calendar year 2002. With this request, we attached the information
MDI manufacturers provided in response to the 114 letters. FDA compared
the information from the companies' responses to EPA's section 114
letters with the annual reports companies file with FDA and used this
information as a basis for their determination.
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\3\ EPA requested that respondents provide details of the
additional amount needed, e.g., canisters produced but not
distributed, CFCs lost in processing, CFCs remaining at end of batch
run, CFCs used in line cleaning.
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4. On August 9, 2001, FDA sent a letter to EPA stating the amount
of CFCs necessary for use in MDIs for calendar year 2002. The FDA
determination was based on the assumption that the total U.S. request
of 3,450 metric tons of CFCs will be approved at the next Meeting of
the Parties in October 2001. In accordance with the determination made
by FDA, specified in their letter of August 9, 2001, today's action
proposes to allocate essential-use allowances for a total of 3,388
metric tons of CFCs for use in MDIs for the year 2002 calendar year.
D. How Were the Decisions on the Amounts of Essential-Use Allowances
for Each Company Made?
FDA states in their letter to EPA that ``Under our existing
regulations and our proposed rule \4\, we have interpreted the CAA
definition of medical device to refer to any product that contains an
active moiety \5\ that appears on the essential-use list found at 21
CFR 2.125. We further understand that under the Montreal Protocol, and
therefore under the CAA, only products for the treatment of asthma or
chronic obstructive pulmonary disease (COPD) are eligible for
essential-use nominations and allocations. Under this definition, the
sponsor of any drug product produced under an approved new drug
application, abbreviated new drug application, or valid investigational
new drug application, approved for the treatment of asthma or COPD, and
containing an active moiety on our essential list may obtain CFCs. We
also understand that Decision XII/2 of the 12th Meeting of the Parties
to the Montreal Protocol states that any CFC metered-dose inhaler
product for the treatment of asthma and/or COPD approved after December
31, 2000, in a non-Article 5(1) Party is not an essential-use, unless
the product meets the criteria set out in paragraph 1(a) of Decision
IV/25.''
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\4\ Use of Ozone-Depleting Substances; Essential Use
Determinations, September 1, 1999. (64 FR 47719)
\5\ An FDA regulation at 21 CFR 108(a) defines active moiety as
``the molecule or ion excluding those appended portions of the
molecule that cause the drug to be an ester, salt (including a salt
with hydrogen or coordination bonds), or other noncovalent
derivative (such as a pharmacological action of the drug
substance.''
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``With these definitions in mind, we [FDA]
have examined the
information you [EPA]
obtained from individual sponsors regarding their
historical and intended use of CFCs in specific products. We compared
this information to the information filed with us by sponsors in
previous annual reports. In listing the amounts we believe to be
necessary for use in medical devices, we referred to this information,
eliminated any double-counting we found, considered changes in the
prevalence of asthma and COPD, and eliminated allocations for uses not
considered essential by the Parties to the Montreal Protocol, even if
those uses are currently listed in our regulations at 21 CFR
2.125(e).''
[[Page 55148]]
E. Will the Amounts Actually Allocated in the Final Rule Be the Same as
the Amounts Listed in This Proposed Rule?
The amounts listed in this proposal are subject to additional
review by EPA and FDA if new information demonstrates that the proposed
allocations are either too high or too low. Commentors requesting
increases or decreases of essential-use allowances should provide
detailed information supporting their claim for additional or fewer
CFCs. Any company that no longer needs the full amount listed in this
proposal should notify EPA of the actual amount needed.
EPA will only be authorized to allocate a total of 3,450 metric
tons of CFCs if the Parties approve the U.S. supplemental request at
the October 2001 meeting. As stated earlier, in the event that the
Parties do not approve the U.S. supplemental request for the year 2002
in its entirety, EPA, in consultation with FDA, will allocate CFCs
based on the total amount authorized by the Parties.
F. How Does Decision XII/2 of the Parties to the Montreal Protocol
Affect This Year's Regulation?
(1) Eligible Products
Decision XII/2, titled ``Measures to facilitate the transition to
chlorofluorocarbon-free metered dose inhalers'', taken at the last
Meeting of the Parties in December 2000 has two provisions that are
being implemented with today's action. First, as noted in the FDA
letter, paragraph 2 of Decision XII/2 states ``that any
chlorofluorocarbon metered-dose inhaler product approved after 31
December 2000 for treatment of asthma and/or chronic obstructive
pulmonary disease in a non-Article 5(1) Party is not an essential-use
unless the product meets the criteria set out in paragraph 1(a) of
Decision IV/25.''
In the past, EPA has allocated essential-use allowances for all CFC
MDIs containing active moieties used for the treatment of asthma and
COPD, without distinguishing among individual products. However,
Decision XII/2 raises the bar for MDI products approved after December
31, 2000. In order for an MDI product in the research and development
phase\6\ to be considered essential, the MDI product must individually
meet the criteria in Decision IV/25 paragraph 1(a). Decision IV/25 1(a)
states that ``use of a controlled substance should qualify as essential
only if it is necessary for the health, safety or critical for the
functioning of society (encompassing cultural and intellectual
aspects); and there are no available technically and economically
feasible alternatives or substitutes that are acceptable from the
standpoint of environment and health.'' Based on Decision XII/2, EPA
believes that CFC MDI that are still in research and development, and
that contain active moieties already commercially available in other
MDI products are no longer ``essential''. This is because the new MDI
products would not provide additional therapy to patients, and thus are
not themselves necessary for the health, safety or functioning of
society as specified by paragraph 1(a) of Decision IV/25.
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\6\ EPA is unaware of any CFC MDI product that has been approved
by the FDA since December 31, 2000.
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Decision XII/2 allows for the possibility that a CFC MDI product
containing an active moiety not currently available as an MDI might be
considered essential if the product met the requirements of paragraph 1
of Decision IV/25. If the FDA, in consultation with EPA, determined
that the new product was ``essential'' and the product met the criteria
in Decision XII/2, the U.S. would forward a nomination to the Parties.
Consistent with our current practice, EPA and FDA would only allocate
essential-use allowances for MDIs considered to be essential by the
Parties to the Protocol.
EPA, in consultation with FDA, is implementing paragraph 2 of
Decision XII/2 by allocating essential-use allowances to companies only
for production of CFC MDIs for the treatment of asthma and COPD, and
approved by FDA prior to December 31, 2000. EPA is also proposing to
amend the language at 40 CFR 82.4(t) to reflect this. One company had
in prior years received essential-use allowances for research and
development of CFC MDIs containing active moieties that are already
available to patients in MDI form. Due to Decision XII/2, EPA and FDA
cannot allocate essential-use allowances to this company for research
and development of MDIs now considered to be non-essential.
(2) Transfers of Essential-Use Allowances and ``Essential-Use CFCs''
With today's proposal, EPA is implementing paragraph 8 of Decision
XII/2 which states that ``* * * as a means of avoiding unnecessary
production of new chlorofluorocarbons, and provided that the conditions
set out in paragraphs (a)-(d) of Decision IX/20 are met, a Party may
allow a MDI company to transfer:
(a) All or part of its essential-use authorization to another
existing MDI company; or
(b) CFCs to another MDI company provided that the transfer complies
with national/regional licence or other authorization requirements.''
Paragraphs (a)-(d) of Decision IX/20 provide the following
conditions for transfers between Parties: the transfer applies only up
to the maximum level that has previously been authorized for the
calendar year in which the next Meeting of the Parties is to be held;
both Parties agree to the transfer; the aggregate annual level of
authorizations for all Parties for essential-uses of MDIs does not
increase as a result of the transfer; the transfer or receipt is
reported by each Party involved on the essential-use quantity-
accounting format approved by the Eighth Meeting of the Parties by
paragraph 9 of Decision VIII/9.
As the transition progresses, and more CFC-free MDIs become
available, fewer CFC MDIs will be produced globally. While many
pharmaceutical companies have production lines for CFC MDIs in more
than one country, this is likely to change as demand for CFC MDIs
decreases. With last year's allocation rule, EPA amended its
regulations to allow transfer of essential-use allowances for CFC among
essential-use allowance holders domestically (66 FR 1462). As a result
of Decision XII/2, EPA is proposing to allow metered dose inhaler
companies to transfer essential-use allowances internationally and to
allow transfer of essential-use allowances to companies that do not
currently hold essential-use allowances from the U.S.
To accomplish this, EPA is proposing to change the regulations at
82.12(a)(1) to allow essential-use allowances for CFCs to be
transferred to another MDI company and not just to another essential-
use allowance holder. This will allow an MDI company that currently
does not have essential-use allowances to receive them through a trade
provided that the allowances are used to produce essential MDIs. EPA is
also adding essential-use allowances to the list of allowances that may
be traded internationally under paragraph 82.9(c). The international
transfer of essential-use allowances would occur in the same manner as
international transfers of Article 5 allowances and production
allowances are currently traded. This ensures compliance with section
616 of the CAA which governs international trades. For approval of an
international trade for essential-use allowances the transferor must
submit the following information:
[[Page 55149]]
The identity of the Party (i.e. the country other than the
U.S. that is participating in the transfer);
The names and telephone number of contact person for the
company where the allowances are being transferred to (transferee) and
names and contact person for that country's government representative;
The type of allowances being transferred (essential-use
allowances), the type of chemical being transferred (CFC-11, CFC-12, or
CFC-114);
The control period (i.e., calendar year) to which the
transfer applies.
After receiving a transfer request, the Administrator may at her
discretion consider the following factors in deciding whether to
approve a transfer:
Possible creation of economic hardship;
Possible effects on trade;
Potential environmental implications;
The total amount of unexpended allowances held by United
States entities;
Whether the essential-use allowances will be used in
metered dose inhaler considered essential by the Parties.
EPA is proposing a mechanism to allow MDI companies to transfer
CFCs already produced under the authority of essential-use allowances
to other MDI companies as specified by paragraph 8 of Decision XII/2.
EPA believes that other Parties to the Protocol are implementing this
portion of Decision XII/2 in a similar manner which will allow free
flow of CFCs produced with essential-use allowances between Parties and
between MDI companies. EPA believes that this additional flexibility
will result in a decrease in the total amount of CFCs produced for
essential-uses globally.
First, we are amending section 82.3 to define the term ``essential-
use CFC'' to mean CFCs already produced using essential-use allowances.
Second, we are modifying the parenthetical in paragraph 82.4(d) so that
import of ``essential-use CFCs'' will no longer count against the U.S.
MDI company's essential-use allowances for that year. This will allow
an MDI company to procure ``essential-use CFCs'' beyond the amount of
essential-use allowances allocated to them in a particular control
period if the transfer is approved by EPA (see next paragraph). Third,
we are defining the term ``essential MDIs'' in section 82.3 as the
following, ``MDIs for the treatment of asthma and chronic obstructive
pulmonary disease, approved by the FDA or by another Party's analogous
health authority before December 31, 2000, and considered to be
essential by the Party where the MDI product will eventually be sold.
If the MDI product is to be sold in the U.S., the active moiety
contained in the MDI must be listed as essential at 21 CFR 2.125(e).''
By defining essential MDIs as such, we ensure that transferred
``essential-use CFCs'' would be used solely for production of MDIs
considered essential by the Parties and the country where they are
being ultimately sold.
EPA is adding paragraph (d) to the regulations at 82.12 to create
the mechanism that EPA will use to approve transfers of essential-use
CFCs between MDI companies in the U.S., and adding paragraph (g) to
82.9 to govern transfer of essential-use CFCs between U.S. companies
and companies in other Parties. Under the proposed changes to 82.12 the
transferee would submit to EPA the following information before EPA
would approve a transfer of essential-use CFCs.
The identities and addresses of the transferor and the
transferee;
The name and telephone numbers of contact persons for the
transferor and the transferee;
The amount of each controlled substance (CFC-11, CFC-12,
or CFC-114) being transferred;
The specific metered dose inhaler products (i.e. the MDI
drug product or active moiety) that the company plans to produce with
the transferred CFCs;
The country(ies) where the CFC metered dose inhalers
produced with the transferred essential-use CFCs will be sold if other
than in the United States;
Certification that the essential-use CFCs will be used in
the production of essential MDIs. If the metered dose inhalers are to
be sold in the United States, the certification must state that metered
dose inhalers produced with the transferred essential-use CFCs are
listed as essential at 21 CFR 2.125. If the metered dose inhalers
produced with the essential-use CFCs are to be sold outside the United
States, the transferee must certify that the metered dose inhalers
produced with the essential-use CFCs are considered essential by the
importing country.
The transferor must submit to EPA a letter concurring with the
terms of the transferees request before the application is complete.
For international transfers under section 82.9, EPA would require the
same information requested at 82.12 and listed above, and a letter from
the embassy of the Party involved in the transfer stating that the
transfer is approved by the government of the Party.
If EPA approves the transfer, EPA would issue letters to the
transferor and the transferee indicating that the transfer may proceed.
If EPA objects to the transfer, EPA would issue letters to the
transferor and transferee stating the basis for disallowing the
transfer. The burden of proof is placed on the transferee (if the
transferee is a U.S. company) to retain sufficient records to prove
that the transferred essential-use CFCs are used only for production of
essential MDIs. If the MDIs are produced in the U.S. and are to be
exported to another country the transferee must ensure that the MDIs
produced are considered essential by the national authority of the
importing country. If EPA ultimately found that the transferee did not
use the essential-use CFCs in essential MDIs, then the transferee would
be in violation of the CAA.
Finally, EPA is proposing to revise the definition of ``essential-
use allowances'' under section 82.3 to ensure consistency with the
Montreal Protocol and section 82.4. Under the Montreal Protocol,
essential-use exemptions were granted for the years 1996-2003. EPA has
already granted essential-use allowances for calendar year 2001, and is
proposing to allocate essential-use allowances for calendar year 2002.
Further, EPA anticipates that the Parties will continue to grant
essential-use exemptions until the transition from class I ODS in
essential applications is complete. Therefore, EPA is proposing to
change the definition of essential-use allowance by omitting a specific
end date for the program.
III. Exemption for Methyl Chloroform for Use in the Space Shuttle
and Titan Rockets
EPA is proposing to allocate methyl chloroform (MCF) for use in
solid rocket motor assemblies. The CAA exemption for continued
production and import of methyl chloroform is found at 604(d)(1) and
reads as follows:
(1) Essential Uses of Methyl Chloroform.--Notwithstanding the
termination of production required by subsection (b), during the
period beginning on January 1, 2002, and ending on January 1, 2005,
the Administrator [of EPA], after notice and opportunity for public
comment, may, to the extent such action is consistent with the
Montreal Protocol, authorize the production of limited quantities of
methyl chloroform solely for use in essential applications (such as
nondestructive testing for metal fatigue and corrosion of existing
airplane engines and airplane parts susceptible to metal fatigue)
for which no safe and effective substitute is available.
Notwithstanding this paragraph, the authority to produce methyl
chloroform
[[Page 55150]]
for use in medical devices shall be provided in accordance with
paragraph (2).
Decision X/6 states that ``* * * the remaining quantity of methyl
chloroform authorized for the United States at previous meetings of the
Parties [will]
be made available for use in manufacturing solid rocket
motors until such time as the 1999-2001 quantity of 176.4 tons (17.6
ODP-weighted tons) allowance is depleted, or until such time as safe
alternatives are implemented for remaining essential-uses.'' According
to the EPA tracking system, the total amount of MCF produced or
imported by essential-use allowance holders was 15.2 metric tons in the
calendar year 1999, and 3.3 metric tons in the calendar year 2000. EPA
is proposing to allocate 50.4 metric tons of MCF for 2002 for use in
the Space Shuttle and Titan Rockets, which is the amount requested by
essential-use applicants for 2002. Essential-use allowance holders
should be aware that the exemption for MCF under section 604(d)(1) of
the CAA expires in the year 2005. Thus, EPA will not have statutory
authority to allocate essential-use allowances for MCF after that date.
IV. Allocation of Essential-Use Allowances for Medical Devices and
the Space Shuttle and Titan Rockets for Calendar Year 2002
EPA is proposing to allocate essential-use allowances for calendar
year 2002 to entities listed in Table I for exempted production or
import of the specific quantity of class I controlled substances solely
for the specified essential-use.
Table I.--Essential Use Allocation for Calendar Year 2002
------------------------------------------------------------------------
Quantity
Company Chemical (metric tons)
------------------------------------------------------------------------
(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma
and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals......... CFC-11 or CFC-12 or 343
CFC-114.
Aventis........................... CFC-11 or CFC-12 or 150
CFC-114.
Boehringer Ingelheim CFC-11 or CFC-12 or 743
Pharmaceuticals. CFC-114.
Glaxo SmithKline.................. CFC-11 or CFC-12 or 1016
CFC-114.
Schering-Plough Corporation....... CFC-11 or CFC-12 or 949
CFC-114.
Sidmak Laboratories Inc........... CFC-11 or CFC-12 or 67
CFC-114.
3M Pharmaceuticals................ CFC-11 or CFC-12 or 120
CFC-114.
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space Methyl Chloroform... 47
Administration (NASA)/Thiokol
Rocket.
United States Air Force/Titan Methyl Chloroform... 3.4
Rocket.
------------------------------------------------------------------------
V. General Laboratory Exemption for Class I ODSs
On March 13, 2001, EPA issued a direct final rule that implemented
a de minimis exemption under the Clean Air Act for continued production
and import of class I ODS for laboratory essential-uses (66 FR 14760).
With the direct final rule, EPA allocated essential-use allowances for
laboratory uses for the year 2001 only. Under the Montreal Protocol,
the Parties have approved a global (i.e., general) exemption for
laboratory and analytical uses for set periods of time. At their tenth
meeting in 1998, the Parties, in Decision X/19, extended the global
laboratory and analytical essential-use exemption until December 31,
2005, under the conditions set out in Annex II of the report of the
Sixth Meeting of the Parties. Today's action proposes to extend EPA's
regulatory de minimis exemption for essential laboratory and analytical
uses through 2005 as consistent with the Montreal Protocol.
Decision X/19 also states that at the annual Meetings of the
Parties, on the basis of information reported by the Technology and
Economic Assessment Panel (TEAP), the Parties may ``decide on any uses
of controlled substances which should no longer be eligible under the
exemption for laboratory and analytical uses and the date from which
any such restriction should apply.'' Subsequently, the Parties at the
Eleventh Meeting of the Parties to the Protocol took Decision XI/15
which eliminated the following uses from the global exemption for
laboratory and analytical uses for controlled substances from the year
2002 onward:
(a) Testing of oil and grease, and total petroleum hydrocarbons in
water;
(b) Testing of tar in road-paving materials; and
(c) Forensic finger-printing.
With today's action, EPA is proposing to amend Part 82 subpart A,
appendix G to define the above laboratory methods as non-essential
pursuant to Decision XI/15. Under this proposed change to appendix G,
production or import of class I ODSs for these specific laboratory
methods will be prohibited beginning January 1, 2002.
In the U.S., class I ODSs are not used for testing of tar in road-
paving materials and forensic finger-printing. Thus, we expect that the
major impact of Decision XI/15 will be upon testing of oil and grease,
and total petroleum hydrocarbons in water. EPA requires testing for the
these conventional pollutants as a part of its wastewater and hazardous
waste programs. The analytical methods for measuring ``oil and grease''
include EPA methods 413.1, 413.2 and 418.1, which use CFC-113. Pursuant
to Decision XI/15, methods for testing for oil and grease in water
using class I ODSs will no longer be considered essential in the year
2002. Thus, new production or importation of CFC-113 for those EPA test
methods will be prohibited. This should not cause a problem for
laboratories since there are alternative methods available for testing
of oil and grease that do not rely on class I ODS, and EPA recommends
that laboratories switch to these alternative methods.\7\ You may
[[Page 55151]]
use stockpiled CFC-113 that was imported for production before January
1, 2001 or recycled CFC-113 as long as EPA's Office of Water and Office
of Solid Waste continue to accept results from test methods using CFC-
113.
---------------------------------------------------------------------------
\7\ On May 14, 1999, EPA published alternative analytical
methods for these tests that do not require using class I ODSs:
Method 1664 Revision A: N-Hexane Extractable Material (HEM; Oil and
Grease) and Silica Gel Treated--Hexane Extractable Material (SGR-
HEM; Nonpolar Material) by Extraction and Gravimetry. EPA
promulgated method 9071B to replace method 9070 and incorporates
Method 1664 for use in EPA's Resource Conservation and Recovery Act
programs. For more information on method 1664, please reference
EPA's Office of Water website at www.epa.gov/ost/methods/oil.html.
For technical information regarding Resource Conservation and
Recovery Act test methods and regulations please call the Office of
Solid Waste Methods information and communication exchange at (703)
821-4690. For technical information regarding testing methods
required under the Clean Water Act, call the Office of Water
Resource Center at (202) 260-7786.
---------------------------------------------------------------------------
Pursuant to Decision X/19, the TEAP will continue to make
recommendations for laboratory uses which no longer require class I
ODSs. The Parties to the Protocol may remove additional methods or uses
from the global laboratory exemption in the future. Currently, there
are no recommendations by the TEAP to remove any additional laboratory
uses beyond those listed in Decision XI/15. If the Parties decide to
remove any other laboratory uses from the exemption, EPA will propose
appropriate regulations. EPA reserves the right to determine that a
particular test method is non-essential in the United States, even if
it continues to be considered essential by the Parties.
The current regulations require annual certifications from
laboratory customers stating that the class I ODSs produced and/or
imported under the laboratory exemption will not be resold or used in
manufacturing. EPA is proposing to amend the recordkeeping and
reporting requirements at 40 CFR 82.13 so that these certifications
also state that the class I ODSs obtained under the laboratory
exemption will be used for essential laboratory uses as defined by
appendix G. EPA believes that these additional requirements will not
impose additional paperwork burden on the regulated entities since
annual certifications are already required.
VI. Clarification Regarding Use of Material Produced Under
Essential-Use Allowances for Non-Essential-Uses
EPA is proposing to add paragraph (t)(4) to section 82.4 in order
to clarify that virgin class I ODSs produced under the authority of
essential-use allowances may not be used in applications that are not
essential (i.e., those uses not listed in paragraphs (t)(2), (t)(3),
and appendix G of subpart A). The regulations at section 82.4 establish
limited exceptions to the production and import bans for class I ODS.
The use or sale of virgin class I ODS produced under these exceptions
for other purposes would circumvent the production and import bans and
the intent of these exceptions.
We are concerned that laboratories might obtain class I ODSs in
excess of their own need under the general laboratory exemption with
the intent of ``recycling'' the class I ODS and re-selling it into
other non-laboratory markets at a profit. Therefore, we explicitly
prohibit such actions in section 82.4(t)(4) by stating that ``It is a
violation of this subpart to obtain virgin class I ODSs under the
general laboratory exemption in excess of actual need, and to recycle
that material for sale into other markets.'' The intent of this
provision is not to disallow laboratories from purchasing sufficient
class I ODSs for their own use, nor is it meant to discourage
laboratories from re-using or recycling class I ODSs that are
legitimately used for essential laboratory methods. It is meant to
discourage those that might exploit a potential loophole and purchase
quantities of ODSs far in excess of what would normally be necessary
for laboratory uses, nominally ``use'' the class I ODS, and then
``recycle'' the material and sell it for use in non-laboratory
applications.
EPA is aware that certain companies extract and recycle CFCs from
MDIs that are ``off-specification'' and are thus not marketable. These
recycled CFCs are often sold for use in non-essential applications. The
addition of paragraph (t)(4) would not prevent this practice from
continuing since the CFCs contained in off-specification MDIs are not
considered virgin material. EPA is unaware of any virgin essential-use
material that is being sold or used for non-essential purposes at this
time, and therefore does not anticipate that this clarification will
have any economic impact.
VII. Administrative Requirements
A. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector.
Under section 202 of the UMRA, EPA generally must prepare a written
statement, including a cost-benefit analysis, for proposed and final
rules with ``Federal mandates'' that may result in expenditures by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year. 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. Section 204 of the UMRA requires the
Agency to develop a process to allow elected state, local, and tribal
government officials to provide input in the development of any
proposal containing a significant Federal intergovernmental mandate.
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. This rule imposes no enforceable duty on any
State, local or tribal government. For the private sector, it clarifies
existing requirements and adds recordkeeping and reporting requirements
for those who wish to participate in a voluntary program. Thus, it is
not subject to the requirements of sections 202 and 205 of the UMRA.
EPA has also determined that this rule contains no regulatory
requirements that might significantly or uniquely affect small
governments; therefore, EPA is not required to develop a plan with
regard to small governments under section 203. Finally, because this
rule does not contain a significant intergovernmental mandate, the
Agency is not required to develop a process to obtain input from
elected state, local, and tribal officials under section 204.
B. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether this 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:
[[Page 55152]]
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlement, 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. It has been determined by OMB and EPA that this
action is not a ``significant regulatory action'' under the terms of
Executive Order 12866 and is therefore not subject to OMB review under
the Executive Order.
C. Paperwork Reduction Act (PRA)
The information collection requirements in this proposed rule will
be submitted for approval to the Office of Management and Budget (OMB)
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An
Information Collection Request (ICR) document will be prepared by EPA
and sent to OMB. Once the ICR in completed, EPA will issue a notice
soliciting public comment on the ICR.
The information required in today's proposed rule, and that will be
outlined in the ICR is mandatory under section 603(b) of the CAA which
states that all production, import, and export of class I and class II
ODSs must be reported to EPA. EPA is also requesting information from
transferors and transferees of essential-use CFCs to ensure the
conditions of Decision XII/2 and section 604(d) of the Act are met, so
that only essential MDI products will be produced using essential-use
CFCs. The information collected will be considered confidential, and
will only be released in the aggregate to protect individual company
information.
The estimated burden will be set forth in the ICR. We do not expect
this cost and burden to be substantial since similar reporting
requirements for transferring production, consumption, and essential-
use allowances are already in place under subpart A. Further, there are
only a small number of MDI companies that are able to produce CFC-MDIs
in the U.S. Thus, the number of companies engaged in transferring
essential-use CFC will be small as well. 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 are listed in 40 CFR part 9 and 48 CFR chapter 15.
D. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 6, 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.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian tribes, on
the relationship between the Federal government and the Indian tribes,
or on the distribution of power and responsibilities between the
Federal government and Indian tribes.''
This proposed rule does not have tribal implications. It will not
have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian tribes, as specified in Executive Order 13175.
Today's rule does not affect the communities of Indian tribal
governments since the only entities directly affected by this rule are
the companies that requested essential-use allowances or make use of
the general exemption for laboratory uses. Thus, Executive Order 13175
does not apply to this rule. In the spirit of Executive Order 13175,
and consistent with EPA policy to promote communications between EPA
and tribal governments, EPA specifically solicits additional comment on
this proposed rule from tribal officials.
E. Regulatory Flexibility Act (RFA) as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et
seq.
The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
For purposes of assessing the impact of today's rule on small
entities, small entities is defined as: (1) Pharmaceutical preparations
manufacturing businesses (NAICS code 325412) that have less than 750
employees; and environmental testing services (NAICS code 541380) that
have annual receipts of less than $5 million dollars (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 its field.
After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. We have
determined that the one pharmaceutical company that is not receiving
essential-use allowances for use in CFC MDIs could experience an
economic impact. The direct impact of this rule is that this company
will be unable to import or produce CFCs for research and development
of CFC MDIs that contain active moieties already available to the
public. However, the economic impact is not quantifiable since this
company does not have MDI products that are approved by the FDA and can
be sold in the U.S. This company has participated in the essential-use
allowance process since the original phaseout of class I ODS in 1996,
and is aware that the U.S. as a Party to the Montreal Protocol is bound
to complete the transition to CFC-free MDIs.
Environmental testing labs are affected by this rule in that
beginning in the year 2002 newly imported or produced CFC-113 cannot be
used in the testing of oil and grease, and total petroleum hydrocarbons
in water. EPA believes that because there is an
[[Page 55153]]
alternative method available, and that stockpiled and recycled CFC-113
can continue to be used for this testing if necessary, that the
economic impact of this regulation on small environmental testing
laboratories is minimal. Further, alternative methods to test oil and
grease that do not use ODSs are available.
Although this proposed rule will not have significant economic
impact on a substantial number of small entities, EPA nonetheless has
tried to reduce the impact on small entities. In the case of
environmental testing laboratories, EPA is minimizing the reporting
requirements associated with this rule by simply amending the yearly
certification already required of them under existing regulations. In
this case of the one pharmaceutical company that is not receiving
essential-use allowances for CFCs, we believe that there is no way to
reduce the impact on this small business while still complying with
Decision XII/2 of the Montreal Protocol. We continue to be interested
in the potential impact of the proposed rule on small entities and
welcome comments related to these issues.
F. Applicability of Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
Executive Order 13045: ``Protection of Children from Environmental
Health risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that (1) is determined to be ``economically significant''
as defined under E.O. 12866, and (2) concerns an environmental health
and 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 E.O. 13045 as applying only to those regulatory actions that
are based on health or safety risks, such that the analysis required
under section 5-501 of the Order has the potential to influence the
regulation. This rule is not subject to E.O. 13045 because it
implements the phase-out schedule and exemptions established by
Congress in Title VI of the Clean Air Act.
G. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in this
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
proposed rule does not involve technical standards. Therefore, EPA did
not considering the use of any voluntary consensus standards.
H. Executive Order 13132 (Federalism)
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``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 proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. With today's action EPA is
proposing that the use of CFC-113 for testing of oil and grease is no
longer considered ``essential'' as consistent with Decision XI/15 of
the Parties to the Montreal Protocol. Thus, import and production of
CFCs for this use will be prohibited beginning January 1, 2002. EPA
believes that this will not substantially affect local and state
government implementation of the Clean Water Act since stockpiles of
CFC-113 produced or imported prior to the year 2002, and recycled
material can continue to be used for these methods. Further,
alternative methods that do not use ODSs are available. Thus, Executive
Order 13132 does not apply to this rule. In the spirit of Executive
Order 13132, and consistent with EPA policy to promote communications
between EPA and State and local governments, EPA specifically solicits
comment on this proposed rule from State and local officials.
I. Executive Order 13211 (Energy Effects)
This rule is not subject to Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use (66 FR 28355 (May 22, 2001)) because it is not a
significant regulatory action under Executive Order 12866.
List of Subjects in 40 CFR Part 82
Environmental protection, Administrative practice and procedure,
Air pollution control, Chemicals, Chlorofluorocarbons, Exports,
Imports, Laboratory and analytical uses, Methyl chloroform, Ozone
layer, Reporting and recordkeeping requirements.
Dated: October 24, 2001.
Christine Todd Whitman,
Administrator
40 CFR part 82 is proposed to be amended as follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
1. The authority citation for part 82 continues to read as follows:
Authority: 42 U.S.C. 7414, 7601, 7671-7671q.
Subpart A--Production and Consumption Controls
2. Section 82.3 is amended by adding new definitions in
alphabetical order for ``Essential-use chlorofluorocarbons (Essential
CFCs)'', and ``Essential metered dose inhaler (Essential MDI)'', and
revising the definition of ``Essential-use allowances'' to read as
follows:
Sec. 82.3 Definitions.
* * * * *
Essential Metered Dose Inhaler (Essential MDI) means metered dose
inhalers for the treatment of asthma and chronic obstructive pulmonary
disease, approved by the Food and Drug Administration or by another
Party's analogous health authority before December 31, 2000, and
considered to be essential by the Party where the MDI product will
eventually be sold. If the MDI product is to be sold in the U.S., the
active moiety contained in the MDI must be listed as essential at 21
CFR 2.125(e).
Essential-Use Allowances means the privileges granted by
Sec. 82.4(t) to produce class I substances, as determined by allocation
decisions made by the Parties to the Montreal Protocol and in
accordance with the restrictions delineated in the Clean Air Act
Amendments of 1990.
[[Page 55154]]
Essential-Use Chlorofluorocarbons (Essential-use CFCs) are the CFCs
(CFC-11, CFC-12, or CFC-114) produced under the authority of essential-
use allowances and not the allowances themselves. Essential-use CFCs
include CFCs imported or produced by U.S. entities under the authority
of essential-use allowances for use in metered dose inhalers, as well
as CFCs imported or produced by non-U.S. entities under the authority
of privileges granted by the Parties and the national authority of
another country for use in metered dose inhalers.
* * * * *
3. Section 82.4 is amended:
a. By revising paragraph (d).
b. By revising paragraph (k).
c. By revising paragraphs (t) introductory text, (t)(1)(i), and
(t)(3).
d. By adding the table to the end of paragraph (t)(2).
e. By adding paragraphs (t)(1)(iii) and (t)(4).
The revisions and additions read as follows:
Sec. 82.4 Prohibitions.
* * * * *
(d) Effective January 1, 1996, for any class I , Group I, Group II,
Group III, Group IV, Group V, or Group VII controlled substances, and
effective January 1, 2005, for any class I, Group VI controlled
substances, no person may import (except for transhipments or heels),
at any time in any control period (except for controlled substances
that are transformed or destroyed, or transfers of essential-use CFCs)
in excess of the amount of unexpended essential-use allowances or
exemptions as allocated under this section, or the amount of unexpended
destruction and transformation credits obtained under Sec. 82.9 held by
that person under the authority of this subpart at that time for that
control period. Every kilogram of excess importation (other than
transhipments or heels) constitutes a separate violation of this
subpart. It is a violation of this subpart to obtain virgin class I
ODSs under the general laboratory exemption in excess of actual need
and to recycle that material for sale into other markets.
* * * * *
(k) Prior to January 1, 1996, for all Groups of class I controlled
substances, and prior to January 1, 2005, for class I, Group VI
controlled substances, a person may not use production allowances to
produce a quantity of a class I controlled substance unless that person
holds under the authority of this subpart at the same time consumption
allowances sufficient to cover that quantity of class I controlled
substances nor may a person use consumption allowances to produce a
quantity of class I controlled substances unless the person holds under
authority of this subpart at the same time production allowances
sufficient to cover that quantity of class I controlled substances.
However, prior to January 1, 1996, for all class I controlled
substances, and prior to January 1, 2005 for class I, Group VI
controlled substances, only consumption allowances are required to
import, with the exception of transhipments, heels and used controlled
substances. Effective January 1, 1996, for all Groups of class I
controlled substances, except Group VI, only essential-use allowances
or exemptions are required to import class I controlled substances,
with the exception of transhipments, heels, used controlled substances,
and essential-use CFCs.
* * * * *
(t) Effective January 1, 1996, essential-use allowances are
apportioned to a person under paragraphs (t)(2) and (t)(3) of this
section for the exempted production or importation of specified class I
controlled substances solely for the purposes listed in paragraphs
(t)(1)(i) through (iii) of this section.
(1) * * *
(i) Metered dose inhalers (MDIs) for the treatment of asthma and
chronic obstructive pulmonary disease that were approved by the Food
and Drug Administration before December 31, 2000.
(ii) * * *
(iii) Laboratory and Analytical Uses (Defined at appendix G of this
subpart).
(2) * * *
Table I.--Essential Use Allocation for Calendar Year 2002
------------------------------------------------------------------------
Quantity
Company Chemical (metric tons)
------------------------------------------------------------------------
(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma
and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals......... CFC-11 or CFC-12 or 343
CFC-114.
Aventis........................... CFC-11 or CFC-12 or 150
CFC-114.
Boehinger Ingelheim CFC-11 or CFC-12 or 743
Pharmaceuticals. CFC-114.
Glaxo SmithKline.................. CFC-11 or CFC-12 or 1016
CFC-114.
Schering-Plough Corporation....... CFC-11 or CFC-12 or 949
CFC-114.
Sidmak Laboratories Inc........... CFC-11 or CFC-12 or 67
CFC-114.
3M Pharmaceuticals................ CFC-11 or CFC-12 or 120
CFC-114.
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space Methyl Chloroform... 47
Administration (NASA)/Thiokol
Rocket.
United States Air Force/Titan Methyl Chloroform... 3.4
Rocket.
------------------------------------------------------------------------
(3) A global exemption for class I controlled substances for
essential laboratory and analytical uses shall be in effect through
December 31, 2005 subject to the restrictions in appendix G of this
subpart, and subject to the record keeping and reporting requirements
at Sec. 82.13(u) through (z). There is no amount specified for this
exemption.
(4) Any person using virgin class I ODSs produced under the
authority of essential-use allowances or the essential-use exemption in
paragraph (t)(3) of this section for anything other than an essential-
use (i.e. for uses other than those specifically listed in paragraph
(t)(1) of this section is in violation of this subpart. Each kilogram
of virgin class I ODS produced or imported under the authority of
essential-use allowances or the essential-use exemption and used for a
non-essential-use is a separate violation of this subpart. Any person
selling virgin class I material produced or imported under the
authority of essential-use allowances or the
[[Page 55155]]
essential-use exemption for uses other than an essential-use is in
violation of this subpart. Each kilogram of virgin class I ODS produced
under the authority of essential-use allowances or the essential-use
exemption and sold for a use other than an essential-use is a separate
violation of this subpart. It is a violation of this subpart to obtain
virgin class I ODSs under the general laboratory exemption in excess of
actual need and to recycle that material for sale into other markets.
* * * * *
4. Section 82.9 is amended:
a. By revising the section heading.
b. By revising paragraphs (c) introductory text, (c)(1)
introductory text, (c)(1)(iv), (c)(2)(iv), and (c)(4).
c. By adding paragraphs (c)(3)(v) and (g).
The revisions and additions read as follows:
Sec. 82.9 Availability of allowances in addition to baseline
production allowances for class I ozone depleting substances--
International transfers of production allowances, Article 5 allowances,
essential-use allowances, and essential-use CFCs.
* * * * *
(c) A company may increase or decrease its production allowances,
its Article 5 allowances, or its essential-use allowances for CFCs for
use in essential MDIs, by trading with another Party to the Protocol
according to the provision under this paragraph (c). A nation listed in
appendix C to this subpart (Parties to the Montreal Protocol) must
agree either to transfer to the person for the current control period
some amount of production or import that the nation is permitted under
the Montreal Protocol or to receive from the person for the current
control period some amount of production or import that the person is
permitted under this subpart. If the controlled substance is produced
under the authority of production allowances and is to be returned to
the Party from whom production allowances are received, the request for
production allowances shall also be considered a request for
consumption allowances under Sec. 82.10(c). If the controlled substance
is produced under the authority of production allowances and is to be
sold in the United States or to another Party (not the Party from whom
the allowances are received), the U.S. company must expend its
consumption allowances allocated under Sec. 82.6 and Sec. 82.7 in order
to produced with the additional production allowances.
(1) For trades from a Party, the person must obtain from the
principal diplomatic representative in that nation's embassy in the
United States a signed document stating that the appropriate authority
within that nation has established or revised production limits for the
nation to equal the lesser of the maximum production that the nation is
allowed under the Protocol minus the amount transferred, the maximum
production that is allowed under the nation's applicable domestic law
minus the amount transferred, or the average of the nation's actual
national production level for the three years prior to the transfer
minus the production transferred. The person must submit to the
Administrator a transfer request that includes a true copy of this
document and that sets forth the following:
* * * * *
(iv) The chemical type, type of allowance being transferred, and
the amount of allowances being transferred;
* * * * *
(2) * * *
(iv) The chemical type, type of allowance being transferred, and
the level of allowances being transferred; and
(3) * * *
(v) In the case of transfer of essential-use allowances the
Administrator may consider whether the CFCs will be used for production
of essential MDIs.
* * * * *
(4) The Administrator will issue the person a notice either
granting or deducting production allowances, Article 5 allowances, or
essential-use allowances, and specifying the control period to which
the transfer applies, provided that the request meets the requirement
of paragraph (c)(1) of this sections for trades from Parties and
paragraph (c)(2) of this section for trades to Parties, unless the
Administrator has decided to disapprove the trade under paragraph
(c)(3) of this section. For a trade from a Party, the Administrator
will issue a notice that revises the allowances held by the person to
equal the unexpended production, Article 5, or essential-use allowances
held by the person under this subpart plus the level of allowable
production transferred from the Party. For a trade to a Party, the
Administrator will issue a notice that revises the production limit for
the person to equal the lesser of:
(i) The unexpended production allowances, essential-use allowances,
or Article 5 allowances held by the person under this subpart minus the
amount transferred; or
(ii) The unexpended production allowances, essential-use
allowances, or Article 5 allowances held by the person under this
subpart minus the amount by which the United States average annual
production of the controlled substance being traded for the three years
prior to the transfer is less than the total production allowable for
that substance under this subpart minus the amount transferred. The
change in allowances will be effective on the date that the notice is
issued.
* * * * *
(g) International transfer of essential-use CFCs. (1) For trades of
essential-use CFCs where the transferee or the transferor is a person
in another nation (Party), the transferee must submit the information
requested in Sec. 82.12(d)(2) and (d)(3), along with a signed document
from the principal diplomatic representative in the Party's embassy in
the United States stating that the appropriate authority within that
nation has approved the transfer of the essential-use CFCs.
(2) If the transfer claim is complete, and EPA does not object to
the transfer, then EPA will issue letters to the transferor and the
transferee indicating that the transfer may proceed. EPA reserves the
right to disallow a transfer if the transfer request is incomplete, or
if it has reason to believe that the transferee plans to produce MDIs
that are not essential MDIs. If EPA objects to the transfer, EPA will
issue letters to the transferor and transferee stating the basis for
disallowing the transfer. The burden of proof is placed on the
transferee to retain sufficient records to prove that the transferred
essential-use CFCs are used only for production of essential MDIs. If
EPA ultimately finds that the transferee did not use the essential-use
CFCs for production of essential MDIs then the transferee is in
violation of this subpart.
* * * * *
5. Section 82.12 is amended by
a. Revising the section heading.
b. Revising paragraph (a)(1) introductory text.
c. Adding paragraph (d).
The revisions and additions read as follows:
Sec. 82.12 Domestic transfers for class I controlled substances.
(a) * * *
(1) Until January 1, 1996, for all class I controlled substances,
except for Group VI, and until January 1, 2005, for Group VI, any
person (``transferor'') may transfer to any other person
(``transferee'') any amount of the transferor's consumption allowances
or production allowances, and effective January 1, 1995, for all class
I controlled substances any person (``transferor'') may transfer to any
other person (``transferee'') any amount of the transferor's Article 5
allowances. After
[[Page 55156]]
January 1, 2002 any essential-use allowance holder (including those
persons that hold essential-use allowances issued by a Party other than
the United States) (``transferor'') may transfer essential-use
allowances for CFCs to a metered dose inhaler company solely for the
manufacture of essential MDIs.
* * * * *
(d) Transfers of essential-use CFCs. (1) Effective January 1, 2002,
any metered dose inhaler company (transferor) may transfer essential-
use CFCs to another metered dose inhaler company (transferee) provided
that the Administrator approves the transfer.
(2) The transferee must submit a transfer claim to the
Administrator for approval before the transfer can take place. The
transfer claim must set forth the following:
(i) The identities and addresses of the transferor and the
transferee;
(ii) The name and telephone numbers of contact persons for the
transferor and the transferee.
(iii) The amount of each controlled substance (CFC-11, CFC-12, or
CFC-114) being transferred.
(iv) The specific metered dose inhaler products (i.e. the MDI drug
product or active moiety) that the transferee plans to produce with the
transferred CFCs.
(v) The country(ies) where the CFC metered dose inhalers produced
with the transferred essential-use CFCs will be sold if other than in
the United States.
(vi) Certification that the essential-use CFCs will be used in the
production of essential MDIs. If the MDIs are to be sold in the United
States, the certification must state that MDIs produced with the
transferred essential-use CFCs are listed as essential at 21 CFR 2.125,
and were approved by the Food and Drug Administration before December
31, 2000. If the MDIs produced with the essential-use CFCs are to be
sold outside the United States, the transferee must certify that the
metered dose inhalers produced with the essential-use CFCs are
considered essential by the importing country.
(3) The transferor must submit a letter stating that it concurs
with the terms of the transfer as requested by the transferee.
(4) Once the transfer claim is complete, and if EPA does not object
to the transfer, then EPA will issue letters to the transferor and the
transferee within 10 business days indicating that the transfer may
proceed. EPA reserves the right to disallow a transfer if the transfer
request is incomplete, or if it has reason to believe that the
transferee plans use the essential-use CFCs in anything other than
essential MDIs. If EPA objects to the transfer, within EPA will issue
letters to the transferor and transferee stating the basis for
disallowing the transfer. The burden of proof is placed on the
transferee to retain sufficient records to prove that the transferred
essential-use CFCs are used only for production of essential MDIs. If
EPA ultimately finds that the transferee did not use the essential-use
CFCs for production of essential MDIs then the transferee is in
violation of this subpart.
* * * * *
6. Section 82.13 is amended:
a. By revising paragraphs (f)(2)(xv) and (f)(3)(xii).
b. By revising paragraphs (g)(1)(xvi) and (g)(4)(xiii).
c. By revising paragraph (u).
d. By revising paragraph (v).
e. By revising paragraph (y) introductory text.
The revisions read as follows:
Sec. 82.13 Recordkeeping and reporting requirements.
* * * * *
(f) * * *
(2) * * *
(xv) Written certifications that quantities of controlled
substances, meeting the purity criteria in appendix G of this subpart,
were purchased by distributors of laboratory supplies or by laboratory
customers to be used only in essential laboratory and analytical uses
as defined by appendix G, and not to be resold or used in
manufacturing.
* * * * *
(3) * * *
(xii) In the case of laboratory essential-uses, certifications from
distributors of laboratory supplies that controlled substances were
purchased for sale to laboratory customers who certify that the
substances will only be used for essential laboratory and analytical
uses as defined by appendix G of this subpart, and will not be resold
or used in manufacturing; or, if sales are made directly to
laboratories, certification from laboratories that the controlled
substances will only be used for essential laboratory and analytical
uses (defined at appendix G of this subpart) and will not be resold or
used in manufacturing.
* * * * *
(g) * * *
(1) * * *
(xvi) Copies of certifications that imported controlled substances
are being purchased for essential laboratory and analytical uses
(defined at appendix G of this subpart) or being purchased for eventual
sale to laboratories that certify that controlled substances are for
essential laboratory and analytical uses (defined at appendix G of this
subpart).
* * * * *
(4) * * *
(xiii) The certifications from essential-use allowance holders
stating that the controlled substances were purchased solely for
specified essential-uses and will not be resold or used in
manufacturing; and the certifications from distributors of laboratory
supplies that the controlled substances were purchased solely for
eventual sale to laboratories that certify the controlled substances
are for essential laboratory and analytical uses (defined at appendix G
of this subpart), or if sales are made directly to laboratories,
certifications from laboratories that the controlled substances will
only be used for essential laboratory and analytical uses (defined at
appendix G of this subpart) and will not be resold or used in
manufacturing.
* * * * *
(u) Any person allocated essential-use allowances who submits an
order to a producer or importer for a controlled substance must report
the quarterly quantity received from each producer or importer.
(v) Any distributor of laboratory supplies receiving controlled
substances under the global laboratory essential-use exemption for sale
to laboratory customers must report quarterly the quantity received of
each controlled substance from each producer or importer.
* * * * *
(y) A laboratory customer purchasing a controlled substance under
the global laboratory essential-use exemption must provide the
producer, importer or distributor with a one-time-per-year
certification for each controlled substance that the substance will
only be used for essential laboratory and analytical uses (defined at
appendix G of this subpart) and not be resold or used in manufacturing.
The certification must also include:
* * * * *
7. The heading and paragraph 1 of appendix G to subpart A is
revised to read as follows:
Appendix G to Subpart A of Part 82--UNEP Recommendations for Conditions
Applied to Exemption for Essential Laboratory and Analytical Uses
1. Essential laboratory and analytical uses are identified at
this time to include equipment calibration; use as extraction
solvents, diluents, or carriers for chemical analysis; biochemical
research; inert solvents
[[Page 55157]]
for chemical reactions, as a carrier or laboratory chemical and
other critical analytical and laboratory purposes. Pursuant to
Decision XI/15 of the Parties to the Montreal Protocol, effective
January 1, 2002 the following uses of class I controlled substances
are not considered essential under the global laboratory exemption:
a. Testing of oil and grease, and total petroleum hydrocarbons
in water;
b. Testing of tar in road-paving materials; and
c. Forensic finger printing.
Production for essential laboratory and analytical purposes is
authorized provided that these laboratory and analytical chemicals
shall contain only controlled substances manufactured to the
following purities:
CTC (reagent grade)--99.5
1,1,1,trichloroethane--99.5
CFC-11--99.5
CFC-13--99.5
CFC-12--99.5
CFC-113--99.5
CFC-114--99.5
Other w/ Boiling P>20 degrees C--99.5
Other w/ Boiling P20 degrees C--99.0
* * * * *
[FR Doc. 01-27383 Filed 10-31-01; 8:45 am]
BILLING CODE 6560-50-P