Protection of Stratospheric Ozone: The 2008 Critical Use Exemption From the Phaseout of Methyl Bromide

[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Rules and Regulations]
[Page 74117-74152]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de07-25]
[[Page 74118]]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[EPA-HQ-OAR-2006-1016; FRL-8510-8]
RIN 2060-A030

Protection of Stratospheric Ozone: The 2008 Critical Use
Exemption From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.

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SUMMARY: EPA is finalizing an exemption to the phaseout of methyl
bromide to meet the needs of 2008 critical uses. Specifically, EPA is
authorizing uses that qualify for the 2008 critical use exemption and
the amount of methyl bromide that may be produced, imported, or
supplied from existing pre-phaseout inventory for those uses in 2008.
EPA is taking action under the authority of the Clean Air Act to
reflect recent consensus decisions taken by the Parties to the Montreal
Protocol on Substances that Deplete the Ozone Layer at the 18th Meeting
of the Parties.

DATES: This rule is effective on December 28, 2007.

ADDRESSES: EPA has established a docket for this action identified
under Docket ID No. EPA-HQ-OAR-2006-1016. All documents in the docket
are listed on the http://www.regulations.gov site. Although listed in
the index, some information is not publicly available, e.g., 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 only through http://
www.regulations.gov or in hard copy. To obtain copies of materials in
hard copy, please call the EPA Docket Center at (202) 564-1744 between
the hours of 8:30 a.m.-4:30 p.m. E.S.T., Monday-Friday, excluding legal
holidays, to schedule an appointment. The EPA Docket Center's Public
Reading Room address is EPA/DC, EPA West, Room 3334, 1301 Constitution
Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Aaron Levy by telephone at (202) 343-
9215, or by e-mail at levy.aaron@epa.gov or by mail at Aaron Levy, U.S.
Environmental Protection Agency, Stratospheric Protection Division,
Stratospheric Program Implementation Branch (6205J), 1200 Pennsylvania
Avenue, NW., Washington, DC, 20460. You may also visit the Ozone
Depletion Web site of EPA's Stratospheric Protection Division at http://
www.epa.gov/ozone/strathome.html 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 (CAA)
restrictions on the consumption, production, and use of methyl bromide
(a class I, Group VI controlled substance) for critical uses during
calendar year 2008. Under the Clean Air Act, methyl bromide consumption
(consumption is defined under the CAA as production plus imports minus
exports) and production was phased out on January 1, 2005, apart from
allowable exemptions, namely the critical use exemption and the
quarantine and pre-shipment exemption. With this action, EPA is
authorizing the uses that will qualify for the 2008 critical use
exemption as well as specific amounts of methyl bromide that may be
produced, imported, or sold from pre-phaseout inventory for critical
uses in 2008.
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. EPA is
issuing this final rule under section 307(d) of the Clean Air Act,
which states: ``The provisions of section 553 through 557 * * * of
Title 5 shall not, except as expressly provided in this section, apply
to actions to which this subsection applies.'' CAA section 307(d)(1).
Thus, section 553(d) of the APA does not apply to this rule. EPA is
nevertheless acting consistently with the policies underlying APA
section 553(d) in making this rule effective on December 28, 2007. APA
section 553(d) provides an exception for any action that grants or
recognizes an exemption or relieves a restriction. This final rule
grants an exemption from the phaseout of methyl bromide.

Table of Contents

I. General Information
Regulated Entities
II. What Is Methyl Bromide?
III. What Is the Background to the Phaseout Regulations for Ozone
Depleting Substances?
IV. What Is the Legal Authority for Exempting the Production and
Import of Methyl Bromide for Critical Uses Authorized by the Parties
to the Montreal Protocol?
V. What Is the Critical Use Exemption Process?
A. Background of the Process
B. How Does This Final Rulemaking Relate to Previous Critical
Use Exemption Rulemakings?
C. Critical Uses
D. Critical Use Amounts
1. Background of Critical Use Amounts
2. Calculation of Available Stocks
3. Adjusting New Production and Import Amounts to Account for
Available Stocks
4. Treatment of Carryover Material
a. Reporting Requirements to Calculate Carryover Amounts
b. Apportionment of Carryover Reductions Among Producers
5. Amounts for Research Purposes
6. Methyl Bromide Alternatives
E. The Criteria in Decisions IX/6 and Ex. I/4
F. Emissions Minimization
G. Critical Use Allowance Allocations
H. Critical Stock Allowance Allocations and the Confidentiality
of Information About the Aggregate Methyl Bromide Inventory
I. Stocks of Methyl Bromide
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income Populations
K. Congressional Review Act

I. General Information

Regulated Entities

Entities potentially regulated by this action are those associated
with the production, import, export, sale, application, and use of
methyl bromide covered by an approved critical use exemption.
Potentially regulated categories and entities include:

------------------------------------------------------------------------
Category Examples of regulated entities
------------------------------------------------------------------------
Industry......................... Producers, Importers, and Exporters
of methyl bromide; Applicators and
Distributors of methyl bromide;
Users of methyl bromide, e.g.,
farmers of vegetable crops, fruits,
and seedlings; Owners of stored food
commodities and structures such as
grain mills and processors; and
Agricultural researchers.
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[[Page 74119]]

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

II. What Is Methyl Bromide?

Methyl bromide is an odorless, colorless, toxic gas which is used
as a broad-spectrum pesticide and is controlled under the CAA as a
class I ozone-depleting substance (ODS). Methyl bromide is used in the
U.S. and throughout the world as a fumigant to control a 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). Information on methyl bromide can be found at
http://www.epa.gov/ozone/mbr and http://www.ozone.unep.org
or by contacting the Stratospheric Ozone Hotline at 1-800-296-1996.
Because it is a pesticide, methyl bromide is also regulated by EPA
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
and other statutes and regulatory authority, as well as by States under
their own statutes and regulatory authorities. Under FIFRA, methyl
bromide is a restricted use pesticide. Restricted use pesticides are
subject to certain Federal and State requirements governing their sale,
distribution, and use. Nothing in this final rule implementing the
Clean 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 are affected by provisions of
this action 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 this final rule are intended only to implement the CAA
restrictions on the production, consumption, and use of methyl bromide
for critical uses exempted from the phaseout of methyl bromide.

III. What Is the Background to 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 Protocol is the international
agreement aimed at reducing and eliminating the production and
consumption of stratospheric ozone depleting substances. The U.S. was
one of the original signatories to the 1987 Montreal Protocol and the
U.S. ratified the Protocol on April 12, 1988. Congress then enacted,
and President George H.W. 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 regulations to implement
this legislation and has made several amendments to the regulations
since that time.
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 Montreal Protocol (Parties) agreed that each
industrialized country's level of methyl bromide production and
consumption in 1991 should be the baseline for establishing a freeze in
the level of methyl bromide production and consumption for
industrialized countries. EPA published a final rule in the Federal
Register on December 10, 1993 (58 FR 65018), listing methyl bromide as
a class I, Group VI controlled substance, freezing U.S. production and
consumption at this 1991 level of 25,528,270 kilograms, and, in 40 CFR
82.7, EPA also set forth the percentage of baseline allowances for
methyl bromide granted to companies in each control period (each
calendar year) until 2001, when the complete phaseout would occur. This
phaseout date was established in response to a petition filed in 1991
under sections 602(c)(3) and 606(b) of the CAAA of 1990, requesting
that EPA list methyl bromide as a class I substance and phase out its
production and consumption. This date was consistent with section
602(d) of the CAAA of 1990, which for newly listed class I ozone
depleting substances provides that ``no extension [of the phaseout
schedule in section 604] 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.'' EPA based its
action on scientific assessments and actions by the Parties to the
Montreal Protocol to freeze the level of methyl bromide production and
consumption for industrialized countries at the Fourth Meeting of the
Parties (MOP) in 1992 in Copenhagen, Denmark.
At the Seventh MOP in 1995, 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 that time, the U.S. continued to have a
2001 phaseout date in accordance with the CAAA of 1990 language. At the
Ninth MOP in 1997, the Parties agreed to further adjustments to the
phaseout schedule for methyl bromide in industrialized countries, with
reduction steps leading to a 2005 phaseout.

IV. What Is the Legal Authority for Exempting the Production and Import
of Methyl Bromide for Critical Uses Authorized by the Parties to the
Montreal Protocol?

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 (Pub. L. 105-277, October 21, 1998) and
were codified in section 604 of the CAA, 42 U.S.C. 7671c. The amendment
that specifically addresses the critical use exemption appears at
section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout
schedule for methyl bromide production and consumption 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. EPA again amended the revised phaseout to allow for an

[[Page 74120]]

exemption for quarantine and preshipment purposes on July 19, 2001 (66
FR 37751), with an interim final rule and with a final rule on January
2, 2003 (68 FR 238).
On December 23, 2004 (69 FR 76982), EPA published a final rule
titled ``Protection of Stratospheric Ozone: Process for Exempting
Critical Uses From the Phaseout of Methyl Bromide'' (the ``Framework
Rule'') in the Federal Register that established the framework for the
critical use exemption; set forth a list of approved critical uses for
2005; and specified the amount of methyl bromide that could be supplied
in 2005 from stocks and new production or import to meet the needs of
approved critical uses. EPA then promulgated a supplemental rule on
December 13, 2005 that added critical uses to the exemption program for
2005 and allocated additional stock allowances (70 FR 73604). EPA
published a final rule on February 6, 2006, to exempt production and
import of methyl bromide for 2006 critical uses and indicated which
uses met the criteria for the exemption program for that year (71 FR
5985). EPA published another final rule on December 14, 2006, to exempt
production and import of methyl bromide for critical uses in 2007 and
indicated which uses met the criteria for critical uses for that year
(71 FR 75386). Under authority of section 604(d)(6) of the CAA, this
action lists the uses that qualify as approved critical uses in 2008
and the amount of methyl bromide that may be produced, imported, or
supplied from inventory to satisfy those uses.
This action reflects Decision XVIII/13, taken at the Eighteenth
Meeting of the Parties in October 2006. In accordance with Article
2H(5) of the Montreal Protocol, the Parties have issued several
Decisions pertaining to the critical use exemption. These include
Decisions IX/6 and Ex. I/4, which set forth criteria for review of
proposed critical uses (see Section V.E. of this preamble). The status
of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, DC Cir. 2006)
and in EPA's ``Supplemental Brief for the Respondent,'' filed in NRDC
v. EPA and available in the docket for this action. In this final rule,
EPA is honoring commitments made by the United States in the Montreal
Protocol context.

V. What Is the Critical Use Exemption Process?

A. Background of the Process

Starting in 2002, EPA began notifying applicants of the process for
obtaining a critical use exemption from the methyl bromide phaseout. On
May 8, 2003, the Agency published its first notice in the Federal
Register (68 FR 24737) announcing the availability of the application
for a critical use exemption and the deadline for submission of the
requisite data. Applicants were informed that they may apply as
individuals or as part of a group of users (a ``consortium'') who face
the same limiting critical conditions (i.e. specific conditions that
establish a critical need for methyl bromide). EPA has repeated this
process annually since then. The critical use exemption is designed to
permit production and import of methyl bromide for uses that do not
have technically and economically feasible alternatives.
The criteria for the exemption initially appeared in Decision IX/6
of the Parties to the Protocol. In that Decision, the Parties agreed
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 public health and are suitable to the crops and
circumstances of the nomination.'' These criteria are reflected in
EPA's definition of ``critical use'' at 40 CFR 82.3.
In response to the annual requests for critical use exemption
applications published in the Federal Register, applicants provide data
on the technical and economic feasibility of using alternatives to
methyl bromide. Applicants also submit data on their use of methyl
bromide, on research programs into the use of alternatives to methyl
bromide, and on efforts to minimize use and emissions of methyl bromide.
EPA's Office of Pesticide Programs reviews the data submitted by
applicants, as well as data from governmental and academic sources, to
establish whether there are technically and economically feasible
alternatives available for a particular use of methyl bromide and
whether there would be a significant market disruption if no exemption
were available. In addition, EPA reviews other parameters of the
exemption applications such as dosage and emissions minimization
techniques and applicants' research or transition plans. This
assessment process culminates in the development of a document referred
to as the critical use nomination, or CUN. The U.S. Department of State
submits the CUN annually to the United Nations Environment Programme
(UNEP) Ozone Secretariat. The CUNs of various countries are
subsequently reviewed by the Methyl Bromide Technical Options Committee
(MBTOC) and the Technical and Economic Assessment Panel (TEAP), which
are independent advisory bodies to Parties to the Montreal Protocol.
These bodies make recommendations to the Parties on the nominations.
The Parties then take a Decision to authorize a critical use exemption
for a particular country. The Decision also identifies how much methyl
bromide may be supplied for the exempted critical uses. As required in
section 604(d)(6) of the Clean Air Act, for each exemption period, EPA
consults with the United States Department of Agriculture and other
departments and institutions of the Federal government that have
regulatory authority related to methyl bromide, and provides an
opportunity for public comment on the amounts of methyl bromide that
the Agency has determined to be necessary for critical uses and the
uses that the Agency has determined meet the criteria of the critical
use exemption.
For more information on the domestic review process and methodology
employed by the Office of Pesticide Programs, please refer to a
detailed memo titled ``Development of 2003 Nomination for a Critical
Use Exemption for Methyl Bromide for the United States of America''
available on the docket for this rulemaking. While the particulars of
the data continue to evolve and administrative matters are further
streamlined, the technical review itself has remained the same since
the inception of the exemption program.
On January 24, 2006, the U.S. Government (USG) submitted the fourth
Nomination for a Critical Use Exemption for Methyl Bromide for the
United States of America to the Ozone Secretariat of the UNEP. This
fourth nomination contained the request for 2008 critical uses. In
March 2006, MBTOC sent questions to the USG concerning technical and
economic issues in the nomination. In April 2006, the USG transmitted
responses to MBTOC's requests for clarification. The USG received
MBTOC's second round of questions in June 2006, and sent responses to
MBTOC in August 2006. These documents, together with reports by the
advisory bodies noted above, can be accessed in the public docket for
this rulemaking. The determination in this final rule reflects the
analysis contained in those documents.

[[Page 74121]]

B. How Does This Final Rulemaking Relate to Previous Critical Use
Exemption Rulemakings?

The December 23, 2004, Framework Rule (69 FR 76982) established the
operational framework for the critical use exemption program in the
U.S., including trading provisions and recordkeeping and reporting
obligations. The Framework Rule defined the terms ``critical use
allowances'' (CUAs) and ``critical stock allowances'' (CSAs) at 40 CFR
82.3. Today's action authorizes the uses that will qualify as critical
uses for 2008 and the amounts of CUAs and CSAs that will be allocated
for those uses. The uses that EPA is authorizing as 2008 critical uses
are the uses which the USG included in the fourth CUN, and which were
approved by the Parties in Decision XVIII/13. In this action, EPA is
also refining its approach for determining the amount of CSAs to
allocate in 2008 and each year thereafter. EPA discusses the refined
approach in detail in Section V.D. of this preamble.

C. Critical Uses

In Decision XVIII/13, taken in October 2006, the Parties to the
Protocol agreed as follows: ``for the agreed critical-use categories
for 2008, set forth in table C of the annex to the present decision for
each Party to permit, subject to the conditions set forth in the
present decision and decision Ex.I/4, to the extent that those
conditions are applicable, the levels of production and consumption for
2008 set forth in table D of the annex to the present decision which
are necessary to satisfy critical uses * * *''
The following uses are those set forth in table C of the annex to
Decision XVIII/13: Commodities, Cocoa beans (NPMA \1\ subset), NPMA
food processing structures (cocoa beans removed), Mills and processors,
Smokehouse ham, Cucurbits--field, Eggplant--field, Forest nursery,
Nursery stock--fruit, nut, flower, Orchard replant, Ornamentals,
Peppers--field, Strawberry--field, Strawberry runners, Tomatoes--field,
and Sweet potato slips. The agreed critical-use levels for 2008 total
5,355,946 kilograms (kg), which is equivalent to 21.0% of the U.S. 1991
methyl bromide consumption baseline of 25,528,270 kg. However, the
maximum amount of allowable new production and import as set forth in
table D of Decision XVIII/13 is 4,595,040 kg (18.0% of baseline). For
the reasons described in Section V.D. of this preamble, EPA is allowing
up to 3,083,763 kg (12.1% of baseline) of new production or import of
methyl bromide for critical uses for 2008, with 1,729,689 kg (6.8% of
baseline) coming from stocks. To clarify, while the Parties require
only 760,906 kg of stockpile use if the entire U.S. allotment is
utilized, EPA is allowing use of 1,729,689 kg of pre-phaseout inventory
for critical uses and reducing allowable production accordingly.
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\1\ NPMA stands for National Pest Management Association.
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In this final rule, EPA is amending columns B and C of Appendix L
to 40 CFR art 82, subpart A to reflect the agreed critical-use
categories identified in Decision XVIII/13 for the 2008 control period
(calendar year). The Agency is amending the table of critical uses
based, in part, on the technical analysis contained in the 2008 U.S.
nomination that assesses data submitted by applicants to the critical
use exemption program as well as public and proprietary data on the use
of methyl bromide and its alternatives. EPA sought comment on the
analysis contained in the 2008 nomination and, in particular, any
information regarding changes to the registration or use of
alternatives that may have transpired after the 2008 nomination was
submitted. The Agency stated that such information has the potential to
alter the technical or economic feasibility of an alternative and could
thus cause EPA to modify the analysis that underpins EPA's
determination as to which uses and what amounts of methyl bromide
qualify for the critical use exemption. Based on Decision XIII/13 and
the 2008 U.S. CUN, EPA is determining that the uses in Table I:
Approved Critical Uses, with the limiting critical conditions
specified, qualify to obtain and use critical use methyl bromide in 2008.

Table I.--Approved Critical Uses
------------------------------------------------------------------------
Column A Column B Column C
------------------------------------------------------------------------
Limiting critical
conditions that
either exist, or
Approved critical that the approved
Approved critical uses user and location of critical user
use reasonably expects
could arise without
methyl bromide
fumigation
------------------------------------------------------------------------
Pre-Plant Uses:
Cucurbits............... (a) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.
(b) Southeastern Moderate to severe
U.S. limited to yellow or purple
growing locations nutsedge
in Alabama, infestation.
Louisiana, Moderate to severe
Mississippi, North soilborne disease
Carolina, South infestation.
Carolina, Moderate to severe
Tennessee, and root knot nematode
Virginia. infestation.
A need for methyl
bromide for
research purposes.
(c) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
root knot nematode
infestation.
A need for methyl
bromide for
research purposes.

[[Page 74122]]

Eggplant................ (a) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(b) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Moderate to severe
pythium collar,
crown and root rot.
Moderate to severe
southern blight
infestation.
Restrictions on
alternatives due to
karst topographical
features.
A need for methyl
bromide for
research purposes.
(c) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.
Forest Nursery Seedlings (a) Growers in Moderate to severe
Alabama, Arkansas, yellow or purple
Georgia, Louisiana, nutsedge
Mississippi, North infestation.
Carolina, Oklahoma, Moderate to severe
South Carolina, soilborne disease
Tennessee, Texas, infestation.
and Virginia. Moderate to severe
nematode
infestation.
(b) International Moderate to severe
Paper and its yellow or purple
subsidiaries nutsedge
limited to growing infestation.
locations in Moderate to severe
Alabama, Arkansas, soilborne disease
Georgia, South infestation.
Carolina, and Texas.
(c) Public Moderate to severe
(government-owned) weed infestation
seedling nurseries including purple
in Illinois, and yellow nutsedge
Indiana, Kentucky, infestation.
Maryland, Missouri, Moderate to severe
New Jersey, Ohio, Canada thistle
Pennsylvania, West infestation.
Virginia, and Moderate to severe
Wisconsin. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
(d) Weyerhaeuser Moderate to severe
Company and its yellow or purple
subsidiaries nutsedge
limited to growing infestation.
locations in Moderate to severe
Alabama, Arkansas, soilborne disease
North Carolina, and infestation.
South Carolina. Moderate to severe
nematode or worm
infestation.
(e) Weyerhaeuser Moderate to severe
Company and its yellow nutsedge
subsidiaries infestation.
limited to growing Moderate to severe
locations in Oregon soilborne disease
and Washington. infestation.
(f) Michigan growers Moderate to severe
soilborne disease
infestation.
Moderate to severe
Canada thistle
infestation.
Moderate to severe
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Orchard Nursery (a) Members of the Moderate to severe
Seedlings. Western Raspberry nematode
Nursery Consortium infestation.
limited to growing Presence of medium
locations in to heavy clay
Washington. soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.

[[Page 74123]]

(b) Members of the Moderate to severe
California nematode
Association of infestation.
Nursery and Garden Presence of medium
Centers to heavy clay
representing soils.
Deciduous Tree Prohibition on use
Fruit Growers. of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.
(c) California rose Moderate to severe
nurseries. nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.
Strawberry Nurseries.... (a) California Moderate to severe
growers. soilborne disease
infestation.
Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
A need for methyl
bromide for
research purposes.
(b) North Carolina Moderate to severe
and Tennessee black root rot.
growers. Moderate to severe
root-knot nematode
infestation.
Moderate to severe
yellow and purple
nutsedge
infestation.
A need for methyl
bromide for
research purposes.
Orchard Replant......... (a) California stone Moderate to severe
fruit growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Presence of medium
to heavy soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
(b) California table Moderate to severe
and raisin grape nematode
growers. infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
(c) California wine Moderate to severe
grape growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
(d) California Moderate to severe
walnut growers.. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.

[[Page 74124]]

(e) California Moderate to severe
almond growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Ornamentals............. (a) California Moderate to severe
growers. soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
A need for methyl
bromide for
research purposes.
(b) Florida growers. Moderate to severe
weed infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(c) Michigan Moderate to severe
herbaceous nematode
perennials growers. infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
yellow nutsedge and
other weed
infestation.
Peppers................. (a) Alabama, Moderate to severe
Arkansas, Kentucky, yellow or purple
Louisiana, nutsedge
Mississippi, North infestation.
Carolina, South Moderate to severe
Carolina, nematode
Tennessee, and infestation.
Virginia growers. Moderate to severe
pythium root,
collar, crown and
root rots.
A need for methyl
bromide for
research purposes.
(b) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(c) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation, or
moderate to severe
pythium root and
collar rots.
Moderate to severe
southern blight
infestation, crown
or root rot.
A need for methyl
bromide for
research purposes.
(d) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.

[[Page 74125]]

Strawberry Fruit........ (a) California Moderate to severe
growers. black root rot or
crown rot.
Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Time to transition
to an alternative.
A need for methyl
bromide for
research purposes.
(b) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Carolina geranium or
cut-leaf evening
primrose
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(c) Alabama, Moderate to severe
Arkansas, Georgia, yellow or purple
Illinois, Kentucky, nutsedge
Louisiana, infestation.
Maryland, Moderate to severe
Mississippi, nematode
Missouri, New infestation.
Jersey, North Moderate to severe
Carolina, Ohio, black root and
South Carolina, crown rot.
Tennessee, and A need for methyl
Virginia growers. bromide for
research purposes.
Sweet Potato Slips...... (a) California Prohibition on use
growers. of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Tomatoes................ (a) Michigan growers Moderate to severe
soilborne disease
infestation.
Moderate to severe
fungal pathogen
infestation.
A need for methyl
bromide for
research purposes.
(b) Alabama, Moderate to severe
Arkansas, Florida, yellow or purple
Georgia, Kentucky, nutsedge
Louisiana, North infestation.
Carolina, South Moderate to severe
Carolina, soilborne disease
Tennessee, and infestation.
Virginia growers. Moderate to severe
nematodes.
Restrictions on
alternatives due to
karst topographical
features, and in
Florida, soils not
supporting seepage
irrigation.
A need for methyl
bromide for
research purposes.
Post-Harvest Uses:
Food Processing......... (a) Rice millers in Moderate to severe
all locations in infestation of
the U.S. who are beetles, weevils,
members of the USA or moths.
Rice Millers Presence of
Association. sensitive
electronic
equipment subject
to corrosion.
Time to transition
to an alternative.
(b) Pet food Moderate to severe
manufacturing infestation or
facilities in the beetles, moths, or
U.S. who are active cockroaches.
members of the Pet Presence of
Food Institute (for sensitive
this rule, ``pet electronic
food'' refers to equipment subject
domestic dog and to corrosion.
cat food). Time to transition
to an alternative.
(c) Bakeries in the Presence of
U.S.. sensitive
electronic
equipment subject
to corrosion.
Time to transition
to an alternative.
(d) Members of the Moderate to severe
North American beetle infestation.
Millers' Presence of
Association in the sensitive
U.S. electronic
equipment subject
to corrosion.
Time to transition
to an alternative.

[[Page 74126]]

(e) Members of the Moderate to severe
National Pest beetle or moth
Management infestation.
Association Presence of
treating cocoa sensitive
beans in storage electronic
and associated equipment subject
spaces and to corrosion.
equipment and Time to transition
processed food, to an alternative.
cheese, herbs,
spices and spaces
and equipment in
associated
processing
facilities.
Commodities............. (a) California Rapid fumigation is
entities storing required to meet a
walnuts, beans, critical market
dried plums, figs, window, such as
raisins, and dates during the holiday
(in Riverside season, rapid
county only) in fumigation is
California. required when a
buyer provides
short (2 working
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.
A need for methyl
bromide for
research purposes.
Dry Cured Pork Products. (a) Members of the Red legged ham
National Country beetle infestation.
Ham Association. Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
(b) Members of the Red legged ham
American beetle infestation.
Association of Meat Cheese/ham skipper
Processors. infestation.
Dermested beetle
infestation.
Ham mite
infestation.
(c) Nahunta Pork Red legged ham
Center (North beetle infestation.
Carolina). Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
(d) Gwaltney of Red legged ham
Smithfield Ltd. beetle infestation.
Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
------------------------------------------------------------------------

The National Pest Management Association (NPMA) requested that the
language in Column B of Table I describing the NPMA be changed to
``Members of the National Pest Management Association treating cocoa
beans in storage and associated spaces and equipment and processed
food, cheese, dried milk, herbs, spices and spaces and equipment in
associated processing facilities.'' EPA has incorporated this revised
language describing the NPMA because it clarifies that commodities will
be fumigated as part of space fumigations, as indicated in NPMA's
application.
Dow Agrosciences LLC (Dow) commented that sulfuryl fluoride
(ProFume) can replace methyl bromide for all post-harvest uses during
the 2008 control period. Dow also states that some post-harvest use
limiting critical conditions are no longer relevant and should be
removed. The commenter noted that sulfuryl fluoride has superseded
phosphine and heat as the preferred alternative in post-harvest use
categories. The commenter requested removal of the following limiting
critical conditions:

• Time to transition to an alternative
• Older structures that cannot be properly sealed
• Presence of sensitive electronic equipment subject to
corrosion by phosphine
• Rapid fumigation

First, EPA addresses the transition rate and overall feasibility of
sulfuryl fluoride for post-harvest sectors in Section V.D.6. of this
preamble. Second, EPA agrees that the inability to properly seal older
structures in preparation for fumigation should not be the sole
condition for granting critical use exemption status to food processing
facilities. The 2008 CUN does not state that the inability to seal
older structures is a basis for methyl bromide need. Therefore, EPA
agrees and has removed this limiting critical condition from the rule text.
Third, as discussed in the 2008 CUN, research is still ongoing
regarding the efficacy of sulfuryl fluoride for the post-harvest
critical uses listed in Table I, and EPA must ensure that post-harvest
sectors have sufficient time to validate and adopt the new technology.
Therefore, the presence of sensitive electronic equipment remains a
proper limiting critical condition for critical use applications that
would otherwise use phosphine, which corrodes electronic equipment.
Finally, regarding the rapid fumigation limiting critical condition
for certain post-harvest sectors, the United States Department of
Agriculture (USDA) Agriculture Research Service (ARS) is currently
conducting research on the efficacy and practicality of using
alternative fumigants, including sulfuryl fluoride, to control post-
harvest pests of durable commodities such as nuts and dried fruit.
While acknowledging that sulfuryl fluoride appears to have the
potential to provide effective and rapid vacuum fumigation of nuts and
dried fruit, the Agency must ensure that the tree nut and dried fruit
industry has sufficient time to validate and adopt the new technology.
Therefore, rapid fumigation remains a valid limiting critical condition
for the sectors where it is listed in Table I.

[[Page 74127]]

Dow commented that EPA should remove or modify some of the pre-
plant limiting critical conditions in the final rule. The commenter
stated that with the availability of 1,3-Dichloropropene (1,3-D) as a
nematicide, ``nematode infestations'' should not qualify as a limiting
critical condition. The 2008 CUN explained that methyl bromide is the
only option to effectively control the target pests, including
nematodes, found in the Southeastern U.S. where pest pressures commonly
exist at moderate to severe levels. EPA responds in more detail in the
Response to Comments document for this action.
At the public hearing for this action the Florida Golf Course
Superintendents Association and a researcher from Florida University
argued that the golf and turf industry should qualify for critical use
methyl bromide. EPA responds to these comments in a Response to
Comments document available on the docket for this rulemaking.
EPA is finalizing the proposed changes amending the table in 40 CFR
Part 82, subpart A, Appendix L, as reflected above. EPA is adding six
references and deleting four references in column B, changing the
description of one critical use in column B, and removing one limiting
critical condition from five post-harvest sectors in column C.
Specifically, the changes are as follows: Adding Mississippi to the
approved locations for cucurbit growers because that location was
included in the approved Southeast Cucurbit Consortium application for
2008; removing Florida from the approved forest seedling locations
because a 2008 application for that location was not submitted to EPA;
removing Maryland from the approved strawberry nursery locations
because a 2008 application for that location was not submitted to EPA;
removing California from the approved locations for pepper growers
because the United States Government did not reflect this location in
its 2008 CUN; adding Mississippi to the approved locations for pepper
growers because that location was included in the approved Southeast
Pepper Consortium application for 2008; adding Mississippi and Missouri
to the approved locations for strawberry fruit growers because those
locations were included in the approved Southeastern Strawberry
Consortium application for 2008; adding California sweet potato slip
growers to reflect the authorization of that use in Decision XVIII/13;
adding Mississippi to the approved locations for tomato growers because
that location was included in the approved Southeastern Tomato
Consortium application for 2008; removing turf grass because that use
was not agreed to by the Parties in Decision XVIII/13; adding Gwaltney
and Smithfield Inc. to the approved entities for dry cured pork
products because their application was approved for 2008; changing the
description of members of the National Pest Management Association
(NPMA) as requested by NPMA; and deleting the limiting critical
condition ``older structures that can not be properly sealed to use an
alternative to methyl bromide'' for post-harvest sectors.
The categories listed in Table I above have been designated
critical uses for 2008 in Decision XVIII/13 of the Parties. The amount
of methyl bromide approved for research purposes is included in the
amount of methyl bromide approved by the Parties for the commodities
for which ``research purposes'' is indicated as a limiting critical
condition in the table above. As explained in Section V.D.5. of this
preamble, EPA is allowing sale of 15,491 kg of methyl bromide from
existing stocks for research purposes, and adjusting new production
accordingly.
In accordance with the recommendations in Table 9 of the TEAP's
September 2006 Final Report entitled ``Evaluations of 2006 Critical Use
Nominations for Methyl Bromide and Related Matters,'' available on the
docket for this rulemaking, EPA is allowing the following sectors to
use critical use methyl bromide for research purposes: Commodities,
cucurbits (field), eggplant (field), nursery stock (fruit, nut,
flower), ornamentals, peppers (field), strawberry (field), strawberry
runners, and tomatoes (field). In their applications to EPA, these sectors
identified research programs that require the use of methyl bromide.

D. Critical Use Amounts

Section V.C. of this preamble explains that Table C of the annex to
Decision XVIII/13 lists critical uses and amounts agreed to by the
Parties to the Montreal Protocol (Parties). When added together, the
critical use amounts authorized by the Parties for the U.S. in 2008
total 5,355,946 kilograms (kg), which is equivalent to 21.0% of the
U.S. 1991 methyl bromide consumption baseline of 25,528,270 kg.
However, the limit on authorized new production or import as set forth
in Table D of the annex to Decision XVIII/13 is 4,595,040 kg (18.0% of
baseline). The difference between allowable new production and import
and the total critical use amount is to be made up from pre-phaseout
inventory that was produced before January 1, 2005. EPA further
discusses the breakout between new production or import and stocks in
sections V.D.1-3. of this preamble.
EPA is establishing the following reductions to the amount of newly
produced or imported methyl bromide authorized in Decision XVIII/13 to
satisfy critical uses:
(a) Reductions to account for the amount of available stocks;
(b) Reductions to account for unused critical use methyl bromide at
the end of 2006;
(c) Reductions to account for methyl bromide for research purposes
that EPA encourages researchers to purchase from available stocks;
(d) Reductions to accommodate uptake of sulfuryl fluoride for post-
harvest cocoa bean fumigation in 2008; and
(e) Reduction to accommodate a certain amount of transition to the
recently registered fumigant iodomethane for some pre-plant uses.
After accounting for the reductions listed above, in this action
EPA is issuing 3,083,763 kg of critical use allowances (CUAs), which
allow limited amounts of new production and import of methyl bromide
for 2008 critical uses up to the amount of 3,083,763 kg (12.1% of
baseline) as shown in Table II. EPA is also issuing 1,729,689 kg of
critical stock allowances (CSAs), which allow sales of 1,729,689 kg
(6.8% of baseline) from existing pre-phaseout inventories for critical
uses in 2008. Sections V.H. and V.I. of this preamble provide
definitions for the terms CUA and CSA. EPA explains each of the
reductions listed above in subsequent sections of this preamble.
EPA received five comments that object to the Agency's proposed
reductions and state that EPA should grant the full amount of new
production allowed by the Parties to the Montreal Protocol in Decision
XVIII/13.
EPA received one comment from Chemtura Corporation (Chemtura)
asserting that EPA ``arbitrarily'' reduces the amount of production
authorized by the Parties and ``never deigns to explain how amounts for
production previously determined to be critical are deemed no longer to
be critical.'' At the public hearing for this action three commenters
argued that the methyl bromide allocations have been reduced at each
stage of the review process and do not need to be further reduced by
the Agency in this rulemaking. When the USG prepares a critical use
nomination, it is making a determination as to the level of critical
need. It is not making a determination that a particular portion of
that need should be met from new

[[Page 74128]]

production as compared to stocks. The Parties' Decisions contain a
determination as to the level of critical need as well as a maximum
amount of that total need that may be met from new production. The
Parties' Decisions do not specify a minimum amount that must be met
from new production. It is not accurate to state, as the commenter
does, that a particular production amount is itself ``critical.'' As
explained elsewhere in this preamble, EPA is adjusting the amount of
new production to take into account stocks that it has determined to be
available.
Fumigation Service and Supply, Inc. (FSS) commented that the
Copenhagen Amendment was signed by the U.S. to phase out methyl bromide
14 years ago, and stated that this time period should have been
adequate for all users of methyl bromide to switch to alternative
fumigation methods. The commenter stated that EPA's proposed
allocations will penalize companies that have already phased out methyl
bromide. The Natural Resources Defense Council (NRDC) requested that
EPA reduce the 2008 CUE allocations by at least 1,275,000 kg and by
larger amounts in 2009 due to advancements in using sulfuryl fluoride
and iodomethane. The comments on EPA's proposed allocation amounts are
addressed in subsequent sections of this preamble and in the Response
to Comments document available on the docket for this action.
1. Background of Critical Use Amounts
The Framework Rule (69 FR 76982) and subsequent CUE rules each took
note of language regarding stocks of methyl bromide in relevant
decisions of the Parties. In developing this action, the Agency noted
that paragraph six of Decision XVIII/13 contains the following
language: ``that each Party which has an agreed critical use renews its
commitment to ensure that the criteria in paragraph 1 of decision IX/6
are applied when licensing, permitting or authorizing critical use of
methyl bromide and that such procedures take into account available
stocks of banked or recycled methyl bromide, in particular, the
criterion laid down in paragraph 1(b)(ii) of decision IX/6.'' Language
calling on Parties to address stocks also appears in prior Decisions
related to the critical use exemption.
In the Framework Rule, which established the architecture of the
CUE program and set out the exempted levels of critical use for 2005,
EPA interpreted paragraph 5 of Decision Ex. I/3, which is similar to
Decision XVIII/13(6), ``as meaning that the U.S. should not authorize
critical use exemptions without including provisions addressing
drawdown from stocks for critical uses'' (69 FR 76987). Consistent with
that interpretation, the Framework Rule established provisions
governing the sale of pre-phaseout inventories for critical uses,
including the concept of CSAs and a prohibition on the sale of pre-
phaseout inventories for critical uses in excess of the amount of CSAs
held by the seller. In addition, EPA noted that stocks were further
taken into account through the trading provisions that allow CUAs to be
converted into CSAs. In developing this final rule, EPA did not propose
changes to these basic CSA provisions.
In the August 25, 2004, Proposed Framework Rule (69 FR 52366), EPA
proposed to adjust the authorized level of new production and
consumption for critical uses by the amount of ``available'' stocks.
The methodology for determining the amount of ``available'' stocks
considered exports, methyl bromide for feedstock uses, and the need for
a buffer in case of catastrophic events. However, the Final Framework
Rule did not adopt the proposed methodology for determining available
stocks. Instead, EPA issued CSAs in an amount equal to the difference
between the total authorized CUE amount and the amount of new
production or import authorized by the Parties (Total Authorized CUE
Amount--Authorized New Production and Import).
In the 2006 CUE Rule, published February 6, 2006 (71 FR 5985), EPA
applied the approach described in the Framework Rule by allocating as
CSAs the difference between the total authorized CUE amount and the
amount of new production and import authorized by the Parties (2.0% of
baseline), as well as the small supplemental allocation in Decision
XVII/9 (0.4% of baseline). EPA also issued CSAs allowing additional
amounts of existing stocks to be sold for critical uses (roughly 3.0%
of baseline). In the 2006 CUE Rule, EPA issued a total of 1,136,008 kg
as CSAs, equivalent to 5.0% of baseline. Similarly, in the 2007 CUE
Rule, EPA issued a number of CSAs that represented not only the
difference between the total authorized CUE amount and the amount of
authorized new production and import (6.2% of baseline), but also an
additional amount (1.3% of baseline) for a total of 1,915,600 CSAs
(7.5% of baseline).
EPA viewed the allocation of additional CSA amounts as an
appropriate exercise of its discretion. EPA reasoned that the Agency
was not required to allocate the full amount of authorized new
production and consumption. The Parties agreed to ``permit'' a
particular level of production and consumption; they did not--and could
not--mandate that the U.S. authorize this level of production and
consumption domestically. Nor does the CAA require EPA to exempt the
full amount permitted by the Parties. Section 604(d)(6) of the Clean
Air Act (CAA) does not require EPA to exempt any amount of production
and consumption for critical uses, but instead specifies that the
Agency ``may'' exempt amounts for production, import, and consumption,
thus providing EPA with substantial discretion in creating critical use
exemptions.
In the July 6, 2006, Proposed 2007 CUE Rule (71 FR 38325), EPA
sought comment on ``whether, in the critical use exemption context, it
would be appropriate to adjust the level of new production and import
with the goal of maintaining a stockpile of some specified duration [*
* *] and on how many months of methyl bromide inventory would be
appropriate, in order to maintain non-disruptive management of this
chemical in the supply chain'' (71 FR 38339). In the Final 2007 CUE
Rule, EPA noted that ``the Parties have not taken a decision on an
appropriate amount of inventory for reserve. Nor has EPA reached any
conclusion regarding what amount might be appropriate. Given this
uncertainty, and the continuing decline in inventory levels, EPA is
exercising caution in this year's CSA allocation. EPA will consider
various approaches to this issue in the future based on the data
received during this notice and comment rulemaking process and other
information obtained by the Agency'' (71 FR 75399).
The benefits of pre-phaseout methyl bromide inventories for
critical uses were discussed at the 18th and 19th Meetings of the
Parties (MOPs). The Parties did not take a decision at the 18th or 19th
MOP on whether it would be appropriate to allow some specific amount of
pre-phaseout stocks to remain in inventory, or what amount that might
be. However, at the 19th MOP, the Parties did recognize that it is
appropriate to adjust new production and import levels to account for
the amount of ``available stocks.'' In Table D of the Annex to Decision
XIX/9, the Parties authorized new production and consumption for
critical uses in the United States during 2009 of 3,961,974 kg, ``minus
available stocks.''
In the proposed rule, EPA noted that in another instance--essential
use exemption process for the use of chlorofluorocarbons in the
manufacture of metered-dose inhalers--the Parties have allowed
companies to maintain

[[Page 74129]]

working stocks of up to one year's supply. As explained in the FDA
Determination Letter available on the public docket for this
rulemaking, FDA bases its determination of the amount of CFC production
that is necessary for medical devices ``on an estimate of the quantity
of CFCs that would allow manufacturers to maintain as much as a 12-
month stockpile.'' However, neither FDA nor EPA maintains a CFC reserve
on behalf of any essential use manufacturer, or guarantees that a
certain amount of CFCs will always be held in inventory.
Similarly, in developing this action, EPA did not propose to
maintain a reserve of methyl bromide for critical uses, or to guarantee
that a certain amount of methyl bromide would always be held in
inventory. EPA did, however, propose to calculate the amount of
existing methyl bromide stocks that is available for critical uses in
2008, and to consider this amount in the Agency's determination of how
much sale of existing stocks and how much production and import to
allow for critical uses in 2008. Section V.D.2. of the proposed rule
described EPA's proposed method to calculate the amount of stocks
available for critical uses in 2008. Section V.D.3. of the proposed
rule explained how EPA proposed to adjust new production and import
levels to account for the Agency's calculation of the amount of
available stocks.
In the proposed rule, EPA explained that through data collection
and experience, EPA has gained information about the CUE program that
the Agency did not have when the program began. For example, data on
the aggregate amount of methyl bromide held in inventory at the end of
calendar years 2003, 2004, 2005, and 2006 is now available in the
public docket for this rulemaking. The pre-phaseout inventory has
gradually declined to the point where, for the first time, EPA
estimates that at the start of the 2008 control period the pre-phaseout
inventory will represent less than a one-year supply of critical use
methyl bromide. EPA explained that the proposed approach is intended as
a clear and repeatable process for the Agency to make responsible
allocations that reflect a reasonable estimate of the amount of
inventory available in a future control period based on data collected
from earlier control periods.

2. Calculation of Available Stocks

In developing this action, EPA proposed a formula to calculate the
amount of available stocks in 2008, expressed as follows: AS = ES--D--
SCF, where AS = available stocks on January 1, 2008; ES = existing pre-
phaseout stocks of methyl bromide held in the United States by
producers, importers, and distributors on January 1, 2007; D =
estimated drawdown of existing stocks during calendar year 2007; and
SCF = a supply chain factor, the calculation of which was described in
the proposed rule and in the Technical Support Document (TSD) available
on the public docket for this rulemaking. Using the methodology
described in the proposed rule, EPA proposed that ES = 7,671,091 kg; D
= 3,224,351 kg; and SCF = 2,731,211 kg. EPA proposed that 1,715,438 kg
(6.7% of baseline) of pre-phaseout methyl bromide stocks will be
available for critical uses in 2008. The Agency sought comments on its
proposed methodology.
The Methyl Bromide Industry Panel (MBIP) correctly noticed in its
comments that EPA made a mathematical error in its calculation of
available stocks in the proposed rule. Even though EPA listed existing
stocks as 7,671,091 kg, which is the correct value, the Agency used the
value 7,671,000 kg in its calculation. As a result, EPA proposed
1,715,438 kg of available stocks in 2008, when EPA intended to proposed
available stocks of 1,715,529 kg. In other words, EPA underestimated
available stocks by 91 kg. EPA has corrected its calculations in this
final rule.
The North American Millers' Association (NAMA) commented that the
mechanisms for reporting pre-phaseout inventory and usage are
imprecise, and therefore the Agency's calculations of inventory levels
are likely inaccurate. The commenter did not explain why it stated that
the mechanisms for reporting stocks and usage are imprecise, and EPA
has not found any specific reason to question the accuracy of its
aggregate pre-phaseout inventory data.
EPA received seven comments supporting the creation of a supply
chain factor (SCF), but these comments asserted that the 15-week SCF
suggested for use in the event of a supply disruption is inadequate and
recommended a one-year supply instead. The commenters may have
misunderstood the assumption in the TSD, which explains EPA's analysis
of how large the SCF should be, that it would take up to 15 weeks for
adequate amounts of methyl bromide imports to reach the U.S. if there
is a domestic production failure. Because the Agency proposed an SCF
that would provide insurance against a production failure during the
peak production season (i.e. the beginning of the calendar year), the
Agency's proposed SCF is actually equivalent to about 51% of the
5,355,946 kg authorized for U.S. critical uses in 2008, or roughly a
six-month supply if demand were constant throughout the year. The
commenters provide a number of reasons why they recommend a larger
supply buffer, and EPA responds to those comments below.
Chemtura stated that EPA's proposed SCF is inappropriate because it
conflicts with the USG's position at the 19th Meeting of the Parties
(MOP) to the Montreal Protocol in Montreal, Canada, where the commenter
asserted the USG delegation requested a six month reserve for critical
uses. NRDC commented that the Parties rejected the U.S. proposal to
allow maintenance of a half-year supply chain reserve at the 19th
Meeting of the Parties. EPA disagrees with Chemtura's characterization
of the events at the September 2007 MOP, and with Chemtura's assertion
because a negotiating position does not constitute a factual basis for
a rulemaking, or a specific policy or technical finding of the USG.
Furthermore, as explained in the proposed rule (72 FR 48966), EPA's
proposed SCF provides a technical basis for calculating available
stocks that is consistent with the Montreal Protocol, and therefore
clearly within EPA's authority under Section 604(d)(6) of the Clean Air
Act. EPA also disagrees with NRDC's assertion, because the Parties
neither adopted nor rejected the creation of such a reserve. More
information about the 2007 MOP is provided in the Report of the
Nineteenth MOP, available on the docket for this action.
Chemtura and MBIP quoted the technical limitations discussed in the
TSD and stated that these limitations render the final calculation
invalid. The Agency does not agree that any of the acknowledged
technical limitations individually, or taken together, invalidate
either the proposed SCF or EPA's calculation of available pre-phaseout
inventory. EPA's proposed SCF should be considered within the context
of the United States' renewed commitment in paragraph six of Decision
Ex.II/1, which was restated in Decision XVIII/13, to ensure that the
criteria in Decision IX/6(1), which is explained above, are applied
when allowing the use of methyl bromide. One of the primary ways that
EPA met this commitment in previous years was to consider the aggregate
quantity of existing stocks, and to reduce authorized new production
levels to encourage a more rapid drawdown of existing stocks than
required by the Parties. EPA's consideration of stocks in

[[Page 74130]]

determining the appropriate production level is partially responsible
for steadily shrinking the volume of pre-phaseout inventory to less
than half of its 2003 amount, and the Agency projects that aggregate
stocks will represent less than a one year supply of critical use
methyl bromide at the beginning of 2008. With existing inventories
declining significantly, EPA asked, at what point should the Agency
stop facilitating a more rapid inventory drawdown? To answer this
question, and to enhance the transparency and uniformity of future CUE
allocation rules, EPA proposed to estimate the level of aggregate
inventory that would be necessary to respond to a scenario in which all
methyl bromide production in the U.S. is abruptly halted during peak
production season. The Agency did not conduct a statistical or
probability analysis of the likelihood of this scenario. EPA chose this
scenario because in the U.S. methyl bromide, unlike most commercial
chemicals, is produced at only one facility. Therefore, a scenario in
which this facility completely ceases production is of special concern.
In estimating the amount of methyl bromide that would be necessary in
such a scenario, EPA considered the effect of such a production failure
during the peak production season. EPA chose this conservative approach
partly in recognition that there could be other contingencies that
might affect critical users' ability to obtain methyl bromide.
Five commenters raised examples of other events that could occur,
and argued that the SCF should account for all of these contingencies
happening together. EPA notes that the probability that all of these
contingencies occurring together is lower than the probability that any
of them will occur individually. In addition, many of the possible
events described by the commenters would have an uncertain effect not
easily quantified. The scenario that EPA used as a basis for the size
of the proposed SCF is straightforward and allows for quantification.
In general, EPA relies on private entities to take prudent steps to
protect themselves against various contingencies. The inclusion of the
SCF in the calculation of available stocks provides suppliers an
opportunity to maintain a buffer, but is not designed to guarantee the
availability of pre-phaseout inventory in all conceivable circumstances.
NRDC and Dow stated that EPA has no basis for assuming a
catastrophic loss at the U.S. methyl bromide production plant, as no
such event has ever occurred at this location. In addition, they found
unlikely EPA's assumption of such an event happening right after the
first of the year. First, EPA points out--as it did in the proposed
rule--that the methyl bromide industry is unlike many others because
there is only one active production facility in the United States. EPA
recognizes that a catastrophic loss is unlikely, but this does not
obviate the need to plan for such a scenario. While EPA expects private
entities to take prudent steps to protect themselves, EPA does not wish
to render them incapable of maintaining a reasonable supply buffer. In
developing the TSD, the Agency estimated that significant imports could
arrive in up to 15 weeks. Depending on what season the production
failure occurred, EPA estimated that the lost production would be
within the range of 11-51% of the 2008 demand for 2008 critical use
methyl bromide. EPA proposed the conservative value, an SCF equivalent
to 51% of the 2008 need for critical use methyl bromide, in part to
account for a wider range of other supply disruption scenarios that
could occur.
Below, EPA reiterates the technical limitations of the TSD, and
explains why each limitation does not render the final estimate
invalid, as a number of the commenters contended.
The TSD stated that, ``pre-2005 inventory is held by multiple
companies, and the sale of that inventory is governed by market forces.
Hence, in the event of a production failure, the stockpile could be
purchased by any user (i.e., critical use/non-critical use, quarantine
and preshipment, feedstock, or foreign users). Most likely, the
stockpile would go to the user willing to pay the highest price in time
of short-term global shortage. Second, there may also be existing
contract agreements that must be honored. As a result, there is no
guarantee that the existing pre-2005 inventory of methyl bromide will
flow towards U.S. critical uses in the case of a production failure.''
Quarantine and preshipment (QPS) refers to the exemption from the
phaseout of methyl bromide for quarantine and preshipment applications
as defined in the January 2, 2003, QPS Final Rule (68 FR 238) and at 40
CFR 82.3. EPA believes that methyl bromide for QPS, feedstock, and
exempted Article 5 country (developing country) uses would not have to
be supplied from pre-phaseout inventory after a supply disruption,
because, as explained in the proposed rule, existing regulations allow
manufacturers and distributors to manage inventories of methyl bromide
designated for those purposes (72 FR 48968).
There is precedent in the CUE program for allowing methyl bromide
distributors to respond to market forces. In the Proposed Framework
Rule, EPA explained that, ``The issuance of critical stock allowances
(CSAs) does not obligate holders to make these quantities available to
critical uses if they choose for practical or business reasons not to
sell or distribute stocks to critical uses. However, EPA believes that
these firms will respond to market conditions'' (69 FR 52376).
Similarly, EPA's consideration of a SCF in its calculation of available
stocks does not obligate suppliers to sell their stocks to critical
users following a supply disruption. EPA is unable to predict exactly
how stocks would be used after a disruption. All things considered, EPA
does not believe that the possibility that some inventory would be
consumed by non-critical users after a supply disruption should
invalidate or alter the size of the proposed SCF.
The TSD also stated that, ``it is not clear that a contingency plan
exists amongst the various methyl bromide producers as to how to
respond to a major supply disruption. Thus, the reallocation of
shipping containers to import methyl bromide into the United States may
not occur smoothly over the first weeks or months while the various
manufacturers, shippers, and customers sort out their arrangements.''
Similarly, two commenters expressed concern that importing the methyl
bromide necessary to meet U.S. demand would take far longer than 15
weeks due to inflexibilities in the methyl bromide shipping system.
Chemtura stated that ``adjusting distribution patterns to accommodate a
sudden shift in worldwide demand and supply, as would occur with the
loss of U.S. production, would require an extensive, ad hoc redesign of
this distribution system with very little, if any, lead time.''
The possibility that methyl bromide distributors have not conducted
emergency response planning does not invalidate the SCF estimate
described in the TSD. Methyl bromide distribution is the responsibility
of the methyl bromide industry and not EPA. EPA's role is to allow
producers and distributors to satisfy critical needs for methyl
bromide, not to guarantee that they will do so. The Agency carefully
considered physical shipping constraints that dictate how rapidly
methyl bromide distribution patterns can shift, including ISO container
capacity, the length and timing of shipping routes, and the volume of
methyl bromide that could be shipped internationally to maintain the
global distribution system following a

[[Page 74131]]

U.S. production failure. However, for the reasons expressed above, the
TSD does not assume that distributors would need long periods of time
to redesign their distribution patterns in order to respond.
Furthermore, since each shipping route would take weeks to complete,
the TSD assumed that industry would have ample planning time to re-
route containers as necessary.
Finally, the TSD stated that, ``characteristics such as the purity
of the pre-2005 inventory of methyl bromide could affect users' ability
to use this inventory to meet their needs for methyl bromide; however,
these characteristics are not known. For example, some of the methyl
bromide held in inventory intended for pre-plant uses may be pre-mixed
with chloropicrin in compressed gas cylinders and therefore could not
be used for post-harvest fumigation.'' Similarly, EPA received comments
from The Industrial Fumigant Company (IFC) and MBIP that expressed
concern about the availability of stocks of methyl bromide free of
chloropicrin for the post-harvest sector. MBIP stated that chloropicrin
is premixed in ``virtually the entire'' U.S. inventory of existing
stocks. IFC was especially concerned about the possible need for
emergency fumigation treatments, which would require pure methyl bromide.
EPA's current reporting requirements do not request information
about all of the characteristics, or composition, of the existing
stockpile. Just prior to publishing the proposed rule, the Agency
received anecdotal information suggesting that a large percentage of
the existing stockpile is mixed with chloropicrin, and therefore
unsuitable for post-harvest uses. EPA has also heard conflicting
reports stating that a substantial portion of the existing stockpile is
pure methyl bromide. The Agency is currently considering options to
obtain more information about the existing stockpile, including but not
limited to, requesting information from holders of pre-phaseout
inventory using information-gathering authority under section 114 of
the Clean Air Act. Because the CUA amount in today's final rule is less
than the production amount authorized by the Parties, EPA may consider
allowing the conversion of some CSAs to CUAs in appropriate
circumstances. The Agency also notes that if pre-phaseout inventory
contains very small amounts of pure methyl bromide, then allowing for a
larger supply buffer composed of that inventory would not remedy the
commenters' concerns.
Chemtura commented that EPA needs to acknowledge methyl bromide's
role as a tool in responding to catastrophic events such as a need to
provide widespread re-fumigation after a natural disaster, and that
methyl bromide has security as well as economic importance. EPA agrees
with the commenter and acknowledges methyl bromide's role in responding
to the situations described by the commenter. Methyl bromide's role in
responding to such challenges as those listed by the commenter is one
of the reasons EPA proposed a SCF in its analysis of available stocks,
and based its estimate of the SCF on conservative assumptions.
Four commenters stated that the SCF should be a one-year supply
because of the global ramifications that the supply disruption from the
U.S.'s one plant could have. EPA agrees that a severe critical use
methyl bromide shortage in the U.S. could have important global
ramifications. That is one reason EPA considered international factors
in its SCF analysis. For example, after close scrutiny, EPA estimated
that foreign production capacity is capable of meeting global demands
for methyl bromide. While the commenters did not provide a specific
basis for why a one-year supply would be most appropriate, EPA responds
to some of their other concerns below and in the Response to Comments
document on the docket for this rulemaking.
Four commenters raised concerns about the ability of the Israeli
plant, which could supply critical use methyl bromide to the U.S. after
a domestic production failure, to divert methyl bromide to the U.S.,
especially in light of conflicts occurring in the Middle East. The
commenters did not provide specific information about the likelihood or
consequences of the Israeli supply disruption that they mentioned. The
TSD required a determination about which contingencies to use as the
basis for the analysis. Contingencies that were too speculative or
whose effects could not be readily quantified were not included in the
analysis. However, EPA adopted a conservative approach in recognition
that its analysis could not address all possible contingencies. One of
the commenters stated that the U.S. would not be sacrificing
environmental goals by maintaining a one-year SCF because stockpiled
methyl bromide that is not in use can do no harm to the environment.
EPA notes that using existing methyl bromide can displace the need for
new production, with corresponding environmental benefits.
MBIP and Chemtura both asserted that importing methyl bromide to
meet U.S. demand would take longer than the 15 weeks EPA estimates.
MBIP claimed that the current capacity of specialized ISO containers,
which are used to ship methyl bromide overseas, is inadequate to
maintain global distribution following a supply disruption. MBIP
stated, ``Assuming round trip times of 45 days for shipments from
Israel to Europe and 90 days for all other trips, the current worldwide
fleet of ISO containers would need to immediately grow by more than 35%
to establish and maintain the global distribution system for methyl
bromide within the 15-week period estimated by EPA.'' In their public
comments Chemtura stated, ``To assist the Agency further in
understanding the logistical challenges raised by a shut-down of U.S.
production, Chemtura is submitting, as business-confidential exhibits,
two diagrams showing its estimates of the current global distribution
map, and how the distribution map would change if U.S. production were
suddenly disrupted.''
EPA disagrees with MBIP's claim that the current fleet of ISO
containers would be unable to maintain the global distribution system
for methyl bromide within the 15-week period estimated by the Agency.
The conclusions described in the TSD are based, in part, on a detailed
analysis of the capacity of the existing ISO container fleet, and other
shipping logistics. EPA could not reconcile the differences between the
Agency's estimate and MBIP's estimate, because MBIP did not provide
details about how it concluded that the existing fleet of containers
would be inadequate.
After close analysis, EPA found a number of points of disagreement
with the assumptions in Chemtura's confidential submission. In general,
these disagreements are related to concerns that Chemtura raised in its
public comments, which EPA addresses in this preamble. For
confidentiality reasons, the Agency is unable to elaborate on how
Chemtura's submission conflicts with the analysis explained in the TSD.
The Agency closely analyzed Chemtura's confidential submissions and did
not find a specific reason therein to revise the TSD, or the size of
the proposed SCF. EPA's detailed response to Chemtura's confidential
comments has been placed on a confidential section of the docket because
it includes information claimed as confidential business information.
MBIP raised several concerns about the amount of time it would take
for foreign methyl bromide producers--specifically Israel Chemicals
Ltd. (ICL)--to ramp-up production after a U.S. production failure. MBIP
stated that increasing foreign production would take longer than EPA
estimated because: Methyl bromide manufacturers

[[Page 74132]]

typically plan production several months in advance; foreign producers
may have to wait for government approval before increasing their
production; and an immediate increase in methyl bromide production may
not be possible due to limited storage capacity.
In the analysis underpinning the TSD, EPA built in a certain amount
of time--starting when U.S. production fails--for foreign producers to
make arrangements and adjustments to their production schedules before
they would need to ramp-up production. EPA considered the ability of
foreign producers to ramp-up production, including gaining access to
raw materials and storage capacity. Foreign producers could increase
production and exports to the United States without approval from the
Parties to the Montreal Protocol, so long as entities holding CUA
allowances are willing to expend their CUAs to import that material.
MBIP did not provide specific information about how the concerns it
raised should change the analysis contained in the TSD, or whether
there are steps that foreign producers could take in advance as
contingency measures that could alleviate these concerns. EPA responds
to these comments in more detail in the Response to Comments document
on the docket for this action.
MBIP noted that ``significant regulatory challenges could hamper
companies' ability to obtain a sufficient supply of chloropicrin for
methyl bromide formulations'' and that ``if quantities of chloropicrin
had to be exported from the U.S. to Israel, several CWC [Chemical
Weapons Convention] regulatory requirements would be triggered.'' While
it is true that the export of chloropicrin to Israel would involve
certain export certificates, it is not clear that quantities of
chloropicrin would need to be exported from the U.S. to Israel.
According to preliminary Form R reports from the 2006 Toxic Release
Inventory (TRI), as well as past reports from 2005, methyl bromide/
chloropicrin products are currently formulated at five or more
facilities around the United States (EPA has placed information
collected from the TRI on the docket for this action). Thus, at least
for the products sold by these distributors to U.S. critical users,
chloropicrin would not be required to be exported to Israel for
formulation. The commenter did not provide specific information about
the likelihood that the CWC, or other regulatory measures, would impede
the supply of methyl bromide products to U.S. critical users, or
whether advance planning could help resolve potential difficulties.
MBIP commented that the distribution system for methyl bromide in
the U.S. is complex and that imports would not reach all repackaging
locations in the same time period. The commenter stated that 500,000
kilograms of methyl bromide must remain in the system (a minimum of
3,231 metric tons of pre-phaseout stocks) to keep the domestic
distribution system functional. EPA specifically accounted for this
concern in the proposed SCF analysis. The SCF would replace lost
production for 15 weeks until imports arrive. Assuming these imports
are all shipped to the location where methyl bromide is currently
produced in the U.S., imported methyl bromide could be expected to
reach repackaging locations in the same amount of time as it would if
there were no production failure. EPA recognizes that the timely
distribution of pre-phaseout stocks after a domestic production failure
would depend upon business decisions made by suppliers. However, the
proposed SCF is large enough to give suppliers the opportunity to
provide uninterrupted distribution in the analyzed scenario.
In its comments, MBIP stated: ``EPA does not consider regulatory
obstacles that may delay the availability of alternate supply * * * In
addition, formulations of methyl bromide are regulated by EPA as
pesticides under FIFRA. As such, suppliers of these products must
maintain registrations with EPA. Under FIFRA, the source of methyl
bromide used in the products must be identified to EPA and detailed
information about the manufacturing process must be submitted. In
addition, the labels for all products must bear a special number that
denotes the pesticide producing establishment where the product is
formulated. If production is shifted to another location, the source
information, manufacturing process data, and labels for all affected
products would have to be updated before the products could be imported
or distributed in the U.S. For example, if the methyl bromide that is
sourced from Israel is made using a different manufacturing process
than those on file with EPA, U.S. registrants may need to notify EPA of
the change in the formulation process that is on file or even file an
amendment to that process.''
Pesticide registration information is highly confidential, but
critical sales data shows that imported methyl bromide is registered
for some critical uses in the U.S. EPA does not obligate producers to
register their products for all U.S. critical uses, but the Agency
believes that firms will respond to market conditions, and undertake
appropriate emergency response planning. A firm's decision about
whether to register its product for critical uses is similar to
business planning decisions under the established critical stock
allowance policy noted above; in which EPA let firms respond to market
conditions, instead of requiring them to sell methyl bromide to
critical users (69 FR 52376). The Agency believes that the added
transparency of the SCF approach will help companies respond to market
conditions more rapidly and appropriately.
NRDC and Dow objected to the proposal to create an SCF and believe
the methyl bromide in question should be used to reduce or eliminate
the need for new production and import allocations for 2008. The Agency
explained the reasons for proposing an SCF in the proposed rule. EPA
responds to the commenters' specific concerns below and in the Response
to Comments document.
NRDC stated that the SCF will be equivalent to existing stockpiles
and will be easy to get and use by those with restricted use pesticide
licenses. NRDC also stated that stocks will not be maintained for the
purpose of the SCF--the stocks intended for the SCF that remain
unallocated for CUEs can be freely used by non-critical users. The
commenter is correct that this supply buffer would be composed of
methyl bromide produced before the January 1, 2005, phaseout. The
commenter is also correct that non-critical users are not barred from
purchasing pre-phaseout methyl bromide inventory. In the Final
Framework Rule, EPA explained its rationale and authority for allowing
non-critical users to access pre-phaseout inventory (69 FR 76988). EPA
is not revisiting that issue in this rulemaking.
The Agency does not believe that the fact that producers and
distributors may sell pre-phaseout inventory to non-critical users
invalidates the proposed SCF, or EPA's proposed estimation of the
amount of available stocks in 2008. The commenter is speculating about
what suppliers would do given the opportunity to maintain a buffer,
which is something that has not yet been tested. Information on pre-
phaseout inventory drawdown during 2008 will inform EPA's future CUE
rulemakings.
While EPA did not propose to require that distributors keep the SCF
amount as a supply buffer for critical users, Section V.D.3. of the
proposed rule laid out an approach in which the Agency would stop
drawing down stocks faster

[[Page 74133]]

than the minimum agreed by the Parties, if EPA determines that
available stocks will be less than the SCF amount. By considering a SCF
in its analysis of the amount of stocks that are available for critical
uses, EPA is giving producers and distributors the opportunity to
provide a reasonable supply buffer to satisfy critical needs.
At the public hearing for this action the California Strawberry
Commission (CSC) and Ameribrom Inc. commented that the private
companies that own pre-phaseout inventory have no obligation to sell
it. Ameribrom commented that the SCF needs to be held by manufacturers
and importers because distributors, who own a large portion of the pre-
phaseout inventory, do not distribute the methyl bromide when it is
needed. EPA notes that the supply of pre-phaseout inventories to
critical users is based upon private business decisions that the Agency
does not control and responds to these comments in more detail in the
Response to Comments document available on the docket for this action.
Dow stated that the SCF should be based on what it called ``the
actual 2008 methyl bromide demand (4,816,514 kg) as determined by the
U.S. Government and as proposed in the rule,'' rather than the amount
approved by the Parties (5,355,946 kg). The commenter stated that an
SCF calculated based upon a methyl bromide volume that exceeds the
critical need for 2008 renders the SCF value and basis for the
calculation nonsensical. Dow concluded that this simple recalculation
would reduce overall new production in 2008 by more than 250,000 kg.
It appears that the Dow's figure for ``actual methyl bromide
demand'' is derived by subtracting the proposed 539,432 kg carryover
amount (72 FR 48969), from the critical use amount agreed to by the
Parties (5,355,946 kg). As discussed in Section V.D.4. of this
preamble, EPA reduces new production to account for carryover critical
use material in order to prevent companies from building inventories of
newly produced critical use methyl bromide. EPA reduces new production
amounts to account for carryover, but in doing so the Agency is not
reopening the issue of the overall amount of total critical need. EPA
expects that critical users will satisfy the remainder of their
critical needs by using the critical use methyl bromide that was unused
in previous control periods. Therefore, the SCF is only affected by
reductions to account for the feasibility of alternatives. Accordingly,
for the reasons explained in Section V.D.6. of this preamble, EPA is
reducing the total 2008 CUE by 27,769 kg to account for the increased
uptake of sulfuryl fluoride and iodomethane in 2008. The Agency has re-
calculated the SCF by applying a revised 2008 critical use demand of
5,328,177 kg. This adjustment reduces the SCF by 14,160 kg.
To clarify, EPA proposed that the SCF should represent about 51% of
the total critical need in 2008. In the proposed rule, the Agency
assumed that the total critical need in 2008 would be 5,355,946 kg, as
agreed to by the Parties in Decision XVIII/13. Therefore, EPA proposed
an SCF of 2,731,211 kg (5,355,946 kg * 50.994% = 2,731,211 kg). As
explained in Section V.D.6. of this preamble, EPA now estimates that
the total critical need in 2008 will be 27,769 kg less than the Parties
authorized in Decision XVIII/13, because EPA is making further
reductions to account for the uptake of sulfuryl fluoride for cocoa
bean fumigation, and for the newly registered fumigant iodomethane.
Therefore, in this final rule EPA estimates that the total critical
need in 2008 will be 5,328,177 kg. Accordingly, EPA now calculates an
SCF of 2,717,051 kg (5,328,177 kg * 50.944% = 2,717,051 kg).
Dow commented that the SCF is counterproductive to the phase-out of
methyl bromide and offers disincentives to companies to invest in
alternatives. EPA recognizes that a very large methyl bromide inventory
could have the counterproductive effects that the commenter mentioned.
In response to this concern, EPA has encouraged a faster draw down of
the pre-phaseout inventory than the minimum agreed by the Parties. The
Agency has also explained the rigorous technical review process for
critical uses both domestically and internationally. Companies should
be aware that as soon as technically and economically feasible methyl
bromide alternatives are available for particular uses, critical use
exemptions will be reduced accordingly. Because the SCF is a percentage
of the current year's estimated critical need, companies should also
consider that, all things being equal, the SCF will change in
accordance with critical use exemption levels.
NRDC objected to the SCF because Congress and the Parties did not
intend for EPA to designate stocks as ``unavailable.'' EPA did not
propose to designate any amount of pre-phaseout inventory, or any
specific holdings, as ``unavailable.'' EPA proposed to recognize the
amount of existing stocks that is available. As discussed above and in
the proposed rule, in paragraph 4 of Decision XVIII/13, and similar
Decisions, the Parties indicated that each individual Party has
discretion to recognize the amount of existing stocks that is available
for critical uses. Most recently, Table D of the Annex to Decision XIX/
9 explicitly indicates that for the 2009 control period the United
States will reduce authorized new production levels to account for the
amount of available stocks. Thus, EPA's proposed approach is consistent
with the practice under the Montreal Protocol. It is also an
appropriate exercise of the discretion granted by Congress under
Section 604(d)(6) of the Clean Air Act.
NRDC stated that no chemical company keeps more than a two- or
three-month supply of a chemical, yet the SCF is nearly a four-month
supply. The commenter provided no evidence for its assertion that no
chemical company keeps more than a two- to three-month supply of a
chemical. Furthermore, the methyl bromide industry is unusual because
there is only one production facility in the United States and in fact
in the Western Hemisphere. The proposed rule estimated that the SCF for
2008 should be 2,731,211 kg, or roughly a six-month supply of critical
use methyl bromide if demand were constant throughout the year.
NRDC commented that methyl bromide users can make temporary
adjustments at a manageable cost in the event of a supply disruption,
such as using alternatives or shifting fumigation schedules. EPA agrees
that depending on when a supply disruption occurs, it is possible that
a limited number of entities might be able to delay scheduled
fumigations. It is also possible that some non-critical users might
need to access the pre-phaseout inventory for security or other
emergency purposes. We do not know whether these effects would occur or
to what extent they would offset each other. Such speculation does not
change the validity of EPA's estimate that 2,717,051 kg is a reasonable
SCF for 2008. EPA disagrees with the commenter's assertion that
critical users could readily switch to alternatives following a supply
disruption. By definition, and as confirmed by several rounds of expert
review, entities that qualify for critical use methyl bromide do not
have access to technically and economically feasible alternatives.
In this final rule, EPA is adopting the proposed formula for
calculating the amount of stocks available for critical uses in 2008,
expressed as follows: AS₂₀₀₈ = ES₂₀₀₇-
D₂₀₀₇-SCF₂₀₀₈, where AS₂₀₀₈ =
available stocks on January 1,

[[Page 74134]]

2008; ES₂₀₀₇ = existing pre-phaseout stocks of methyl
bromide held in the United States by producers, importers, and
distributors on January 1, 2007; D₂₀₀₇ = estimated drawdown
of existing stocks during calendar year 2007; and SCF₂₀₀₈ =
a supply chain factor for 2008, the calculation of which was described
in the proposed rule and in the TSD available on the public docket for
this rulemaking. Using the methodology described in the proposed rule,
correcting for mathematical errors explained above, and reducing 2008
critical needs by 27,769 kg to account for the uptake of sulfuryl
fluoride and iodomethane explained below in Section V.D.6., EPA finds
that ES₂₀₀₇ = 7,671,091 kg; D₂₀₀₇ = 3,224,351 kg;
and SCF₂₀₀₈ = 2,717,051 kg. Therefore, EPA calculates that
1,729,689 kg (6.8% of baseline) of pre-phaseout methyl bromide stocks
will be available for critical uses in 2008.
EPA believes 1,729,689 kg is a reasonable estimate of the amount of
stocks that should be considered available for critical uses in 2008,
especially given the U.S. role as one of the world's largest suppliers
to meet global methyl bromide needs. EPA also believes the methodology
used to make this estimate is consistent with the relevant Decisions of
the Parties, including Decision IX/6, and the Clean Air Act. EPA has
determined that the approach finalized in this action is the most
efficient and reasonable way to balance the goals of satisfying
critical needs for methyl bromide and also facilitating the transition
to ozone-safe alternatives. Finally, as discussed above and in the
Response to Comments document, EPA considered all of the comments
received and did not find a specific reason to change its proposed
refined approach for calculating the amount of available stocks.
3. Adjusting New Production and Import Amounts To Account for Available
Stocks
In developing this action, EPA proposed to refine its allocation
approach to account for the amount of stocks available for critical
uses in 2008, and each year thereafter as appropriate and feasible. EPA
proposed to allocate critical stock allowances (CSAs) in 2008 in an
amount equal to the quantity of pre-phaseout inventory ``available''
for critical uses in 2008, as estimated by EPA using the formula
described above. In the proposed rule, EPA calculated that there would
be 1,715,438 kg of available inventory in 2008. Therefore, EPA proposed
to allow the sale of 1,715,438 kg from existing stocks for critical
uses in 2008 by allocating an equivalent number of CSAs. As in past
years, EPA proposed to adjust the critical use allowance (CUA) amounts
accordingly, so that the total number of CUAs and CSAs is not greater
than the total critical use amount authorized by the Parties. In the
proposed rule, EPA noted that to account for carryover amounts of
methyl bromide, amounts for research purposes or other appropriate
reasons, including updated information on alternatives, EPA may
allocate a total number of CUAs and CSAs that is less than the total
critical use amount authorized by the Parties for 2008. EPA also
proposed a method for adjusting new production and import to account
for the amount of available stocks in future years if the amount of
available stocks is less than the amount of stocks the Parties
authorize for critical uses for the year in question. EPA sought
comments on its proposed approach for adjusting new production and
import amounts to account for the amount of stocks available for
critical uses.
EPA received six comments that expressed concern about the proposed
level of CSAs for 2008. The commenters noted that the proposed amount
of methyl bromide to come from pre-phaseout inventory is greater than
the amount agreed to by the Parties in Decision XVIII/13. The proposed
rule and Section V.D.1. of this preamble explain that in previous years
EPA has determined that more critical use methyl bromide should come
from stocks than the minimum levels agreed to by the Parties, and that
EPA understands those actions to be in compliance with the Montreal
Protocol, and within the Agency's authority established in Section
604(d)(6) of the Clean Air Act. Furthermore, the inclusion of a SCF in
EPA's determination of the amount of available stocks should relieve
some of the commenters' concerns.
MBIP commented that EPA's proposal to use pre-phaseout inventory
for critical uses jeopardizes the U.S.'s ability to address a
catastrophic supply disruption. The proposed rule and Section V.D.2. of
this preamble explain that by including a SCF in its calculation of
available stocks, EPA is allowing for the maintenance of a supply
buffer that could help to satisfy critical needs in the event of an
emergency, such as a major supply disruption.
The Florida Fruit and Vegetable Association (FFVA) stated that EPA
should develop and make available to CUE holders a timely and accurate
accounting system for use during the control period for both new
production and CSAs. The commenter contended that this accounting
system would be important as stockpiles decrease and would allow the
Agency flexibility to shift from CSAs to new production during the
control period if necessary. The commenter stated that without this
flexibility the Agency should authorize the total quantity approved for
the 2008 control period as new production with the understanding that
the portion of material not used as a result of the use of pre-phaseout
stocks during 2008 would be deducted from future authorizations. If EPA
understands correctly, the commenter is concerned that at some point
existing stocks will not be able to satisfy all of the CSAs issued by
EPA for a given control period, and that if this happens during a
control period, EPA should convert CSAs to CUAs. The Agency believes
that the proposed approach for determining CUA and CSA amounts, which
accounts for the amount of available stocks, is a major step towards
decreasing the probability that EPA would issue more CSAs than existing
stocks are able to satisfy in a given control period. Currently, EPA
collects annual data about critical sales of new production and pre-
phaseout inventory. EPA agrees with the commenter that collecting this
data more often, quarterly for example, could have certain benefits
related to monitoring pre-phaseout inventory information. As the
commenter stated, more timely data could help EPA determine more
rapidly if it would be appropriate to allow the conversion of some CSAs
to CUAs. However, by increasing the frequency of reporting, the
commenter's proposal would impose a substantial administrative burden
upon the regulated community, especially upon small distributors.
Considering the approach that EPA is finalizing in this rule, which
should decrease the likelihood of impractically large CSA allocations,
the Agency does not believe the benefits of the commenter's proposal
would justify the additional costs it would impose.
In this rule, EPA is adopting the proposed approach for adjusting
allowable new production and import levels to account for the amount of
available stocks. As discussed above, this approach is consistent with
the relevant Decisions of the Parties, especially Table D of the Annex
to Decision XIX/9, which for 2009 explicitly authorizes for the United
States a certain amount of new production and import ``minus available
stocks.'' After considering all of the comments received, EPA believes that

[[Page 74135]]

this is the most reasonable, efficient, and transparent way for the
Agency to continue to facilitate responsible management of pre-phaseout
inventory. Therefore, with this action the Agency is allowing 1,729,689
kg of methyl bromide to be supplied from pre-phaseout inventory for
critical uses in 2008 by issuing an equivalent number of CSAs, and
adjusting the amount of CUAs accordingly.
To clarify, the critical use amounts authorized by the Parties in
Decision XVIII/13 for 2008 total 5,355,946 kg. However, the maximum
amount of authorized new production or import as set forth in Table D
of the Annex to Decision XVIII/13 is 4,595,040 kg. This means that
while the Parties require only 760,906 kg of stockpile consumption if
the entire U.S. allotment is utilized, EPA is allowing 1,729,689 kg of
2008 critical use needs to be met from pre-phaseout inventory. Thus, to
account for the amount of available stocks, EPA is allocating 968,783
kg of extra pre-phaseout inventory consumption for critical uses in
2008. As in past years, EPA proposed to adjust the amount of CUAs
accordingly, so that the sum of CUAs and CSAs is not greater than the
total amount authorized by the Parties. After accounting for the
additional reductions discussed below for unused critical use methyl
bromide at the end of 2006, increased uptake of sulfuryl fluoride for
post-harvest cocoa bean fumigation in 2008, transition to the recently
registered fumigant iodomethane, and reductions to encourage research
amounts to be supplied from pre-phaseout inventory, EPA is allowing
3,083,763 kg of new production and import for critical uses in 2008.
In developing this action, EPA proposed to adjust new production
and import to account for the amount of available stocks in future
years if the amount of available stocks is less than the amount of
stocks the Parties authorize for critical uses for the year in question
(72 FR 48969). EPA did not receive any comments on how it proposed to
account for available stocks if the amount of available stocks is less
than the amount of stocks the Parties authorize for critical uses for
the year in question. If that scenario arises, EPA may adopt the
approach it described in the proposed rule after a notice and comment
rulemaking process. EPA estimates that there will be sufficient pre-
phaseout inventory at the beginning of the 2009 control period to
satisfy the amount of 2009 inventory drawdown (300,000 kg) for critical
uses authorized by the Parties in Decision XIX/19.
4. Treatment of Carryover Material
As described in the December 23, 2004, Framework Rule (69 FR
76997), EPA is not permitting entities to build stocks of methyl
bromide produced or imported after January 1, 2005, under the critical
use exemption. Under current regulations, quantities of methyl bromide
produced, imported, exported, or sold to end-users under the critical
use exemption in a calendar year must be reported to EPA the following
year. These reporting requirements appear at Sec. Sec. 82.13(f)(3),
82.13(g)(4), 82.13(h)(1), 82.13(bb)(2), and 82.13(cc)(2). EPA uses the
reported information to calculate the amount of methyl bromide that was
produced or imported under the critical use exemption, but not exported
or sold to end-users in that year. An amount equivalent to this
``carryover,'' whether pre-plant or post-harvest, is then deducted from
the total level of allowable new production and import in the year
following the year of the data report. For example, the amount of
carryover from 2005, which was reported in 2006, was deducted from the
allowable amount of production or import for critical uses in 2007. In
developing this action, EPA proposed to treat carryover the same way
for 2008.
As discussed in Section V.D.2., carryover critical use material is
not included in EPA's definition of existing stocks as it applies to
the proposed formula for determining the amount of available stocks.
EPA is not including carryover amounts as part of existing stocks,
because doing so could lead to a double-counting of carryover amounts,
and thus a double reduction of CUAs. The definition of existing stocks
specifically refers to pre-phaseout inventory, not material produced or
imported under the critical use exemption.
In developing this action, EPA explained that in February 2007 the
Agency, received reports about critical use methyl bromide production,
imports, exports, sales and/or inventory holdings in 2006 under the
requirements at 40 CFR 82.13. The information reported to EPA indicated
that 6,923,926 kg of critical use methyl bromide was acquired through
production or import in 2006, and 6,384,493 kg of critical use methyl
bromide was exported or sold to end-users in 2006. EPA proposed to
calculate the amount of carryover at the end of 2006 with the method
used in column L of the U.S. Accounting Framework for critical uses of
methyl bromide. The Agency calculated that the carryover amount at the
end of 2006 was 539,433 kg, which was the difference between the
reported amount of critical use methyl bromide acquired (i.e. produced
or imported) in 2006 and the reported amount used (i.e. sold to end
users in 2006) (6,923,926 kg-6,384,493 kg = 539,433 kg). On March 16,
2007, in the 2006 U.S. Accounting Framework for critical uses of methyl
bromide, which is available on the docket for this action, the Agency
officially reported 539 metric tons of carryover from 2006 to the UNEP
Ozone Secretariat.
In the proposed rule, EPA brought attention to a petition submitted
by Chemtura that proposed changes to: (1) The Agency's established
method for calculating carryover; (2) the distribution of subsequent
CUA reductions; and (3) the existing recordkeeping and reporting
requirements. The Agency made Chemtura's petition available on the
public docket, and specifically sought detailed comments on Chemtura's
proposals. EPA asked that comments suggesting alternative methods for
calculating the amount of carryover material at the end of each year be
detailed and comprehensive; address what changes would be needed to the
reporting requirements; and discuss the degree of administrative burden
that alternative methods might impose. The Agency also sought comment
on ways to improve the completeness of data reporting by affected
companies. EPA emphasized that the process for calculating the amount
of carryover CUE material each year relies on data regarding sales to
end users as reported to EPA by distributors and applicators. The
Agency specifically requested comment on whether requiring producers,
importers, and distributors to report the names of distributors and
third-party applicators to which they have sold critical-use methyl
bromide would result in more complete reporting, and whether this would
justify the additional burden of such requirements.
Chemtura's petition asserted that ``EPA must adjust its methodology
for calculating carry over.'' EPA disagrees for two fundamental
reasons: the Agency's established methodology is a simple and accurate
way to calculate the carryover amount each year; and adjusting the
established method could create international confusion about U.S.
reporting, which could jeopardize international authorizations of new
production to satisfy the critical needs of U.S. agriculture. EPA
expands on these points below.
Six commenters supported Chemtura's request that EPA revise its
carryover calculation procedures to consider a broader range of information

[[Page 74136]]

sources when determining the carryover amount from a given control
period. The commenters suggested that EPA calculate the carryover as
the sum of all critical use methyl bromide that companies report as
being held in inventory. In its comments, Chemtura recognizes that this
approach would not fully address the problem of incomplete reporting,
and suggests that a conservative margin for error could be achieved by
calculating the average carryover for all reported sales and applying
the average to any remaining unreported volume. If EPA understands
correctly, the commenters are requesting an ``inventory approach'' to
calculate the carryover amount, in which EPA would calculate carryover
as the sum of critical use methyl bromide inventory reported in section
2.6 of the annual Sales of Critical Use Methyl Bromide to End Users
Reports (``sales reports''), a sample of which is posted on the docket
for this rulemaking. EPA understands that the commenter believes the
inventory method would result in a lower carryover amount and would be
more accurate. However, EPA does not believe the inventory method would
be as accurate as the established ``sales method'' that the Agency uses
to report carryover amounts internationally.
For 2006, the inventory method would rely on data reported in
section 2.6 of the annual sales report forms. In collaboration with
major methyl bromide producers and distributors, the reporting forms
were updated and posted on EPA's Web site in 2006. EPA posted
instructional materials online with the updated forms, and held
compliance assistance meetings to teach stakeholders how to use the new
forms, including a session at the Methyl Bromide Alternatives Outreach
(MBAO) conference in Orlando in November 2006 and a similar session at
the MBAO conference in San Diego in October 2007. If the sales reports
are completely and accurately filled out, section 2.6 is calculated
with information from sections 2.4A, 2.4B, 2.2, and 2.5. For companies
that hold critical use methyl bromide for other companies, the
information reported in section 2.7 is an important cross-check of the
information reported in section 2.6. However, EPA reviewed the data in
sections 2.4 through 2.7 of the 2006 sales reports, and found several
instances of blank, incomplete or apparently misreported information in
those sections. EPA made efforts to contact distributors that filed
reports with significant inconsistencies, and many of the reports were
subsequently corrected. However, some of the data points remain blank
or questionable. On the other hand, there were far fewer instances of
blank or apparent misreporting in section 2.2 of the sales report,
which lists sales to end users by critical use sector. Most
importantly, all instances of blank or apparently misreported sales in
section 2.2 were corrected after EPA staff contacted the corresponding
reporting entities. Given EPA's concerns about the data in sections 2.4
through 2.7 and the Agency's reservations about changing the carryover
calculation method, EPA has decided to retain the proposed approach in
this final rule.
Six commenters asserted that the critical use material calculated
as carryover for 2006 is actually unaccounted sales rather than
inventory held at the end of the year, and contend that EPA has
evidence that this is the case. As discussed further below, the
commenters claimed to have evidence that 2006 sales remain unreported,
but did not produce official sales reports to support their claim.
MBIP stated that EPA should have been aware of underreporting of
critical use sales and that EPA's data set for calculating the
carryover set was deficient. MBIP claimed that information it received
in response to its Freedom of Information Action (FOIA) request of May
2007 clearly showed that some companies filed reports in 2005 and not
in 2006. Nonetheless, MBIP contended, EPA had mistakenly assumed that
100 percent of the unreported sales of critical use methyl bromide are
held in inventory. In response, EPA points out that it made every
reasonable effort to contact entities that reported in 2005 and not
2006. Although EPA contacted these entities, some of them still have
not reported 2006 sales for critical uses. Whether every entity that
sold critical use methyl bromide in 2005 did so in 2006 remains an open
question. EPA has made it clear to MBIP that it would consider late
submissions of official sales reports from 2006, but MBIP has been
unable to produce suitable evidence of the unreported sales that they
insist took place during 2006. With this final rule EPA is making a
final determination of the 2006 carryover amount.
At the public hearing for this action, Ameribrom Inc. said that 80
percent of the 539 metric tons (MT) that EPA calculated as carryover is
actually methyl bromide that was sold to critical users but not
reported. The commenter also said that many small distributors do not
understand the reporting requirements, and some are incapable of
complying with them. The commenter did not provide specific, verifiable
information to support the claim that 80 percent of the carryover is
actually unreported sales. Therefore, EPA will not change its proposed
approach as a result of Ameribrom's claims. The Agency is concerned
with Ameribrom's statement that some small distributors did not file
required reports. EPA continues to educate stakeholders about critical
use exemption reporting requirements through outreach programs. For
example, EPA posts instructional material on its Web site, holds
informational sessions about reporting at the annual Methyl Bromide
Alternatives Outreach Conference, and provides staff contacts to assist
with reporting requirements. Most recently, EPA provided a letter
template to members of MBIP, including Ameribrom, that explains the
importance of full reporting, provides information about how to acquire
official reporting forms, and a contact person to answer questions. EPA
encouraged MBIP's members to customize the letter and send it to all of
their customers.
MBIP stated that an independent auditor found that approximately 20
methyl bromide suppliers failed to provide EPA with sales reports,
which accounted for approximately 80 percent of the calculated
carryover. However, MBIP did not provide the names of these suppliers,
so EPA could not confirm the veracity of MBIP's claim. Thus, as EPA
explains above, the Agency is unwilling to revise its methodology for
determining the previously calculated 2006 carryover amount, which was
reported internationally on March 16, 2007. EPA has taken a number of
steps to work with MBIP and other stakeholders to encourage full
reporting. Full reporting is in everyone's interest, and the Agency
will continue to work with industry in outreach and educational
programs toward that end.
Chemtura asserted that many of the companies that routinely filed
required reports were the entities most likely to be holding critical
use methyl bromide inventory--manufacturers and distributors, and that
that EPA's contention that ``carryover increased while allocations and
stocks have plummeted'' is not credible. Similarly, EPA MBIP commented
that it performed an audit that revealed that non-reporting entities
were mostly smaller entities that were unlikely to hold any inventory.
Six commenters requested that EPA rigorously enforce compliance with
the supplier reporting requirements at 40 CFR 82.13. EPA received
comments from Chemtura and MBIP that stated

[[Page 74137]]

that the proposed rule's explanation of how the carryover is calculated
is the first such explanation given by EPA in any CUE rule promulgated
to date. MBIP stated that this was their first opportunity to comment
on EPA's method of calculation. EPA received a comment from Chemtura
that expressed the view that EPA lacks authority to reduce the 2008 CUE
amount based on carryover from a previous year. EPA responds to all of
these comments in the Response to Comment document available on the
docket for this action.
In this final rule, EPA is not adjusting the established
methodology for calculating the amount of carryover critical use methyl
bromide, because doing so could create international confusion about
U.S. reporting, which could jeopardize international authorizations of
new production to satisfy the critical needs of U.S. agriculture. The
United States has important commitments to report information about
methyl bromide for critical uses. In December 2004 the Parties agreed
to Decision XVI/6, which adopted an accounting framework for critical
uses of methyl bromide. Each Party with critical needs submits an
accounting framework annually. The U.S. submitted its first Accounting
Framework for 2005 critical uses on May 19, 2006. The U.S. subsequently
revised the accounting framework agreed to by the Parties slightly
because the amount of pre-phaseout inventory was being treated as
confidential.
For 2005 and 2006, EPA calculated the carryover amount using the
method described in the proposed rule, and reported the result
internationally in the U.S. Accounting Framework for critical uses of
methyl bromide. The Parties expect EPA to reduce new production, when
appropriate, by the amount of carryover CUE material. A post-hoc
revision of the methodology for the U.S. Accounting Framework could
create international confusion, and, as discussed in this preamble,
there is not a compelling reason to change EPA's method at this time.
Therefore, EPA has determined that any revision of the previously
reported 2006 carryover amount must be based upon new data, not a new
method for manipulating old data.
In this final rule, EPA is continuing its practice of not
permitting entities to build stocks of methyl bromide produced or
imported after January 1, 2005, under the critical use exemption. In
the proposed rule, EPA explained that the Agency received official
sales reports under the requirements at 40 CFR 82.13 showing that
6,923,926 kg of critical use methyl bromide was acquired through
production or import in 2006. The proposed rule stated that the
information reported to EPA also indicated that 6,384,493 kg of
critical use methyl bromide was sold to end-users in 2006. EPA
calculated that the carryover amount at the end of 2006 was 539,433 kg,
which is the difference between the amount acquired and the amount
sold, and proposed to reduce 2008 CUA allocations accordingly. However,
EPA received five official 2006 sales reports after the submission
deadline, which was 45 days after December 31, 2006. The late sales
reports were not counted in the proposed rule, or the 2006 U.S.
Accounting Framework. These late reports show that an additional 40,199
kg of critical use methyl bromide was sold to end users in 2006. As a
result, EPA's official records now show that 6,424,692 kg of methyl
bromide was sold to end users in 2006. Therefore, in accordance with
EPA's proposed method for calculating carryover amounts, EPA calculates
that the 2006 carryover amount was 499,234 kg of critical use methyl
bromide. This amount was calculated as follows: 6,923,926 kg--6,424,692
kg = 499,234 kg. To account for carryover of critical use methyl
bromide, EPA is reducing the level of new production and import for
critical uses by 499,234 kg.
a. Reporting Requirements To Calculate Carryover Amounts
In developing this action, EPA specifically requested comment on
whether requiring producers, importers, and distributors to report the
names of distributors and third-party applicators to which they have
sold critical-use methyl bromide would provide valuable information to
EPA, and encourage complete reporting of sales to end-user data. EPA
sought comment on whether this would justify the additional burden of
such requirements (72 FR 48970).
EPA received six comments that supported a petition submitted by
Chemtura to augment the current reporting and recordkeeping process to
prevent underreporting of methyl bromide use. The commenters proposed
that EPA modify its reporting system in a manner that would allow the
Agency to identify non-reporting companies and the amount of critical
use sales attributable to each company. EPA could achieve this, the
commenters asserted, by requiring each entity in the supply chain--from
the manufacturer to the company that sells to the end user--to report
the name of the entity that purchased the critical use methyl bromide
and how much material it purchased.
EPA does not agree that it should require information that would
allow the Agency to quantify the amount of critical use sales
attributable to each non-reporting company. Instead of imposing
additional burden on entities that do report in order to obtain
information about non-reporters, a more straightforward and practical
approach is to encourage full reporting. EPA, though, believes it would
be beneficial to acquire the names of all distributors and third-party
applicators with critical use exemption reporting requirements under 40
CFR 82.13. Collecting the names of these entities will facilitate
Agency follow-up with non-reporters, allowing collection of necessary
information in a more targeted manner than collecting detailed
information from all entities. In early 2008 EPA will use its
information gathering authority under section 114 of the Clean Air Act
to ask all entities that sell critical use methyl bromide to report the
names of all non-end user entities (i.e. producers, importers,
distributors and third-party applicators) to which they sold critical
use methyl bromide during the 2007 control period.
Chemtura commented that EPA's reliance on full and accurate
reporting by the regulated community is unreasonable, because the
existing reporting system does not provide EPA with any way to verify
whether all entities that should file reports have done so. NRDC
commented that EPA should require producers, importers, distributors
and third-party applicators to report the names of distributors and
third-party applicators to which they have sold any methyl bromide,
including pre-2005 stocks, in order to get accurate data to track
amounts sold for all purposes (including non-critical uses). The
commenter stated that the costs of such reporting would be minimal and
would be justified by the benefits of better tracking of CAA and
Protocol compliance. EPA responds to these comments in the Response to
Comment document available on the docket for this action.
b. Apportionment of Carryover Reductions Among Producers
In previous CUE rules, EPA used the approach described in the
Framework Rule for applying reductions in CUA amounts equal to the
amount of carryover CUE material from a previous year. EPA's practice
to date has been to apply this reduction to the total volumes of
allowable new production or import, and then to pro-rate CUA
allocations to each company based on its 1991 baseline market share. In

[[Page 74138]]

developing this action, EPA proposed to use the same approach for 2008.
In the proposed rule, EPA explained that Chemtura's petition
recommended alternative methods for apportioning carryover reductions
among CUA holders. EPA encouraged interested parties to comment on the
recommendations in Chemtura's petition and provide any additional
suggestions regarding the apportionment of carryover among companies.
Chemtura's petition requested that EPA apportion carryover amounts
proportional to the producers' responsibility for the carryover
originating in their own supply chain. The petition further stated that
EPA's process for apportioning carryover reductions among producers is
arbitrary, capricious, unfair, and perpetuates poor stewardship. In its
comments Chemtura acknowledged that EPA does not currently collect
information that would allow the Agency to reduce CUAs on the basis of
carryover originating in each producer's supply chain. As discussed
below in more detail, EPA believes that acquiring credible data of this
nature would impose extra burden on the regulated community without
producing any discernible environmental benefit. The extra reporting
that Chemtura proposed could redistribute the proportional allocation
of CUAs among producers, but it would not affect the overall amount of
critical use methyl bromide available to critical users, and therefore,
would not help EPA achieve the primary goal of the critical use
exemption program: to satisfy critical needs for methyl bromide. A
better solution that does not impose extra burden on the regulated
community is to continue to strengthen outreach and educational
programs that facilitate full reporting under existing requirements.
Chemtura commented that CUE reductions to account for carryover are
distributed among the four methyl bromide producers based on a
proportional basis according to their 1991 consumption baselines. The
commenter stated that an equal allocation of the carryover would be
fairer and that using the 1991 data is now inconsistent with the
available supply chain information and would maximize future
distortions in the critical use market. EPA notes that Chemtura has not
objected to EPA's framework for distributing CUAs to producers based on
their 1991 market share, under which Chemtura receives over 60 percent
of the new production allowances each year. The Proposed Framework Rule
stated that, ``Allocating CUAs based on each company's 1991 baseline
allowances (on a pro-rata basis) is a better reflection of market share
than simply dividing the number of allowances by the total number of
entities, and would be less burdensome than conducting a detailed
historical market share analysis on a [sic] an annual basis. Using the
1991 historic baseline method for distributing CUAs is consistent with
how EPA has allocated methyl bromide production and consumption
allowances for the past decade under the methyl bromide phaseout'' (69
FR 52376). EPA believes the arguments in the Proposed Framework Rule
still apply. Using the 1991 market shares, which have become the
company-specific baselines for CUA allocations, provides the best
available estimation of how much carryover is attributable to each
company's supply chain. A more detailed method of estimation would
involve additional burden for respondents.
Chemtura's petition recommended a ``fault-based'' system for
allocating CUA reductions to account for carryover amounts. Chemtura
stated that in order to support the fault-based carryover allocation
process, EPA could modify the reporting requirements established at 40
CFR 82.13 to require that importers, producers, distributors, and
third-party applicators list the producer of any critical use methyl
bromide they acquired during the year. In its comments, Chemtura
asserted that, ``Identifying the producer of origin for any given sale
or distributor should be a simple task, as each of the four producers
supplies downstream customers with methyl bromide products under
different pesticide registrations, labels, and product names. Thus,
regardless of how many intermediary distributors a methyl bromide
product may have passed through before reaching the end user, that entity
can identify the producer by a review of the label or sales invoice.''
Whether or not producer of origin reporting would be a ``simple
task,'' it would add to the regulatory burden currently borne by
entities in the distribution chain. Preliminary estimates, using as a
guideline EPA's previous estimates under Paperwork Reduction Act (PRA)
requirements, a guideline, suggest that the burden imposed by producer
of origin reporting could require 150 respondent hours per year,
depending on how much EPA follow-up is necessary to perform standard
data quality assurance procedures. EPA does not believe the ``fault-
based'' system, or the extra reporting burden it requires, would
provide any discernible environmental benefit, or help to satisfy
critical needs for methyl bromide. Therefore, while the Agency may
continue to analyze Chemtura's proposed reporting additions as part of
the renewal process for its information collection request (ICR) under
PRA, in this final rule the Agency is not implementing Chemtura's
``fault-based'' system or the additional reporting that it would require.
Chemtura's petition asserted that, ``The opt-out system proposed
[in the petition] provides an appropriate method for apportioning
carryover penalties.'' Chemtura's proposed ``opt-out'' system would
allow producers to voluntarily submit supply chain data in exchange for
EPA's removal of the individual producer from the ``default penalty
pool.'' In its comments on the proposed rule, Chemtura asserted that
Ameribrom had acknowledged responsibility for the majority of the 2008
carryover. Chemtura also commented that ``EPA has received ample notice
of the flaws in the framework.'' Chemtura further commented that any
material that stays in the distribution system past the end of a
control period should be considered part of the SCF rather than
carryover, and that no carryover should be subtracted from CUEs in 2008
and beyond. EPA responds to these comments in the Response to Comment
document available on the docket for this rulemaking.
In this action, EPA is reducing the total level of new production
and import--i.e., the total number of CUAs issued--for 2008 by 499,234
kg to reflect the total level of carryover material available at the
end of 2006. EPA will continue to consider the level of available
stocks, and may consider adjusting carryover policies, through a notice
and comment rulemaking process, if available stocks become very scarce.
However, considering the current amount of available pre-phaseout
inventory, in this action it is best to maintain the existing framework
for responding to carryover.
5. Amounts for Research Purposes
Decision XVII/9(7) ``request[ed] Parties to endeavor to use stocks,
where available, to meet any demand for methyl bromide for the purposes
of research and development.'' Consistent with that Decision, in the
2007 CUE Rule, EPA reduced the amount of new production and import by
21,702 kilograms, which was the amount needed for research, and
encouraged methyl bromide suppliers to sell inventory to researchers
and encouraged researchers to purchase inventory.

[[Page 74139]]

Decision XVIII/15(1) authorized ``the production and consumption of
[methyl bromide] necessary to satisfy laboratory and analytical
critical uses.'' Paragraph 2 of that decision stated that methyl
bromide produced under the exemption for laboratory and analytical uses
may be used as a reference or standard; in laboratory toxicology
studies; to compare the efficacy of methyl bromide and its alternatives
inside a laboratory; and as a laboratory agent which is destroyed in a
chemical reaction in the manner of feedstock. In a separate notice-and-
comment rulemaking titled the ``Global Essential Laboratory and
Analytical Use Exemption,'' EPA is implementing the exemption
authorized in Decision XVIII/15 (72 FR 52332). More information about
that rulemaking process is available on the docket for that rule (EPA-
HQ-OAR-2007-0384).
In the proposed CUE rule for 2008, EPA stated that there continues
to be a need for methyl bromide for research purposes that do not meet
the criteria for laboratory and analytical uses, as defined in Decision
XVIII/15. A common example is an outdoor field experiment that requires
methyl bromide as a standard control treatment with which to compare
the trial alternatives' results. In the proposed rule, EPA listed the
critical use sectors that were approved by the Parties to use methyl
bromide for research purposes in 2008 in Section V.C. and with the
phrase ``research purposes'' listed in their limiting critical
conditions in Table I of this preamble.
In developing this action, EPA proposed to allow sale of 15,491 kg
of existing stocks for research purposes in 2008 to account for the
amount authorized for those purposes. EPA proposed to allow the sale of
methyl bromide from stocks for exempted research purposes by expending
CSAs. An explanation of what amounts of methyl bromide and of what
sectors qualify for research purposes can be found in Section V.C. of
this preamble. The Agency proposed to continue to encourage methyl
bromide suppliers to sell pre-phaseout inventory to researchers and to
encourage researchers to purchase pre-phaseout inventory for research
purposes. EPA sought comment on its proposal to issue CSAs for sale of
pre-phaseout methyl bromide for exempted research purposes.
MBIP objected to EPA's proposal to issue CSAs for sale of pre-
phaseout inventory for exempted research purposes. The commenter stated
that existing stocks of pre-2005 inventory are too low to warrant
further drawdown for research purposes and that new production should
be increased by 15,491 kilograms to account for research needs. The
Agency disagrees, and proposed a detailed analysis of the amount of
available stocks, explained further in Section V.D.2. of this preamble,
which found more than 1,700,000 kg of pre-phaseout inventory available
for critical uses. Therefore, EPA is reducing new production by 15,491
kg, and encouraging researchers to procure methyl bromide from pre-
phaseout inventory.
6. Methyl Bromide Alternatives
In the 2006 CUE Rule (71 FR 5985), EPA allocated less methyl
bromide for critical uses than was authorized by the Parties in order
to account for the recent Federal registration of sulfuryl fluoride.
The allocation reductions in that rule reflected transition rates that
were included for the first time in the 2007 U.S. CUN. In the 2007 CUE
Rule, EPA explained why a similar reduction was made in that rule:
``The report of the Methyl Bromide Technical Options Committee (MBTOC)
indicated that the MBTOC did not make any reductions in these [post-
harvest] use categories for the uptake of sulfuryl fluoride in 2007
because the United States Government indicated that it would do so in
its domestic allocation procedures. Therefore, EPA is reducing the
total volume of critical use methyl bromide by 53,703 kilograms to
reflect the continuing transition to sulfuryl fluoride'' (75 FR 75390).
In developing today's action, EPA referenced preliminary results of
a study by Dr. Brian D. Adam of Oklahoma State University, which the
Agency is making available on the public docket for this rulemaking.
The proposed rule stated that Dr. Adam's study indicates that the cost
of post-harvest cocoa fumigation with sulfuryl fluoride is not
substantially greater than the cost of using methyl bromide for that
fumigation. The proposed rule explained that in response to the study
results, the National Pest Management Association (NPMA) withdrew its
nomination request for critical use methyl bromide for 2009 cocoa
fumigations, and informed EPA that it does not intend to seek critical
use methyl bromide for 2010 cocoa fumigations. EPA reiterated NPMA's
stated need for some critical use methyl bromide for cocoa in 2008 as
the sector transitions to sulfuryl fluoride, and explained the
situation further. EPA sought comment on how much of the 53,188 kg of
critical use methyl bromide approved by the Parties for cocoa for 2008
should be allowed by the Agency. EPA asked that comments on this topic
recommend specific amounts of critical use methyl bromide for cocoa in
2008, and provide detailed justifications for their recommendations.
EPA received a comment from NPMA that recognized that the Oklahoma
State University study showed that the cost of using sulfuryl fluoride
to treat post-harvest cocoa was not substantially greater than the cost
of using methyl bromide. However, NPMA's comment stated that smaller
companies in the industry needed time to transition to sulfuryl
fluoride. This transition includes the completion of a manufacturer's
stewardship program as well as customer education about non-methyl
bromide treatment. Additionally, while most states in which cocoa is
processed have a special 24(C) label to allow for higher Concentration
and Time (CT) dosage allocations for use of sulfuryl fluoride on cocoa,
New York has not approved this label. Therefore, NPMA requested that at
least 75 percent of the 53,188 kg of critical use methyl bromide
approved by the Parties be allocated for 2008. NPMA stated that its
application for 2009 had been withdrawn, as the transition to sulfuryl
fluoride should be complete by that time.
In their 2008 CUE application, NPMA requested 79,950 kg for 2008
critical uses. In developing the 2008 critical use nomination, the USG
reduced NPMA's original request to account for growth, because EPA's
framework does not allow critical users to increase their critical need
based on expansion of their operations (FR 69 76996). USG also reduced
NPMA's request to account for a reduction in the use rate of methyl
bromide from 24 kg/1,000 m\3\ to 20 kg/ 1,000 m\3\. USG made a further
reduction to account for a transition rate of 16.8% per year to
sulfuryl fluoride. After accounting for these factors, USG nominated a
total of 53,255 kg for cocoa bean fumigation in 2008, and the Parties
approved 53,188 kg in Decision XVIII/13. In light of new information
about the economic feasibility of sulfuryl fluoride for post-harvest
cocoa fumigation, in this action EPA is approving less critical use
methyl bromide for cocoa fumigation than the Parties authorized.
The Agency appreciates that NPMA voluntarily came forward and
agreed to a more rapid transition to methyl bromide alternatives for
cocoa fumigation. With this final rule, EPA is approving 39,891 kg of
critical use methyl bromide for this sector, or 75 percent of the
amount agreed to by the Parties in Dec. XVIIII/13. Therefore, EPA is
reducing the total amount authorized for 2008 critical uses by 13,297
kg to account for increased

[[Page 74140]]

uptake of sulfuryl fluoride for cocoa fumigation.
NRDC stated that EPA recently approved the use of iodomethane
(methyl iodide) for field uses, which will reduce the need for methyl
bromide CUE allocations. The commenter stated that iodomethane is a
drop-in substitute for methyl bromide and that while it is more costly
per kilogram, less of it is require to achieve the same efficacy. The
commenter also stated that while iodomethane poses direct toxicity
issues, the toxicity issues associated with methyl bromide are worse.
Chemtura requested that EPA assess the technical and economic
feasibility of iodomethane for no fewer than two years before factoring
its availability into future CUE decisions. The commenter stated that
the controversial nature of the registration combined with the
proximity of the registration to the close of the comment period on the
CUE rule provided reason to delay considering this alternative when
allocating CUEs. The commenter also noted that iodomethane was not yet
registered in California because of safety questions and that there was
anecdotal evidence of efficacy problems with the chemical. The
commenter stated that at least two growing seasons are necessary to
review and assess viability.
In the proposed rule EPA sought ``information regarding changes to
the registration or use of alternatives that may have transpired after
the 2008 U.S. nomination was written.'' The Agency stated that, ``Such
information has the potential to alter * * *. EPA's determination as to
which uses and what amounts of methyl bromide qualify for the critical
use exemption.'' In this final rule, EPA is following through with that
statement, and reducing pre-plant critical use amounts to account for
new information about the uptake of iodomethane.
After considering new information about iodomethane, EPA estimates
that in 2008 iodomethane will be a technically and economically
feasible alternative for a limited amount of pre-plant applications.
Iodomethane has been registered at the federal level for the period of
October 1, 2007 to October 1, 2008 for the following crops: Strawberry,
Pepper, Tomato, Ornamentals, Nurseries, Trees and Vines. The pesticide
registration process in the U.S. involves multiple layers of regulatory
review, and State registrations are required before a pesticide can be
applied. As of December 11, 2007, the last day that EPA could
reasonably consider information for this rulemaking, iodomethane had
been registered in the following states that are included in Column B
of Table I as locations that qualify to use pre-plant critical use
methyl bromide for certain uses in 2008: Georgia, Michigan, Missouri,
North Carolina, Ohio, Oregon, Pennsylvania, Tennessee and Virginia.
Therefore, EPA expects that iodomethane will be a legal fumigant option
in 2008 for some growers that qualify for critical use methyl bromide.
To estimate the amount of iodomethane that will be a technically
and economically feasible methyl bromide alternative in 2008, EPA
considered a number of factors. The Agency considered that iodomethane
is currently registered for 10 of 12 months during 2008, that
iodomethane is expected to cost more than methyl bromide, and that
there are restrictions on the use of iodomethane such as the imposition
of buffers, that do not apply to methyl bromide use. The Agency's
analysis, described in a memo on the docket for this action, estimates
that iodomethane can feasibly replace 14,472 kg of methyl bromide in
2008. Therefore, in this action EPA is reducing the total amount of
pre-plant critical use methyl bromide in 2008 by 14,472 kg to account
for the uptake of iodomethane in 2008.
Besides the issues regarding post-harvest cocoa fumigation, and the
newly registered pre-plant fumigant iodomethane, EPA is not making any
additional reductions in critical use allowances to account for the
uptake of alternatives. In developing this action, the Agency explained
that in the 2008 CUN that USG applied transition rates for all critical
use sectors. The MBTOC report of September 2006 included reductions in
its recommendations for critical use categories based on the transition
rates in the 2008 CUN. MBTOC's recommendations were then considered in
the Parties' 2008 authorization amounts, as listed in Decision XVIII/
13. Therefore, EPA explained that transition rates, which account for
the uptake of alternatives, have already been applied for authorized
2008 critical use amounts. Furthermore, the Agency stated that the 2009
CUN, which represented the most recent analysis and the best available
data for methyl bromide alternatives, did not conclude that transition
rates should be increased for 2008. In developing this action, EPA
sought comment on its proposal not to make further reductions in 2008
to account for the uptake of methyl bromide alternatives.
FSS stated that post harvest application requests by NPMA, Pet Food
Institute, and Rice Millers are for applications for which methyl
bromide is not necessary. FSS and Dow stated that methyl bromide
allocations for these applications should therefore be significantly
reduced or eliminated. Dow stated that nearly half of the 220 flour
mills in the U.S. are fumigated with sulfuryl fluoride. Dow also stated
that the transition rates for alternatives used by EPA may apply to
farm applications, but Dow claimed these transition rates are too low
for structural applications. Additionally, Dow and FSS asserted that
sulfuryl fluoride has proved successful even after multiple
applications with no return to methyl bromide, and that fumigation
failures can happen with all materials, including methyl bromide. The
Agency responds to these comments in a separate Response to Comments
document available on the docket for this action.
MBIP noted that some fumigation companies need more time to
transition to sulfuryl fluoride, including the purchase of new
equipment and training in its use. Specifically, MBIP argued that
allowing CUEs for cocoa in 2008 would enable a smoother transition to
sulfuryl fluoride and would help to guarantee methyl bromide
availability to guard against unforeseen problems with the transition.
EPA received extensive comments from Dow objecting to EPA's
assessment of the label restriction on 1,3-D product use near karst
topographical features in Florida. EPA responds to these comments in
detail in the Response to Comments document available on the docket for
this action.
As discussed above, in this action, EPA is reducing the proposed
critical use amount for post-harvest cocoa fumigation by 13,297 kg. EPA
is also reducing the proposed critical use amount for pre-plant
fumigation by 14,472 kg to account for new information about the
fumigant iodomethane. EPA is not reducing any of the other proposed
critical use amounts for 2008 to account for the transition to
alternatives, because uptake of alternatives was already considered in
the 2008 U.S. CUN, adopted by MBTOC, and reflected in the 2008 CUE
authorization amounts that EPA is finalizing with this action. The most
recent information that EPA received does not support further reductions.

E. The Criteria in Decisions IX/6 and Ex. I/4

Paragraphs 2 and 6 of Decision XVIII/13 requested Parties to ensure
that the conditions or criteria listed in Decisions Ex. I/4 and IX/6,
paragraph 1, are applied to exempted critical uses for the

[[Page 74141]]

2008 control period. A discussion of the Agency's application of the
criteria in paragraph one of Decision IX/6 appears in sections V.A.,
V.C., V.D., and V.G. of this preamble. The CUNs detail how each
proposed critical use meets the criteria listed in paragraph 1 of
Decision IX/6, apart from the criterion located at (b)(ii), as well as
the criteria in paragraphs 5 and 6 of Decision Ex. I/4.
The criterion in Decision IX/6(1)(b)(ii), which referred to the use
of available stocks of methyl bromide, is addressed in sections V.D.,
V.F., and V.G. of this preamble. The Agency has previously provided its
interpretation of the criterion in Decision IX/6(1)(a)(i) regarding the
presence of significant market disruption in the absence of an
exemption, and EPA refers readers to the 2006 CUE final rule (71 FR
5989) as well as to the memo on the docket titled ``Development of 2003
Nomination for a Critical Use Exemption for Methyl Bromide for the
United States of America'' for further elaboration.
The remaining considerations, including the lack of available
technically and economically feasible alternatives under the
circumstance of the nomination; efforts to minimize use and emissions
of methyl bromide where technically and economically feasible; the
development of research and transition plans; and the requests in
Decision Ex. I/4(5) that Parties consider and implement MBTOC
recommendations, where feasible, on reductions in the critical use of
methyl bromide and in paragraph 6 for Parties that submit critical use
nominations to include information on the methodology they use to determine
economic feasibility, are all addressed in the nomination documents.
Some of these criteria were evaluated in other documents as well.
For example, the U.S. considered matters regarding the adoption of
alternatives and research into methyl bromide alternatives, criterion
(1)(b)(iii) in Decision IX/6, in the development of the National
Management Strategy (NMS) submitted to the Ozone Secretariat in
December 2005 and in on-going consultations with industry. The NMS
addresses all of the aims specified in Decision Ex. I/4(3) to the
extent feasible and is available in the docket for this rulemaking.

F. Emissions Minimization

In the proposed rule, EPA noted for the regulated community the
reference to emission minimization techniques in paragraph 8 of
Decision XVIII/13, which stated that Parties shall request critical
users to employ ``emission minimization techniques such as virtually
impermeable films, barrier film technologies, deep shank injection and/
or other techniques that promote environmental protection, whenever
technically and economically feasible.'' EPA understands that research
is being conducted on the potential to reduce rates and emissions using
newly available high-barrier films and that these studies show
promising results. Users of methyl bromide should make every effort to
minimize overall emissions of methyl bromide by using measures such as
the ones listed above, to the extent consistent with State and local
laws and regulations. In the proposed rule, the Agency encouraged
researchers and users who are successfully utilizing such techniques to
inform EPA of their experiences as part of their comments and to
provide such information with their critical use applications. In
addition, the Agency welcomed comments on the implementation of
emissions minimization techniques and whether and how further emissions
minimization could be achieved.
At the public hearing for this action the CSC expressed its opinion
that EPA should create a regulatory incentive for emissions reduction.
NRDC commented that the most effective way to achieve further emission
minimization is to require the use of emissions minimization techniques
such as virtually impermeable films (VIF), barrier films, and deep
shank injection. NRDC noted that these techniques offer the concurrent
benefit of reducing the amount of methyl bromide needed for
fumigations. EPA believes that reducing supply through the phaseout
provides incentives for use minimization and therefore limits
emissions. Other points discussed by this commenter can be found in the
Response to Comments document on the docket for this action.
At the public hearing for this action, West Coast Tomato stated
that VIF keeps methyl bromide in the soil longer where it is
metabolized rather than escaping into the atmosphere. The commenter
suggested that methyl bromide that is used in this way should not be
decreased since it is not reaching the ozone layer. EPA has not fully
reviewed the research that the commenter is referring to. In compiling
annual critical use nominations, USG considers the feasibility of VIF,
and other less permeable tarps, because the use of these technologies
can reduce required dosage rates and the critical need for methyl
bromide to treat certain crops. The commenter may be proposing a
different type of exemption for methyl bromide use that does not result
in emissions to the stratosphere, but this would require a change in
the Montreal Protocol, which is outside the scope of the present
rulemaking. Until EPA fully reviews the research that the commenter
refers to, it would be inappropriate for the Agency to respond further.

G. Critical Use Allowance Allocations

A critical use allowance (CUA) is a privilege granted by EPA, using
its authority under Section 604(d)(6) of the Clean Air Act, that
enables the holder to produce or import one kilogram of methyl bromide
for an approved critical use during the specified control period. These
allowances expire at the end of the control period and, as explained in
the Framework Rule, are not bankable from one year to the next. The
allocation of 2008 pre-plant and post-harvest CUAs to the entities
listed below is subject to the trading provisions at 40 CFR 82.12,
which are discussed in section V.G. of the preamble to the Framework
Rule (69 FR 76982).
In the August 27, 2007, proposed rule, EPA proposed to allow
limited amounts of new production or import of methyl bromide for
critical uses for 2008 up to the amount of 3,101,076 kg (12.2% of
baseline) as shown in Table II below. EPA sought comment on the total
levels of exempted new production or import for pre-plant and post-
harvest critical uses in 2008. For the reasons discussed in Section
V.D. of this preamble, EPA is adjusting the proposed CUA amounts to
account for late sales reports that decrease the calculated 2006
carryover amount and to account for the uptake of alternatives.
Therefore, the total critical use exemption amount for 2008 is
4,813,452 kg (18.9% of baseline), with 3,083,763 kg (12.1% of baseline)
of critical use allowances allowing new production or import, and the
remaining amount, 1,729,689 kg (6.8% of baseline), available through
critical stock allowances (CSAs) that allow critical users to access
pre-phaseout methyl bromide. EPA is continuing to calculate company-
specific CUA allocations on the basis of the 1991 baseline consumption
share of the companies listed in Table II. The updated calculation
spreadsheet is available on Docket ID No. EPA-HQ-OAR-2006-1016.
Therefore, the CUAs are allocated as follows:

[[Page 74142]]

Table II.--Allocation of Critical Use Allowances
----------------------------------------------------------------------------------------------------------------
2008 Critical use
2008 Critical use allowances for post-
Company allowances for pre- harvest uses*
plant uses* (kilograms) (kilograms)
----------------------------------------------------------------------------------------------------------------
Chemtura Corp................................................. 1,687,407 186,595
Albemarle Corp................................................ 693,900 76,732
Ameribrom, Inc................................................ 383,464 42,404
TriCal, Inc................................................... 11,940 1,320
-------------------------------------------------
Total..................................................... 2,776,711 307,052
----------------------------------------------------------------------------------------------------------------
* For production or import of class I, Group VI controlled substances exclusively for the pre-plant or post-
harvest uses specified in Appendix L to this subpart.

Paragraph five of Decision XVIII/13 states ``that Parties shall
endeavor to license, permit, authorize, or allocate quantities of
critical use methyl bromide as listed in tables A and C of the annex to
the present decision.'' This is similar to language in Decisions Ex. I/
3(4), Ex. II/1(4) and VII/9(4) regarding 2005, 2006, and 2007 critical
uses, respectively. The language from these Decisions called on Parties
to endeavor to allocate critical use methyl bromide on a sector basis.
In establishing the critical use exemption program, the Agency
endeavored to allocate directly on a sector-by-sector basis by
analyzing and proposing this option among others in the August 2004
Framework Rule notice (69 FR 52366). EPA solicited comment on both
universal and sector-based allocation of critical use allowances. The
Agency evaluated the various options based on their economic,
environmental, and practical effects. After receiving comments, EPA
determined in the final Framework Rule (69 FR 76989) that a lump-sum,
or universal, allocation, modified to include distinct caps for pre-
plant and post-harvest uses, was the most efficient and least
burdensome approach that would achieve the desired environmental
results, and that a sector-specific approach would pose significant
administrative and practical difficulties. Although the approach
adopted in the Framework Rule does not directly allocate allowances to
each category of use, the Agency anticipates that reliance on market
mechanisms will achieve similar results indirectly. The TEAP
recommendations were based on data submitted by the U.S. which in turn
were based on recent historic use data in the current methyl bromide
market. In other words, the TEAP recommendations agreed to by the
Parties were based on current use and the current use patterns take
place in a market where all pre-plant and post-harvest methyl bromide
uses compete for a lump sum supply of critical use material. Therefore,
the Agency believes that under a system of universal allocations,
divided into pre-plant and post-harvest sectors, the actual critical
use will closely follow the sector breakout listed by the TEAP. These
issues were addressed in the Framework Rule and EPA is not aware of any
factors that would alter the analysis performed during the development
of previous CUE allocation rules. A summary of the options analysis
conducted by EPA is available in the docket for this rulemaking.
In developing this action, EPA did not propose to change the
approach adopted in the Framework Rule for the allocation of CUAs but,
in an effort to address Decision XVIII/13(5), EPA sought additional
comment on the Agency's allocation of CUAs in the two groupings (pre-
plant and post-harvest) that the Agency has employed in the past. NPMA
and Chemtura commented that the universal system is working well and
believe the concept of the pre-plant/post-harvest allocations is simple
and easy for stakeholders to understand. The commenters also noted that
the system has not disrupted the supply chain and has been easy for
distributors to implement, and discouraged the Agency from switching to
a sector-by-sector allocation system.
FFVA and a representative of the walnut, prune and fig industry
commented that the geographical distribution of methyl bromide has
created shortfalls resulting in the inability of individual growers to
access or afford material to fumigate their fields in accordance with
their production schedules. FFVA indicated that this was particularly
noticeable during the 2005 and 2006 fall fumigation periods. The other
commenter stated that the universal system has not worked well for the
above reasons, but believes that a sector-by-sector allocation system
would be equally flawed due to insufficient allocations in certain
sectors and unequal holdings of pre-phaseout inventory.
CSC stated that EPA should explore a hybrid between a regional and
a lump-sum allocation system. Specifically, the commenter suggested
that EPA consider creating several large regional areas (such as the
EPA regions) that combine all of the sectors within each region to
create a regional lump-sum. The commenter further stated that the
methyl bromide users who most frequently face difficulty obtaining
methyl bromide are small, minority growers. The commenter argued that
the allocation of methyl bromide creates a harm that is
disproportionately distributed. The commenter's primary concern does
not appear to be human health and environmental effects on minority or
low-income populations. Instead, the commenter appears to believe that
EPA's current allocation system causes economic harm for these
populations, because they have difficulty satisfying their critical
needs for methyl bromide.
This final rule creates an exemption to the phaseout of methyl
bromide. The overall impact of this action is deregulatory, and has an
economic benefit for growers with critical needs for methyl bromide.
EPA responds further to this comment in the Response to Comment
document for this action.
EPA agrees with the comments that supported the existing allocation
system. EPA considered sector-specific, and other allocation approaches
in the proposed Framework Rule, and decided that the existing universal
allocation system with pre-plant and post-harvest allowances was the
most effective and least burdensome system. The Framework Rule did not
establish a regional approach, as one commenter suggested. EPA may
consider such an approach for future CUE rules. EPA does not believe it
would be appropriate to finalize such an approach without giving other
interested parties an opportunity for comment. EPA responds to these
comments further in the

[[Page 74143]]

Response to Comments document available on the docket for this action.

H. Critical Stock Allowance Allocations and the Confidentiality of
Information About the Aggregate Methyl Bromide Inventory

Each critical stock allowance (CSA) is equivalent to one kilogram
of critical use methyl bromide. These allowances expire at the end of
the control period and, as explained in the Framework Rule, are not
bankable from one year to the next (69 FR 76990). 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 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 movement of pre-phaseout inventories
or methyl bromide along the supply chain does not require expenditure
of a CSA.
In developing this action, EPA proposed to allocate critical stock
allowances (CSAs) to the entities listed below in Table III for the
2008 control period in the amount of 1,715,438 kg (6.8% of U.S. 1991
baseline). EPA's proposal was based on the proposed approach for
accounting for available stocks of methyl bromide, which is described
in Section V.D. of this preamble. For the reasons discussed in Section
V.D., in this action EPA is allocating 1,729,689 kg of CSAs to the
entities listed in Table III below. The amounts are apportioned to each
entity in proportion to inventory held by each on January 1, 2007.
In 2006, the United States District Court for the District of
Columbia upheld EPA's treatment of company-specific methyl bromide
inventory information as confidential. NRDC v. Leavitt, 2006 WL 667327
(D.D.C. March 14, 2006). EPA's allocation of CSAs is based on each
company's proportionate share of the aggregate inventory. Therefore,
the documentation regarding company-specific allocation of CSAs is in
the confidential portion of the rulemaking docket and the individual
CSA allocations are not listed in the table below. EPA will inform the
listed companies of their CSA allocations in a letter following
publication of the final rule.
In developing this action, EPA explained that several companies
that receive small amounts of CSAs from EPA have contacted the Agency
and requested that they be permitted to permanently relinquish their
allowances. Due to the small CSA allocation and because they typically
do not sell critical use methyl bromide, they find the allocation of
CSAs, and associated recordkeeping and reporting requirements, to be
unduly burdensome. In response to this concern, in the proposed 2007
CUE rule EPA proposed to allow CSA holders, on a voluntary basis, to
permanently relinquish their allowances through written notification to
the Agency. EPA received no adverse comments. However, no CSA holders
contacted EPA to take advantage of that voluntary opportunity. In the
2008 proposed rule EPA again gave CSA holders the opportunity, on a
voluntary basis, to permanently relinquish their allowances through
written notification to the Agency. EPA explained that companies
voluntarily relinquishing their allowances would not receive CSA
allocations and would be excluded from future allocations, and that all
allowances forfeited by companies would be reallocated to the remaining
companies on a pro-rata basis.
Seven companies contacted EPA during the comment period for this
action and volunteered to relinquish their CSAs. The companies that
contacted the Agency were: Blair Soil Fumigation, Dodson Brothers,
Carolina Eastern Inc., Harvey Fertilizer & Gas, J.C. Ehrlich Co.,
Southern States Cooperative Inc., and Vanguard Fumigation Co. With this
final rule, EPA is honoring their requests and removing these seven
companies from Table III below. Additionally, EPA will not issue CSAs
to these seven companies in future control periods. EPA has reallocated
their CSAs to the remaining companies on a pro-rata basis.

Table III.--Allocation of Critical Stock Allowances
------------------------------------------------------------------------
Company
-------------------------------------------------------------------------
Albemarle.
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Burnside Services, Inc.
Cardinal Professional Products.
Chemtura Corp.
Degesch America, Inc.
Helena Chemical Co.
Hendrix & Dail.
Hy Yield Bromine.
Industrial Fumigation Company.
Pacific Ag.
Pest Fog Sales Corp.
Prosource One.
Reddick Fumigants.
Royster-Clark, Inc.
Trical Inc.
Trident Agricultural Products.
UAP Southeast (NC).
UAP Southeast (SC).
Univar.
Western Fumigation.

Total--1,729,689 kilograms.
------------------------------------------------------------------------

I. Stocks of Methyl Bromide

As discussed above and in the December 23, 2004 Framework Rule, an
approved critical user may obtain access to exempted production and
import of methyl bromide and to limited inventories of pre-phaseout
methyl bromide, the combination of which constitute the supply of
``critical use methyl bromide'' intended to meet the needs of agreed
critical uses. The Framework Rule established provisions governing the
sale of pre-phaseout inventories for critical uses, including the
concept of CSAs and a prohibition on the sale of pre-phaseout
inventories for critical uses in excess of the amount of CSAs held by
the seller. The Framework Rule also established trading provisions that
allow critical use allowances (CUAs) to be converted into CSAs. Under
this action, no significant changes are being made to those provisions.
NRDC commented that EPA should dedicate all pre-phaseout stocks of
methyl bromide to CUEs. The Agency notes that it has responded to
similar comments in the Final Framework Rule (69 FR 76988), the Final
2007 CUE Rule (71 FR 75400), and in response to NRDC's late submission
of supplemental comments on the Proposed 2007 CUE Rule. EPA is not
revisiting this issue in this rulemaking.
The proposed rule explained in detail how EPA acquired information
about pre-phaseout inventory for 2003 and after, and how EPA had
applied its regulations on treatment of information claimed as
confidential. In the proposed rule, EPA noted that it did not receive
any objections to releasing the aggregate stocks information for
calendar year 2006. To simplify the process of releasing future
aggregate stocks information, EPA proposed to release the aggregate of
methyl bromide stockpile information reported to the Agency under the
reporting requirements at 40 CFR 82.13 for the end of 2007, and each
year thereafter. For the reasons given in a letter that EPA sent on
April 23, 2007, which is available in the docket, to all entities which
had reported holding pre-phaseout inventory at the end of 2003, 2004,
2005, or 2006, this aggregate information is clearly not entitled to

[[Page 74144]]

confidential treatment. EPA proposed to release the aggregate of this
stockpile data in future years without first notifying entities by
letter, as EPA has done in the past two years. EPA sought comment on
this proposal. In the proposed rule, the Agency stated that if it did
not receive any comments opposing its proposal, the aggregate of methyl
bromide stockpile data collected under the reporting requirements at 40
CFR 82.13 would not be treated as confidential information and could be
released in future without additional notice to the competitors.
In its comments MBIP did not object to EPA's proposal to release
aggregate stockpile data in future years at this time. MBIP stated that
they reserve the right to object in the future should the number of
competitors in the industry dwindle to two or fewer in order to protect
confidentiality. Therefore, because EPA received no comments objecting
to its proposal at the present time, for as long as there are a
sufficient number of competitors in the industry, the aggregate of
methyl bromide stockpile data collected under the reporting
requirements at 40 CFR 82.13 will not be treated as confidential
information and may be released in future without further notice.
However, if the number of competitors in the industry were to decline
appreciably, EPA would revisit the question of whether the aggregate is
entitled to treatment as confidential information and would not release
the aggregate without notice.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993),
this action is a ``significant regulatory action,'' because it raises
novel or legal policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order. Accordingly, EPA submitted this action to the Office of
Management and Budget (OMB) for review under EO 12866 and any changes
made in response to OMB recommendations have been documented in the
docket for this action.

B. Paperwork Reduction Act

This rulemaking does not impose any additional information
collection burden. OMB has previously approved the information
collection requirements contained in the existing regulations at 40 CFR
Part 82 under the provisions of the Paperwork Reduction Act, 44 U.S.C.
3501 et seq. and has assigned OMB control number 2060-0564, and EPA ICR
number 2179.03. A copy of the OMB approved Information Collection
Request (ICR) may be obtained from Susan Auby, Collection Strategies
Division; U.S. Environmental Protection Agency (2822T); 1200
Pennsylvania Ave., NW., Washington, DC 20460 or by calling (202) 566-1672.
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.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice-and-comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions. For purposes
of assessing the impacts of this action 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.

----------------------------------------------------------------------------------------------------------------
NAICS small business
size standard (in
Category NAICS code SIC code number of employees or
millions of dollars)
----------------------------------------------------------------------------------------------------------------
Agricultural production.......... 1112--Vegetable and Melon 0171--Berry Crops........ $0.75 million.
farming. 0172--Grapes.............
1113--Fruit and Nut Tree 0173--Tree Nuts..........
Farming. 0175--Deciduous Tree
1114--Greenhouse, Fruits (except apple
Nursery, and orchards and farms).
Floriculture Production. 0179--Fruit and Tree
Nuts, NEC.
0181--Ornamental
Floriculture and Nursery
Products.
0831--Forest Nurseries
and Gathering of Forest
Products.

[[Page 74145]]

Storage Uses..................... 115114--Postharvest Crop 2041--Flour and Other $6.5 million.
activities (except Grain Mill Products. 500 employees.
Cotton Ginning). 2044--Rice Milling....... $23.5 million.
311211--Flour Milling.... 4221--Farm Product
311212--Rice Milling..... Warehousing and Storage.
493110--General 4225--General Warehousing
Warehousing and Storage. and Storage.
493130--Farm Product
Warehousing and Storage.
Distributors and Applicators..... 115112--Soil Preparation, 0721--Crop Planting, $6.5 million.
Planting and Cultivating. Cultivation, and
Protection.
Producers and Importers.......... 325320--Pesticide and 2879--Pesticides and 500 employees.
Other Agricultural Agricultural Chemicals,
Chemical Manufacturing. NEC.
----------------------------------------------------------------------------------------------------------------

Agricultural producers of minor crops and entities that store
agricultural commodities are categories of affected entities that
contain small entities. This action will only affect entities that
applied to EPA for a de-regulatory exemption. In most cases, EPA
received aggregated requests for exemptions from industry consortia. On
the exemption application, EPA asked consortia to describe the number
and size distribution of entities their application covered. EPA
estimated that 3,218 entities submitted critical use applications,
either individually or as members of consortia, for a critical use
exemption for the 2005 control period. EPA received requests from a
comparable number of entities for the 2006, 2007, and 2008 control
periods. Since many applicants did not provide information on the
distribution of sizes of entities covered in their applications, EPA
estimated that, based on the above definition, between one-fourth and
one-third of the entities may be small businesses. In addition, other
categories of affected entities do not contain small businesses based
on the above description.
After considering the economic impacts of this final rule on small
entities, EPA certifies that this action will not have a significant
economic impact on a substantial number of small entities. In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the proposed rule on small entities.'' (5 U.S.C.
603-604). Thus, an Agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities
if the rule relieves a regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule. Since
this rule exempts methyl bromide 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 and $30 million annually. We have therefore concluded that
this 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), Public
Law 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.
This final rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector. This action is deregulatory and does
not impose any new requirements on any entities. Thus, this 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.

E. Executive Order 13132: Federalism

Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
The phrase ``policies that have federalism implications'' is defined in
the Executive Order to include regulations that have ``substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and

[[Page 74146]]

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. This final rule is expected to
primarily affect producers, suppliers, importers and exporters and
users of methyl bromide. Thus, Executive Order 13132 does not apply to
this final rule.

F. 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 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 13175. This 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 13175 does not apply to this final rule.

G. Executive Order 13045: Protection of Children From Environmental
Health 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 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 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

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

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards. This
rulemaking does not involve technical standards. Therefore, EPA is not
considering the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations, because it affects the
level of environmental protection equally for all affected populations
without having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or low-
income population. Any stratospheric ozone depletion that results from
this final rule will impact all affected populations equally because
ozone depletion is a global environmental problem with environmental
and human effects that are, in general, equally distributed across
geographical regions in the U.S.

K. 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 not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective December 28, 2007.

List of Subjects in 40 CFR part 82

Environmental protection, Ozone depletion, Chemicals, Exports, Imports.

Dated: December 19, 2007.
Stephen L. Johnson,
Administrator.

• For the reasons stated in the preamble, 40 CFR Part 82 is 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.

• 2. Section 82.8 is amended by revising the table in paragraph (c)(1)
and paragraph (c)(2) to read as follows:

Sec. 82.8 Grant of essential use allowances and critical use
allowances.

* * * * *
(c) * * *
(1) * * *

[[Page 74147]]

----------------------------------------------------------------------------------------------------------------
2008 Critical use
2008 Critical use allowances for post-
Company allowances for pre- harvest uses*
plant uses* (kilograms) (kilograms)
----------------------------------------------------------------------------------------------------------------
Chemtura Corp................................................. 1,687,407 186,595
Albemarle Corp................................................ 693,900 76,732
Ameribrom, Inc................................................ 383,464 42,404
TriCal, Inc................................................... 11,940 1,320
-------------------------------------------------
Total..................................................... 2,776,711 307,052
----------------------------------------------------------------------------------------------------------------
*For production or import of class I, Group VI controlled substance exclusively for the pre-plant or post-
harvest uses specified in Appendix L of this subpart.

(2) Allocated critical stock allowances granted for specified
control period. The following companies are allocated critical stock
allowances for 2008 on a pro-rata basis in relation to the inventory
held by each.

------------------------------------------------------------------------
Company
-------------------------------------------------------------------------
Albemarle.
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Burnside Services, Inc.
Cardinal Professional Products.
Chemtura Corp.
Degesch America, Inc.
Helena Chemical Co.
Hendrix & Dail.
Hy Yield Bromine.
Industrial Fumigation Company.
Pacific Ag.
Pest Fog Sales Corp.
Prosource One.
Reddick Fumigants.
Royster-Clark, Inc.
Trical Inc.
Trident Agricultural Products.
UAP Southeast (NC).
UAP Southeast (SC).
Univar.
Western Fumigation.
------------------------------------------------------------------------
Total--1,729,689 kilograms.
------------------------------------------------------------------------

• 3. Appendix L to Subpart A is revised to read as follows:

Appendix L to Part 82 Subpart A--Approved Critical Uses and Limiting
Critical Conditions for Those Uses for the 2008 Control Period

------------------------------------------------------------------------
Column A Column B Column C
------------------------------------------------------------------------
Limiting critical
conditions that
either exist, or
Approved critical that the approved
Approved critical uses user and location of critical user
use reasonably expects
could arise without
methyl bromide
fumigation
------------------------------------------------------------------------
Pre-Plant Uses:
Cucurbits............... (a) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.
(b) Southeastern Moderate to severe
U.S. limited to yellow or purple
growing locations nutsedge
in Alabama, infestation.
Louisiana, Moderate to severe
Mississippi, North soilborne disease
Carolina, South infestation.
Carolina, Moderate to severe
Tennessee, and root knot nematode
Virginia. infestation.
A need for methyl
bromide for
research purposes.
(c) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
root knot nematode
infestation.
A need for methyl
bromide for
research purposes.
Eggplant................ (a) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.

[[Page 74148]]

(b) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Moderate to severe
pythium collar,
crown and root rot.
Moderate to severe
southern blight
infestation.
Restrictions on
alternatives due to
karst topographical
features.
A need for methyl
bromide for
research purposes.
(c) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.
Forest Nursery Seedlings (a) Growers in Moderate to severe
Alabama, Arkansas, yellow or purple
Georgia, Louisiana, nutsedge
Mississippi, North infestation.
Carolina, Oklahoma, Moderate to severe
South Carolina, soilborne disease
Tennessee, Texas, infestation.
and Virginia. Moderate to severe
nematode
infestation.
(b) International Moderate to severe
Paper and its yellow or purple
subsidiaries nutsedge
limited to growing infestation.
locations in Moderate to severe
Alabama, Arkansas, soilborne disease
Georgia, South infestation.
Carolina, and Texas.
(c) Public Moderate to severe
(government-owned) weed infestation
seedling nurseries including purple
in Illinois, and yellow nutsedge
Indiana, Kentucky, infestation.
Maryland, Missouri, Moderate to severe
New Jersey, Ohio, Canada thistle
Pennsylvania, West infestation.
Virginia, and Moderate to severe
Wisconsin. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
(d) Weyerhaeuser Moderate to severe
Company and its yellow or purple
subsidiaries nutsedge
limited to growing infestation.
locations in Moderate to severe
Alabama, Arkansas, soilborne disease
North Carolina, and infestation.
South Carolina. Moderate to severe
nematode or worm
infestation.
(e) Weyerhaeuser Moderate to severe
Company and its yellow nutsedge
subsidiaries infestation.
limited to growing Moderate to severe
locations in Oregon soilborne disease
and Washington. infestation.
(f) Michigan growers Moderate to severe
soilborne disease
infestation.
Moderate to severe
Canada thistle
infestation.
Moderate to severe
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Orchard Nursery (a) Members of the Moderate to severe
Seedlings. Western Raspberry nematode
Nursery Consortium infestation.
limited to growing Presence of medium
locations in to heavy clay
Washington. soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.
(b) Members of the Moderate to severe
California nematode
Association of infestation.
Nursery and Garden Presence of medium
Centers to heavy clay
representing soils.
Deciduous Tree Prohibition on use
Fruit Growers. of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.
(c) California rose Moderate to severe
nurseries. nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
A need for methyl
bromide for
research purposes.

[[Page 74149]]

Strawberry Nurseries.... (a) California Moderate to severe
growers. soilborne disease
infestation.
Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
A need for methyl
bromide for
research purposes.
(b) North Carolina Moderate to severe
and Tennessee black root rot.
growers. Moderate to severe
root-knot nematode
infestation.
Moderate to severe
yellow and purple
nutsedge
infestation.
A need for methyl
bromide for
research purposes.
Orchard Replant......... (a) California stone Moderate to severe
fruit growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Presence of medium
to heavy soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits on use of
this alternative
have been reached.
(b) California table Moderate to severe
and raisin grape nematode
growers. infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
(c) California wine Moderate to severe
grape growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
(d) California Moderate to severe
walnut growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
(e) California Moderate to severe
almond growers. nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Replanted (non-
virgin) orchard
soils to prevent
orchard replant
disease.
Medium to heavy
soils.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Ornamentals............. (a) California Moderate to severe
growers. soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
A need for methyl
bromide for
research purposes.

[[Page 74150]]

(b) Florida growers. Moderate to severe
weed infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(c) Michigan Moderate to severe
herbaceous nematode
perennials growers. infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
yellow nutsedge and
other weed
infestation.
Peppers................. (a) Alabama, Moderate to severe
Arkansas, Kentucky, yellow or purple
Louisiana, nutsedge
Mississippi, North infestation
Carolina, South Moderate to severe
Carolina, nematode
Tennessee, and infestation.
Virginia growers. Moderate to severe
pythium root,
collar, crown and
root rots.
A need for methyl
bromide for
research purposes.
(b) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
soilborne disease
infestation.
Moderate to severe
nematode
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.
(c) Georgia growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation, or
moderate to severe
pythium root and
collar rots.
Moderate to severe
southern blight
infestation, crown
or root rot.
A need for methyl
bromide for
research purposes.
(d) Michigan growers Moderate to severe
soilborne disease
infestation.
A need for methyl
bromide for
research purposes.
Strawberry Fruit........ (a) California Moderate to severe
growers. black root rot or
crown rot.
Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Prohibition on use
of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Time to transition
to an alternative.
A need for methyl
bromide for
research purposes.
(b) Florida growers. Moderate to severe
yellow or purple
nutsedge
infestation.
Moderate to severe
nematode
infestation.
Moderate to severe
soilborne disease
infestation.
Carolina geranium or
cut-leaf evening
primrose
infestation.
Restrictions on
alternatives due to
karst topographical
features and soils
not supporting
seepage irrigation.
A need for methyl
bromide for
research purposes.

[[Page 74151]]

(c) Alabama, Moderate to severe
Arkansas, Georgia, yellow or purple
Illinois, Kentucky, nutsedge
Louisiana, infestation.
Maryland, Moderate to severe
Mississippi, nematode
Missouri, New infestation.
Jersey, North Moderate to severe
Carolina, Ohio, black root and
South Carolina, crown rot.
Tennessee, and A need for methyl
Virginia growers. bromide for
research purposes.
Sweet Potato Slips...... (a) California Prohibition on use
growers. of 1,3-
dichloropropene
products because
local township
limits for this
alternative have
been reached.
Tomatoes................ (a) Michigan growers Moderate to severe
soilborne disease
infestation
Moderate to severe
fungal pathogen
infestation.
A need for methyl
bromide for
research purposes.
(b) Alabama, Moderate to severe
Arkansas, Florida, yellow or purple
Georgia, Kentucky, nutsedge
Louisiana, North infestation
Carolina, South Moderate to severe
Carolina, soilborne disease
Tennessee, and infestation.
Virginia growers. Moderate to severe
nematodes.
Restrictions on
alternatives due to
karst topographical
features, and in
Florida, soils not
supporting seepage
irrigation.
A need for methyl
bromide for
research purposes.
Post-Harvest Uses:
Food Processing......... (a) Rice millers in Moderate to severe
all locations in infestation of
the U.S. who are beetles, weevils,
members of the USA or moths.
Rice Millers Presence of
Association. sensitive
electronic
equipment subject
to corrosion.
Time to transition
to an alternative.
(b) Pet food Moderate to severe
manufacturing infestation or
facilities in the beetles, moths, or
U.S. who are active cockroaches.
members of the Pet Presence of
Food Institute (for sensitive
this rule, ``pet electronic
food'' refers to equipment subject
domestic dog and to corrosion.
cat food). Time to transition
to an alternative.
(c) Bakeries in the Presence of
U.S.. sensitive
electronic
equipment subject
to corrosion.
Time to transition
to an alternative.
(d) Members of the Moderate to severe
North American beetle infestation.
Millers' Presence of
Association in the sensitive
U.S.. electronic
equipment subject
to corrosion.
Time to transition
to an alternative.
(e) Members of the Moderate to severe
National Pest beetle or moth
Management infestation.
Association Presence of
treating cocoa sensitive
beans in storage electronic
and associated equipment subject
spaces and to corrosion.
equipment and Time to transition
processed food, to an alternative.
cheese, herbs,
spices and spaces
and equipment in
associated
processing
facilities.
Commodities............. (a) California Rapid fumigation is
entities storing required to meet a
walnuts, beans, critical market
dried plums, figs, window, such as
raisins, and dates during the holiday
(in Riverside season, rapid
county only) in fumigation is
California. required when a
buyer provides
short (2 working
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.
A need for methyl
bromide for
research purposes.
Dry Cured Pork Products. (a) Members of the Red legged ham
National Country beetle infestation.
Ham Association. Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
(b) Members of the Red legged ham
American beetle infestation.
Association of Meat Cheese/ham skipper
Processors. infestation.
Dermested beetle
infestation.
Ham mite
infestation.

[[Page 74152]]

(c) Nahunta Pork Red legged ham
Center (North beetle infestation.
Carolina). Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
(d) Gwaltney of Red legged ham
Smithfield Ltd.. beetle infestation.
Cheese/ham skipper
infestation.
Dermested beetle
infestation.
Ham mite
infestation.
------------------------------------------------------------------------

[FR Doc. E7-25065 Filed 12-27-07; 8:45 am]
BILLING CODE 6560-50-P

Notices For
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994

Protection of Stratospheric Ozone: The 2008 Critical Use Exemption From the Phaseout of Methyl Bromide

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