[Federal Register Volume 69, Number 246 (Thursday, December 23, 2004)]
[Rules and Regulations]
[Pages 76982-77009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27905]
[[Page 76981]]
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Part II
Environmental Protection Agency
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40 CFR Part 82
Protection of Stratospheric Ozone: Process for Exempting Critical Uses
From the Phaseout of Methyl Bromide; Final Rule
Federal Register / Vol. 69, No. 246 / Thursday, December 23, 2004 /
Rules and Regulations
[[Page 76982]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[FRL-7850-8]
RIN 2060-AJ63
Protection of Stratospheric Ozone: Process for Exempting Critical
Uses From the Phaseout of Methyl Bromide
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is taking final action to exempt production and import of
methyl bromide for critical uses from the accelerated phaseout
regulations that govern the production, import, export, transformation
and destruction of substances that deplete the ozone layer under the
authority of the Clean Air Act (CAA). Today's amendments establish the
framework for an exemption permitted under the Montreal Protocol on
Substances That Deplete the Ozone Layer (Protocol) and the CAA and
specify the amount of methyl bromide that may be supplied in 2005 from
available stocks and new production and consumption to meet approved
critical uses. In addition, this action establishes the list of
critical uses approved by EPA for 2005.
DATES: Effective Date: This final rule is effective on January 1, 2005.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. OAR-2003-0230. All documents in the docket are listed in the
EDOCKET index at http://www.epa.gov/edocket. Although listed in the
index, some information is not publicly available, i.e., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically in
EDOCKET or in hard copy at the Air Docket, EPA/DC, EPA West, Room B102,
1301 Constitution Ave., NW., Washington, DC. This Docket Facility is
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The Public Reading Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is (202) 566-1744, and the telephone
number for the Air Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Hodayah Finman, U.S. Environmental
Protection Agency, Office of Air and Radiation, Stratospheric
Protection Division (6205J), 1200 Pennsylvania Avenue, NW., Washington,
DC 20460; telephone number: (202) 343-9246; fax numbers: (202) 343-
2338; [email protected]. You may also visit the EPA's Ozone
Depletion Web site at www.epa.gov/ozone for further information about
EPA's Stratospheric Ozone Protection regulations, the science of ozone
layer depletion, and other related topics.
SUPPLEMENTARY INFORMATION: This final rule concerns CAA restrictions on
the consumption, production and on the use of methyl bromide (class I,
Group VI controlled substance) for critical uses after the phaseout
date of January 1, 2005. Under the CAA, methyl bromide consumption and
production will be phased out on January 1, 2005 apart from allowable
exemptions, namely the critical use exemption and the existing
quarantine and pre-shipment exemption. With today's action, EPA is
establishing a framework for how the critical use exemption will
operate as well as specific amounts of methyl bromide to be made
available for approved critical uses in 2005.
Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C.,
Chapter 5, generally provides that rules may not take effect earlier
than 30 days after they are published in the Federal Register. Today's
final rule is issued under section 307(d) of the CAA, which states:
``The provisions of section 553 through 557 * * * of Title 5 shall not,
except as expressly provided in this subsection, apply to actions to
which this subsection applies.'' CAA Section 307(d)(1). Thus, section
553(d) of the APA does not apply to this rule. EPA nevertheless is
acting consistently with the policies underlying APA section 553(d) in
making this rule effective January 1, 2005. APA section 553(d) provides
an exception for any action that grants or recognizes an exemption or
relieves a restriction. Today's final rule grants an exemption from the
phaseout of production and import of methyl bromide for critical uses.
Because the complete phaseout takes effect January 1, 2005, EPA is
making this exemption effective on the same date to ensure the
availability of methyl bromide for critical uses.
Table of Contents
I. General Information
A. Does This Action Apply to Me?
II. What Is the Background of the Phaseout Regulations for Ozone
Depleting Substances?
III. What Is Methyl Bromide?
IV. What Is the Background for Today's Action?
V. What Are the Details of Today's Action?
A. Critical Need
1. Should EPA Establish a Critical Use Exemption
2. Should EPA Further Adjust the Amount of Methyl Bromide Under
the Critical Use Exemption
B. Amount From Stocks
C. Access to Stocks
D. Cap on Critical Use Methyl Bromide
E. Critical Use Allowance Allocations
1. Allocation of Critical Use Allowances
2. Baseline for Critical Use Allowance Distribution
3. Frequency of Critical Use Allowance Distribution
F. Critical Stock Allowance Allocations
G. Trading Allowances
H. Acquiring Critical Use Methyl Bromide
I. Who Is an Approved Critical User
1. Users and Uses
2. New Market Entrants
J. Reporting and Recordkeeping Requirements
1. Reporting
2. Recordkeeping
3. Treatment of Unused Critical Use Methyl Bromide
K. Enforcement Provisions
L. Export Provisions
VI. What Are the Other Considerations and Situations on Which EPA
Received Comments?
A. Distribution of Permits to Approved Critical Users
B. Comments on the Burden Associated With This Regulatory System
VII. Statutory and Executive Order Reviews
A. Executive Order No. 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order No. 13132: Federalism
F. Executive Order No. 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order No. 13045: Protection of Children From
Environmental Health & Safety Risks
H. Executive Order No. 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Congressional Review Act
I. General Information
A. Does This Action Apply to Me?
Entities potentially regulated by this proposed action are those
associated with the production, import, export, sale, application and
use of methyl bromide. Potentially regulated categories and entities
include:
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Category Examples of regulated entities
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Industry.......................... Producers, Importers and Exporters
of methyl bromide; Applicators,
Distributors of methyl bromide;
Users of methyl bromide, e.g.
farmers of vegetable crops, fruits
and seedlings; and owners of stored
food commodities and structures
such as grain mills and processors,
Government and non-government
researchers.
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The above table is not intended to be exhaustive, but rather
provides a guide for readers regarding entities likely to be regulated
by this proposed action. This table lists the types of entities that
EPA is aware could potentially be regulated by this proposed action. To
determine whether your facility, company, business, or organization is
regulated by this proposed action, you should carefully examine the
regulations promulgated at 40 CFR 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 FOR FURTHER
INFORMATION CONTACT Section.
II. What Is the Background of the Phaseout Regulations for Ozone
Depleting Substances?
The current regulatory requirements of the Stratospheric Ozone
Protection Program that limit production and consumption of ozone
depleting substances can be found at 40 CFR Part 82 Subpart A. The
regulatory program was originally published in the Federal Register on
August 12, 1988 (53 FR 30566), in response to the 1987 signing and
subsequent ratification of the Montreal Protocol on Substances that
Deplete the Ozone Layer (Protocol). The U.S. was one of the original
signatories to the 1987 Montreal Protocol and the U.S. ratified the
Protocol on April 21, 1988. Congress then enacted, and President Bush
signed into law, the Clean Air Act Amendments of 1990 (CAAA of 1990)
which included Title VI on Stratospheric Ozone Protection, codified as
42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States
could satisfy its obligations under the Protocol. EPA issued new
regulations to implement this legislation and has made several
amendments to the regulations since that time.
III. What Is Methyl Bromide?
Methyl bromide is an odorless, colorless, toxic gas, which is used
as a broad-spectrum pesticide and is controlled under the CAA as a
Class I ozone depleting substance (ODS). Methyl bromide is used in the
U.S. and throughout the world as a fumigant to control a wide variety
of pests such as insects, weeds, rodents, pathogens, and nematodes.
Additional characteristics and details about the uses of methyl bromide
can be found in the proposed rule on the phaseout schedule for methyl
bromide published in the Federal Register on March 18, 1993 (58 FR
15014) and the final rule published in the Federal Register on December
10, 1993 (58 FR 65018). The phaseout schedule for methyl bromide was
revised in a direct final rulemaking on November 28, 2000 (65 FR 70795)
which allowed for the phased reduction in methyl bromide consumption
and extended the phaseout to 2005. The revised phaseout schedule was
again amended to allow for an exemption for quarantine and preshipment
purposes on July 19, 2001 (66 FR 37751) with an interim final rule and
with a final rule (68 FR 238) on January 2, 2003. Information on methyl
bromide can be found at the following sites of the World Wide Web:
http://www.epa.gov/ozone/mbr and www.unep.org/ozone or by contacting
the Stratospheric Ozone Hotline at 1-800-296-1996.
Because it is a pesticide, methyl bromide is also regulated by EPA
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
and other statutes and regulatory authority and by States under their
own statutes and regulatory authority. Under FIFRA, methyl bromide is a
restricted use pesticide. Because of this status, a restricted use
pesticide is subject to certain Federal and State requirements
governing its sale, distribution, and use. Nothing in this final rule
implementing the Clear Air Act is intended to derogate from provisions
in any other Federal, State, or Local laws or regulations governing
actions including, but not limited to, the sale, distribution,
transfer, and use of methyl bromide. All entities that would be
affected by provisions of this final rule must continue to comply with
FIFRA and other pertinent statutory and regulatory requirements for
pesticides (including, but not limited to, requirements pertaining to
restricted use pesticides) when importing, exporting, acquiring,
selling, distributing, transferring, or using methyl bromide for
critical uses. The regulations in today's action are intended only to
implement CAA restrictions on the production, consumption and use of
methyl bromide for critical uses exempted from the phaseout of methyl
bromide.
IV. What Is the Background for Today's Action?
EPA published a proposed rule in the Federal Register on August 25,
2004 (69 FR 52366) proposing an exemption to the phaseout of methyl
bromide for critical uses, an allowance allocation system for critical
use methyl bromide, and a list of approved critical uses. EPA received
15,231 on-time comments related to Air Docket OAR-2003-0230 and 6
people spoke at a hearing EPA held on September 20, 2004 in Washington
D.C. that was attended by 20 individuals.
Methyl bromide was added to the Protocol as an ozone depleting
substance in 1992 through the Copenhagen Amendment to the Protocol. The
Parties 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, and, in Section 82.7 of
the rule, setting forth the percentage of baseline allowances for
methyl bromide granted to companies in each control period (each
calendar year) until the year 2001, when the complete phaseout would
occur (58 FR 65018). This phaseout date was 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 1992
Meeting of the Parties in Copenhagen.
At their 1995 meeting, the Parties made adjustments to the methyl
bromide control measures and agreed to reduction steps and a 2010
phaseout date for industrialized countries with
[[Page 76984]]
exemptions permitted for critical uses. At this time, the U.S.
continued to have a 2001 phaseout date in accordance with the CAAA of
1990 language. At their 1997 meeting, the Parties agreed to further
adjustments to the phaseout schedule for methyl bromide in
industrialized countries, with reduction steps leading to a 2005
phaseout for industrialized countries. In October 1998, the U.S.
Congress amended the CAA to prohibit the termination of production of
methyl bromide prior to January 1, 2005, to require EPA to bring the
U.S. phaseout of methyl bromide in line with the schedule specified
under the Protocol, and to authorize EPA to provide exemptions for
critical uses. These amendments were contained in Section 764 of the
1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act
(Pub. L. 105-277, October 21, 1998) and were codified in Section 604 of
the CAA, 42 U.S.C. 7671c. On November 28, 2000, EPA issued regulations
to amend the phaseout schedule for methyl bromide and extend the
complete phaseout of production and consumption to 2005 (65 FR 70795).
Today, in accordance with the 1998 amendments to the CAA, EPA is
further amending 40 CFR Part 82 to implement an exemption to the 2005
phaseout of methyl bromide that allows continued production and
consumption of methyl bromide for critical uses. Section 604(d)(6) of
the CAA provides that ``[t]o the extent consistent with the Montreal
Protocol, the Administrator, after notice and the opportunity for
public comment, and after consultation with other departments or
instrumentalities of the Federal Government having regulatory authority
related to methyl bromide, including the Secretary of Agriculture, may
exempt the production, importation, and consumption of methyl bromide
for critical uses.'' 42 U.S.C. 7671c(d)(6). Article 2H(5) of the
Montreal Protocol provides that the 2005 methyl bromide phaseout shall
not apply ``to the extent the Parties decide to permit the level of
production or consumption that is necessary to satisfy uses agreed by
them to be critical uses.''
Both Section 604(d)(6) and Section 614(b) of the CAA address the
relationship between the Montreal Protocol and actions taken under the
CAA's stratospheric ozone provisions. Section 604(d)(6) addresses
critical uses specifically, while Section 614(b) is more general in
scope. Section 604(d)(6) states that ``to the extent consistent with
the Montreal Protocol,'' the Administrator may exempt methyl bromide
for critical uses. Section 614(b) states: ``This title as added by the
Clean Air Act Amendments of 1990 shall be construed, interpreted, and
applied as a supplement to the terms and conditions of the Montreal
Protocol, as provided in Article 2, paragraph 11 thereof, and shall not
be construed, interpreted, or applied to abrogate the responsibilities
or obligations of the United States to implement fully the provisions
of the Montreal Protocol. In the case of conflict between any provision
of this title and any provision of the Montreal Protocol, the more
stringent provision shall govern.''
EPA must take into account not only the text of Article 2H but also
the related Decisions of the Protocol Parties that interpret that text.
Under customary international law, as codified in the 1969 Vienna
Convention on the Law of Treaties (8 International Legal Materials 679
(1969)) both the treaty text and the practice of the parties in
interpreting that text form the basis for its interpretation. Although
the United States is not a party to the 1969 Convention, the United
States has regarded it since 1971 as ``the authoritative guide to
current treaty law and practice.'' See Secretary of State William D.
Rodgers to President Richard Nixon, October 18, 1971, 92d Cong., 1st
Sess., Exec. L (Nov. 22, 1971). Specifically, Article 31(1) of the
Vienna Convention provides that ``[a] treaty shall be interpreted in
good faith in accordance with the ordinary meaning to be given to the
terms of the treaty in their context and in light of its object and
purpose.''
Article 31(3) goes on to provide that ``[t]here shall be taken into
account, together with the context: (a) Any subsequent agreement
between the parties regarding the interpretation of the treaty or the
application of its provisions.'' In the current circumstances,
Decisions of the Parties can be construed as subsequent consensus
agreements among the Parties to the Montreal Protocol, including the
United States, regarding the interpretation and application of the
Protocol.
In accordance with Article 2H(5), the Parties have issued several
Decisions pertaining to the critical use exemption. At their Ninth
Meeting in 1997, the Parties issued Decision IX/6 which established
criteria applicable to the critical use exemption. In paragraph 1 of
Decision IX/6, the Parties agreed as follows:
(a) That a use of methyl bromide should qualify as ``critical''
only if the nominating Party determines that:
(i) The specific use is critical because the lack of availability
of methyl bromide for that use would result in a significant market
disruption; and
(ii) There are no technically and economically feasible
alternatives or substitutes available to the user that are acceptable
from the standpoint of environment and health and are suitable to the
crops and circumstances of the nomination;
(b) That production and consumption, if any, of methyl bromide for
critical uses should be permitted only if:
(i) All technically and economically feasible steps have been
taken to minimize the critical use and any associated emission of
methyl bromide;
(ii) Methyl bromide is not available in sufficient quantity and
quality from existing stocks of banked or recycled methyl bromide,
also bearing in mind the developing countries' need for methyl
bromide;
(iii) It is demonstrated that an appropriate effort is being
made to evaluate, commercialize and secure national regulatory
approval of alternatives and substitutes, taking into account the
circumstances of the nomination * * * Non-Article V [Developed
country] parties must demonstrate that research programmes are in
place to develop and deploy alternatives and substitutes * * *.
The Parties also agreed in Decision IX/6 that the technical panel
(discussed below) that reviews nominations and makes recommendations to
the Parties regarding approval of critical use exemptions, would base
its review and recommendations on the criteria in paragraphs (a)(ii)
and (b). The criterion in paragraph (a)(i) was not subject to review by
this technical panel.
At the First Extraordinary Meeting of the Parties in March of 2004,
the Parties issued several decisions that address the agreed critical
uses, the allowable levels of new production and consumption for
critical uses, the conditions for granting critical use exemptions, and
reporting obligations. Decision Ex. I/3 covers the agreed critical uses
and allowable levels of new production and consumption for the year
2005. This Decision includes the following terms:
1. For the agreed critical uses set forth in annex II A to the
report of the First Extraordinary Meeting of the Parties to the
Montreal Protocol for each Party, to permit, subject to the conditions
set forth in decision Ex. I/4, the levels of production and consumption
set forth in annex II B to the present report which are necessary to
satisfy critical uses, with the understanding that additional levels
and categories of uses may be approved by the Sixteenth Meeting of the
Parties in accordance with decision IX/6;
2. That a Party with a critical-use exemption level in excess of
permitted levels of production and consumption
[[Page 76985]]
for critical uses is to make up any such difference between those
levels by using quantities of methyl bromide from stocks that the Party
has recognized to be available;
3. That a Party using stocks under paragraph 2 above shall prohibit
the use of stocks in the categories set forth in annex II A to the
report of the First Extraordinary Meeting of the Parties to the
Montreal Protocol when amounts from stocks combined with allowable
production and consumption for critical uses exceed the total level for
that Party set forth in annex II A to the present report;
4. That Parties should endeavor to allocate the quantities of
methyl bromide recommended by the Technology and Economic Assessment
Panel as listed in annex II A to the report of the First Extraordinary
Meeting of the Parties;
5. That each Party which has an agreed critical use should ensure
that the criteria in paragraph 1 of decision IX/6 are applied when
licensing, permitting or authorizing the use of methyl bromide and that
such procedures take into account available stocks. Each Party is
requested to report on the implementation of the present paragraph to
the Ozone Secretariat.
The agreed critical uses and allowable levels of production and
consumption are set forth in annexes to the Parties' report. Decision
Ex I/4 addresses the conditions for granting and reporting critical-use
exemption for methyl bromide.
Decisions IX/6, Ex. I/3, and Ex. I/4 are subsequent consensus
agreements of the Parties that address the interpretation and
application of the critical use provision in Article 2H(5) of the
Protocol. For example, Decision Ex. I/3 reflects a decision called for
by the text of Article 2H(5) where the parties are directed to ``decide
to permit the level of production or consumption that is necessary to
satisfy uses agreed by them to be critical uses.'' EPA intends to
follow the terms of Decisions IX/6, Ex. I/3, and Ex. I/4. This will
ensure consistency with the Montreal Protocol and satisfy the
requirements of Section 604(d)(6) and Section 614(b) of the CAA.
V. What Are the Details of Today's Action?
A. Critical Need
1. Should EPA Establish a Critical Use Exemption?
With today's final action, EPA is establishing the critical use
exemption (CUE) by amending 40 CFR Part 82 to exempt production and
import of methyl bromide from the January 1, 2005 phaseout to meet the
needs of users who do not have technically and economically feasible
alternatives available to them. In today's rulemaking, EPA is
describing the framework for the critical use exemption, assigning
allowances for critical use methyl bromide, and determining the
quantities of exempted methyl bromide allowable under the Clean Air Act
(CAA) and the Montreal Protocol.
EPA received 15,176 on time comments requesting the Agency not to
exempt any methyl bromide for critical uses. The CAA allows the Agency
to create an exemption for critical uses to the extent consistent with
the Protocol. The Protocol authorizes an exemption to the extent
decided by the Parties. In Decision Ex. I/3, the Parties decided to
permit a limited exemption for specified uses nominated by the United
States. EPA, in conjunction with other U.S. government entities, spent
substantial time reviewing applications for critical use exemptions and
preparing a nomination based on the lack of technically and
economically feasible alternatives for the nominated uses. As discussed
below, EPA does not have new information that would change the basis
for the nomination. Although the Act does not require EPA to establish
an exemption, EPA believes that the lack of suitable alternatives for
the uses listed as approved critical uses in today's rulemaking
warrants the establishment of an exemption.
The history of the ozone protection programs has been the
transition of industries away from production, import, and use of ozone
depleting chemicals to alternatives. In some instances a successful
transition was possible within the allotted time. In other instances,
additional time has been required to allow for the development and
market penetration of alternatives. In fact, more than ten years after
the phaseout of chloroflurocarbons (CFCs), the U.S. government is still
exempting the production of CFCs for essential uses in metered dose
inhalers. In the instance of critical uses where suitable alternatives
are not yet available for all uses, EPA believes it would be
inconsistent with the history and the goals of the ozone protection
program to not allow for a safety valve in accordance with the
provisions of both international and domestic law.
2. Should EPA Further Adjust the Amount of Methyl Bromide Available
Under the Critical Use Exemption?
Similar to CFCs which were used in varied applications, methyl
bromide is a highly effective general biocide and is used in a wide
variety of distinctly different pest control operations. Some of the
effective treatments which are available as alternatives to methyl
bromide work in certain niche applications or under specific
conditions. There is no ``drop in'' replacement for all of the current
uses of methyl bromide. The registration of alternatives continues to
be a priority for the Agency.
EPA conducted a thorough analysis on the technical and economic
feasibility of available alternatives specified by the Methyl Bromide
Technical Options Committee (MBTOC) for each critical use and the
potential for significant market disruption in the event that methyl
bromide were not available for a particular use. The analysis, in the
form of the U.S. nomination of critical uses and answers to clarifying
questions on those documents, is available in the docket OAR-2003-0230.
A memorandum describing the review process, titled ``Memorandum: 2003
Nomination Process'' is also available in the docket. In the notice of
proposed rulemaking, EPA solicited comments on the technical and
economic assessment conducted on the alternatives to methyl bromide.
EPA received 14 comments on the technical and economic assessment
of alternatives to methyl bromide. These comments did not provide the
Agency with any new information for EPA's consideration on the efficacy
and cost of alternatives. Therefore, EPA is not further adjusting the
amount of methyl bromide available under the critical use exemption.
One commenter stated that their products, 1,3-dichloropropene (1,3-
D) and sulfuryl flouride (SF), can displace a significant portion of
the critical use market, 40% of the authorized amount, but they
recognize that from a practical transition perspective, such reductions
will not easily happen in the next year. The commenter provided a table
indicating that these two products could be technical and economical
substitutes in every critical use category for which their products are
registered.
In the U.S. nomination, the EPA took great pains to describe the
specific circumstances that make 1,3-D, which may be otherwise
technically and economically feasible, not feasible for a certain
portion of total domestic use. The EPA determined that 1,3-D products
can be used in a variety of circumstances but there are some factors,
such as regulatory limits on the use of 1,3-D or the presence of heavy
nutsedge weed populations that would
[[Page 76986]]
make the 1,3-D products not technically and economically feasible. EPA,
in consultation with the U.S. Department of Agriculture (USDA), has
determined that over the portion of the crop there may be technical
limitations to the use of 1,3-D treatments or economic losses
associated with the use of this fumigant.
The commenter specifically pointed to comments made in the 2004
Methyl Bromide Technical Options Committee (MBTOC) report where the
committee indicated that there are technically feasible herbicides
available to control nutsedge, specifically halosulfuron for peppers
and halosulfuron and triflxysulfuron for tomatoes, that can be used in
combination with 1,3-D products to provide complete spectrum pest
control. As described in the nomination, both of these herbicides have
been recently registered and can provide effective control of nutsedge
populations, however certain regulatory restrictions exist on the use
of these products causing them to be not technically available within
current cropping systems for the exempted portion of production. For
example, both products have plant back restrictions which limit the
ability of growers to plant a second crop. Almost without exception,
U.S. pepper and tomato farmers plant more than one crop on the same
acreage. The U.S. nominations additionally analyzed the feasibility of
using 1,3-D products without the herbicides and finds that the
treatment is not economically feasible. For example, a typical tomato
farm in the southeastern U.S. would experience approximately $5,700 in
losses per acre using 1,3-D products compared to using methyl bromide
due to losses in product yield and quality.
The commenter indicated the use of alternatives, specifically an
emulsified formulation of chloropicrin (Pic EC) and metham sodium in
combination with chloropicrin, is technically feasible for strawberry
production in California according to the 2004 MBTOC report. Again, the
U.S. nomination describes the limitations of these alternatives for the
specific circumstance of the nominated acreage. For example, 15% of the
nominated area is located on hilly terrain that makes the use of drip
applied fumigants a technically infeasible alternative. Furthermore,
chloropicrin is not a full spectrum fumigant. Chloropicrin provides
good control of disease but the nomination clearly states that the
nominated area additionally has nematode and weed pressures as well.
The commenter did not provide a copy of a study documenting comparable
pest control and yields using Pic EC for areas with nematode, weed, and
disease pressures. Further, metham sodium used with chloropicrin is not
economically feasible according to the nomination. EPA, in consultation
with USDA, has determined that yield differences could result in 24%
decline in gross revenues on average compared to methyl bromide.
Six of the 14 comments indicted above that the Agency should reduce
the amounts the methyl bromide exempted from the phaseout to allow for
the uptake of a newly registered alternative, sulfuryl fluoride, for
mills and grains. Sulfuryl fluoride (SF) was registered by EPA for use
on grains and flour mills on January 23, 2004 under the trade name
Profume. The SF fumigant has been available in the U.S. since 1961
under the trade name Vikane for non food uses such as structural
termite fumigation. The registrant, Dow Agrochemicals, is pursuing
registration of Profume for use on dried fruit and tree nuts and non-
specific food handling and storage.
The U.S. originally nominated 536,328 kilograms (kg) of methyl
bromide for critical uses in mills and processors for the year 2005. As
described in the notice of proposed rulemaking, this nomination was
reduced by the Parties to 483,000 kgs to account for the market uptake
of alternatives including sulfuryl fluoride and to account for more
efficient methyl bromide fumigation practices. This reduction is a 10%
reduction from the originally nominated amount. The 2004 MBTOC report
on recommended exemptions for next year (2006) states that a further
10% reduction for flour mills could be warranted to allow for the
adoption of a number of alternatives, of which sulfuryl fluoride is
one, and more efficient methyl bromide fumigation techniques. Since the
2005 exemption had already been reduced by 10% for sulfuryl fluoride
and that 10% seems to be a reasonable technical adoption rate according
to the MBTOC as quoted by the commenter. EPA does not believe further
reductions for 2005 can be justified at this time given the lack of
specific technical and economic feasibility data provided to the Agency
on Profume and given the lack of specific market penetration data
provided by the commenter to substantiate assertions for a larger
market penetration.
EPA understands that Profume can be effective in controlling
insects, although higher rates of the chemical are required to control
insect eggs. As this is a newly registered compound, EPA does not have
sufficient data at this time to conduct a technical and economic
analysis to determine if further reductions are warranted. One key
uncertainty regarding the market penetration and economic feasibility
of Profume is the cost of the product on a per pound basis and the cost
of a typical fumigation. The Agency anticipates that as trial
fumigations or commercial fumigations take place, that the registrant
will be able to compile technical and economic data to EPA for use in
the development of future critical use nominations.
In addition to the technical and economic data required to conduct
a critical use assessment, as noted by the Technology and Economic
Assessment Panel (TEAP), a scientific panel that advises the Parties to
the Montreal Protocol, a specific alternative may take up to 5
fumigation cycles of use before efficacy can be determined in the
specific circumstances of the user. This would mean that several repeat
fumigations would be needed before determining the technical
feasibility of an alternative. An additional limitation to SF uptake at
this time is that many mills in the U.S. produce partial recipe
products that contain ingredients such as sugar or baking soda. The
registration of SF does not include tolerances for these ingredients
thus limiting the use of this alternative for a certain portion of the
sector. Finally SF is not registered in California and therefore can
not be used by mills in that state.
B. Amount From Stocks
EPA is allowing up to 1,283,214 kilograms of methyl bromide from
inventories stockpiled before the phaseout date of January 1, 2005 to
be sold for approved critical uses. In evaluating the issue of the
amount of the critical use level for 2005 that should be met from
stocks, EPA considered comments received and the following statements
in Decision Ex. I/3. Decision Ex I/3(1) permits a level of production
and consumption equal to 30% of the 1991 baseline and establishes an
agreed critical use level equal to 35% of the 1991 baseline. With
regard to drawdown from existing inventory, Decision Ex. I/3(2) states:
``That a Party with a critical-use exemption level in excess of
permitted levels of production and consumption for critical uses is to
make up any such difference between those levels by using quantities of
methyl bromide from stocks that the Party has recognized to be
available.'' The availability of stocks is also addressed in Decision
Ex. I/3(5), which states: ``That each Party which has an agreed
critical use should ensure that the criteria in paragraph 1 of decision
IX/6 are applied when licensing, permitting
[[Page 76987]]
or authorizing the use of methyl bromide and that such procedures take
into account available stocks.
In acting in accordance with Decision Ex. I/3, EPA looks to
Paragraph (3) of that Decision, which states that a Party ``shall
prohibit'' the use of stocks when the usage of stocks combined with
production and consumption exceeds the total level of critical uses
agreed to by the Parties, and to Paragraph (2) of that Decision, which
states that a Party with a use exemption exceeding allowable production
and consumption ``is to make up'' any such difference by using stocks
recognized to be available. Additionally, Paragraph (5) of Decision Ex.
I/3 states that Parties should ensure that Decision IX/6's criteria are
applied, and Decision IX/6 states that production and consumption
should not be permitted where stocks are recognized to be available.
Taking into account the language of Decision Ex. I/3's first three
Paragraphs, and the fact that the fifth Paragraph is hortatory, EPA
concludes that the appropriate level of stocks utilization is set forth
in Decision Ex. I/3(1), which establishes a critical use level of 35%
but permits production and consumption of 30%. Paragraph (1) of
Decision Ex. I/3, read in conjunction with paragraph (2) of the same
Decision, specifies the amount of the critical use level for 2005 that
should be met from stocks. Paragraph (1) establishes a critical use
level of 35% of baseline but permits production and consumption of 30%.
Paragraph (2) explains that the difference is to made up by using
available stocks. Therefore, the amount of the United States' 2005
critical use level that should be met from stocks is 1,283,214
kilograms, i.e., an amount equivalent to 5% of baseline.
EPA's conclusion is consistent with Paragraph (5) of Decision Ex.
I/3. That Paragraph requests each Party with an agreed critical use to
take into account available stocks when authorizing the use of methyl
bromide. Given the language in Paragraphs (1) and (2) of Decision Ex.
I/3, EPA interprets Paragraph (5)'s language as meaning that the U.S.
should not authorize critical use exemptions without including
provisions addressing drawdown from stocks for critical uses. EPA is
acting consistently with Paragraph (5) by establishing requirements
governing the sale of pre-phaseout inventories for approved critical
uses. In section V.F of today's rulemaking, EPA describes the mechanism
by which the Agency is allowing stocks of methyl bromide to be sold for
approved critical uses. In addition, EPA is taking into account stocks
through the trading provisions outlined in section V. G of today's
rulemaking, which allow critical use allowances to be converted into
critical stock allowances.
EPA had proposed to undertake an independent analysis of the amount
to come from stocks and to adjust the authorized level of new
production and consumption for critical uses by the amount of
``available'' stocks determined through this analysis. The methodology
proposed for this analysis was elaborated in the NPRM and also in a
Technical Support Document that can be obtained from the rulemaking
docket.
EPA also sought comment on an alternative approach: ``For the 2005
calendar year, the Agency could make a determination that the amount of
methyl bromide available from existing stocks is simply based on the
difference between the limit on methyl bromide for critical uses (8,942
metric tons) and the limit on new production and import (7,659 metric
tons) in the Decision Ex. I/3.'' 69 FR 52375. This is essentially the
approach adopted in today's final rule. EPA is clarifying, however,
that the appropriate level of stock drawdown for critical uses in 2005
is set out in Decision Ex. I/3.
EPA received 10 comments on the independent assessment approach
proposed in the NPRM for determining available stocks: five comments in
favor of this approach and nine comments suggesting further refinements
to the methodology. However, since EPA is not using the methodology to
determine available stocks for the 2005 control period, the Agency is
not responding to the details of the comments in today's rulemaking.
One commenter stated that EPA should use a ``mathematical''
approach, under which the amount from stocks would equal the difference
between the limit on methyl bromide for critical uses and the limit on
new production and import. EPA believes that the approach adopted in
this final rule is consistent with this commenter's recommendation.
Two commenters stated that all stocks must be used before any new
production is permitted and that all stocks other than those for export
to developing countries should be considered ``available'' for critical
uses. One commenter refers to Decision IX/6, paragraph (1)(b), in which
the Parties agreed: ``That production and consumption, if any, of
methyl bromide for critical uses should be permitted only if: * * *
(ii) Methyl bromide is not available in sufficient quantity and quality
from existing stocks of banked or recycled methyl bromide, also bearing
in mind the developing countries' need for methyl bromide.'' EPA does
not believe that this is an accurate characterization of Decision IX/6
as it relates to Decision Ex. I/3. Paragraph 2 of Decision Ex. I/3
states that a Party ``is to make up'' the difference between an agreed
use level and production and consumption ``from stocks that the Party
has recognized to be available.'' Moreover, Decision IX/6 asks Parties
to permit production and consumption where ``methyl bromide is not
available in sufficient quantity and quality from existing stocks of
banked and recycled methyl bromide, also bearing in mind the developing
countries' need for methyl bromide.'' Both of these statements
contemplate the possibility that available stocks could be less than
existing stocks. Moreover, the United States and other countries have
interpreted identical decisional language in the essential use
exemption context not to require the use of all existing stocks, and
Decision Ex. I/3's consideration of stocks is consistent with this
interpretation. In addition, EPA disagrees with the commenter's
assumption that all stocks that are not specifically designated for
export to developing countries are available for critical uses. For
example, there may be stocks in the U.S. produced specifically for
quarantine and pre-shipment uses or stocks held on behalf of another
entity for a non-critical use during their transition to alternatives.
In addition, the U.S. is a global supplier of methyl bromide and
existing inventories may be tagged for critical uses in other developed
countries.
C. Access to Stocks
In the proposed rule, EPA described several different approaches to
controlling access to stocks of methyl bromide produced or imported
before the phaseout date of January 1, 2005. EPA proposed a limit on
the sale of stocks to approved critical users. In addition, EPA
proposed to prohibit sale of stocks to end users in nominated sectors
who lacked the limiting critical conditions that make methyl bromide
use critical for the categories listed in Decision Ex. I/3. EPA sought
comment on whether to apply use restrictions to other groups. The
Agency recognizes that a person who qualifies as an approved critical
user may have both approved critical uses and other uses. Further, the
Agency also recognizes the possibility that an approved critical user
could grow two distinct crops or fumigate two distinct commodities in
the same field or structure during a single control period. In today's
rule, EPA is restricting access to stocks for approved critical uses.
Approved
[[Page 76988]]
critical uses are listed in Appendix L to 40 CFR Part 82, Subpart A.
The total amount of pre-phaseout inventory that may be sold as
critical use methyl bromide is equivalent to 5% of the 1991 baseline.
As discussed below, this rule creates critical stock allowances (CSAs)
in this amount. For each kilogram of methyl bromide sold from pre-
phaseout inventories as critical use methyl bromide, a CSA holder must
expend one CSA.
In finalizing the provisions on access to stocks, EPA considered
comments received and the language of Decision Ex I/3(3), which states:
``That a Party using stocks under paragraph 2 above shall prohibit the
use of stocks in the categories set forth in annex II A to the report
of the First Extraordinary Meeting of the Parties to the Montreal
Protocol when amounts from stocks combined with allowable production
and consumption for critical uses exceed the total level for that Party
set forth in annex II A to the present report.''
EPA received four comments supporting unlimited access to stocks
for approved critical uses and 24 additional comments supporting
unlimited access to stocks for all uses. EPA also received 1 comment
stating that there is no legal basis for allowing use of stocks by
users that did not apply for or did not qualify for critical use
status, and no basis for the Agency's supposition that some users did
not apply for CUE status because they were counting on use of stocks.
EPA reads Decision Ex I/3(3) as requiring limitations on the use of
stocks only with respect to uses agreed by the Parties to be critical.
Annex II A to the report of the First Extraordinary Meeting is titled
``Agreed critical-use categories.'' Paragraph (1) of Decision Ex. I/3
permits limited production and consumption ``[f]or the agreed critical
uses set forth in annex II A.'' Because paragraph (3) of Decision Ex I/
3 also refers to Annex II A, EPA concludes that the burden of the stock
restriction is coextensive with the benefit of the new production and
import. EPA does not believe that Decision Ex I/3(3) can be read to
allow unlimited access to stocks for approved critical uses because the
prohibition is directly linked to ``the categories set forth in annex
II A,'' which are the categories of critical uses agreed to by the
Parties. Nor can the Decision be read to allow unlimited access to
stocks for all uses: that would fail to give any effect to the phrase
``shall prohibit the use of stocks.'' EPA disagrees with the comment
that there is no legal basis for allowing use of stocks by users that
did not apply for or did not qualify for critical use status. Decision
Ex I/3(3) does not require that individual Parties prohibit use of
stocks by users whose uses fall outside the categories of agreed
critical uses. Nothing in the Protocol or the CAA mandates that EPA
limit drawdown from stocks for such uses. In anticipating that some
users did not apply for CUE status because they were counting on use of
stocks, the Agency did not assume that any user had special knowledge
of the total amount of stocks available but rather that an individual
user might have confirmed with its supplier that enough methyl bromide
would be available from that supplier's inventory to meet the
individual user's limited transitional needs. For example, some onion
growers in the southeastern U.S. informed EPA in their comments on the
rulemaking they did not apply for an exemption because they intend to
avail themselves of existing stocks.
Nine commenters stated that EPA does not have legal authority to
restrict the use of methyl bromide stocks. These commenters argue that
no provision of the CAA authorizes EPA to impose such restrictions.
Specifically, they state that section 604(d)(6) refers only to
production, importation, and consumption, and that by addressing use in
other sections of the CAA, Congress demonstrated its intent to deny EPA
authority to regulate stocks under 604(d)(6). However, section
604(d)(6) directly relates to use: the exempted production, importation
and consumption is for critical ``uses.'' While Congress, in the CAA,
generally mandated that production and consumption of ozone-depleting
substances be phased out across the board, regardless of use, the Act
does contain certain provisions, including section 604(d)(6), that
authorize EPA to provide exceptions on the basis of use. Thus, section
604(d)(6) is one of the provisions of the CAA where use is clearly at
issue.
In today's final rule, EPA is imposing narrowly tailored use
restrictions as a condition of obtaining new production and import. EPA
believes that section 604(d)(6) mandates this result. In section
604(d)(6), Congress provided EPA authority to exempt production and
import of methyl bromide for critical uses, but only ``to the extent
consistent with the Protocol.'' The use restrictions in today's final
rule are necessary to ensure that total usage for critical uses does
not exceed the limit agreed to by the Parties in implementing the
critical use provision in Article 2H of the Protocol. The relationship
between sections 604(d)(6) and 614(b) of the CAA and the Protocol and
its Decisions is discussed in detail in the NPRM and in the background
section of this preamble.
The commenters further argue that EPA cannot rely on Decision Ex I/
3 to justify restrictions on use of stocks. They state that while
Decisions may be used to interpret existing requirements in the
Protocol, they cannot be used to substantively change those
requirements. However, EPA is not suggesting that Decision Ex I/3
substantively changed the requirements of Article 2H. Article 2H
establishes a prohibition on the production and consumption of methyl
bromide, but states that the prohibition shall not apply ``to the
extent the Parties decide to permit the level of production and
consumption that is necessary to satisfy uses agreed by them to be
critical uses.'' The Parties have not interpreted Article 2H in the
manner the commenters assert. Instead, they understood the language
referring to ``uses agreed by them to be critical uses'' to allow the
Parties to tie the determinations of production and consumption to use.
Under international law, this interpretation and practice of the
Parties may, in the current situation, be read to be an accurate
interpretation of Article 2H's language. Although Decision Ex. I/3
focuses on regulating production and consumption, the Parties could
reasonably set related conditions on agreeing to production and
consumption at a particular level. Therefore, the stock restrictions
are an integral part of the Parties' decision regarding the level of
production and consumption necessary to satisfy critical uses.
The commenters further characterize the restrictions on access to
stocks proposed in the NPRM as ``an attempt by the Agency to bypass the
Treaty Clause of the U.S. Constitution by unilaterally amending the
Montreal Protocol through a rulemaking, without the advice and consent
of the Senate.'' EPA rejects this characterization. Article 2H
explicitly assigns to the Parties the task of deciding what level of
production and consumption ``is necessary to satisfy uses agreed by
them to be critical uses * * *.'' Therefore, EPA looks to the Parties'
Decisions to provide the details of the exemption authorized in Article
2H. In Decision Ex I/3, the Parties decided what level of production
and consumption was necessary given certain assumptions about stocks.
Accordingly, in compliance with Article 2H, this final rule addresses
both production and consumption and the use of stocks.
[[Page 76989]]
D. Cap on Critical Use Methyl Bromide
Based on the EPA's assessment of the technical and economic
feasibility of alternatives and the potential for a significant market
disruption if methyl bromide were not available for the uses listed in
Appendix L, and the lack of any new information that would change EPA's
assessment, EPA is establishing the following amounts of methyl bromide
as critical use methyl bromide available only for approved critical
uses as described in section V.H of this preamble for the control
period of the year of 2005.
With today's action, EPA is finalizing a determination that
8,942,214 kgs of methyl bromide are required to satisfy critical uses
for 2005. EPA intends to address supplemental and new CUE allocations
in a subsequent rulemaking following the 16th Meeting of the Parties to
the Montreal Protocol. EPA is authorizing the full amount of new
production/import allowable under Decision Ex I/3, a total of 7,659,000
kgs, and is authorizing those entities that hold inventories of methyl
bromide to sell 1,283,214 kgs for approved critical uses during 2005.
The details of allowance allocation for both critical production/import
and critical stocks are described in sections V.E and V.F of this
preamble.
EPA co-proposed two options for the cap on critical use methyl
bromide: A universal cap where all approved critical uses would
purchase critical use methyl bromide under the same cap and a sector
specific cap where each of the 16 critical use sectors would have their
own cap of reserved material. EPA also solicited comment on an
applicant-specific cap and on several hybrid options. In preparing this
final rule, EPA considered comments received and Decision Ex I/3(4),
which states: ``That Parties should endeavor to allocate the quantities
of methyl bromide recommended by the Technology and Economic Assessment
Panel as listed in annex II A to the report of the First Extraordinary
Meeting of the Parties.''
EPA received 28 comments supporting the fully flexible universal
cap. Commenters supported this option for several reasons: ease of
implementation, cost savings and efficiencies to the regulated
community, and the inability of EPA to predict with precision the exact
market demand for methyl bromide on a sector basis. EPA received four
comments supporting a sector specific cap to ensure that smaller uses,
less frequent uses, and uses that occur towards the end of the control
period are guaranteed access to some minimum supply. EPA received one
comment supporting an applicant specific approach so that the Agency
can track use of methyl bromide at a more specific level. EPA also
received one comment supporting a hybrid option that would separate
pre-plant uses of methyl bromide from post-harvest uses. Additional
comments received by EPA on other hybrids are addressed in the response
to comment (RTC) document available in the docket for today's rule.
In today's rulemaking, EPA is establishing two types of critical
use allowances (CUAs) for the production/import of methyl bromide: CUAs
for pre-plant soil uses and CUAs for post-harvest and structural uses.
The portion of the critical use methyl bromide supplies obtained from
available stocks, however, will be allocated as a universal cap as
proposed. EPA did not receive any adverse comment on the proposal to
make the quantities from stocks available in a universal fashion.
EPA agrees with the comments made by entities supporting the
universal option and believes that such a system would in fact lead to
the most economically efficient outcome and impose the least burden on
industry. However, to address concerns raised by smaller, less frequent
and end of year uses, EPA is separating out the post-harvest uses of
methyl bromide, which occur regularly throughout the year, from pre-
plant uses which tend to be clustered around a particular time in the
growing season. Noting that Decision Ex I/3 (4) states that Parties
``should endeavor'' to allocate ``as listed in annex II A,'' EPA
examined our ability to implement a sector specific system. However,
there are several practical impediments to implementing such a system.
EPA does not have precise data on use of methyl bromide because the
current regulations on methyl bromide require reporting of production,
imports, and exports of methyl bromide, not use. The more specific the
categories for which EPA is estimating use, the less precise the
estimate becomes. Therefore, EPA is reluctant to create sector or
applicant specific limits because of the inherent uncertainty of the
data at that detailed level. With the establishment of the critical use
exemption, EPA will begin to track sector level use data and therefore
the concern about data viability should diminish over time.
Another limitation to the sector or applicant specific approach is
the upstream allowance allocation system itself where EPA issues
allowances to producers and importers and not end users. Using an
upstream allowance allocation system as proposed, EPA would be unable
to adjust amounts of methyl bromide from one sector to another after
the allowance was expended. This artifact of the allocation framework
would deny the marketplace any flexibility to meet unforseen demand in
a particular use. For example, under a sector specific system, if a
pest outbreak were to occur in the peppers sector no additional
material could be made available to peppers even if there were an
unanticipated surplus in a different sector. For these reasons, EPA
believes it is not practicable to implement a sector specific system at
this time.
The Agency believes, and has received comment to that effect, that
the pre-plant and post-harvest markets operate as separate markets
under the phaseout, as evidenced by the different prices for methyl
bromide in the two markets, for several reasons. The timing and cycles
of fumigations for the two sectors are different as well. Pre-plant
fumigations typically occur once a year about a month before planting
the first crop whereas fumigations for post-harvest uses occur
routinely throughout the year to control ongoing insect pressures. The
standard product formulations for pre-plant and post harvest uses
substantially differ. In the pre-plant uses the formulations of methyl
bromide contain substantially more chloropicrin, as much as 50%.
Lastly, the post harvest sector has more purchasing power than the pre-
plant sector and is therefore willing to pay more for methyl bromide.
Post-harvest uses rely on nearly pure methyl bromide. For all of these
reasons, EPA believes that these two use categories already function as
separate markets and therefore the hybrid option would not result in
substantial regulatory burden but would achieve a careful balance
between flexibility and greater assurance.
EPA believes that establishing distinct caps for pre-plant and
post-harvest uses is consistent with the Parties' statement in Decision
Ex I/3(4) that each Party ``should endeavor'' to allocate ``as listed
in annex II A.'' By virtue of this rulemaking process, EPA has made the
endeavor to allocate quantities of methyl bromide in a manner
consistent with Annex IIA of the Report to the First Extraordinary
Meeting of the Parties. Because of the practical and administrative
difficulties described above, however, EPA has arrived at an allocation
system that relies at least partly on the market to allocate quantities
on a sectoral basis. EPA anticipates, based on historical use patterns
and the research undertaken pursuant to submitting the U.S. nomination,
that usage patterns will
[[Page 76990]]
generally reflect the sectoral quantities found in Annex IIA.
E. Critical Use Allowance Allocations
1. Allocation of Critical Use Allowances
EPA is allocating the following number of pre-plant and post-
harvest critical use allowances (CUAs) to the entities listed below
subject to the trading provisions discussed in section V.G of the
preamble. Through this rulemaking, EPA is notifying entities in Table I
that they have an allocation of the number of critical use allowances
specified in the table for 2005. Depending on the agreement of the
Parties to the Protocol, EPA may engage in a subsequent rulemaking to
allocate supplemental methyl bromide for 2005. Each allowance is
equivalent to 1 kg of critical use methyl bromide. These allowances
expire at the end of the control period and, consistent with the
proposed rule and comments received, are not bankable from one year to
the next.
Table I.--Allocation of Critical Use Allowances
------------------------------------------------------------------------
2005 Critical 2005 Critical
use allowances use allowances
Company for pre-plant for post-
uses * harvest uses *
(kilograms) (kilograms)
------------------------------------------------------------------------
Great Lakes Chemical Corp............. 4,357,690 297,049
Albemarle Corp........................ 1,791,950 122,151
Ameribrom, Inc........................ 989,911 67,479
TriCal, Inc........................... 30,679 2,091
------------------
Total........................... 7,170,230 488,770
------------------------------------------------------------------------
* For production or import of class I, Group VI controlled substance
exclusively for the Pre-Plant or Post-Harvest uses specified in
Appendix L to 40 CFR Part 82.
2. Baseline for Critical Use Allowance Distribution
EPA is using the 1991 methyl bromide consumption baseline for
distribution of critical use allowances because this is the best data
available to the Agency at the current time. EPA used the 1991 baseline
to distribute allowances to the companies listed above during the
phaseout of methyl bromide. The 1991 baseline is therefore familiar to
the regulated community and poses the least steep learning curve on
industry of all the options discussed in the proposed rule.
EPA received four comments supporting use of the 1991 baseline for
distribution of allowances and two comments favoring a baseline that
uses the volume of methyl bromide marketed over the past three years.
EPA does not have the necessary data to implement a marketed volume
baseline representing the past three years and the time required to
gather, verify, and make publically available such data would prohibit
the Agency from implementing this exemption before the beginning of the
control period. Such a baseline is therefore not practical to
implement.
3. Frequency of Critical Use Allowance Distribution
EPA will issue critical use allowances once a year through an
annual rulemaking as proposed, with one important exception noted
below. EPA described scenarios where the Agency would distribute
allowances more than once a year but did not receive any comments in
favor of such options.
The exception to the once a year allocation of allowances applies
when the Parties authorize supplemental critical use exemptions for a
given control period after EPA has already initiated the notice and
comment rulemaking process for the original authorized exemptions. For
example, the Parties authorized exemptions for 2005 at their First
Extraordinary Meeting of the Parties in March 2004. The Parties are
considering additional exemptions for 2005 at the Sixteenth Meeting of
the Parties to be held November 2004. EPA would propose additional
exemptions as a result of additional authorizations made by the
Parties. In this situation, EPA could in fact issue allowances twice
for a single control period.
F. Critical Stock Allowance Allocations
EPA is allocating critical stock allowances (CSAs) to the entities
listed below in Table 2 for the control period of 2005. CSAs are being
issued on a pro-rata basis according to the amount of stocks owned by
the entity based on an average of their December 31, 2003 and August
25, 2004 data because only that entity has the ability to sell the
quantities of material associated with the CSAs on a kilogram basis,
regardless of which company is physically holding the stocks. Similar
to CUAs, CSAs can not be banked from one control period to the next.
Critical stock allowances (CSAs) are not used to produce or import
methyl bromide but are rights that enable the holder to sell pre-
phaseout inventories of methyl bromide for use in 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 of methyl
bromide along the supply chain does not require expenditure of a CSA.
EPA has determined that the individual holdings of stocks of methyl
bromide are confidential business information. The amount of CSAs
allocated to each company could be used to calculate the individual
stock holdings if information on aggregate stock holdings were
released. EPA has determined that the aggregate stock information is
not confidential business information but is currently withholding that
information due to the filing of complaints seeking to enjoin the
Agency from its release. Because release could occur depending on the
outcome of that litigation, EPA is not listing the number of allowances
distributed to each entity. Concurrent with today's rule, EPA is
sending letters to each entity to inform them of the number of critical
stock allowances EPA has issued them. In addition, EPA is placing a
document listing the allocations and distribution basis of critical
stock allowances for each entity in the confidential portion of the
docket.
[[Page 76991]]
Table 2.--Allocation of Critical Stock Allowances
------------------------------------------------------------------------
Company
-------------------------------------------------------------------------
Albemarle
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Blair Soil Fumigation
Burnside Services, Inc.
Cardinal Professional Products
Carolina Eastern, Inc.
Degesch America, Inc.
Dodson Bros.
Great Lakes Chemical Corp.
Harvey Fertilizer & Gas
Helena Chemical Co.
Hendrix & Dail
Hy Yield Bromine
Industrial Fumigation Company
J.C. Ehrlich Co.
Pacific Ag
Pest Fog Sales Corp.
Pro Source One
Reddick Fumigants
Royster-Clark, Inc.
Southern State Cooperative, Inc.
Trical Inc.
Trident Agricultural Products
UAP Southeast (NC)
UAP Southeast (SC)
Univar
Vanguard Fumigation Co.
Western Fumigation
Total 1,283,214 kilograms
------------------------------------------------------------------------
G. Trading Allowances
In accordance with Section 607 of the CAA of 1990, EPA is allowing
producers and importers of methyl bromide to trade or transfer critical
use allowances subject to the provisions of 40 CFR part 82. In
accordance with paragraph (c) of Section 607, EPA is establishing an
offset of one tenth of one percent of the amount of the CUAs
transferred consistent with proposed rule. The Act requires that
transfers of allowances result in lower production than if the trade
had not occurred.
The offset will be deducted from the transferor's allowance balance
at the time of a trade. A one tenth of one percent offset is consistent
with the offset required for the transfer of essential use allowances
under the phaseout program for class I controlled ozone-depleting
substances (ODS), which, like critical use allowances permit the
exempted production or import of ODS beyond a phaseout date.
Because, CSAs govern the amount of existing material that can be
sold, EPA is not implementing an offset for the transfer of CSAs. If
the holder of a CSA does not wish to sell his inventories of methyl
bromide to the critical use market, he (the transferor) may sell his
allowances to another methyl bromide producer, importer, distributer,
or applicator (the transferee).
EPA received seven comments supporting the ability of allowance
holders to trade allowances. EPA did not receive any adverse comments
on the one tenth of one percent offset that is similarly applied to the
essential use exemption and is implementing this offset in today's
rule.
EPA received one comment suggesting that the Agency should modify
its proposed CSA trading framework to allow anyone who wishes to sell
inventories of critical use methyl bromide to buy CSAs, not just
initial CSA recipients. EPA modified its proposal to allow for any
entity in the methyl bromide supply chain to acquire CSAs even if they
did not receive an initial CSA allocation from EPA. EPA agrees that the
Agency should not restrict the normal flow of commerce.
Lastly, the Agency is allowing for trades of CUAs into CSAs and is
not requiring an offset to accompany such transactions. A CUA holder
would retire a number of allowances to EPA and EPA would then issue
additional CSAs to the allowance holder. EPA is allowing this type of
allowance trade to accommodate an entity who wishes to forgo exempted
production or import of new methyl bromide to make more of pre-phaseout
inventories available for approved critical uses. EPA believes that an
environmental benefit would be derived in this type of exchange since
the result is less new production or import. As described in the
proposed rule, EPA is not allowing the reverse transaction, exchange of
CSAs for CUAs, because Decision Ex I/3 imposes a cap of no more than
30% production and import for critical uses in 2005. If the Agency were
to allow CSAs to become additional rights to production or import, the
U.S. would potentially run into non-compliance with the 30% production
cap.
For consistency with the requirements governing other types of
allowance transfers in the ozone protection program, EPA is requiring
that an entity who sells allowances must file an allowance transfer
form with EPA. Existing regulations require EPA to process these forms
within 3 business days of receipt.
The Agency believes that trading critical use allowances and
critical stock allowances will allow entities to make rational business
decisions as to the amount of critical use methyl bromide to produce or
import in a given control period and thus supports flexible trading
provisions with appropriate environmental offsets as described in this
section of today's rule.
H. Acquiring Critical Use Methyl Bromide
Approved critical users who have an approved critical use may
acquire methyl bromide, as described in the proposal, in a similar
manner to which they acquire methyl bromide exempted for quarantine and
pre-shipment uses (68 FR 237, January 2, 2003). EPA received eight
comments supporting the ``QPS-like'' approach because it is familiar to
the regulated community.
Approved critical users who have an approved critical use may
acquire critical use methyl bromide, or fumigation services with
critical use methyl bromide, by certifying at the point of purchase
that they are in fact approved critical users and that they will use
the methyl bromide for an approved critical use. The certifications
shall be retained by the supplier for a minimum of three years and are
part of the reporting and recordkeeping requirements set forth in Sec.
82.13 of this regulation.
Specifically, the certification will state, in part: ``I certify,
under penalty of law, I am an approved critical user and I will use
this quantity of methyl bromide for an approved critical use. My action
conforms to the requirements associated with the critical use exemption
published in 40 CFR part 82. I am aware that any agricultural commodity
within a treatment chamber, facility, or field I fumigate with critical
use methyl bromide can not subsequently or concurrently be fumigated
with non-critical use methyl bromide during the same control period,
excepting a QPS treatment or a treatment for a different use (e.g., a
different crop or commodity). I will not use this quantity of methyl
bromide for a treatment chamber, facility, or field that I previously
fumigated with non-critical use methyl bromide purchased during the
same control period, excepting a QPS treatment or a treatment for a
different use (e.g., a different crop or commodity), unless a local
township limit now prevents me from using methyl bromide
alternatives.'' The form will further require users to provide
information on the type of critical use methyl bromide purchased, the
location of the treatment, the crop or commodity treated, the quantity
of critical use methyl bromide purchased and the acreage/cubic footage
treated. This information is required so that distributers and
applicators are able to meet their annual reporting obligations to EPA.
Providing false information on this form constitutes a violation.
[[Page 76992]]
EPA is prohibiting suppliers from selling critical use methyl
bromide without first obtaining a signed and dated certification form.
I. Who Is an Approved Critical User
1. Users and Uses
An approved critical user may obtain access to exempted production/
import and reserved inventories of pre-phaseout methyl bromide stocks,
the combination of which constitute the supply of ``critical use methyl
bromide'' intended to meet the needs of agreed critical uses. However,
a condition for obtaining access to critical use methyl bromide is a
limit on the amount of stocks that can be purchased in the control
period, as described under section V.D of this rule.
An approved critical user is a self identified entity who meets the
following requirements:
(1) For the applicable control period, applied to EPA for a
critical use exemption or is a member of a consortium that applied for
a critical use exemption for a use and location of use that was
included in the U.S. nomination, authorized by a Decision of the
Parties to the Montreal Protocol, and notice and comment rulemaking to
be a critical use in that location, and
(2) Has an area in the applicable location of use that requires
methyl bromide fumigation because the person reasonably expects that
the area will be subject to a limiting critical condition (LCC) during
the applicable control period, if an LCC is given in Appendix L.
Using these criteria, an approved critical user could be a tomato
farmer in Florida whose farm is over karst topography but would not
include a tomato farmer in Oklahoma even if he too has a farm over
karst topography because no exemption application was filed on behalf
of Oklahoma tomato farmers. Similarly, a Florida tomato farmer who did
not have a field with karst topography, or one of the other limiting
critical conditions specified in this rule, would not be an approved
critical user because the circumstance of the use is not an approved
critical use.
Approved critical uses are those uses of methyl bromide listed in
Appendix L to 40 CFR Part 82 for the use listed in column A and the
location of use in Column B, reproduced from the regulatory text in the
table below.
Table 3.--Approved Critical Uses
----------------------------------------------------------------------------------------------------------------
Column B--approved critical user Column C--limiting critical
Column A--approved critical uses and location of use conditions
----------------------------------------------------------------------------------------------------------------
PRE-PLANT USES
----------------------------------------------------------------------------------------------------------------
Cucurbits.................................... (a) Michigan growers............ With a reasonable expectation
that moderate to severe fungal
pathogen infestation already
either exists or could occur
without methyl bromide
fumigation.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that moderate to severe yellow
Tennessee, and Virginia growers. or purple nutsedge infestation
already either exists or could
occur without methyl bromide
fumigation.
Eggplant..................................... (a) Georgia growers............. With a reasonable expectation
that moderate to severe yellow
or purple nutsedge infestation
either already exists or could
occur without methyl bromide
fumigation.
(b) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions either already
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
Forest Seedlings............................. (a) Members of the Southern With a reasonable expectation
Forest Nursery Management that one or more of the
Cooperative limited to growing following limiting critical
locations in Alabama, Arkansas, conditions already either
Florida, Georgia, Louisiana, exists or could occur without
Mississippi, North Carolina, methyl bromide fumigation:
Oklahoma, South Carolina, Moderate to severe yellow or
Tennessee, Texas, and Virginia. purple nutsedge infestation,
or moderate to severe disease
infestation.
(b) International Paper and its With a reasonable expectation
subsidiaries limited to growing that one or more of the
locations in Arkansas, Alabama, following limiting critical
Georgia, South Carolina and, conditions already either
Texas. exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
(c) Weyerhaeuser Company and its With a reasonable expectation
subsidiaries limited to growing that one or more of the
locations in Alabama, Arkansas, following limiting critical
North Carolina, South Carolina, conditions already either
Oregon, and Washington. exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
(d) Public (government owned) With a reasonable expectation
seedling nurseries in the that one or more of the
states of California, Idaho, following limiting critical
Illinois, Indiana, Kansas, conditions already either
Kentucky, Maryland, Missouri, exists or could occur without
Nebraska, New Jersey, Ohio, methyl bromide fumigation:
Oregon, Pennsylvania, Utah, Moderate to severe yellow or
Washington, West Virginia, and purple nutsedge infestation,
Wisconsin. or moderate to severe disease
infestation.
(e) Members of the Nursery With a reasonable expectation
Technology Cooperative limited that one or more of the
to growing locations in Oregon following limiting critical
and Washington. conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
[[Page 76993]]
(f) Michigan seedling nurseries. With a reasonable expectation
that one or more of the
following limiting critical
conditions already exists or
could occur without methyl
bromide fumigation: moderate
to severe yellow or purple
nutsedge infestation, or
moderate to severe disease
infestation.
Ginger....................................... Hawaii growers.................. With a reasonable expectation
that the limiting critical
condition already either
exists or could occur without
methyl bromide fumigation, or
moderate to severe bacterial
wilt infestation.
Orchard Nursery Seedlings.................... (a) Members of the Western With a reasonable expectation
Raspberry Nursery Consortium that one or more of the
limited to growing locations in following limiting critical
California and Washington conditions already either
(Driscoll's raspberries and exists or could occur without
their contract growers in methyl bromide fumigation:
California and Washington). Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
(b) Members of the California With a reasonable expectation
Association of Nurserymen- that one or more of the
Deciduous Fruit and Nut Tree following limiting critical
Growers. conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
(c) Members of the California With a reasonable expectation
Association of Nurserymen- that one or more of the
Citrus and Avocado Growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
Orchard Replant.............................. (a) California stone fruit With a reasonable expectation
growers. that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non- virgin)
orchard soils to prevent
orchard replant disease, or
medium to heavy soils, or a
prohibition on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(b) California table and raisin With a reasonable expectation
grape growers. that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(c) California walnut growers... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(d) California almond growers... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
Ornamentals.................................. (a) Yoder Brothers Inc. in For use in all chrysanthemum
Florida. production.
(b) California rose nurseries... With a reasonable expectation
that the user may be
prohibited from using 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
[[Page 76994]]
Peppers...................................... (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe disease
infestation, or moderate to
severe yellow or purple
nutsedge infestation, or a
prohibition on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee and Virginia growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or the presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
(c) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
Strawberry Nurseries......................... (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe black root
rot or crown rot, or moderate
to severe yellow or purple
nutsedge infestation.
(b) North Carolina and Tennessee With a reasonable expectation
growers. that the use will occur in the
presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
Strawberry Fruit............................. (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe black root
rot or crown rot, moderate to
severe yellow or purple
nutsedge infestation, a
prohibition of the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached, time to transition to
an alternative.
(b) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge, or karst
topography.
(c) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee, Virginia, Ohio, and following limiting critical
New Jersey growers. conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge, or the
presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
Sweet Potatoes............................... California growers.............. With a reasonable expectation
that the user may be
prohibited from using 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
Tomatoes..................................... (a) Michigan growers............ With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe disease
infestation, fungal pathogens
infestation.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee and Virginia growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or the presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
(c) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
[[Page 76995]]
Turfgrass.................................... (a) U.S. turfgrass sod nursery For the production of industry
producers who are members of certified pure sod.
Turfgrass Producers
International (TPI).
(b) U.S. golf courses........... For establishing sod in the
construction of new golf
courses or the renovation of
putting greens, tees, and
fairways.
----------------------------------------------
POST-HARVEST USES
----------------------------------------------------------------------------------------------------------------
Food Processing.............................. (a) Rice millers in all With a reasonable expectation
locations in the U.S. who are that one or more of the
members of the USA Rice Millers following limiting critical
Association.. conditions exists: older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(b) Pet food manufacturing With a reasonable expectation
facilities in the U.S. who are that one or more of the
active members of the Pet Food following limiting critical
Institute. (For today's rule, conditions exists: older
``pet food'' refers to domestic structures that can not be
dog and cat food). properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(c) Kraft Foods in the U.S...... With a reasonable expectation
that one or more of the
following limiting critical
conditions exists: older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(d) Members of the North With a reasonable expectation
American Millers' Association that one or more of the
in the U.S. following limiting critical
conditions already exists or
could occur without methyl
bromide fumigation: older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
Commodity Storage............................ (a) Gwaltney of Smithfield in For smokehouse ham curing
the U.S. facilities owned by the
company.
(b) California entities storing With a reasonable expectation
walnuts, beans, dried plums, that one or more of the
figs, raisins, and pistachios following limiting critical
in California. conditions exists: rapid
fumigation is required to meet
a critical market window, such
as during the holiday season,
rapid fumigation is required
when a buyer provides short (2
days or less) notification for
a purchase, or there is a
short period after harvest in
which to fumigate and there is
limited silo availability for
using alternatives.
----------------------------------------------------------------------------------------------------------------
The approved critical uses and limiting critical conditions listed
in the above table have been modified from the original proposal to
reflect comments provided to EPA. EPA received clarifying comments from
four commenters that EPA mischaracterized the scope of their
application or misidentified some limiting critical conditions. For
example, one commenter indicated to EPA that their application only
covered dog and cat pet food facilities whereas EPA inadvertently
listed all pet food facilities as part of the consortium.
The most significant change to this section involves the limiting
critical conditions (LCC). EPA received four comments with concerns
about the LCCs and two in favor of the LCCs. The concerns raised in the
comments is that these conditions are difficult to understand and
identify. For example, one commenter asked how many nutsedges over what
area constitute ``moderate to severe'' infestation. The same commenter
also indicated that at the time of fumigation, nutsedges would not be
visible. EPA recognizes that a user may not be able to certify that
certain limiting critical conditions will definitely occur. For
example, a grower may not know with one hundred percent certainty that
moderate to severe nutsedge infestation would occur in a given field in
the absence of methyl bromide fumigation. However, the grower should be
able to form a reasonable expectation in this regard, based on past
experience and the information included in the application. EPA has
modified the definition of approved critical user to reflect the
``reasonable expectation'' standard. Therefore, if a reasonable person
expects that he would have high levels of nutsedge, perhaps because of
a problem in a neighboring field or the field in question had problems
the previous year, that would be a sufficient basis to meet the LCC.
This renders it unnecessary for the grower to wait for a nutsedge
problem to develop during the growing season when it is no longer
possible to remedy the problem.
EPA received two sets of comments requesting specific modifications
to the LCCs. Based on those comments, EPA is making the following
changes in today's rule: (a) Eliminating the LCC of ``moderate to
severe nematode pressure'' in all uses except Michigan tomatoes because
the commenter correctly states that there are effective alternatives to
control this condition when it occurs alone; (b) eliminating ``moderate
to
[[Page 76996]]
severe pathogens'' in all uses except Michigan tomatoes because there
are effective alternatives to control this condition when it occurs
alone and; (c) modifying the buffer zone LCC to reflect recent label
changes that reduce the buffer to 100 feet from an occupied structure.
The last LCC would apply, as the commenter pointed out, only in
situations where methyl bromide has a less restrictive buffer zone. EPA
is eliminating the first two LCCs on nematode and pathogen infestation
because there are effective alternatives to control these pests when
they happen to be the only key pest. EPA had incorrectly characterized
these conditions as stand alone circumstances that would allow for the
use of methyl bromide in the proposal although the nomination describes
these situations as requiring methyl bromide when in conjunction with
another circumstance. EPA did not eliminate the first two LCC for
Michigan tomatoes because severe neamatode or pathogen pressures alone
make the alternatives not feasible. This is because Michigan is a cold
climate and the alternatives which would otherwise be effective can not
properly diffuse in the cool soils.
2. New Market Entrants
EPA received two favorable comments on the proposed method for
regulating access to critical use methyl bromide by new market
entrants. For example, a new market entrant may be a new farmer, a
farmer who is expanding production of a crop that is an approved
critical use or, a farmer that is moving production from one location
to a new location that has the limiting critical condition. EPA is
finalizing a framework in today's rule that allows a new market entrant
who is a member of a consortium that applied for an exemption to be an
approved critical user so long as the use is for a use listed in column
A and a location listed in column B of Appendix L to 40 CFR 82.
Therefore, an approved critical user includes those users who are
members of a consortium that applied for an exemption, even if the user
was not a member of the consortium at the time the application was
filed. As described in the proposal, EPA will not increase the amount
of methyl bromide exempted to accommodate new market entrants without
first seeking authorization from the Parties through the nomination and
then engaging in a notice and comment rulemaking process. Therefore any
increase in demand for methyl bromide due to new market entrants must
be met under the cap set forth in today's rule.
For example, the Southern Forest Nursery Management Cooperative
consists of a certain number of forest seedling nursery operators. The
Cooperative made an application to EPA for an exemption solely on
behalf of their membership. If a company that is a member of the
Cooperative otherwise meets the definition of approved critical user,
the company can access critical use methyl bromide even if it did not
join the Cooperative until 2004.
The Agency wishes to accommodate the ever shifting marketplace to
allow growers to increase or move production as needed provided that
critical use methyl bromide only goes to those uses and locations
listed in Appendix L of 40 CFR part 82.
EPA received three comments against EPA's definition because it
allows for users to join a consortium in 2005 and use methyl bromide
that should be reserved only for those who were part of the consortium
at the time of application in the opinion of the commenters. One
commenter provided an alternative approach that would have EPA disallow
all new market entrants for the first year they enter the market. EPA
considered this approach but EPA does not have information on every
company that is part of a given consortium. Therefore, it would be
difficult if not impossible for EPA to ``pre-qualify'' some companies
as critical uses and disqualify others. Instead, EPA is finalizing an
approach that leaves it up to each consortium to define their
membership at the time of application for an exemption as broadly or
narrowly as they choose.
J. Reporting and Recordkeeping Requirements
1. Reporting
With today's action, producers and importers are required to report
the number of expended and unexpended pre-plant CUAs and post-harvest
CUAs on a quarterly basis to EPA. On an annual basis, producers,
importers, distributers, and third-party applicators are required to
report to EPA the following information: the number of expended and
unexpended CSAs; a list of the total amount of pre-plant methyl bromide
bought and the amount sold to approved critical users for each sector;
a list of the total amount of post-harvest methyl bromide bought and
the amount sold to approved critical users for each sector; the amount
of critical use methyl bromide that has not been sold to an approved
critical user as of the end of the control period that the reporting
entity owns; the amount of critical use methyl bromide that has not
been sold to an approved critical user that reporting entity is holding
on behalf of another entity along with the name of the entity who owns
the material.
This information is required so that EPA can track compliance with
the critical use allowance and critical stock allowance caps, determine
how much methyl bromide is used on a sector (crop or use) basis, and
determine how much critical use methyl bromide remains unused at the
end of the compliance period. The information collected for this
exemption is authorized under Sections 603(b), 603(d) and 614(b) of the
CAAA of 1990. EPA believes these reporting requirements are necessary
to meet U.S. reporting obligations under Article 7 of the Protocol, CAA
reporting requirements to Congress under Section 603(d), and
implementation of the exemption from one control period to the next.
The reporting framework that EPA is implementing with today's
action is consistent with the information requirements described in the
proposal and section 114 request for information on inventories (69 FR
52366 and 69 FR 52403). EPA did not receive any adverse comment on the
information requirements although one entity indicated that EPA
underestimated the time various compliance activities would take. EPA
believes that today's recordkeeping and reporting requirements create
the least burden while still ensuring compliance with Protocol
requirements. See section VI.C of this preamble for EPA's response to
those comments.
EPA also received comment that the Agency should use a real time
database system to track the use of methyl bromide. A system similar to
this is used in California to allow regulators to prohibit the use of
1,3-D products when the local township cap is close to its maximum
allowable level. EPA is primarily concerned with understanding how much
methyl bromide is used for each critical use sector on an annual basis.
Therefore, a real time tracking system is not warranted. The reporting
requirements described in today's action are sufficient to meet the
information requirements under the Protocol and the CAAA of 1990 and to
ensure that EPA can implement the exemption from one control period to
the next. However, there is nothing in this rule to prohibit the
private development of such a system and EPA understands that one such
database company has had conversations with methyl bromide registrants
about developing a database
[[Page 76997]]
similar to the one described in the proposal.
EPA received one comment that the Agency should develop a better
understanding on use of methyl bromide and to facilitate that
understanding, EPA should require direct reporting on methyl bromide
use by all large users, defined as those who use more than 10,000 kgs
of methyl bromide a year. While EPA understands that at some point
during the exemption program it may be helpful to understand use trends
for major individual users, the Agency does not believe that it will
derive any additional benefit from requiring annual reporting of the
data. In addition this would impose additional burden on users and
potentially on producers, importers, and distributers. In the event
that EPA does need this data at some point, the Agency could use
section 114 of the CAA to require distributers and third-party
applicators to provide individual user data to EPA based on the
recordkeeping requirements laid out in today's rule.
2. Recordkeeping
Producers, importers, distributers, and third-party applicators are
required to maintain self certification records for three years along
with other transactional records such as invoices and order forms. EPA
did not receive any adverse comments on the recordkeeping requirements
described in the proposal and is implementing the recordkeeping
requirements without modification.
3. Treatment of Unused Critical Use Methyl Bromide
EPA will use the information collected through the annual reporting
requirement to determine how much unused critical use methyl bromide is
available, or not already sold to an approved critical user, at the end
of the calendar year. EPA proposed deducting the corresponding amount
from the total number of critical use allowances the Agency would make
available for the following control period. A number of commenters
correctly indicated that EPA would not have the data on the amount of
critical use methyl bromide unused at the end of the year until the
March of the following year when the last report is due. EPA is only
issuing allowances once a year and such allowance allocations are
likely to take place well before EPA has the required data on unused
methyl bromide. Therefore, with today's action, EPA is creating a
system for deducting the amount of unused methyl bromide from the total
number of allowances issued for the control period following the
control period immediately after the control period when the methyl
bromide was unused for critical uses. The 2007 CUAs will reflect any
unused critical use methyl bromide from 2005 and so forth. For the year
2006, this will result in no reductions made; however all years after
2006 will experience a reduction should there be any unused critical
use methyl bromide.
All pre-plant critical use methyl bromide from 2005 would remain
pre-plant critical use methyl bromide in 2006 available for all 2006
pre-plant approved critical uses, subject to any adjustments that may
be described in the 2006 or 2007 allocation notice and comment
rulemaking.
EPA received comment that the Agency should account for the time
lag between reporting and issuing of allowances for the following
control period using an estimated approach. In other words, the Agency
would estimate how much critical use methyl bromide would be unused and
then deduct that amount from the number of allowances issued for the
following year. EPA is requiring reporting of the required data once a
year and so the Agency would have little basis for making realistic
estimates of this nature. Although EPA could require more frequent data
reports, EPA would still have to estimate year end data because of the
large number of fumigations that occur late in the control period. EPA
prefers to use actual data even if there is a time lag to ensure that
those who need critical use methyl bromide have access to it and that
future production can be adjusted to reflect the actual carryover.
K. Enforcement Provisions
Unauthorized production, import, or sale of critical use methyl
bromide will incur a violation on a per kilogram basis identical to
nearly all other aspects of the ozone protection program. Section 113
of the CAA governs enforcement activities for violations of
requirements under Title VI. One commenter supported the size of
violations EPA proposed for allowance holders. There were no dissenting
comments on this point.
EPA proposed adjusting the maximum potential fine applied to end
users of methyl bromide because users typically operate on a smaller
scale and have less ability to pay than chemical companies. EPA
proposed defining a violation for improper use of critical use methyl
bromide as one violation for every 200 kilograms of misuse. EPA
received several comments that the Agency should further lower the
penalties to be identical to those applied under the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA), the statute that
usually governs use of fumigants. Today those penalties are $1,200 per
violation, and a violation is the occurrence of misuse. EPA also
received two comments supporting a maximum penalty of $25,000 per
violation, and a violation is the occurrence of misuse and nine
comments that end user penalties should be identical to those under
FIFRA or should be handled exclusively under FIFRA authorities.
With today's rule, EPA is defining a violation with respect to
improper use by a user as one violation for every 200 kilograms noting
that EPA typically uses discretion in assessing penalties and takes
into account such things as the size of the operation and ability to
pay as well as the circumstances--such as whether the misuse was self-
reported. Today's rule lowers the basis for calculating a maximum
penalty and the Agency notes there is discretion to apply less than the
maximum fine per each violation. Today's rule is providing assurances
to the end users that they will not face the same level of fines as a
chemical producer and codifies flexibility for the Agency to apply less
than the maximum penalty for this type of violation. In assessing
penalties, the Agency takes into consideration the size of the
violator, the economic benefit or advantage achieved from the violation
and the ability of the violator to pay a penalty. Thus, the concerns
raised by commenters regarding the ability of methyl bromide users to
pay the maximum allowable fine proposed by the Agency are addressed
through the flexibility EPA provides to enforcement officers in
assessing penalties.
Because it is a pesticide, methyl bromide is also regulated by EPA
under FIFRA and under other statutes and regulatory authority and by
states under their own statutes and regulatory authority. Nothing in
today's rule is intended to derogate from provisions in any other
Federal, State, or local laws or regulations governing actions
including, but not limited to, the sale, distribution, transfer, and
use of methyl bromide.
L. Exporting Provisions
We received two comments that noted the need for regulatory
provisions that would permit U.S. producers of methyl bromide to
manufacture material for other countries with critical uses authorized
by the Parties. In today's action, the regulatory text includes
provisions that permit methyl bromide production explicitly and solely
to meet the needs of other countries that have been authorized critical
use exemptions for the specific control period. The
[[Page 76998]]
producers will be required to report quarterly on quantities produced
solely for export to meet orders placed by other countries with
authorized critical needs. The proposal noted that the U.S. is the
largest world manufacturer of methyl bromide and that U.S.
manufacturers will likely produce to meet the needs of other non-
Article 5(1) countries that have critical uses authorized by the
Parties, such as Canada, Australia or Italy. In creating the regulatory
provisions in today's rule to permit production beyond the phaseout
explicitly for export to other countries with critical uses authorized
by the Parties, we are also correcting an oversight that was discussed
in the final rule published in the Federal Register on January 2, 2003,
(68 FR 238) regarding production beyond the phaseout for quarantine and
preshipment applications. In that prior final rule (68 FR 238) as well
as in the proposal, we discuss that exempt production for quarantine
and preshipment applications is above and beyond the reduction steps
prior to the phaseout, and continues after the phaseout. The addition
of provisions regarding the quarantine and preshipment exemption is to
correct the absence of the intended exemption beyond the phaseout.
VI. What Are the Other Considerations and Situations on Which EPA
Received Comments?
A. Distribution of Permits to Approved Critical Users
In today's rule, EPA is creating an exemption program that
emphasizes direct regulation of the supply chain of methyl bromide
through an allowance allocation system that distributes allowances to
producers, importers, distributers, and third-party applicators of
methyl bromide as described in section V of this preamble. EPA did
receive two comments supporting a system that emphasizes direct
regulation of the user community whereby EPA would issue critical use
permits to end users of methyl bromide in order to direct critical use
methyl bromide to the appropriate uses.
One commenter supported the user oriented approach because the
administrative burden of such a system would act as a deterrent to the
use of methyl bromide and would lead to greater efficiencies. As EPA
described in the proposal, the critical use permit (CUP) system would
impose additional costs and burden on industry compared to the proposed
option. Although these costs could be a deterrent to the use of methyl
bromide and thus achieve an environmental objective of reducing methyl
bromide use, EPA is committed to a regulatory approach that relies on
existing market mechanisms. Certain critical uses were agreed to and
determined through an extensive domestic and international review based
on the technical and economic feasibility of alternatives. EPA does not
want to impose a regulatory framework with the goal of establishing
high administrative costs to force growers who do not have any
alternative available to them out of the market. Doing so would obviate
the purpose of an exemption altogether.
EPA believes the timing of the domestic and international
authorization process would not allow for the creation of a end user
allocation scheme on a yearly basis. In addition the learning and
transaction costs of changing the whole market structure in the face of
the phaseout could adversely impact in U.S. agricultural sectors. For a
more detailed description of the economic consideration of the user
based system, please refer to the Regulatory Impact Assessment
conducted for the proposed rulemaking available at EPA's e-docket
number OAR-2003-0230.
EPA received two comments on using an auction to distribute permits
to users of methyl bromide, one in favor and one opposed. The commenter
in favor of the auction indicated that the revenues derived from an
auction could be used to fund transition activities. The other
commenter indicated that the auction approach would take a significant
amount of time to develop and methyl bromide would be directed to the
highest value uses disadvantaging other important uses of methyl
bromide. This commenter disputes EPA's assertion that an auction would
serve to redistribute windfall profits. EPA did not propose and is not
finalizing this option due to the lack of clear statutory guidance on
some of the details of this approach, the time it would take to develop
this program, and the relatively small size of the market compared to
the burden associated with this approach.
B. Comments on the Burden Associated With This Regulatory System
EPA received one comment on the estimated burden hours associated
with this regulatory system. One commenter indicated that EPA grossly
underestimated the time required for data compilation and reporting and
suggested that it is at least two times greater than what EPA estimated
in the Paperwork Reduction Analysis. This commenter did not provide
additional comment to explain specifically how or why the EPA estimate
was incorrect nor did they indicate which particular activities should
be adjusted. Therefore, EPA has not adjusted the estimated burden
hours.
VII. Statutory and Executive Order Reviews
A. Executive Order No. 12866: Regulatory Planning and Review
Under Executive Order No. 12866, (58 FR 51735, October 4, 1993) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
OMB has notified EPA that it considers this a ``significant regulatory
action'' under Executive Order No. 12866 and EPA has submitted it to
OMB for review. We will document changes made in response to OMB
suggestions or recommendations in the public record.
EPA conducted an economic impact analysis that attempts to assess
the likely effect of allowing critical use exemptions on the regulated
entities using three illustrative alternatives. The estimated cost
savings are approximately $19 million to $31 million on an annual
basis. The two factors that affect these estimates are the size of the
cap and how freely critical use methyl bromide is allocated. Since the
assumed cap in the analysis is 39% of the 1991 baseline consumption,
and the allocation system chosen for the final rule is not a full
universal cap system, the likely cost savings that should result from
this rule is lower than the estimates presented in the analysis.
B. Paperwork Reduction Act
The information collection requirements in this rule will be
[[Page 76999]]
submitted for approval to the Office of Management and Budget (OMB)
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
information collection requirements are not enforceable until OMB
approves them.
The information collection under this rule is authorized under
Sections 603(b), 603(d) and 614(b) of the CAAA of 1990.
The mandatory reporting requirements included in this rule are
intended to:
(1) Satisfy U.S. obligations under the international treaty, The
Montreal Protocol on Substances that Deplete the Ozone Layer
(Protocol), to report data under Article 7;
(2) Fulfill statutory obligations under Section 603(b) of the CAAA
of 1990 for reporting and monitoring;
(3) Provide information to report to Congress on the production,
use and consumption of class I controlled substances as statutorily
required in Section 603(d) of the CAAA of 1990.
Information will be collected through quarterly reporting by
producers and importers and annual reporting by distributors and third
party applicators of methyl bromide. EPA estimates the total burden
associated with today's action to be 1,505 hours annually. EPA does not
estimate any start-up or capital costs associated with today's action.
----------------------------------------------------------------------------------------------------------------
No. of Total No. of Hours per
Collection activity respondents responses response Total hours
----------------------------------------------------------------------------------------------------------------
Rule Familiarization............................ 54 54 4 216
Report Inventory Data (one time)................ 54 54 2.5 135
Data Compilation (quarterly basis).............. 4 16 4 64
Data Compilation (annual basis)................. 50 50 8 400
Data Reporting (quarterly basis)................ 4 16 .5 8
Data Reporting (annual basis)................... 50 50 .5 25
Reporting on Allowance Trading Activities....... 4 16 .5 8
Self Certification Activities by Producers, 54 100 .25 25
Importers, and Distributors....................
Self Certification Activities by End Users...... 2,000 2,500 .25 625
-----------------
Total Burden Hours.......................... .............. .............. 18 1,505
----------------------------------------------------------------------------------------------------------------
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is
approved by OMB, the Agency will publish a technical amendment to 40
CFR part 9 in the Federal Register to display the OMB control number
for the approved information collection requirements contained in this
final rule.
C. Regulatory Flexibility Act
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. For purposes
of assessing the impacts of today's rule on small entities, small
entity is defined as: (1) A small business that is identified by the
North American Industry Classification System (NAICS) Code in the Table
below; (2) a small governmental jurisdiction that is a government of a
city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
----------------------------------------------------------------------------------------------------------------
NAICS Small business
size standard (in
Category NAICS code SIC code number of employees
or millions of
dollars)
----------------------------------------------------------------------------------------------------------------
Agricultural production............. 1112--Vegetable and 0171--Berry Crops; $0.75 million.
Melon 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 0179--Fruit and Tree
production. Nuts, NEC;
0181--Ornamental
Floriculture and
Nursery products;
0831--Forest Nurseries
and Gathering of Forest
products.
Storage Uses........................ 115114--Postharvest Crop 2041--Flour and Other $6 million.
activities (except Grain; Mill Products;
Cotton Ginning); 2044--Rice Milling.
311211--Flour Milling;
311212--Rice Milling.
493110--General 4221--Farm Product $21.5 million.
Warehousing and Warehousing and
Storage; 493130--Farm Storage;
Product Warehousing and 4225--General
Storage. Warehousing and
Storage.
----------------------------------------------------------------------------------------------------------------
[[Page 77000]]
After considering the economic impacts of today's final rule on
small entities, EPA has concluded that this action will not have a
significant economic impact on a substantial number of small entities.
In determining whether a rule has a significant economic impact on a
substantial 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
and 604. Thus, an agency may conclude that a rule will not have a
significant economic impact on a substantial number of small entities
if the rule relieves regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule.
Since this rule will make methyl bromide available for approved
critical uses after the phaseout date of January 1, 2005, this is a de-
regulatory action which will confer a benefit to users of methyl
bromide. EPA believes the estimated de-regulatory value for users of
methyl bromide is between $20 million to $30 million annually. We have
therefore concluded that today's final rule will relieve regulatory
burden for all small entities.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 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.
EPA has determined that this rule does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and tribal governments, in the aggregate, or the private
sector in any one year. Today's rule creates a recordkeeping and
reporting burden on the private sector that is estimated to be under
$200,000 on an annual basis. Thus, today's rule is not subject to the
requirements of sections 202 and 205 of the UMRA. Further, EPA has
determined that this rule contains no regulatory requirements that
might significantly or uniquely affect small governments because it
does not create any requirements on any State, local, or tribal
government.
E. Executive Order No. 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This final rule does not have federalism implications. It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Today's rule is expected to
primarily affect producers, suppliers, importers and exporters and
users of methyl bromide. Thus, Executive Order 13132 does not apply to
this rule.
F. Executive Order No. 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order No. 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This final rule does not have
tribal implications, as specified in Executive Order No. 13175. Today's
final rule does not significantly or uniquely affect the communities of
Indian tribal governments. The final rule does not impose any
enforceable duties on communities of Indian tribal governments. Thus,
Executive Order No. 13175 does not apply to this final rule.
G. Executive Order No. 13045: Protection of Children From Environmental
Health & Safety Risks
Executive Order No. 13045: ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997) applies to any rule that: (1) Is determined to be ``economically
significant'' as defined under Executive Order 12866, and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory
action meets both criteria, the Agency must evaluate the environmental
health or safety effects of the planned rule on children, and explain
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives considered by the Agency.
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under Section 5-501 of the Order has the
potential to influence the regulation. This final rule is not subject
to Executive Order 13045 because it does not establish an environmental
standard intended to mitigate health or safety risks.
H. Executive Order No. 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This rule is not a ``significant energy action'' as defined in
Executive Order No. 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
[[Page 77001]]
effect on the supply, distribution, or use of energy. This rule does
not pertain to any segment of the energy production economy nor does it
regulate any manner of energy use. Therefore, we have concluded that
this rule is not likely to have any adverse energy effects.
I. National Technology Transfer Advancement Act
As noted in the proposed rule, Section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (``NTTAA''), 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 action does not involved
technical standards. Therefore, EPA did not consider the use of any
voluntary consensus standards.
J. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on January 1, 2005.
List of Subjects in 40 CFR Part 82
Environmental protection, Chemicals, Exports, Imports, Methyl
bromide, Ozone, Production, Reporting and recordkeeping requirements,
Treaties.
Dated: December 15, 2004.
Michael O. Leavitt,
Administrator.
0
For the reasons stated in the preamble, 40 CFR part 82 is amended as
follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
0
1. The authority citation for part 82 continues to read as follows:
Authority: 42 U.S.C. 7414, 7601, 7671-7671q.
Subpart A--Production and Consumption Controls
0
2. Section 82.3 is amended as follows:
0
a. By adding definitions in alphabetical order for the terms,
``Approved critical use(s),'' ``Approved critical user(s),''
``Consortium,'' ``Critical stock allowance (CSA),'' ``Critical stock
allowance (CSA) holder,'' ``Critical use,'' ``Critical use allowance
(CUA),'' ``Critical use allowance (CUA) for pre-plant use,'' ``Critical
use allowance (CUA) for post-harvest use,'' ``Critical use allowance
(CUA) holder,'' ``Critical use methyl bromide,'' ``Limiting critical
condition,'' ``Location of use,'' ``Third party applicator,''
``Unexpended critical stock allowance (CUA),'' and ``Unexpended
critical use allowances (CUA);''
0
b. By revising definition of ``Confer.''
Sec. 82.3 Definitions for class I and class II controlled substances.
* * * * *
Approved critical use(s) means those uses of methyl bromide listed
in Column A of appendix L to this subpart as further clarified in
Columns B and C of that appendix.
Approved critical user(s) means a person who:
(1) For the applicable control period, applied to EPA for a
critical use exemption or is a member of a consortium that applied to
EPA for a critical use exemption for a use and location of use that was
included in the U.S. nomination, authorized by a Decision of the
Parties to the Montreal Protocol, and then finally determined by EPA in
a notice-and-comment rulemaking to be an approved critical use; and
(2) Has an area in the applicable location of use that requires
methyl bromide fumigation because the person reasonably expects that
the area will be subject to a limiting critical condition during the
applicable control period.
* * * * *
Confer means to shift the essential-use allowances obtained under
Sec. 82.8 from the holder of the unexpended essential-use allowances
to a person for the production of a specified controlled substance, or
to shift the HCFC-141b exemption allowances granted under Sec.
82.16(h) from the holder of the unexpended HCFC-141b exemption
allowances to a person for the production or import of the controlled
substance.
Consortium means an organization representing a group of methyl
bromide users that has collectively submitted an application for a
critical use exemption on behalf of all members of the group. The
members of a consortium shall be determined on the basis of the rules
established by the organization. Members may either be required to
formally join the consortium (e.g., by submitting an application or
paying dues) or may automatically become members upon meeting
particular criteria (e.g., a grower of a specific crop in a particular
region).
* * * * *
Critical stock allowance (CSA) means the right granted by this
subpart to sell one (1) kilogram of class I, Group VI controlled
substances from inventory produced or imported prior to the January 1,
2005 phaseout date for an approved critical use during the specified
control period to the extent permitted by federal and state pesticide
statutes and regulations other than the Clean Air Act and regulations
in this part. A person's critical stock allowances are the total of the
allowances obtained under Sec. 82.8(c) as may be modified under Sec.
82.12 (transfer of allowances).
Critical stock allowance (CSA) holder means an entity to which EPA
allocates a quantity of critical stock allowances as reflected under
Sec. 82.8(c), or who receives a quantity of critical stock allowances
through a transfer under Sec. 82.12.
Critical use means a circumstance in which the following two
conditions are satisfied:
(1) There are no technically and economically feasible alternatives
or substitutes for methyl bromide available that are acceptable from
the standpoint of environment and health and are suitable to the crops
and circumstances involved, and
(2) The lack of availability of methyl bromide for a particular use
would result in significant market disruption.
Critical use allowance (CUA) means the privilege granted by this
subpart to produce or import one (1) kilogram of methyl bromide for an
approved critical use during the specified control period. A person's
critical use allowances are the total of the allowances obtained
[[Page 77002]]
under Sec. 82.8(c) as may be modified under Sec. 82.12 (transfer of
allowances).
Critical use allowance for pre-plant uses means the privilege
granted by this subpart to produce or import one (1) kilogram of methyl
bromide solely for an approved critical use in pre-plant categories
specified in Appendix L to this subpart during the specified control
period. A person's critical use allowances for pre-plant uses are the
total of the allowances obtained under Sec. 82.8(c) as may be modified
under Sec. 82.12 (transfer of allowances).
Critical use allowance for post-harvest uses means the privilege
granted by this subpart to produce or import one (1) kilogram of methyl
bromide solely for an approved critical use in post-harvest categories
specified in appendix L to this subpart during the specified control
period. A person's critical use allowances for post-harvest uses are
the total of the allowances obtained under Sec. 82.8(c) as may be
modified under Sec. 82.12 (transfer of allowances).
Critical use allowance (CUA) holder means an entity to which EPA
allocates a quantity of critical use allowances as reflected in Sec.
82.8(c) or who receives a quantity of critical use allowances through a
transfer under Sec. 82.12.
Critical use methyl bromide means the class I, Group VI controlled
substance produced or imported through expending a critical use
allowance or that portion of inventory produced or imported prior to
the January 1, 2005 phaseout date that is sold only for approved
critical uses through expending a critical stock allowance.
* * * * *
Limiting critical condition means the regulatory, technical, and
economic circumstances listed in Column C of Appendix L to this subpart
that establish conditions of critical use for methyl bromide in a
fumigation area.
Location of use means the geographic area (such as a state, region,
or the entire United States) covered by an application for a critical
use exemption in which the limiting critical condition may occur.
* * * * *
Third party applicator means an applicator of critical use methyl
bromide who fumigates or treats commodities, structures, crops, or land
on behalf of an approved critical user.
* * * * *
Unexpended critical stock allowance (CSA) means critical stock
allowances against which methyl bromide has not yet been sold for an
approved critical use.
Unexpended critical use allowances (CUA) means critical use
allowances against which methyl bromide has not yet been produced or
imported. At any time in any control period a person's unexpended
critical use allowances are the total of the level of critical use
allowances the person holds at that time for that control period, minus
the level of class I, Group VI controlled substances that the person
has produced or has imported solely for approved critical uses in that
control period.
* * * * *
0
3. Section 82.4 is amended by revising paragraphs (b), (d) and (n), and
by adding paragraph (p) as follows:
Sec. 82.4 Prohibitions for class I controlled substances.
* * * * *
(b) (1) Effective January 1, 1996, for any class I, Group I, Group
II, Group III, Group IV, Group V, or Group VII controlled substances,
and effective January 1, 2005, for any class I, Group VI controlled
substance, and effective August 18, 2003, for any class I, Group VIII
controlled substance, no person may produce, at any time in any control
period, (except that are transformed or destroyed domestically or by a
person of another Party) in excess of the amount of conferred
unexpended essential use allowances or exemptions, or in excess of the
amount of unexpended critical use allowances, or in excess of the
amount of unexpended Article 5 allowances as allocated under Sec. 82.9
as may be modified under Sec. 82.12 (transfer of allowances), for that
substance held by that person under the authority of this subpart at
that time for that control period. Every kilogram of excess production
constitutes a separate violation of this subpart.
(2) Effective January 1, 2005, production of class I, Group VI
controlled substances is not subject to the prohibitions in paragraph
(b)(1) of this section if it is solely for quarantine or preshipment
applications as defined in this subpart, or it is solely for export to
satisfy critical uses authorized by the Parties for that control
period.
* * * * *
(d) Effective January 1, 1996, for any class I, Group I, Group II,
Group III, Group IV, Group V, or Group VII controlled substances, and
effective January 1, 2005, for any class I, Group VI controlled
substance, and effective August 18, 2003, for any class I, Group VIII
controlled substance, no person may import (except for transhipments or
heels), at any time in any control period, (except for controlled
substances that are transformed or destroyed) in excess of the amount
of unexpended essential use allowances or exemptions, or in excess of
unexpended critical use allowances, for that substance held by that
person under the authority of this subpart at that time for that
control period. Every kilogram of excess importation (other than
transhipments or heels) constitutes a separate violation of this
subpart. It is a violation of this subpart to obtain unused class I
controlled substances under the general laboratory exemption in excess
of actual need and to recycle that material for sale into other
markets.
* * * * *
(n) No person may use class I controlled substances produced or
imported under the essential use exemption for any purpose other than
those set forth in this paragraph. Effective January 1, 1996,
essential-use allowances are apportioned to a person under Sec.
82.8(a) and (b) for the exempted production or importation of specified
class I controlled substances solely for the purposes listed in
paragraphs (n)(1)(i) through (iii) of this section.
(1) Essential-uses for the production or importation of controlled
substances as agreed to by the Parties to the Protocol and subject to
the periodic revision of the Parties are:
(i) Metered dose inhalers (MDIs) for the treatment of asthma and
chronic obstructive pulmonary disease that were approved by the Food
and Drug Administration before December 31, 2000.
(ii) Space Shuttle--solvents.
(iii) Essential laboratory and analytical uses (defined in Appendix
G of this subpart).
(2) Any person acquiring unused class I controlled substances
produced or imported under the authority of essential-use allowances or
the essential-use exemption granted in Sec. 82.8 to this subpart for
use in anything other than an essential-use (i.e., for uses other than
those specifically listed in paragraph (n)(1) of this section) is in
violation of this subpart. Each kilogram of unused class I controlled
substance produced or imported under the authority of essential-use
allowances or the essential-use exemption and used for a non-essential
use is a separate violation of this subpart. Any person selling unused
class I controlled substances produced or imported under authority of
essential-use allowances or the essential-use exemption for uses other
than an essential-use is in violation of this subpart. Each kilogram of
unused class I controlled substances produced or imported under
authority of essential-use allowances or the essential-use exemption
and sold for a use other than an essential-use is a
[[Page 77003]]
separate violation of this subpart. It is a violation of this subpart
to obtain unused class I controlled substances under the exemption for
laboratory and analytical uses in excess of actual need and to recycle
that material for sale into other markets.
* * * * *
(p) Critical Use Exemption: With respect to class I, Group VI
substances (methyl bromide):
(1) For critical use allowance holders and critical stock allowance
holders:
(i) No person shall sell critical use methyl bromide without first
receiving a certification from the purchaser that the quantity
purchased will be sold or used solely for an approved critical use.
Every kilogram of critical use methyl bromide sold without first
obtaining such certification constitutes a separate violation of this
subpart.
(ii) No person shall sell a portion of inventory produced or
imported prior to the January 1, 2005 phaseout date as critical use
methyl bromide in excess of the number of unexpended critical stock
allowances held by that person.
(iii) A person who sells methyl bromide produced or imported before
the phaseout date of January 1, 2005 for a use identified by the user
as a critical use must hold sufficient critical stock allowances (CSA)
for the transaction and shall expend one allowance for each kilogram of
methyl bromide sold. Every kilogram of critical use methyl bromide
produced or imported before the phaseout date of January 1, 2005 that
is sold without expending an allowance constitutes a separate violation
of this subpart.
(2) For approved critical users, each action associated with each
200 kilograms of critical use methyl bromide for the following
subparagraphs constitutes a separate violation of this subpart.
(i) No person shall take possession of quantities of critical use
methyl bromide or acquire fumigation services using quantities of
critical use methyl bromide without first completing the appropriate
certification in accordance with the requirements in Sec. 82.13.
(ii) No person who purchases critical use methyl bromide may use
such quantities for a use other than the specified critical use listed
in Column A and the specified location of use in Column B of Appendix L
to this subpart.
(iii) No person who purchases critical use methyl bromide produced
or imported with expended critical use allowances for pre-plant uses,
may use such quantities for other than the pre-plant uses as specified
in Column A and Column B of appendix L to this subpart.
(iv) No person who purchases critical use methyl bromide produced
or imported with expended critical use allowances for post-harvest
uses, may use such quantities for other than the post-harvest uses as
specified in Column A and Column B of appendix L to this subpart.
(v) No person who uses critical use methyl bromide on a specific
field or structure may concurrently or subsequently use non-critical
use methyl bromide on the same field or structure for the same use (as
defined in Column A and Column B of appendix L) in the same control
period, excepting methyl bromide used under the quarantine and pre-
shipment exemption.
(vi) No person who purchases critical use methyl bromide during the
control period shall use that methyl bromide on a field or structure
for which that person has used non-critical use methyl bromide for the
same use (as defined in Columns A and B of appendix L) in the same
control period, excepting methyl bromide used under the quarantine and
pre-shipment exemption, unless, subsequent to that person's use of the
non-critical use methyl bromide, that person becomes subject to a
prohibition on the use of methyl bromide alternatives due to the
reaching of a local township limit described in appendix L of this
part.
* * * * *
0
4. Section 82.8 is added to read as follows:
Sec. 82.8 Grant of essential use allowances and critical use
allowances.
(a) Effective January 1, 1996, persons in the following list are
allocated essential-use allowances or exemptions for quantities of a
specific class I controlled substance for a specific essential-use (the
Administrator reserves the right to revise the allocations based on
future decisions of the Parties).
Table 1.--Essential Use Allowances for Calendar Year 2004
------------------------------------------------------------------------
Quantity
Company Chemical (metric tons)
------------------------------------------------------------------------
(1) Metered Dose Inhalers (for Oral Inhalation) for Treatment of Asthma
and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals...... CFC-11 or CFC-12 or 390.60
CFC-114.
Aventis Pharmaceutical Products CFC-11 or CFC-12 or 48.40
CFC-114.
Boehringer Ingelheim CFC-11 or CFC-12 or 500.20
Pharmaceuticals. CFC-114.
PLIVA Inc...................... CFC-11 or CFC-12 or 136.00
CFC-114.
Schering-Plough Corporation.... CFC-11 or CFC-12 or 918.00
CFC-114.
3M Pharmaceuticals............. CFC-11 or CFC-12 or 84.71
CFC-114.
--------------------------------
(2) Cleaning, Bonding and Surface Activation Applications for the Space
Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space Methyl Chloroform..... 141.877
Administration (NASA)/Thiokol
Rocket.
------------------------------------------------------------------------
(b) A global exemption for class I controlled substances for
essential laboratory and analytical uses shall be in effect through
December 31, 2005 subject to the restrictions in Appendix G of this
subpart, and subject to the record-keeping and reporting requirements
at Sec. 82.13(u) through (x). There is no amount specified for this
exemption.
(c) Effective January 1, 2005, critical use allowances are
apportioned as set forth in paragraph (c)(1) of this section for the
exempted production and import of class I, Group VI controlled
substances specifically for those approved critical uses listed in
Appendix L to this subpart for the applicable control period. Every
kilogram of production and import in excess of the total number and
type of unexpended critical use allowances held for a particular type
of use constitutes a separate violation of this subpart. Effective
January 1, 2005,
[[Page 77004]]
critical stock allowances are issued as set forth in paragraph (c)(2)
of this section for the sale of class I, Group VI controlled substances
from inventory produced or imported before the January 1, 2005 phaseout
date specifically for those approved critical uses listed in Appendix L
to this subpart for the applicable control period.
(1) Allocated critical use allowances granted for specified control
period.
------------------------------------------------------------------------
2005 Critical 2005 Critical
use allowances use allowances
Company for pre-plant for post-
uses* harvest uses*
(kilograms) (kilograms)
------------------------------------------------------------------------
Albemarle Corp.......................... 1,791,950 122,151
Ameribrom, Inc.......................... 989,911 67,479
Great Lakes Chemical Corp............... 4,357,690 297,049
TriCal, Inc............................. 30,679 2,091
------------------------------------------------------------------------
*For production or import of class I, Group VI controlled substance
exclusively for the Pre-Plant or Post-Harvest uses specified in
appendix L to this subpart.
(2) Allocated critical stock allowances granted for specified
control period. The following companies are allocated critical stock
allowances for 2005 on pro-rata basis in relation to the stocks held by
each.
------------------------------------------------------------------------
Company
-------------------------------------------------------------------------
Albemarle
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Blair Soil Fumigation
Burnside Services, Inc.
Cardinal Professional Products
Carolina Eastern, Inc.
Degesch America, Inc.
Dodson Bros.
Great Lakes Chemical Corp.
Harvey Fertilizer & Gas
Helena Chemical Co.
Hendrix & Dail
Hy Yield Bromine
Industrial Fumigation Company
J.C. Ehrlich Co.
Pacific Ag
Pest Fog Sales Corp.
Pro Source One
Reddick Fumigants
Royster-Clark, Inc.
Southern State Cooperative, Inc.
Trical Inc.
Trident Agricultural Products
UAP Southeast (NC)
UAP Southeast (SC)
Univar
Vanguard Fumigation Co.
Western Fumigation
Total--1,283,214 kilograms.
------------------------------------------------------------------------
0
5. Section 82.12 is amended by revising paragraph (a)(1) introductory
text, (a)(1)(i)(H), (a)(1)(ii) introductory text, and (a)(1)(iii) and
by adding paragraph (e) to read as follows:
Sec. 82.12 Transfers of allowances for class I controlled substances.
(a) Inter-company transfers. (1) Until January 1, 1996, for all
class I controlled substances, except for Group VI, and until January
1, 2005, for Group VI, any person (``transferor'') may transfer to any
other person (``transferee'') any amount of the transferor's
consumption allowances or production allowances, and effective January
1, 1995, for all class I controlled substances any person
(``transferor'') may transfer to any other person (``transferee'') any
amount of the transferor's Article 5 allowances. After January 1, 2002,
any essential-use allowance holder (including those persons that hold
essential-use allowances issued by a Party other than the United
States) (``transferor'') may transfer essential-use allowances for CFCs
to a metered dose inhaler company solely for the manufacture of
essential MDIs. After January 1, 2005, any critical use allowance
holder (``transferor'') may transfer critical use allowances to any
other person (``transferee''). After January 1, 2005, any critical
stock allowance holder (``transferor'') may transfer critical stock
allowances to any critical stock allowance holder or any methyl bromide
producer, importer, distributer or third party applicator
(``transferee'').
(i) * * *
(H) The one percent offset applied to the unweighted amount traded
will be deducted from the transferor's production or consumption
allowance balance (except for trades from transformers and destroyers
to producers or importers for the purpose of allowance reimbursement).
In the case of transferring essential use allowances, the amount of one
tenth of one percent of the amount traded will be deducted from the
transferor's allowance balance. In the case of transferring critical
use allowances, the amount of one tenth of one percent of the amount
traded will be deducted from the transferor's critical use allowance
balance.
* * * * *
(ii) The Administrator will determine whether the records
maintained by EPA, taking into account any previous transfers and any
production, allowable imports and exports of controlled substances
reported by the transferor, indicate that the transferor possesses, as
of the date the transfer claim is processed, unexpended allowances
sufficient to cover the transfer claim (i.e., the amount to be
transferred plus, in the case of transferors of essential use
allowances and critical use allowances, one tenth of one percent of the
transferred amount). Within three working days of receiving a complete
transfer claim, the Administrator will take action to notify the
transferor and transferee as follows:
* * * * *
(iii) In the event that the Administrator does not respond to a
transfer claim within the three working days specified in paragraph
(a)(1)(ii) of this section the transferor and transferee may proceed
with the transfer. EPA will reduce the transferor's balance of
unexpended allowances by the amount to be transferred plus, in the case
of transfers of production or consumption allowances, one percent of
that amount, and in the case of essential use allowances and critical
use allowances, one tenth of one percent of that amount. However if EPA
ultimately finds that the transferor did not have sufficient unexpended
allowances to cover the claim, the transferor and transferee will be
held liable for any violations of the regulations of this subpart that
occur as a result of, or in conjunction with, the improper transfer.
* * * * *
(e) Exchange of Critical Use Allowances for Critical Stock
Allowances. (1) Critical use allowance holders may petition the
Administrator to exchange a quantity of their unexpended critical use
allowances for an equivalent amount of critical stock allowances. A
person allocated critical stock allowances may not petition to exchange
unexpended critical stock allowances for critical use allowances.
(2) [Reserved]
[[Page 77005]]
0
6. Section 82.13 is amended as follows:
0
a. Revising paragraph (a).
0
b. Adding paragraphs (f)(2)(xx) through (f)(2)(xxii).
0
c. Revising paragraph (f)(3)(iv).
0
d. Adding paragraphs (f)(3)(xvi), and (f)(3)(xvii).
0
e. Adding paragraphs (g)(1)(xx) and (xxi).
0
f. Revising paragraph (g)(4)(vii).
0
h. Adding paragraphs (g)(4)(xviii) and (bb) through (dd).
Sec. 82.13 Recordkeeping and reporting requirements for class I
controlled substances.
(a) Unless otherwise specified, the recordkeeping and reporting
requirements set forth in this section take effect on January 1, 1995.
For class I, Group VIII controlled substances, the recordkeeping and
reporting requirements set forth in this section take effect on August
18, 2003. For class I, Group VI critical use methyl bromide, the
recordkeeping and reporting requirements set forth in this section take
effect January 1, 2005.
* * * * *
(f) * * *
(2) * * *
(xx) For class I, Group VI controlled substances, dated records
such as invoices and order forms, and a log of the quantity of
controlled substances produced for critical use, specifying quantities
dedicated for pre-plant use and quantities dedicated for post-harvest
use, and the quantity sold for critical use, specifying quantities
dedicated for pre-plant use and quantities dedicated for post-harvest
use;
(xxi) Written certifications that quantities of class I, Group VI
controlled substances produced for critical use were purchased by
distributors, applicators, or approved critical users to be used or
sold only for critical use in accordance with the definitions and
prohibitions in this subpart. Certifications must be maintained by the
producer for a minimum of three years and;
(xxii) For class I, Group VI controlled substances, dated records
such as invoices and order forms, and a log of the quantity of
controlled substances produced solely for export to satisfy critical
uses authorized by the Parties for that control period, and the
quantity sold solely for export to satisfy critical uses authorized by
the Parties for that control period.
(3) * * *
(iv) The producer's total of expended and unexpended production
allowances, consumption allowances, Article 5 allowances, critical use
allowances (pre-plant), critical use allowances (post-harvest),
critical stock allowances, and amount of essential-use allowances and
destruction and transformation credits conferred at the end of that
quarter;
* * * * *
(xvi) For critical uses of class I, Group VI controlled substances,
producers shall report annually the amount of critical use methyl
bromide owned by the reporting entity, specifying quantities dedicated
for pre-plant use and quantities dedicated for post-harvest use, as
well as quantities held by the reporting entity on behalf of another
entity, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use along with the name of the
entity on whose behalf the material is held; and
(xvii) A list of the quantities of class I, Group VI controlled
substances produced by the producer and exported by the producer and/or
by other U.S. companies in that control period, solely to satisfy the
critical uses authorized by the Parties for that control period.
(g) * * *
(1) * * *
(xx) For class I, Group VI controlled substances, dated records
such as invoices and order forms, of the quantity of controlled
substances imported for critical use, specifying quantities dedicated
for pre-plant use and quantities dedicated for post-harvest use, and
the quantity sold for critical use, specifying quantities dedicated for
pre-plant use and quantities dedicated for post-harvest use, and;
(xxi) Written certifications that quantities of class I, Group VI
controlled substances imported for critical use were purchased by
distributors, applicators, or approved critical users to be used or
sold only for critical use in accordance with the definitions and
prohibitions in this subpart. Certifications must be maintained by an
importer for a minimum of three years.
(4) * * *
(vii) The importer's total sum of expended and unexpended
consumption allowances by chemical as of the end of that quarter and
the total sum of expended and unexpended critical use allowances (pre-
plant) and unexpended critical use allowances (post-harvest) and
critical stock allowances;
* * * * *
(xviii) For critical uses of class I, Group VI controlled
substances, importers shall report annually the amount of critical use
methyl bromide owned by the reporting entity, specifying quantities
dedicated for pre-plant use and quantities dedicated for post-harvest
use, as well as quantities held by the reporting entity on behalf of
another entity, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use along with the name of the
entity on whose behalf the material is held.
* * * * *
(bb) Every distributor of methyl bromide (class I, Group VI
controlled substances) who purchases or receives a quantity of critical
use methyl bromide must comply with recordkeeping and reporting
requirements specified in this paragraph (bb).
(1) Recordkeeping--Every distributor of critical use methyl bromide
must certify to the producer or importer or other entity from which
they are acquiring quantities of critical use methyl bromide that such
quantities received will be sold or used only for approved critical
use(s) in accordance with the definitions and prohibitions in this
subpart.
(i) Every distributor of a quantity of critical use methyl bromide
must receive from an applicator, or any other entity to whom they sell
critical use methyl bromide, a certification of the quantity of
critical use methyl bromide ordered, prior to delivery of the quantity,
stating that the quantity will be sold or used only for approved
critical uses in accordance with definitions and prohibitions in this
subpart.
(ii) Every distributor of methyl bromide who receives a
certification from an applicator or any other entity to which they sell
critical use methyl bromide must maintain the certifications as records
for 3 years.
(iii) Every distributor of a quantity of critical use methyl
bromide must maintain invoice and order records related to the sale of
such material for 3 years.
(2) Reporting--Every distributor of critical use methyl bromide
must report to the Administrator annually, the following items:
(i) For critical uses of class I, Group VI controlled substances,
an annual list of the amount of critical use methyl bromide bought;
(ii) For critical uses of class I, Group VI controlled substances,
an annual list of the amount of critical use methyl bromide sold for
each specified critical use in Appendix L of this subpart;
(iii) For critical uses of class I, Group VI controlled substances,
report the amount of critical use methyl bromide owned by the reporting
entity, specifying quantities dedicated for pre-
[[Page 77006]]
plant use and quantities dedicated for post-harvest use, as well as
quantities held by the reporting entity on behalf of another entity,
specifying quantities dedicated for pre-plant use and quantities
dedicated for post-harvest use, along with the name of the entity on
whose behalf the material is held;
(iv) The number of unexpended critical stock allowances.
(cc) Every third party applicator of methyl bromide (class I, Group
VI controlled substances) that purchases or receives critical use
methyl bromide must comply with recordkeeping and reporting
requirements specified in this paragraph (cc).
(1) Recordkeeping--Every third party applicator of critical use
methyl bromide must certify to the producer or importer or other entity
from which they are acquiring quantities of critical use methyl bromide
that such quantities received will be sold or used only for approved
critical use(s) in accordance with the definitions and prohibitions in
this subpart.
(i) Every third party applicator of a quantity of critical use
methyl bromide must receive from any entity to whom they sell critical
use methyl bromide, a certification of the quantity of critical use
methyl bromide ordered, prior to delivery of the quantity, stating that
the quantity will be sold or used only for approved critical uses in
accordance with definitions and prohibitions in this subpart.
(ii) Every third party applicator of methyl bromide who receives a
certification from an entity to which they sell critical use methyl
bromide must maintain the certifications as records for 3 years.
(iii) Every third party applicator of a quantity of critical use
methyl bromide must maintain invoice and order records related to the
sale of such material for 3 years.
(2) Reporting--Every third party applicator of critical use methyl
bromide must report to the Administrator annually, the following items:
(i) For critical uses of class I, Group VI controlled substances,
an annual list of the amount of critical use methyl bromide bought;
(ii) For critical uses of class I, Group VI controlled substances,
an annual list of the amount of critical use methyl bromide sold for
each specified critical use in Appendix L of this subpart;
(iii) For critical uses of class I, Group VI controlled substances,
report annually the amount of critical use methyl bromide owned by the
reporting entity, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use, as well as quantities held
by the reporting entity on behalf of another entity, specifying
quantities dedicated for pre-plant use and quantities dedicated for
post-harvest use, along with the name of the entity on whose behalf the
material is held;
(iv) The number of unexpended critical stock allowances.
(dd) Every approved critical user purchasing an amount of critical
use methyl bromide or purchasing fumigation services with critical use
methyl bromide must, for each request, identify the use as a critical
use and certify being an approved critical user. The approved critical
user certification will state, in part: ``I certify, under penalty of
law, I am an approved critical user and I will use this quantity of
methyl bromide for an approved critical use. My action conforms to the
requirements associated with the critical use exemption published in 40
CFR part 82. I am aware that any agricultural commodity within a
treatment chamber, facility, or field I fumigate with critical use
methyl bromide can not subsequently or concurrently be fumigated with
non-critical use methyl bromide during the same control period,
excepting a QPS treatment or a treatment for a different use (e.g., a
different crop or commodity). I will not use this quantity of methyl
bromide for a treatment chamber, facility, or field that I previously
fumigated with non-critical use methyl bromide purchased during the
same control period, excepting a QPS treatment or a treatment for a
different use (e.g., a different crop or commodity), unless a local
township limit now prevents me from using methyl bromide
alternatives.'' The certification will also indicate the type of
critical use methyl bromide purchased, the location of the treatment,
the crop or commodity treated, the quantity of critical use methyl
bromide purchased, the acreage/square footage treated and will be
signed and dated by the approved critical user.
0
7. Add Appendix L to subpart A to read as follows:
Appendix L to Subpart A Of Part 82--Approved Critical Uses, and
Limiting Critical Conditions for Those Uses for the 2005 Control Period
----------------------------------------------------------------------------------------------------------------
Column B--Approved critical user Column C--Limiting critical
Column A--Approved critical uses and location of use conditions
----------------------------------------------------------------------------------------------------------------
PRE-PLANT USES
----------------------------------------------------------------------------------------------------------------
Cucurbits.................................... (a) Michigan growers............ With a reasonable expectation
that moderate to severe fungal
pathogen infestation already
either exists or could occur
without methyl bromide
fumigation.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that moderate to severe yellow
Tennessee, and Virginia growers. or purple nutsedge infestation
already either exists or could
occur without methyl bromide
fumigation.
Eggplant..................................... (a) Georgia growers............. With a reasonable expectation
that moderate to severe yellow
or purple nutsedge infestation
either already exist or could
occur without methyl bromide
fumigation.
(b) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions either already
exist or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
Forest Seedlings............................. (a) Members of the Southern With a reasonable expectation
Forest Nursery Management that one or more of the
Cooperative limited to growing following limiting critical
locations in Alabama, Arkansas, conditions already either
Florida, Georgia, Louisiana, exist or could occur without
Mississippi, North Carolina, methyl bromide fumigation:
Oklahoma, South Carolina, Moderate to severe yellow or
Tennessee, Texas, and Virginia. purple nutsedge infestation,
or moderate to severe disease
infestation.
[[Page 77007]]
(b) International Paper and its With a reasonable expectation
subsidiaries limited to growing that one or more of the
locations in Arkansas, Alabama, following limiting critical
Georgia, South Carolina and, conditions already either
Texas. exist or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
(c) Weyerhaeuser Company and its With a reasonable expectation
subsidiaries limiting to that one or more of the
growing locations in Alabama, following limited critical
Arkansas, North Carolina, South conditions already either
Carolina, Oregon, and exist or could occur without
Washington. methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
(d) Public (government owned) With a reasonable expectation
seedling nurseries in the that one or more of the
states of California, Idaho, following limiting critical
Illinois, Indiana, Kansas, conditions already either
Kentucky, Maryland, Missouri, exist or could occur without
Nebraska, New Jersey, Ohio, methyl bromide fumigation:
Oregon, Pennsylvania, Utah, Moderate to severe yellow or
Washington, West Virginia and, purple nutsedge infestation,
Wisconsin. or moderate to severe disease
infestation.
(e) Members of the Nursery With a reasonable expectation
Technology Cooperative limited that one or more of the
to growing locations in Oregon following limiting critical
and Washington. conditions already either
exist or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or moderate to severe disease
infestation.
(f) Michigan seedling nurseries. With a reasonable expectation
that one or more of the
following limiting critical
conditions already exist or
could occur without methyl
bromide fumigation: Moderate
to severe yellow or purple
nutsedge infestation, or
moderate to severe disease
infestation.
Ginger....................................... Hawaii growers.................. With a reasonable expectation
that the limiting critical
condition already either
exists or could occur without
methyl bromide fumigation, or
moderate to severe bacterial
wilt infestation.
Orchard Nursery Seedlings.................... (a) Members of the Western With a reasonable expectation
Raspberry Nursery Consortium that one or more of the
limited to growing locations in following limiting critical
California and Washington conditions already either
(Driscoll's raspberries and exists or could occur without
their contract growers in methyl bromide fumigation:
California and Washington). Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
(b) Members of the California With a reasonable expectation
Association of Nurserymen- that one or more of the
Deciduous Fruit and Nut Tree following limiting critical
Growers. conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
(c) Members of the California With a reasonable expectation
Association of Nurserymen- that one or more of the
Citrus and Avocado Growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe nematode
infestation, medium to heavy
clay soils, or a prohibition
of on the use of 1,3-
dichloropropene products due
to reaching local township
limits on the use of this
alternative.
Orchard Replant.............................. (a) California stone fruit With a reasonable expectation
growers. that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(b) California table and raisin With a reasonable expectation
grape growers. that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
[[Page 77008]]
(c) California walnut growers... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(d) California almond growers... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Replanted (non-virgin) orchard
soils to prevent orchard
replant disease, or medium to
heavy soils, or a prohibition
on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
Ornamentals.................................. (a) Yoder Brothers Inc. in For use in all chrysanthemum
Florida. production.
(b) California rose nurseries... With a reasonable expectation
that the user may be
prohibited from using 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
Peppers...................................... (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe disease
infestation, or moderate to
severe yellow or purple
nutsedge infestation, or a
prohibition on the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee and Virginia growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or the presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
(c) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
Strawberry Nurseries......................... (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe black root
rot or crown rote, or moderate
to severe yellow or purple
nutsedge infestation.
(b) North Carolina and Tennessee With a reasonable expectation
growers. that the use will occur in the
presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
Strawberry Fruit............................. (a) California growers.......... With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe black root
rot or crown rot, moderate to
severe yellow or purple
nutsedge infestation, a
prohibition of the use of 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached, time to transition to
an alternative.
(b) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge, or karst
topography.
(c) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee, Virginia, Ohio and, following limiting critical
New Jersey growers. conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge, or the
presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
[[Page 77009]]
Sweet Potatoes............................... California growers.............. With a reasonable expectation
that the user may be
prohibited from using 1,3-
dichloropropene products
because local township limits
for this alternative have been
reached.
Tomatoes..................................... (a) Michigan growers............ With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
moderate to severe disease
infestation, fungal pathogens
infestation.
(b) Alabama, Arkansas, Georgia, With a reasonable expectation
North Carolina, South Carolina, that one or more of the
Tennessee and Virginia growers. following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or the presence of an occupied
structure within 100 feet of a
grower's field the size of 100
acres or less.
(c) Florida growers............. With a reasonable expectation
that one or more of the
following limiting critical
conditions already either
exists or could occur without
methyl bromide fumigation:
Moderate to severe yellow or
purple nutsedge infestation,
or karst topography.
Turfgrass.................................... (a) U.S. turfgrass sod nursery For the production of industry
producers who are members of certified pure sod.
Turfgrass Producers
International (TPI).
(b) U.S. golf courses........... For establishing sod in the
construction of new golf
courses or the renovation of
putting greens, tees, and
fairways.
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POST-HARVEST USES
----------------------------------------------------------------------------------------------------------------
Food Processing.............................. (a) Rice millers in all With a reasonable expectation
locations in the U.S. who are that one or more of the
members of the USA Rice Millers following limiting critical
Association. conditions exists: Older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(b) Pet food manufacturing With a reasonable expectation
facilities in the U.S. who are that one or more of the
active members of the Pet Food following limiting critical
Institute. (For today's rule, conditions exists: Older
``pet food'' refers to domestic structures that can not be
dog and cat food). properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(c) Kraft Foods in the U.S...... With a reasonable expectation
that one or more of the
following limiting critical
conditions exists: Older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
(d) Members of the North With a reasonable expectation
American Millers' Association that one or more of the
in the U.S. following limiting critical
conditions already exists or
could occur without methyl
bromide fumigation: Older
structures that can not be
properly sealed to use an
alternative to methyl bromide,
or the presence of sensitive
electronic equipment subject
to corrosivity, time to
transition to an alternative.
Commodity Storage............................ (a) Gwaltney of Smithfield in For smokehouse ham curing
the U.S.. facilities owned by the
company.
(b) California entities storing With a reasonable expectation
walnuts, beans, dried plums, that one or more of the
figs, raisins, and pistachios following limiting critical
in California. conditions exists: Rapid
fumigation is required to meet
a critical market window, such
as during the holiday season,
rapid fumigation is required
when a buyer provides short (2
days or less) notification for
a purchase, or there is a
short period after harvest in
which to fumigate and there is
limited silo availability for
using alternatives.
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[FR Doc. 04-27905 Filed 12-22-04; 8:45 am]
BILLING CODE 6560-50-P