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Proposed Rule2022-26981

Phasedown of Hydrofluorocarbons: Restrictions on the Use of Certain Hydrofluorocarbons Under Subsection (i) the American Innovation and Manufacturing Act of 2020

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Published

December 15, 2022

Issuing agencies

Environmental Protection Agency

Abstract

The U.S. Environmental Protection Agency is proposing to issue regulations to implement certain provisions of the American Innovation and Manufacturing Act, as enacted on December 27, 2020. This rulemaking proposes to: restrict the use of hydrofluorocarbons in specific sectors or subsectors in which they are used; establish a process for submitting technology transitions petitions; establish recordkeeping and reporting requirements; and address certain other elements related to the effective implementation of the American Innovation and Manufacturing Act. The proposed restrictions on the use of hydrofluorocarbons would, in part, address petitions granted on October 7, 2021, and September 19, 2022. The U.S. Environmental Protection Agency is also seeking advance information on certain topics that may be helpful to developing a future proposed rule including on restrictions on the use of hydrofluorocarbons for certain other sectors and subsectors and on a third-party auditing program to verify substances used in products.

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[Federal Register Volume 87, Number 240 (Thursday, December 15, 2022)]
[Proposed Rules]
[Pages 76738-76813]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-26981]

[[Page 76737]]

Vol. 87

Thursday,

No. 240

December 15, 2022

Part III

Environmental Protection Agency

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40 CFR Part 84

Phasedown of Hydrofluorocarbons: Restrictions on the Use of Certain
Hydrofluorocarbons Under Subsection (i) the American Innovation and
Manufacturing Act of 2020; Proposed Rule

Federal Register / Vol. 87, No. 240 / Thursday, December 15, 2022 /
Proposed Rules

[[Page 76738]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 84

[EPA-HQ-OAR-2021-0643; FRL-8831-01-OAR]

Phasedown of Hydrofluorocarbons: Restrictions on the Use of
Certain Hydrofluorocarbons Under Subsection (i) the American Innovation
and Manufacturing Act of 2020

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking and advance notice of proposed
rulemaking.

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SUMMARY: The U.S. Environmental Protection Agency is proposing to issue
regulations to implement certain provisions of the American Innovation
and Manufacturing Act, as enacted on December 27, 2020. This rulemaking
proposes to: restrict the use of hydrofluorocarbons in specific sectors
or subsectors in which they are used; establish a process for
submitting technology transitions petitions; establish recordkeeping
and reporting requirements; and address certain other elements related
to the effective implementation of the American Innovation and
Manufacturing Act. The proposed restrictions on the use of
hydrofluorocarbons would, in part, address petitions granted on October
7, 2021, and September 19, 2022. The U.S. Environmental Protection
Agency is also seeking advance information on certain topics that may
be helpful to developing a future proposed rule including on
restrictions on the use of hydrofluorocarbons for certain other sectors
and subsectors and on a third-party auditing program to verify
substances used in products.

DATES: Comments on this notice of proposed rulemaking must be received
on or before January 30, 2023. Under the Paperwork Reduction Act (PRA),
comments on the information collection provisions are best ensured of
consideration if the Office of Management and Budget (OMB) receives a
copy of your comments on or before January 17, 2023. The U.S.
Environmental Protection Agency (EPA) will hold a virtual public
hearing on December 30, 2022. The date, time, and other relevant
information for the virtual public hearing will be available at <a href="https://www.epa.gov/climate-hfcs-reduction">https://www.epa.gov/climate-hfcs-reduction</a>.

ADDRESSES: You may send comments, identified by docket identification
number EPA-HQ-OAR-2021-0643, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>
(our preferred method). Follow the online instructions for submitting
comments.
<bullet> Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Air and Radiation Docket, Mail Code 28221T, 1200 Pennsylvania
Avenue NW, Washington, DC 20460.
<bullet> Hand Delivery or Courier (by scheduled appointment only):
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Avenue NW, Washington, DC 20004. The Docket Center's hours of
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal
Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. For information on EPA's Docket Center, please visit us
online at <a href="https://www.epa.gov/dockets">https://www.epa.gov/dockets</a>.
You may find the following suggestions helpful for preparing your
comments: Direct your comments to specific sections of this proposed
rulemaking and note where your comments may apply to future separate
actions where possible; explain your views as clearly as possible;
describe any assumptions that you used; provide any technical
information or data you used that support your views; provide specific
examples to illustrate your concerns; offer alternatives; and, make
sure to submit your comments by the comment period deadline. Please
provide any published studies or raw data supporting your position.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (e.g., on the web, cloud, or other file sharing
system).
Do not submit any information you consider to be Confidential
Business Information (CBI) through <a href="https://www.regulations.gov">https://www.regulations.gov</a>. For
submission of confidential comments, please work with the person listed
in the FOR FURTHER INFORMATION CONTACT section. For additional
submission methods, the full EPA public comment policy, information
about CBI or multimedia submissions, and general guidance on making
effective comments, please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a>.

FOR FURTHER INFORMATION CONTACT: Allison Cain, Stratospheric Protection
Division, Office of Atmospheric Programs (Mail Code 6205A),
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460; telephone number: 202-564-1566; email address:
<a href="/cdn-cgi/l/email-protection#c2a1a3abaceca3aeaeabb1adac82a7b2a3eca5adb4">[email&#160;protected]</a>. You may also visit EPA's website at <a href="https://www.epa.gov/climate-hfcs-reduction">https://www.epa.gov/climate-hfcs-reduction</a> for further information.

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we,''
``us,'' ``the Agency,'' or ``our'' is used, we mean EPA. Acronyms that
are used in this rulemaking that may be helpful include:

AC--Air Conditioning
AHAM--Association of Home Appliance Manufacturers
AHRI--Air-Conditioning, Heating, and Refrigeration Institute
AIM Act--American Innovation and Manufacturing Act of 2020
ANSI--American National Standards Institute
ASHRAE--American Society of Heating, Refrigerating and Air-
Conditioning Engineers
ASTM--American Society for Testing and Materials
CAA--Clean Air Act
CARB--California Air Resources Board
CAS Reg. No.--Chemical Abstracts Service Registry Identification
Number
CBI--Confidential Business Information
CBP--U.S. Customs and Border Protection
CDR--Chemical Data Reporting
CDX--Central Data Exchange
CFC--Chlorofluorocarbon
CO<INF>2</INF>--Carbon Dioxide
DX--Direct Expansion
DOE--U.S. Department of Energy
EAV--Equivalent Annualized Value
ECHO--Enforcement and Compliance History Online
e-GGRT--Electronic Greenhouse Gas Reporting Tool
EIA--Environmental Investigation Agency
EPA--U.S. Environmental Protection Agency
EU--European Union
FR--Federal Register
GDP--Gross Domestic Product
GHG--Greenhouse Gas
GHGRP--Greenhouse Gas Reporting Program
GSHP--Ground-source Heat Pump
GVWR--Gross Vehicle Weight Rating
GWP--Global Warming Potential
HD--Heavy-duty
HC--Hydrocarbon
HCFC--Hydrochlorofluorocarbon
HCFO--Hydrochlorofluoroolefin
HCPA--Household and Commercial Products Association
HFC--Hydrofluorocarbon
HFO--Hydrofluoroolefin
HPWH--Heat Pump Water Heater
IAM--Integrated Assessment Model
IAPMO--International Association of Plumbing and Mechanical
Officials
ICC--International Code Council
ICR--Information Collection Request
IPR--Industrial Process Refrigeration
IIAR--International Institute of Ammonia Refrigeration
IPCC--Intergovernmental Panel on Climate Change

[[Page 76739]]

IWG--Interagency Working Group on the Social Cost of Greenhouse
Gases
LD--Light-duty
LFL--Lower Flammability Limit
MAC--Marginal Abatement Cost
MDPV--Medium-duty Passenger Vehicle
MMTCO<INF>2</INF> e--Million Metric Tons of Carbon Dioxide
Equivalent
MVAC--Motor Vehicle Air Conditioning
MY--Model Year
NAA--National Aerosol Association
NAICS--North American Industry Classification System
NATA--National Air Toxics Assessment
NFPA --National Fire Protection Association
NRDC--Natural Resources Defense Council
OEM--Original Equipment Manufacturer
ODS--Ozone-depleting Substance
OMB--U.S. Office of Management and Budget
PRA--Paperwork Reduction Act
PTAC--Packaged Terminal Air Conditioner
PTHP--Packaged Terminal Heat Pump
PV--Present Value
RACHP--Refrigeration, Air Conditioning, and Heat Pumps
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
RTOC--Refrigeration, Air Conditioning and Heat Pumps Technical
Options Committee
SBREFA--Small Business Regulatory Enforcement Fairness Act
SC-HFCs--Social Costs of Hydrofluorocarbons
SNAP--Significant New Alternatives Policy
TEAP--Technology and Economic Assessment Panel
TLV-TWA--Threshold Limit Value-Time-Weighted Average
TRI--Toxics Release Inventory
TSD--Technical Support Document
UL--Underwriters Laboratories Inc
VRF--Variable Refrigerant Flow
WSHP--Water-source Heat Pump
WMO--World Meteorological Organization

Table of Contents

I. Executive Summary
A. What is the purpose of this proposed regulatory action?
B. What is the summary of this proposed regulatory action?
C. What is the summary of the costs and benefits?
II. General Information
A. Does this action apply to me?
B. What is EPA's authority for taking this action?
III. Background
A. What are HFCs?
B. How do HFCs affect public health and welfare?
C. How is EPA evaluating environmental justice?
IV. What factors will be considered for evaluating a petition?
V. What is the petition process under the technology transitions
program?
A. What is required to be included in a technology transitions
petition?
B. What happens after a petition is submitted?
C. Can I revise or resubmit my petition?
VI. How is EPA considering negotiated rulemaking?
A. Summary of the AIM Act's Directive on Negotiated Rulemaking
B. How does EPA intend to consider negotiating with stakeholders
under the AIM Act?
VII. What is EPA's proposed action concerning restrictions on the
use of HFCs?
A. What definitions is EPA proposing to implement subsection
(i)?
B. How is EPA proposing to restrict the use of HFCs in the
sector or subsector in which the HFCs are used?
C. Applicability
1. Which uses is EPA proposing to restrict in this proposal?
2. Would the proposed use restrictions also apply to products
that are manufactured for export?
3. Would restrictions apply to existing equipment?
4. Effective and Compliance Dates of Rules Promulgated Under
Subsection (i)
D. How is EPA proposing to address restrictions on the use of
HFCs requested in petitions granted?
1. Petitions Granted on October 7, 2021
2. How is EPA proposing to address additional petitions that
cover similar sectors and subsectors?
3. Petitions Granted on September 19, 2022
E. Subsection (i)(4) Factors for Determination
1. How is EPA considering best available data?
2. How is EPA considering the availability of substitutes?
3. How is EPA considering overall economic costs and
environmental impacts, as compared to historical trends?
4. How is EPA considering the remaining phase-down period for
regulated substances under the final rule issued under subsection
(e)(3) of the AIM Act?
F. For which sectors and subsectors is EPA proposing to
establish restrictions on the use of HFCs and blends containing
HFCs?
1. How did EPA determine the degree of the proposed restrictions
for each sector and subsector?
2. Summary of Proposed Restrictions on the Use of HFCs
3. Refrigeration, Air conditioning, and Heat Pump
4. Foam Blowing
5. Aerosols
G. For what additional sectors or subsectors is EPA requesting
advance information on the use of HFCs?
VIII. What are the proposed enforcement and compliance provisions?
A. What is EPA proposing for labeling requirements?
B. What potential auditing and third-party testing programs is
EPA seeking advance information on?
1. Who should be subject to the independent third-party testing
and audits?
2. What elements and criteria should be included in the third-
party auditors and/or accreditation body requirements?
IX. What are the proposed recordkeeping and reporting requirements?
A. What reporting is EPA proposing to require?
B. What recordkeeping is EPA proposing?
X. What are the costs and benefits of this proposed action?
A. Assessment of Costs and Additional Benefits Utilizing
Transition Options
B. Scoping Analysis of Imports of Regulated Products
XI. Statutory and Executive Order Review

I. Executive Summary

A. What is the purpose of this proposed regulatory action?

The U.S. Environmental Protection Agency (EPA) is proposing
regulations that would implement certain provisions of the American
Innovation and Manufacturing Act of 2020, codified at 42 U.S.C. 7675
(AIM Act or the Act). The AIM Act authorizes EPA to address
hydrofluorocarbons (HFCs) in three main ways: phasing down HFC
production and consumption through an allowance allocation program; \1\
promulgating certain regulations for purposes of maximizing reclamation
and minimizing releases of HFCs and their substitutes from equipment;
and facilitating sector-based transitions to next-generation
technologies. This proposal focuses on the third area--facilitating the
transition to next-generation technologies by restricting use of HFCs
in the sectors or subsectors in which they are used.
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\1\ EPA has issued regulations establishing and codifying a
framework for phasing down HFC production and consumption through an
allowance allocation program, ``Phasedown of Hydrofluorocarbons:
Establishing the Allowance Allocation and Trading Program Under the
American Innovation and Manufacturing Act'' (86 FR 55116, October 5,
2021). That rule is referred to as the ``Allocation Framework Rule''
throughout this document. EPA is currently undertaking a separate
rulemaking to update certain aspects of that regulatory framework.
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Subsection (i) of the Act, entitled ``Technology Transitions,''
authorizes EPA, by rulemaking, to restrict the use of regulated
substances (used interchangeably with ``HFCs'' in this document) in
sectors or subsectors where the regulated substances are used.\2\ The
Act also includes provisions for the public to petition EPA to initiate
such a rulemaking. On October 7, 2021, and September 19, 2022, EPA
granted 12 petitions and partially granted one petition (hereby
referred to as ``granted petitions'') requesting restrictions on the
use of HFCs in various sectors and subsectors (86 FR 57141, October 14,
2021). The Act directs EPA to promulgate a final rule within two years
after the date on which the Agency grants a petition. Thus, this
proposed

[[Page 76740]]

rulemaking, in part, addresses the granted petitions.
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\2\ The Act lists 18 saturated HFCs, and by reference any of
their isomers not so listed, that are covered by the statute's
provisions, referred to as ``regulated substances'' under the Act.
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This proposed rulemaking further addresses the framework for how
EPA intends to implement its authority to restrict the use of HFCs in
sectors and subsectors where they are used. Additionally, it proposes
provisions to support implementation of, compliance with, and
enforcement of statutory and regulatory requirements under subsection
(i) of the Act. To provide the public with additional information about
this new program, this document also includes a description of how EPA
intends to implement certain aspects of the program, such as the
processing of petitions to restrict the use of HFCs in sectors and
subsectors in which they are used under subsection (i) of the Act.
Lastly, EPA is seeking advance information on certain topics that
may be helpful for developing a future proposed rule. Specifically, EPA
is seeking advance information on the application of restrictions on
the use of HFCs to heat pump water heaters and to certain retrofitted
equipment in the refrigeration, air conditioning, and heat pump (RACHP)
sector. EPA is also seeking advance information on a third-party
auditing program to verify substances used in products. EPA does not
intend to finalize an auditing program or restrictions on the use of
HFCs for those sectors and subsectors on which it is seeking advance
information as part of this rulemaking process. Accordingly, EPA does
not intend to respond to any advance information received on the
options discussed in these sections in any final rulemaking for this
proposal.

B. What is the summary of this proposed regulatory action?

Technology transitions petitions: EPA is proposing the process for
petitions submitted under subsection (i) of the AIM Act and describes
how the Agency intends to evaluate petitions. EPA is proposing that
petitions be submitted electronically with required minimum
information. Upon receiving a petition, the Agency will consider, to
the extent practicable, the factors listed in subsection (i)(4) of the
AIM Act in making a determination to grant or deny the petition.
Consistent with the Act, EPA also considered these factors to the
extent practicable in establishing the restrictions on the use of HFCs
in this proposed rulemaking.
Restrictions on the use of HFCs: EPA is proposing restrictions on
the use of certain HFCs within new products in the following sectors
and subsectors: refrigeration, air conditioning, and heat pumps; foam
blowing; and aerosols. All proposed restrictions would occur in two
stages; the manufacture or import of products would be prohibited by
either 2025 or 2026, depending on the sector or subsector, followed a
year later by a prohibition on the sale, distribution, offer for sale
or distribution, export, and other activities pertaining to those
products.
Enforcement and compliance: To support compliance with the proposed
prohibitions on the use of HFCs with high global warming potentials
(GWPs) in specific sectors and subsectors, EPA is proposing labeling,
reporting, and recordkeeping requirements for products imported or
manufactured using an HFC. The Agency is proposing to use the same
reporting platform used in prior AIM Act rules and the Greenhouse Gas
Reporting Program (GHGRP).\3\
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\3\ The GHGRP requires reporting of greenhouse gas (GHG) data
and other relevant information from large GHG emission sources, fuel
and industrial gas suppliers, and carbon dioxide (CO<INF>2</INF>)
injection sites in the United States. The program generally requires
reporting when emissions from covered sources are greater than
25,000 metric tons of CO<INF>2</INF>e per year. Publicly available
information includes facility names, addresses, and latitude/
longitude information.
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C. What is the summary of the costs and benefits?

EPA is providing information on the costs and benefits of
restricting use of HFCs consistent with this proposed rule. The
analyses, presented in the Costs and Environmental Impacts technical
support document (TSD) and in a regulatory impact analysis (RIA)
addendum to the Allocation Framework RIA, are contained in the docket
to this proposed rule. These analyses--as summarized below--highlight
economic cost and benefits, including benefits from HFC consumption and
emissions reductions. While significant, the benefits presented in this
summary are considered incidental and secondary to the rule's statutory
objective of facilitating the transition to next-generation
technologies by restricting use of HFCs in the sectors or subsectors in
which they are used.
Given that the provisions EPA is proposing concern HFCs, which are
subject to the overall phasedown of production and consumption under
the AIM Act, EPA relied on previous analyses conducted for the
Allocation Framework Rule (86 FR 55116, October 5, 2021) and the
proposed 2024 Allocation Rule, ``Phasedown of Hydrofluorocarbons:
Allowance Allocation Methodology for 2024 and Later Years'' 87 FR
66372, November 3, 2022) as a starting point for the assessment of
costs and benefits of this rule. In this way, EPA analyzed the
potential incremental impacts of the proposed rule, attributing
benefits only insofar as they are additional to those already assessed
in the Allocation Framework RIA and proposed 2024 Allocation Rule RIA
addendum (collectively referred to as ``Allocation Rules'' in this
discussion).
As detailed in the RIA addendum and the Costs and Environmental
Impacts TSD, additional benefits of the proposed rule relative to the
Allocation Rules may vary depending on the mix and timing of industry
transitions made in order to achieve compliance in affected subsectors.
In its analysis of the Allocation Rules, EPA estimated that regulated
entities would adopt specific technology transition options to achieve
compliance with the statutory allowance cap step-downs. Industry is
already making many of these transitions, and we expect that achieving
the allowance cap step-downs will require many of the same subsector-
specific technology transitions that would also be required by this
proposed rule. However, the rule may in some cases require regulated
entities to further accelerate transitions in specific subsectors,
relative to what EPA previously assumed in its analysis of the
Allocation Rules. Conversely, entities in a discrete set of subsectors
not covered by this proposed rule could conceivably forgo or delay
adopting abatement options that were assumed to be undertaken to comply
with the Allocation Rules.
Given this uncertainty, EPA analyzed two scenarios to represent the
range of potential incremental impacts resulting from the proposed
rule: a ``base case'' and ``high additionality case.'' Both scenarios
use the results from the Allocation Rule as a starting point, and count
benefits in terms of reductions of consumption and emissions only in
cases where the proposed rule would result in additional reductions in
HFC consumption. The ``base case'' represents a conservative assessment
of benefits and assumes that any industry activity not necessary for
compliance is excluded. In other words, the scenario excludes
consumption reductions not covered by a GWP restriction in the proposed
rule and not needed to reach the phasedown cap (so long as the
phasedown caps are otherwise met through consumption reductions in
subsectors that are covered by the proposed rule restrictions). By
contrast, the ``high additionality case'' is a less conservative
scenario and assumes that HFC consumption reduction activities not
covered by the proposed rule would remain consistent with the
Allocation

[[Page 76741]]

Rule reference scenario (i.e., neither increase nor decrease in
response to this proposed rule). Based on the results of these two
scenarios, which are detailed further in the Costs and Environmental
Impacts TSD and the RIA addendum, EPA estimates that additional
emission reductions through 2050 would be 5 to 35 million metric tons
of carbon dioxide equivalent (MMTCO<INF>2</INF>e) annually.\4\ These
emission reductions generally lag the anticipated incidental
consumption reductions, which range from 735 to 1,121
MMTCO<INF>2</INF>e for 2025-2050 at an annual average of 28 to 43
MMTCO<INF>2</INF>e.
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\4\ As noted in the Allocation Framework Rule, the exchange
values provided in the AIM Act are numerically equivalent to the
100-year integrated global warming potentials provided in IPCC
(2007). EPA provides values in CO<INF>2</INF>e and notes here that
the same values would be used if expressed in exchange value
equivalents.
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Table 1 summarizes the reductions in both consumption and emissions
as described in the RIA addendum. The table shows the incremental
annual reductions--that is, the difference in reductions compared to
the Allocation Rule reference scenario--from the proposed rule for
selected years in the time period 2025-2050. Both the base case and
high additionality case results show a net reduction in consumption and
emissions on a cumulative basis through 2050. Emissions under the
proposed rule would decrease compared to the business-as-usual
estimates shown in the RIA, however they would not decrease as much as
under the Allocation Rule reference scenario for certain model years.
For these years, incremental emission reductions are therefore shown as
negative numbers in the table. This effect is due to assumptions about
the technological solutions used to comply with each rule.
Specifically, the base case excludes actions not required by this
proposed rule, such as improved leak reduction and enhanced recovery of
HFCs, which are assumed to otherwise yield relatively rapid emission
reductions. Since the Allocation Rule reference scenario includes those
actions, incremental emission reductions in the base case accrue more
slowly (and therefore are shown as negative in certain years) while
still yielding a net reduction on a cumulative basis.

Table 1--Incremental Consumption and Emission Reductions in the Technology Transitions Rule Base Case and High
Additionality Case
----------------------------------------------------------------------------------------------------------------
Incremental consumption reductions (MMTCO2e) Incremental emission
--------------------------------------------------------------------------------- reductions (MMTCO2e)
-------------------------------
Technology Technology Technology
transitions transitions Technology transitions
Year rule base high transitions high
case additionality rule base additionality
case case case
----------------------------------------------------------------------------------------------------------------
2025............................................ 9 42 -52 8
2029............................................ 27 53 -13 34
2034............................................ 35 49 2 43
2036............................................ 34 42 -3 36
2040............................................ 21 29 27 40
2045............................................ 35 44 27 37
2050............................................ 37 46 30 38
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Total (cumulative).......................... 735 1121 134 903
----------------------------------------------------------------------------------------------------------------

As reflected in the RIA addendum, however, although the base case
is a reasonable projection of the potential impacts of the proposed
rule, there is reason to believe that it is a conservative one, and
that the incremental emission reductions associated with this proposal
could be far greater than reflected in the base case scenario. Previous
regulatory programs to reduce chemical use in the affected industries
show that regulated entities do not limit their response to the
required compliance level; rather, regulated entities may take
additional actions that transform industry practices for various
reasons, including the anticipation of future restrictions,
strengthening their competitive position, and supporting overall
environmental goals. For example, U.S. production and consumption of
ozone-depleting substances (ODS) during their phaseout was consistently
below the limits established under the Montreal Protocol. For this
reason, in the high additionality case we assumed certain abatement
options not covered by the proposed rule--but which were assumed in the
prior accounting of benefits for the Allocation Rules--continue to be
undertaken. Based on the two scenarios, on a cumulative basis the rule
is expected to yield incremental emission reductions ranging from 134
to 903 MMTCO<INF>2</INF>e through 2050 (respectively, about 3 percent
and 20 percent of the total emissions over that same time period in the
Allocations Rules analyses). In the RIA addendum, we estimate the
present value of these incremental benefits to be between $5 billion
and $51 billion in 2020 dollars.
EPA also estimates that the proposed rule would result in lower
compliance costs relative to the Allocation Rules. These additional
savings stem largely from assumed energy efficiency gains and lower
cost refrigerants associated with the technological transitions
necessary to meet the proposed requirements. The present value of these
cumulative incremental savings from 2025-2050 is estimated to be
between $2.2 billion and $4.2 billion, using a 7 percent discount rate,
or between $5.1 billion and $8 billion, using a 3 percent discount rate
(in 2020 dollars).
Table 2 summarizes key findings from the RIA addendum, including
the incremental annual climate benefits, costs, and net benefits of the
rule for selected years in the time period 2025-2050, with the climate
benefits discounted at 3 percent, for the base case and high
additionality case. The table also provides the present value (PV) and
equivalent annualized value (EAV) of the annual costs under a 3% and 7%
discount rate. We note that the climate benefits and net benefits
findings were not used for decisional purposes in this proposed rule
and are

[[Page 76742]]

provided for informational and illustrative purposes only.

Table 2--Summary of Annual Incremental Climate Benefits, Costs, and Net Benefits of the Technology Transitions Rule Base Case and High Additionality
Case Scenarios for the 2025-2050 Timeframe
[Millions of 2020$, discounted to 2022] a b c d e
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base case High additionality case
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual costs Net benefits Annual costs Net benefits
Incremental (negative (3% benefits, Incremental (negative (3% benefits,
Year climate values are 3% or 7% climate values are 3% or 7%
benefits (3%) savings) costs) \e\ benefits (3%) savings) Costs) \e\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2025.................................................... -$3,603 -$395 -$3,209 $546 $31 $515
2029.................................................... -1,043 50 -1,092 2,563 335 2,227
2034.................................................... 141 -200 340 3,739 -77 3,816
2036.................................................... -404 -677 273 3,213 -635 3,848
2040.................................................... 2,669 -848 3,516 3,928 -784 4,712
2045.................................................... 2,946 -786 3,732 4,031 -717 4,748
2050.................................................... 3,606 -817 4,422 4,677 -743 5,419
--------------------------------------------------------------------------------------------------------------------------------------------------------

Discount rate 3% 3% 7% 3% 7% 3% 3% 7% 3% 7%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PV............................................................ $5,084 -$8,045 -$4,225 $13,130 $9,309 $51,145 -$5,140 -$2,190 $56,285 $53,335
EAV........................................................... $311 -$492 -$438 $803 $748 $3,126 -$314 -$227 $3,440 $3,353
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Benefits include only those related to climate. Climate benefits are based on changes in HFC emissions and are calculated using four different estimates of the SC-HFCs (model average at
2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent discount rate). For purposes of this table, we show the effects associated with the model average at a 3
percent discount rate, but the Agency does not have a single central SC-HFC point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-HFC
estimates. As discussed in Chapter 5 of the RIA addendum a consideration of climate effects calculated using discount rates below 3 percent, including 2 percent and lower, is also warranted
when discounting intergenerational impacts.
\b\ Rows may not appear to add correctly due to rounding.
\c\ The annualized present value of costs and benefits are calculated as if they occur over a 26-year period from 2025 to 2050.
\d\ The costs presented in this table are annual estimates.
\e\ The PV for the 7% net benefits column is found by taking the difference between the PV of climate benefits at 3% and the PV of costs discounted at 7%. Due to the intergenerational nature
of climate impacts the social rate of return to capital, estimated to be 7 percent in OMB's Circular A-4, is not appropriate for use in calculating PV of climate benefits.

Some of the information regarding projected impacts of the rule,
including cost estimates and anticipated environmental impacts, was
considered by EPA in its assessment of certain factors listed in
subsection (i)(4) of the AIM Act.\5\ The cost and benefit information
relied upon by EPA in its consideration of the subsection (i)(4)
factors is compiled in the Costs and Environmental Impacts TSD. As
discussed in section VII.E, EPA chose to use certain cost and
environmental benefit information that it had generated in conducting
its RIA addendum in considering certain factors under subsection
(i)(4), but we expect that in future rulemakings we may consider
different types of information to address the (i)(4) factors. In
assessing the (i)(4) factors for this proposed rule, as summarized in
the Costs and Environmental Impacts TSD, EPA considered estimates of
costs of the proposed action and estimates of cumulative consumption
and emission reductions for 2025-2050 of 735 to 1,121
MMTCO<INF>2</INF>e and 134 to 903 MMTCO<INF>2</INF>e, respectively,
neither of which incorporate the social costs of HFCs (SC-HFCs).
---------------------------------------------------------------------------

\5\ Subsection (i)(4) of the AIM Act contains a list of factors
that the statute directs EPA to consider, to the extent practicable,
when carrying out a rulemaking or making a determination to grant or
deny a petition.
---------------------------------------------------------------------------

Although EPA is using SC-HFCs for purposes of some of the analysis
in the RIA addendum, this proposed action does not rely on those
estimates of these costs as a record basis for the Agency action, and
EPA would reach the proposed conclusions even in the absence of the
social costs of HFCs.
Additional information on this analysis can be found in section X
of this preamble and in the Costs and Environmental Impacts TSD and RIA
addendum contained in the docket.

II. General Information

A. Does this action apply to me?

You may be potentially affected by this rule if you manufacture,
import, export, package, sell or otherwise distribute products that use
or are intended to use HFCs, such as refrigeration and air-conditioning
(AC) systems, foams, and aerosols. You may also be potentially affected
by this action if you produce, import, export, destroy, use as a
feedstock, reclaim, package, or otherwise distribute HFCs. Potentially
affected categories, by North American Industry Classification System
(NAICS) code, are included in Table 3.

Table 3--NAICS Classification of Potentially Affected Entities
------------------------------------------------------------------------
NAICS code NAICS industry description
------------------------------------------------------------------------
238220................... Plumbing, Heating, and Air[dash]Conditioning
Contractors.
311812................... Commercial Bakeries.
321999................... All Other Miscellaneous Wood Product
Manufacturing.
322299................... All Other Converted Paper Product
Manufacturing.
324191................... Petroleum Lubricating Oil and Grease
Manufacturing.
324199................... All Other Petroleum and Coal Products
Manufacturing.
325199................... All Other Basic Organic Chemical
Manufacturing.
325211................... Plastics Material and Resin Manufacturing.

[[Page 76743]]

325412................... Pharmaceutical Preparation Manufacturing.
325414................... Biological Product (except Diagnostic)
Manufacturing.
325998................... All Other Miscellaneous Chemical Product and
Preparation Manufacturing.
326150................... Urethane and Other Foam Product.
326299................... All Other Rubber Product Manufacturing.
327999................... All Other Miscellaneous Nonmetallic Mineral
Product Manufacturing.
332812................... Metal Coating, Engraving (except Jewelry and
Silverware), and Allied Services to
Manufacturers.
332999................... All Other Miscellaneous Fabricated Metal
Product Manufacturing.
333415................... Air[dash]Conditioning and Warm Air Heating
Equipment and Commercial and Industrial
Refrigeration Equipment Manufacturing.
333511................... Industrial Mold Manufacturing.
333912................... Air and Gas Compressor Manufacturing.
333999................... All Other Miscellaneous General Purpose
Machinery Manufacturing.
334419................... Other Electronic Component Manufacturing.
335220................... Major Household Appliance Manufacturing.
336120................... Heavy Duty Truck Manufacturing.
336212................... Truck Trailer Manufacturing.
336214................... Travel Trailer and Camper Manufacturing.
3363..................... Motor Vehicle Parts Manufacturing.
3364..................... Aerospace Product and Parts Manufacturing.
336411................... Aircraft Manufacturing.
336611................... Ship Building and Repairing.
336612................... Boat Building.
336992................... Military Armored Vehicle, Tank, and Tank
Component Manufacturing.
337214................... Office Furniture (Except Wood) Manufacturing.
339112................... Surgical and Medical Instrument
Manufacturing.
339113................... Surgical Appliance and Supplies
Manufacturing.
339999................... All Other Miscellaneous Manufacturing.
423120................... Motor Vehicle Supplies and New Parts Merchant
Wholesalers.
423450................... Medical, Dental, and Hospital Equipment and
Supplies Merchant Wholesalers.
423610................... Electrical Apparatus and Equipment, Wiring
Supplies, and Related Equipment Merchant
Wholesalers.
423620................... Household Appliances, Electric Housewares,
and Consumer Electronics Merchant
Wholesalers.
423690................... Other Electronic Parts and Equipment Merchant
Wholesalers.
423720................... Plumbing and Heating Equipment and Supplies
(Hydronics) Merchant Wholesalers.
423730................... Warm Air Heating and Air-Conditioning
Equipment and Supplies Merchant Wholesalers.
423740................... Refrigeration Equipment and Supplies Merchant
Wholesalers.
423830................... Industrial Machinery and Equipment Merchant
Wholesalers.
423840................... Industrial Supplies Merchant Wholesalers.
423850................... Service Establishment Equipment and Supplies
Merchant Wholesalers.
423860................... Transportation Equipment and Supplies (except
Motor Vehicle) Merchant Wholesalers.
423990................... Other Miscellaneous Durable Goods Merchant
Wholesalers.
424690................... Other Chemical and Allied Products Merchant
Wholesalers.
424820................... Wine and Distilled Alcoholic Beverage
Merchant Wholesalers.
443142................... Electronics Stores.
444190................... Other Building Material Dealers.
445110................... Supermarkets and Other Grocery (except
Convenience) Stores.
445131................... Convenience Retailers.
445298................... All Other Specialty Food Retailers.
449210................... Appliance Stores, Household-Type.
453998................... All Other Miscellaneous Store Retailers
(except Tobacco Stores).
45711.................... Gasoline Stations With Convenience Stores.
481111................... Scheduled Passenger Air Transportation.
531120................... Lessors of Nonresidential Buildings (except
Miniwarehouses).
541330................... Engineering Services.
541380................... Testing Laboratories.
541512................... Computer Systems Design Services.
541519................... Other Computer Related Services.
541620................... Environmental Consulting Services.
562111................... Solid Waste Collection.
562211................... Hazardous Waste Treatment and Disposal.
562920................... Materials Recovery Facilities.
621498................... All Other Outpatient Care Centers.
621999................... All Other Miscellaneous Ambulatory Health
Care Services.
72111.................... Hotels (Except Casino Hotels) and Motels.
72112.................... Casino Hotels.
72241.................... Drinking Places (Alcoholic Beverages).
722513................... Limited-Service Restaurants.
722514................... Cafeterias, Grill Buffets, and Buffets.
722515................... Snack and Nonalcoholic Beverage Bars.
81119.................... Other Automotive Repair and Maintenance.
811219................... Other Electronic and Precision Equipment
Repair and Maintenance.
811412................... Appliance Repair and Maintenance.
922160................... Fire Protection.
------------------------------------------------------------------------

[[Page 76744]]

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA expects could
potentially be regulated by this action. Other types of entities not
listed in the table could also be regulated. To determine whether your
entity may be regulated by this action, you should carefully examine
the regulatory text at the end of this document. If you have questions
regarding the applicability of this action to a particular entity,
consult the person listed in the FOR FURTHER INFORMATION CONTACT
section.

B. What is EPA's authority for taking this action?

On December 27, 2020, the AIM Act was enacted as section 103 in
Division S, Innovation for the Environment, of the Consolidated
Appropriations Act, 2021 (codified at 42 U.S.C. 7675). In subsection
(k)(1)(A), the AIM Act provides EPA with the authority to promulgate
necessary regulations to carry out EPA's functions under the Act,
including its obligations to ensure that the Act's requirements are
satisfied. Subsection (k)(1)(C) of the Act also provides that Clean Air
Act (CAA) sections 113, 114, 304, and 307 apply to the AIM Act and any
regulations EPA promulgates under the AIM Act as though the AIM Act
were part of title VI of the CAA. Accordingly, this rulemaking is
subject to CAA section 307(d) (see 42 U.S.C. 7607(d)(1)(I)) (CAA
section 307(d) applies to ``promulgation or revision of regulations
under subchapter VI of this chapter (relating to stratosphere and ozone
protection)'').
The AIM Act authorizes EPA to address HFCs by providing new
authorities in three main areas: phasing down the production and
consumption of listed HFCs; managing these HFCs and their substitutes;
and facilitating the transition to next-generation technologies by
restricting use of these HFCs in the sector or subsectors in which they
are used. This rulemaking focuses on the third area: the transition to
next-generation technologies by restricting use of these HFCs in the
sector or subsectors in which they are used.
Subsection (i) of the AIM Act, ``Technology Transitions,'' provides
that ``the Administrator may by rule restrict, fully, partially, or on
a graduated schedule, the use of a regulated substance in the sector or
subsector in which the regulated substance is used.'' 42 U.S.C.
7675(i)(1). The Act lists 18 saturated HFCs, and by reference any of
their isomers not so listed, that are covered by the statute's
provisions, referred to as ``regulated substances'' under the Act.\6\
(42 U.S.C. 7675(c)(1)). EPA is also authorized to designate additional
substances that meet certain criteria as regulated substances (42
U.S.C. 7675(c)(3)). EPA has not so designated any additional
substances, and the list of 18 regulated substances can also be found
in appendix A of 40 CFR part 84. Through this rule, EPA is proposing to
restrict the use of certain HFCs, whether neat or used in a blend, in
specific sectors or subsectors, based on EPA's consideration of the
factors listed in (i)(4) of the AIM Act.
---------------------------------------------------------------------------

\6\ As noted previously in this document, ``regulated
substance'' and ``HFC'' are used interchangeably in this document.
---------------------------------------------------------------------------

A rulemaking restricting the use of regulated substances in sectors
or subsectors can be initiated by EPA on its own accord, or a person
may petition EPA to promulgate such a rule. Specifically, subsection
(i)(3)(A) states, ``A person may petition the Administrator to
promulgate a rule under subsection (i)(1) for the restriction on use of
a regulated substance in a sector or subsector.'' Where the Agency
grants such a petition submitted under subsection (i), the statute
requires that ``the Administrator shall promulgate a final rule not
later than 2 years after the date on which the Administrator grants the
petition.'' (42 U.S.C. 7675(i)(3)(C)(ii)). Thus, EPA is addressing the
granted petitions under subsection (i) in this proposed action.
Furthermore, prior to proposing a rule, subsection (i)(2)(A)
directs EPA to consider negotiating with stakeholders in the sector or
subsector subject to the potential rule in accordance with negotiated
rulemaking procedures established under subchapter III of chapter 5 of
title 5, United States Code (commonly known as the ``Negotiated
Rulemaking Act of 1990''). A brief discussion on EPA's consideration of
using negotiated rulemaking procedures and its decision not to
negotiate with stakeholders prior to this proposal can be found in
section VI.B of this preamble.
In addition to proposing HFC use restrictions, this proposal
includes measures designed to assist with enforcement and to help
ensure compliance with those use restrictions, including recordkeeping,
reporting, and labeling requirements. The proposed reporting
requirements are also intended to inform EPA of market dynamics and the
transitions that are occurring in those sectors and subsectors
addressed by this rulemaking. EPA notes that subsection (k)(1)(C) of
the AIM Act states that section 114 of the CAA applies to the AIM Act
and rules promulgated under it as if the AIM Act were included in title
VI of the CAA. Thus, section 114 of the CAA, which provides authority
to the EPA Administrator to require recordkeeping and reporting in
carrying out provisions of the CAA, also applies to and supports this
rulemaking.

III. Background

A. What are HFCs?

HFCs are anthropogenic \7\ fluorinated chemicals that have no known
natural sources. HFCs are used in a variety of applications such as
refrigeration and air conditioning, foam blowing agents, solvents,
aerosols, and fire suppression. HFCs are potent greenhouse gases (GHGs)
with 100-year GWPs (a measure of the relative climatic impact of a GHG)
that can be hundreds to thousands of times more potent than carbon
dioxide (CO<INF>2</INF>).
---------------------------------------------------------------------------

\7\ While the overwhelming majority of HFC production is
intentional, EPA is aware that HFC-23 can be a byproduct associated
with the production of other chemicals, including but not limited to
hydrochlorofluorocarbon (HCFC)-22.
---------------------------------------------------------------------------

HFC use and emissions \8\ have been growing worldwide due to the
global phaseout of ODS under the Montreal Protocol on Substances that
Deplete the Ozone Layer (Montreal Protocol) and the increasing use of
refrigeration and air-conditioning equipment globally. HFC emissions
had previously been projected to increase substantially over the next
several decades. In 2016, in Kigali, Rwanda, countries agreed to adopt
an amendment to the Montreal Protocol, known as the Kigali Amendment,
which provides for a global phasedown of the production and consumption
of HFCs. Global adherence to the Kigali Amendment would substantially
reduce future emissions, leading to a peaking of HFC emissions before
2040.9 10
---------------------------------------------------------------------------

\8\ World Meteorological Organization (WMO), Scientific
Assessment of Ozone Depletion: 2018, World Meteorological
Organization, Global Ozone Research and Monitoring Project--Report
No. 58, 588 pp., Geneva, Switzerland, 2018. Available at: <a href="https://ozone.unep.org/sites/default/files/2019-05/SAP-2018-Assessment-report.pdf">https://ozone.unep.org/sites/default/files/2019-05/SAP-2018-Assessment-report.pdf</a>.
\9\ Ibid.
\10\ A recent study estimated that global compliance with the
Kigali Amendment is expected to lower 2050 annual emissions by 3.0-
4.4 Million Metric Tons of Carbon Dioxide Equivalent
(MMTCO<INF>2</INF>e). Guus J.M. Velders et al. Projections of
hydrofluorocarbon (HFC) emissions and the resulting global warming
based on recent trends in observed abundances and current policies.
Atmos. Chem. Phys., 22, 6087-6101, 2022. Available at: <a href="https://doi.org/10.5194/acp-22-6087-2022">https://doi.org/10.5194/acp-22-6087-2022</a>.
---------------------------------------------------------------------------

Atmospheric observations of most currently measured HFCs confirm
their abundances are increasing at

[[Page 76745]]

accelerating rates. Total emissions of HFCs increased by 23 percent
from 2012 to 2016 and the four most abundant HFCs in the atmosphere, in
GWP-weighted terms, are HFC-134a, HFC-125, HFC-23, and HFC-143a.\11\
---------------------------------------------------------------------------

\11\ WMO, 2018.
---------------------------------------------------------------------------

In 2016, HFCs excluding HFC-23 accounted for a radiative forcing of
0.025 W/m\2\. This is a 36 percent increase in total radiative forcing
due to HFCs relative to 2012. This radiative forcing was projected to
increase by an order of magnitude to 0.25 W/m\2\ by 2050. If the Kigali
Amendment were to be fully implemented, it would be expected to reduce
the future radiative forcing due to HFCs (excluding HFC-23) to 0.13 W/
m\2\ in 2050 which is a reduction of about 50 percent compared to the
radiative forcing projected in the business-as-usual scenario of
uncontrolled HFCs.\12\
---------------------------------------------------------------------------

\12\ Ibid.
---------------------------------------------------------------------------

The 18 HFCs listed as regulated substances by the AIM Act are the
most commonly used HFCs and have high impacts as measured by the
quantity of each substance emitted multiplied by their respective
GWPs.\13\ These 18 HFCs are all saturated, meaning they have only
single bonds between their atoms and therefore have longer atmospheric
lifetimes.
---------------------------------------------------------------------------

\13\ The AIM Act uses exchange values which are numerically
equivalent to the 100-year GWP of the chemical as given in the
Errata to Table 2.14 of the IPCC's 2007 Fourth Assessment Report
(AR4).
---------------------------------------------------------------------------

In the United States, HFCs are used primarily in refrigeration and
air-conditioning equipment in homes, commercial buildings, and
industrial operations (~75 percent of total HFC use in 2018) and in air
conditioning in vehicles and refrigerated transport (~8 percent).
Smaller amounts are used in foam products (~11 percent), aerosols (~4
percent), fire protection systems (~1 percent), and solvents (~1
percent).\14\
---------------------------------------------------------------------------

\14\ Calculations based on EPA's Vintaging Model, which
estimates the annual chemical emissions from industry sectors that
historically used ODS, including refrigeration and air conditioning,
foam blowing agents, solvents, aerosols, and fire suppression. The
model uses information on the market size and growth for each end
use, as well as a history and projections of the market transition
from ODS to substitutes. The model tracks emissions of annual
``vintages'' of new equipment that enter into operation by
incorporating information on estimates of the quantity of equipment
or products sold, serviced, and retired or converted each year, and
the quantity of the compound required to manufacture, charge, and/or
maintain the equipment. Additional information on these estimates is
available in U.S. EPA, April 2016. EPA Report EPA-430-R-16-002.
Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2014.
Available at: <a href="https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2014">https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2014</a>.
---------------------------------------------------------------------------

EPA estimated in the Allocation Framework Rule that phasing down
HFC production and consumption according to the schedule provided in
the AIM Act will avoid cumulative consumption of 3,152 million metric
tons of exchange value equivalent (MMTEVe) of HFCs in the United States
for the years 2022 through 2036 (86 FR 55116, October 5, 2021). That
estimate included both consumption as defined in Sec. 84.3--i.e., with
respect to a regulated substance, bulk production plus bulk imports
minus bulk exports--and, although not requiring AIM Act allowances, the
amount in imported products containing a regulated substance, for the
abatement options necessary to meet the HFC cap. Annual avoided
consumption was estimated at 42 MMTCO<INF>2</INF>e in 2022 and 282
MMTCO<INF>2</INF>e in 2036. In order to calculate the climate benefits
associated with consumption abatement, the consumption changes were
expressed in terms of emissions reductions. EPA estimated that for the
years 2022-2050 that action will avoid emissions of 4,560
MMTCO<INF>2</INF>e of HFCs in the United States. The annual avoided
emissions are estimated at 22 MMTCO<INF>2</INF>e in the year 2022 and
171 MMTCO<INF>2</INF>e in 2036. More information regarding these
estimates is provided in the Allocation Framework RIA in the docket.

B. How do HFCs affect public health and welfare?

Elevated concentrations of GHGs including HFCs have been warming
the planet, leading to changes in the Earth's climate including changes
in the frequency and intensity of heat waves, precipitation, and
extreme weather events; rising seas; and retreating snow and ice. The
changes taking place in the atmosphere are a result of the well-
documented buildup of GHGs due to human activities and are changing the
climate at a pace and in a way that threatens human health, society,
and the natural environment. In this section, EPA is providing some
scientific background on climate change to offer additional context for
this rulemaking and to help the public understand the environmental
impacts of GHGs such as HFCs.
Extensive additional information on climate change is available in
the scientific assessments and EPA documents that are briefly described
in this section, as well as in the technical and scientific information
supporting them. One of those documents is EPA's 2009 Endangerment and
Cause or Contribute Findings for Greenhouse Gases Under section 202(a)
of the Clean Air Act (CAA) (74 FR 66496, December 15, 2009).\15\ In the
2009 Endangerment Finding, the Administrator found under section 202(a)
of the CAA that elevated atmospheric concentrations of six key well-
mixed GHGs--CO<INF>2</INF>, methane (CH<INF>4</INF>), nitrous oxide
(N<INF>2</INF>O), HFCs, perfluorocarbons (PFCs), and sulfur
hexafluoride (SF<INF>6</INF>)--``may reasonably be anticipated to
endanger the public health and welfare of current and future
generations'' (74 FR 66523, December 15, 2009). The 2009 Endangerment
Finding, together with the extensive scientific and technical evidence
in the supporting record, documented that climate change caused by
human emissions of GHGs (including HFCs) threatens the public health of
the population of the United States. It explained that by raising
average temperatures, climate change increases the likelihood of heat
waves, which are associated with increased deaths and illnesses (74 FR
66497, December 15, 2009). It noted that while climate change also
increases the likelihood of reductions in cold-related mortality,
evidence indicates that the increases in heat mortality will be larger
than the decreases in cold mortality in the United States (74 FR 66525,
December 15, 2009). The 2009 Endangerment Finding further explained
that compared with a future without climate change, climate change is
expected to increase tropospheric ozone pollution over broad areas of
the United States, including in the largest metropolitan areas with the
worst tropospheric ozone problems, and thereby increase the risk of
adverse effects on public health (74 FR 66525, December 15, 2009).
Climate change is also expected to cause more intense hurricanes and
more frequent and intense storms of other types and heavy
precipitation, with impacts on other areas of public health, such as
the potential for increased deaths, injuries, infectious and waterborne
diseases, and stress-related disorders (74 FR 66525, December 15,
2009). Children, the elderly, and the poor are among the most
vulnerable to these climate-related health effects (74 FR 66498,
December 15, 2009).
---------------------------------------------------------------------------

\15\ In describing these 2009 Findings in this proposal, EPA is
neither reopening nor revisiting them.
---------------------------------------------------------------------------

The 2009 Endangerment Finding also documented, together with the
extensive scientific and technical evidence in the supporting record,
that climate change touches nearly every aspect of public welfare \16\
in the United

[[Page 76746]]

States with resulting economic costs, including: changes in water
supply and quality due to changes in drought and extreme rainfall
events; increased risk of storm surge and flooding in coastal areas and
land loss due to inundation; increases in peak electricity demand and
risks to electricity infrastructure; and the potential for significant
agricultural disruptions and crop failures (though offset to some
extent by carbon fertilization). These impacts are also global and may
exacerbate problems outside the United States that raise humanitarian,
trade, and national security issues for the United States (74 FR 66530,
December 15, 2009).
---------------------------------------------------------------------------

\16\ The CAA states in section 302(h) that ``[a]ll language
referring to effects on welfare includes, but is not limited to,
effects on soils, water, crops, vegetation, manmade materials,
animals, wildlife, weather, visibility, and climate, damage to and
deterioration of property, and hazards to transportation, as well as
effects on economic values and on personal comfort and well-being,
whether caused by transformation, conversion, or combination with
other air pollutants.'' 42 U.S.C. 7602(h).
---------------------------------------------------------------------------

In 2016, the Administrator similarly issued Endangerment and Cause
or Contribute Findings for greenhouse gas emissions from aircraft under
section 231(a)(2)(A) of the CAA (81 FR 54422, August 15, 2016).\17\ In
the 2016 Endangerment Finding, the Administrator found that the body of
scientific evidence amassed in the record for the 2009 Endangerment
Finding compellingly supported a similar endangerment finding under CAA
section 231(a)(2)(A) and also found that the science assessments
released between the 2009 and the 2016 Findings ``strengthen and
further support the judgment that GHGs in the atmosphere may reasonably
be anticipated to endanger the public health and welfare of current and
future generations'' (81 FR 54424, August 15, 2016).
---------------------------------------------------------------------------

\17\ In describing these 2016 Findings in this proposal, EPA is
neither reopening nor revisiting them.
---------------------------------------------------------------------------

Since the 2016 Endangerment Finding, the climate has continued to
change, with new records being set for several climate indicators such
as global average surface temperatures, greenhouse gas concentrations,
and sea level rise. Additionally, major scientific assessments continue
to be released that further improve our understanding of the climate
system and the impacts that GHGs have on public health and welfare both
for current and future generations. According to the Intergovernmental
Panel on Climate Change's (IPCC) Sixth Assessment Report, ``it is
unequivocal that human influence has warmed the atmosphere, ocean and
land. Widespread and rapid changes in the atmosphere, ocean, cryosphere
and biosphere have occurred.'' \18\ These updated observations and
projections document the rapid rate of current and future climate
change both globally and in the United States.\19\ \20\ \21\ \22\
---------------------------------------------------------------------------

\18\ IPCC, 2021: Summary for Policymakers. In: Climate Change
2021: The Physical Science Basis. Contribution of Working Group I to
the Sixth Assessment Report of the Intergovernmental Panel on
Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L.
Connors, C. Pe[acute]an, S. Berger, N. Caud, Y. Chen, L. Goldfarb,
M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K.
Maycock, T. Waterfield, O. Yelek[ccedil]i, R. Yu and B. Zhou
(eds.)]. Cambridge University Press. In Press: 4.
\19\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
Available at: <a href="https://nca2018.globalchange.gov">https://nca2018.globalchange.gov</a>.
\20\ IPCC, 2021.
\21\ National Academies of Sciences, Engineering, and Medicine,
2019. Climate Change and Ecosystems. Washington, DC: The National
Academies Press. Available at: <a href="https://doi.org/10.17226/25504">https://doi.org/10.17226/25504</a>.
\22\ NOAA National Centers for Environmental Information, State
of the Climate: Global Climate Report for Annual 2020, published
online January 2021. Available at: <a href="https://www.ncdc.noaa.gov/sotc/global/202013">https://www.ncdc.noaa.gov/sotc/global/202013</a>.
---------------------------------------------------------------------------

C. How is EPA evaluating environmental justice?

EPA provides the following discussion of the Agency's assessment of
environmental justice impacts in relationship to this proposal. This
analysis is intended to provide the public with information on the
potential environmental justice impacts of this action, if finalized as
proposed, and to comply with executive orders. This analysis was not
used for purposes of EPA's consideration of the statutory factors under
AIM Act subsection (i)(4). Executive Order 12898 (59 FR 7629, February
16, 1994) and Executive Order 14008 (86 FR 7619, January 27, 2021)
establish federal executive policy on environmental justice. Executive
Order 12898's main provision directs federal agencies, to the greatest
extent practicable and permitted by law, to make environmental justice
part of their mission by identifying and addressing, as appropriate,
disproportionately high and adverse human health or environmental
effects of their programs, policies, and activities on people of color
and low-income populations in the United States. EPA defines
environmental justice as the fair treatment and meaningful involvement
of all people regardless of race, color, national origin, or income
with respect to the development, implementation, and enforcement of
environmental laws, regulations, and policies.\23\ Meaningful
involvement means that: (1) potentially affected populations have an
appropriate opportunity to participate in decisions about a proposed
activity that will affect their environment and/or health; (2) the
public's contribution can influence the regulatory Agency's decision;
(3) the concerns of all participants involved will be considered in the
decision-making process; and (4) the rule-writers and decision-makers
seek out and facilitate the involvement of those potentially
affected.\24\ The term ``disproportionate impacts'' refers to
differences in impacts or risks that are extensive enough that they may
merit Agency action. In general, the determination of whether there is
a disproportionate impact that may merit Agency action is ultimately a
policy judgment which, while informed by analysis, is the
responsibility of the decision-maker. The terms ``difference'' or
``differential'' indicate an analytically discernible distinction in
impacts or risks across population groups. It is the role of the
analyst to assess and present differences in anticipated impacts across
population groups of concern for both the baseline and proposed
regulatory options, using the best available information (both
quantitative and qualitative) to inform the decision-maker and the
public.\25\
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\23\ See, e.g., Environmental Protection Agency. ``Environmental
Justice.'' Available at: <a href="https://www.epa.gov/environmentaljustice">https://www.epa.gov/environmentaljustice</a>.
\24\ The criteria for meaningful involvement are contained in
EPA's May 2015 document ``Guidance on Considering Environmental
Justice During the Development of an Action.'' Environmental
Protection Agency, 17 Feb. 2017. Available at: <a href="https://www.epa.gov/environmentaljustice/guidance-considering-environmental-justice-during-development-action">https://www.epa.gov/environmentaljustice/guidance-considering-environmental-justice-during-development-action</a>.
\25\ The definitions and criteria for ``disproportionate
impacts,'' ``difference,'' and ``differential'' are contained in
EPA's June 2016 document ``Technical Guidance for Assessing
Environmental Justice in Regulatory Analysis.'' Available at:
<a href="https://www.epa.gov/environmentaljustice/technical-guidance-assessing-environmental-justice-regulatory-analysis">https://www.epa.gov/environmentaljustice/technical-guidance-assessing-environmental-justice-regulatory-analysis</a>.
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A regulatory action may involve potential environmental justice
concerns if it could: (1) create new disproportionate impacts on people
of color, low-income populations, and/or indigenous peoples; (2)
exacerbate existing disproportionate impacts on people of color, low-
income populations, and/or indigenous peoples; or (3) present
opportunities to address existing disproportionate impacts on people of
color, low-income populations, and/or indigenous peoples through the
action under development.
Executive Order 14008 calls on agencies to make achieving
environmental justice part of their missions ``by developing programs,
policies, and activities to address the disproportionately high and
adverse human health, environmental, climate-

[[Page 76747]]

related and other cumulative impacts on disadvantaged communities, as
well as the accompanying economic challenges of such impacts.''
Executive Order 14008 further declares a policy ``to secure
environmental justice and spur economic opportunity for disadvantaged
communities that have been historically marginalized and overburdened
by pollution and under-investment in housing, transportation, water and
wastewater infrastructure, and health care.''
In addition, the Presidential Memorandum on Modernizing Regulatory
Review calls for procedures to ``take into account the distributional
consequences of regulations, including as part of a quantitative or
qualitative analysis of the costs and benefits of regulations, to
ensure that regulatory initiatives appropriately benefit, and do not
inappropriately burden disadvantaged, vulnerable, or marginalized
communities.'' \26\ EPA also released its June 2016 ``Technical
Guidance for Assessing Environmental Justice in Regulatory Analysis''
(2016 Technical Guidance) to provide recommendations that encourage
analysts to conduct the highest quality analysis feasible, recognizing
that data limitations, time and resource constraints, and analytic
challenges will vary by media and circumstance.\27\
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\26\ Presidential Memorandum on Modernizing Regulatory Review,
January 20, 2021. Available at: <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/</a>.
\27\ Technical Guidance for Assessing Environmental Justice in
Regulatory Analysis, June 2016. Available at: <a href="https://www.epa.gov/sites/default/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf">https://www.epa.gov/sites/default/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf</a>.
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The Allocation Framework Rule, among other things, established the
framework for the United States' phasedown of HFCs, which will achieve
significant benefits by reducing production and consumption of certain
chemicals with high GWPs. In that rulemaking, EPA described the
environmental justice analysis conducted in support of the rule and
summarized the public health and welfare effects of GHG emissions
(including HFCs), including information that certain parts of the
population may be especially vulnerable to climate change risks based
on their characteristics or circumstances, including the poor, the
elderly, the very young, those already in poor health, the disabled,
those living alone, and/or indigenous populations dependent on one or
limited resources due to factors including but not limited to
geography, access, and mobility. Potential impacts of climate change
raise environmental justice issues. Low-income communities, for
example, can be especially vulnerable to climate change impacts because
they tend to have more limited capacity to bear the costs of adaptation
and are more dependent on climate-sensitive resources such as local
water and food supplies. In corollary, some communities of color,
specifically populations defined jointly by both ethnic/racial
characteristics and geographic location, may be uniquely vulnerable to
climate change health impacts in the United States.
Many of the environmental justice implications of this proposed
rule are similar to those addressed at length in the RIA \28\ developed
for the Allocation Framework Rule. The analysis of potential
environmental justice concerns for the Allocation Framework Rule
focused mainly on characterizing baseline emissions of air toxics that
are also associated with chemical feedstock use for HFC production. As
detailed in the RIA for the Allocation Framework Rule, the phasedown of
high-GWP HFCs in the United States will reduce GHG emissions, thereby
reducing damages associated with climate change that would have been
associated with those emissions. Similar to the Allocation Framework
Rule, EPA expects that this proposed rule would reduce GHG emissions,
which would benefit populations that may be especially vulnerable to
damages associated with climate change. We also expect that the
restriction on use of certain HFCs will increase the production of HFC
substitutes. However, there continues to be significant uncertainty
about how the transition to lower-GWP substitutes and market trends
independent of this proposed rulemaking could affect production of
predominant HFC substitutes, such as hydrocarbons, ammonia (R-717), and
hydrofluoroolefins (HFOs), at individual facilities and how those
changes in production could affect associated air pollutant emissions,
particularly in communities that are disproportionately burdened by air
pollution. Some predominant HFC substitutes, such as HFOs, use the same
chemicals used in the manufacture of HFCs as feedstocks in their
production or release the same chemicals as byproducts, potentially
raising concerns about local exposure. Due to the limitations of the
current data, we cannot make conclusions about the impact this proposed
rule may have on individuals or specific communities near facilities
producing HFC substitutes. For the purpose of environmental justice,
however, it is important to understand the characteristics of the
communities surrounding these facilities to better ensure that future
actions, as more information becomes available, can improve outcomes.
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\28\ The RIA for the Allocation Framework Rule is available in
the docket for that rulemaking at: <a href="https://www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0227">https://www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0227</a>.
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EPA's 2016 Technical Guidance does not prescribe or recommend a
specific approach or methodology for conducting an environmental
justice analysis, though a key consideration is consistency with the
assumptions underlying other parts of the regulatory analysis when
evaluating the baseline and regulatory options. Therefore, for this
proposed rule, EPA followed the format used for the Allocation
Framework RIA to analyze the demographic characteristics and baseline
exposure of the communities near facilities producing HFC substitutes.
The complete analysis is described in the RIA addendum developed for
this proposed rule, which is available in the docket. EPA relied on
public data from the Toxics Release Inventory (TRI),\29\ GHGRP,
Chemical Data Reporting (CDR) Program,\30\ EJScreen (an environmental
justice mapping and screening tool developed by EPA), Enforcement and
Compliance History Online (ECHO), Census data, and information provided
by industry stakeholders to identify the facilities. In addition, Air
Toxics Screening Assessment (AirToxScreen, formerly National Air Toxics
Assessment (NATA)) data from 2017 (the most recent year available) for
census tracts within and outside of a 1-, 3-, 5-, and 10-mile distance
were used to approximate the cumulative baseline cancer and respiratory
risk due to air toxics exposure for communities near the production
facilities.
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\29\ TRI tracks the management of certain toxic chemicals that
may pose a threat to human health and the environment. U.S.
facilities in different industry sectors must report annually how
much of each chemical is released to the environment and/or managed
through recycling, energy recovery, and treatment. Facilities submit
a TRI Form R for each TRI-listed chemical it manufactures,
processes, or otherwise uses in quantities above the reporting
threshold.
\30\ The CDR program, under the Toxic Substances Control Act,
requires manufacturers (including importers) to provide EPA with
information on the production and use of chemicals in commerce.
Under the CDR rule, EPA collects information on the types,
quantities, and uses of chemical substances produced domestically
and imported into the United States. The information is collected
every four years from manufacturers of certain chemicals in commerce
generally when production volumes are 25,000 pounds or greater for a
specific reporting year.\30\

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[[Page 76748]]

With the restriction on use of certain HFCs, EPA anticipates that
the production of HFC substitutes will increase. Accordingly, for the
environmental justice analysis for this proposed rule, EPA identified
14 facilities producing predominant HFC substitutes that may be
impacted by this proposed rule and where production changes may impact
nearby communities. The relatively small number of facilities that may
be affected by this rule enabled EPA to assemble a uniquely granular
assessment of the characteristics of the facilities and the communities
where they are located. Overall, this proposed rule would reduce GHG
emissions, which would benefit populations that may be especially
vulnerable to damages associated with climate change. However, the
manner in which producers transition from high-GWP HFCs could drive
changes in future risk for communities living near facilities that
produce HFC substitutes, to the extent the use of toxic feedstocks,
byproducts, or catalysts changes, and those chemicals are released into
the environment with adverse local effects.
The environmental justice analysis, which examines racial and
economic demographic and health risk information, found heterogeneity
in community characteristics around individual facilities. The analysis
showed that individuals identified as African American or Black and as
Hispanic with respect to race live in proximity to the identified
facilities compared with the national average or the rural areas
national average. Importantly, the comparison to the rural area
national average is more striking, because so many of the facilities
are rural. While median income is not significantly different for the
communities near the facilities (slightly lower than the national
average but slightly above or equal to the rural median income), there
are more very low-income households in these communities. Additionally,
total cancer risk and total respiratory risk is higher than either the
rural national average or the overall national average in communities
near the facilities. The analysis shows that the risks are higher for
those within the 1-mile average radius and decrease at the 3-mile, 5-
mile, and 10-mile radii.
EPA notes that the averages may obfuscate potentially large
differences in the community characteristics surrounding individual
production facilities. Analysis of the demographic characteristics and
AirToxScreen data for the 14 facilities identified shows that there are
significant differences in the communities near these facilities. The
racial, ethnic, and income results are varied but, in almost all cases,
total cancer risk and total respiratory risk are higher for the
communities in proximity to the sites than to the appropriate (rural or
overall) average when compared with the national or state results.
Additionally, some facilities are in communities that are quite
different from the aggregate results discussed in this section above.
The aggregate results show that the communities near the facilities
identified tend to have slightly fewer neighboring individuals
identified as White, and more identified as African American or Black
and as Hispanic with respect to race, in several cases. In several
cases, however, the communities near specific facilities have higher
percentages of White individuals than either the state or national
averages. This is true for the facilities in San Dimas, CA; Sibley, LA;
El Dorado, AR; Gregory, and Manvel, TX, along with those in Iowa,
Illinois, and West Virginia.
EPA is including a demonstration of a microsimulation approach in
the RIA addendum to analyze the proximity of communities to potentially
affected facilities. Microsimulation is a technique relying upon
advanced statistics and data science to combine disparate survey and
geospatial data. It has long been used in a variety of economic and
social science research and has been used before by EPA (in the context
of understanding the implications of underground storage tank impacts
on groundwater). Recent advances in data science and computational
power have increased the availability of microsimulation for
applications such as environmental justice analysis. The demonstration
analysis included in the RIA addendum contributes to understanding
communities that may warrant further environmental justice analysis.
EPA seeks comment and further discussion of the use of
microsimulation approaches and techniques for regulatory impact
analysis and other program activities. Among other things, EPA seeks
information on what microsimulation tools are appropriate for better
understanding the burdens faced by communities, and in what
circumstances. The demonstration analysis presented in the RIA addendum
uses a dataset of ``synthetic households'' based on geospatial data
combined through microsimulation techniques with information from the
U.S. Decennial Census and the American Communities Survey (ACS). EPA
requests comment on other surveys or other geospatial datasets should
be the focus of EPA efforts to combine with the ACS and/or Decennial
Census data; how microsimulation tools supplement other EPA tools for
understanding demographics, multiple burdens facing communities, and
assessing the impact of EPA programs; and how microsimulation and other
techniques to use current survey information can be used to identify
data gaps which might be filled with refinements or improvements to
existing survey tools.
In considering potential additional analysis for a final rule based
on this proposal, EPA is also considering assessing the estimated
exposure of the communities near the identified facilities to toxics
using the Risk Screening Environmental Index Geographic Microdata
(RSEI-GM). The Agency seeks comment on whether this additional analysis
would be useful and what additional insight it might provide for the
environmental justice analysis.
EPA noted in the Allocation Framework Rule, and reiterates here,
that it is not clear the extent to which these baseline risks are
directly related to potential future HFC substitute production, but
some feedstocks, catalysts, and byproducts are toxic, particularly with
respect to potential carcinogenicity (e.g., carbon tetrachloride). All
HFC substitute production facilities are near other industrial
facilities that could contribute to the cumulative AirToxScreen cancer
and respiratory risk, and, at this time, it is not clear how emissions
related to HFC substitute production compare to other chemical
production at the same or nearby facilities. Because of the limited
information regarding where substitutes will be produced and what other
factors might affect production and emissions at those locations, it's
unclear to what extent this rule may affect baseline risks from
hazardous air toxics for communities living near HFC substitute
production facilities.
Additionally, as mentioned in this section above, emissions from
facilities producing fluorinated and non-fluorinated substitutes may
also be affected by the phasedown of HFCs. For the forthcoming proposed
2024 Allocation Rule, EPA is updating the environmental justice
analysis that was previously conducted for the Allocation Framework RIA
to help determine how the implementation of the HFC phasedown may
affect production and emissions at facilities that produce HFCs. EPA is
following the analytical approach used in the Allocation Framework RIA
to provide an update to the characterization of community demographics
near HFC production facilities using updated data on the total

[[Page 76749]]

number of TRI facilities near HFC production facilities and the cancer
and respiratory risks to surrounding communities. More information will
be provided in conjunction with that proposed rule, which the Agency
anticipates publishing later this year.
EPA seeks input on the environmental justice analysis contained in
the RIA addendum for this proposed rule, as well as broader input on
other health and environmental risks the Agency should assess. To
support the development of comments, EPA is seeking data or analysis to
identify whether it is reasonable to expect net increases in emissions
and, if so, how we might isolate the impacts of this program (i.e.,
effects resulting from the transition to lower-GWP substitutes or some
other factor) in a manner that would enable the Agency to conduct a
more nuanced analysis of changes in releases associated with chemical
feedstocks and byproducts for HFC substitutes, given the inherent
uncertainty regarding where, and in what quantities, substitutes will
be produced.
EPA is also taking comment on whether there are other authorities
that would allow for the reporting of emissions tied to HFC substitute
production. This could complement the emissions reporting and/or
monitoring requirements in the proposed 2024 HFC Allocation Rule for
HFC production facilities. Emissions monitoring and/or reporting
provides communities with greater transparency and allows EPA to better
evaluate potential environmental justice impacts over time. For more
discussion of that proposal, see 87 FR 66372 (November 3, 2022).
Finally, EPA is seeking comment in order to aid our efforts to
understand further cumulative impacts and how they might be addressed.
Since the updated environmental justice analysis and proposed reporting
requirement are focused on chemical stressors, the Agency is requesting
additional information on how both the chemical and non-chemical
stressors associated with the HFC phasedown can alter the cumulative
impacts experienced by communities surrounding HFC production
facilities, how the Agency can share this information with the public,
and whether and how the Agency can assess and measure cumulative
impacts in the context of the HFC phasedown.

IV. What factors will be considered for evaluating a petition?

In making a determination to grant or deny a petition, subsection
(i)(4) of the AIM Act requires EPA to consider, to the extent
practicable:
<bullet> The best available data;
<bullet> The availability of substitutes for use of the regulated
substance that is the subject of the rulemaking or petition, as
applicable, in a sector or subsector, taking into account technological
achievability, commercial demands, affordability for residential and
small business consumers, safety, consumer costs, building codes,
appliance efficiency standards, contractor training costs, and other
relevant factors, including the quantities of regulated substances
available from reclaiming, prior production, or prior import;
<bullet> Overall economic costs and environmental impacts, as
compared to historical trends; and
<bullet> The remaining phase-down period for regulated substances
under the final rule issued under subsection (e)(3) of the AIM Act, if
applicable.
These factors under subsection (i)(4) of the AIM Act were
considered in the process of making a determination on the granted
petitions, and will be the factors that EPA considers in evaluating
future petitions. A discussion on how EPA interprets these factors and
how they were considered in this proposed rulemaking is in section
VII.E of the preamble.

V. What is the petition process under the technology transitions
program?

Subsection (i)(3) of the AIM Act states that a person may petition
EPA to promulgate a rule to restrict the use of a regulated substance
in a sector or subsector in accordance with the Agency's authority to
issue such a rule under subsection (i)(1) of the AIM Act. If EPA
receives a petition under subsection (i)(3), the AIM Act states that
``[t]he Administrator shall grant or deny a petition . . . not later
than 180 days after the date of receipt of the petition'' (42 U.S.C.
7675(i)(3)(B)) and make the petition available to the public no later
than 30 days after receiving the petition (42 U.S.C.
7675(i)(3)(C)(iii)). For petitions that are denied, EPA must publish in
the Federal Register an explanation of the denial (42 U.S.C.
7675(i)(3)(C)(i)). If EPA grants a petition, the statute requires EPA
to promulgate a final rule not later than two years from the date the
Agency grants the petition (42 U.S.C. 7675(i)(3)(C)(ii)).
This section describes the proposed process for submitting a
petition under subsection (i) to the Agency, which includes direction
on how technology transition provisions should be submitted to EPA; the
necessary content of petitions; and how EPA will respond once petitions
are received.
Subsection (i)(3)(A) of the AIM Act explicitly states that ``a
person may petition the Administrator to promulgate a rule under
[subsection (i)(1) of the AIM Act] for the restriction on use of a
regulated substance in a sector or subsector, which shall include a
request that the Administrator negotiate with stakeholders. . .''. EPA
views ``person'' for the purpose of a technology transitions petition
submittal as having the same meaning as how the term is defined in 40
CFR 84.3 (the definition established in the Allocation Framework Rule);
that is, to mean ``any individual or legal entity, including an
individual, corporation, partnership, association, state, municipality,
political subdivision of a state, Indian tribe; any agency, department,
or instrumentality of the United States; and any officer, agent, or
employee thereof.'' Using this definition in 40 CFR 84.3 for purposes
of petition submittal under subsection (i) would ensure consistency of
how this term is used across these two regulatory programs developed
under the AIM Act. This definition of ``person'' also captures the
Agency's intended meaning of this term for purposes of the technology
transitions program. Therefore, any person who fits the Allocation
Framework Rule definition may submit a technology transitions petition
to EPA. We further note that the plain text of subsection (i)(3)(A)
also limits this provision to requests for restrictions on the use of a
regulated substance in a sector or subsector. Other types of requests--
such as exemptions from existing or anticipated restrictions--are
therefore not properly presented under the (i)(3)(A) petition process,
although parties are always welcome to communicate to the Agency
informally, to provide comments on a proposed rule that considers such
restrictions on use, or to generally petition for rulemaking under the
Administrative Procedures Act.
All the petitions considered in this rulemaking were submitted to
EPA electronically. EPA is proposing to require future petitions to
also be submitted electronically. The Agency's preferred method is for
petitions to be submitted to the email address: <a href="/cdn-cgi/l/email-protection#ace4eaefdcc9d8c5d8c5c3c2dfecc9dccd82cbc3da">[email&#160;protected]</a>. A
link to this address is available on EPA's web page at: <a href="https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act">https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act</a>. Petitions can also be submitted electronically through
an EPA electronic reporting system. For instructions on how to submit a
petition through an EPA electronic reporting system, please contact the
individual

[[Page 76750]]

listed in the FOR FURTHER INFORMATION CONTACT section of the preamble.

A. What is required to be included in a technology transitions
petition?

EPA is proposing to require standard content to be included in a
technology transitions petition, which would assist petitioners in
preparing their petitions and also enhance EPA's ability to review and
respond to them promptly. Under this proposal, in order to qualify for
a grant, a technology transitions petition would need to include the
elements described in the following paragraphs. We are seeking comment
on these proposed elements of a petition submission under AIM Act
subsection (i).
EPA is proposing that petitions must indicate either a GWP limit or
the specific name(s) of the regulated substance(s) (including whether
there are specific blend(s) that use the regulated substance(s), if the
petition seeks a restriction on use of the regulated substance(s) in
specific blends) to be restricted and their GWPs. Under this proposal,
petitioners specifying specific regulated substances should use as the
GWP the exchange values for the regulated HFCs listed in subsection (c)
of the AIM Act and codified as appendix A to 40 CFR part 84.\31\ For
blends containing regulated substances, petitioners should identify all
components of the blend using the composition-identifying designation
as listed in American National Standards Institute/American Society of
Heating, Refrigerating and Air-Conditioning Engineers (ANSI/ASHRAE)
Standard 34-2019 \32\ (e.g., HFC-134a, HFO-1234ze(E)). If blends are
not listed in ASHRAE Standard 34, petitioners should provide the
nominal composition of the blend, specifying all components with the
ASHRAE Standard 34 designation for the components. If the components or
substances are not listed in ASHRAE Standard 34, petitioners should
provide the chemical name, the applicable CAS Registry Number, and the
chemical formula and structure (e.g., CHF=C=CF<INF>2</INF> rather than
C<INF>3</INF>F<INF>3</INF>H) for the components not listed in ASHRAE
Standard 34. EPA intends to maintain a list of commonly used blends
containing HFCs and the GWPs of those blends at EPA's Technology
Transitions web page. Nevertheless, EPA is also proposing a process to
determine the GWP of blends containing regulated substances for
purposes of this rulemaking, using the following hierarchy. For the
regulated substances used in the blend, and as previously noted, the
petitioner would use as the GWP the exchange value provided in
subsection (c) of the AIM Act and codified as appendix A to 40 CFR part
84. EPA is proposing to use the 100-year GWP values from the IPCC's
Fourth Assessment Report (AR4) for all substances or components of
blends, which for HFC regulated substances is numerically equal to the
exchange values provided in subsection (c), which are listed in AR4.
EPA is proposing to use AR4 100-year GWPs wherever possible given the
exchange values are numerically the same and because EPA considers such
an approach to be less complicated. For hydrocarbons (HCs) listed in
Table 2-15 of AR4, EPA is proposing to use the net GWP value. For
substances for which no GWP is provided in AR4, EPA is proposing to use
the 100-year GWP listed in World Meteorological Organization (WMO)
2018.\33\ For any substance listed in neither of these sources, EPA is
proposing to use the GWP of the substance in Table A-1 to 40 CFR part
98, as it exists on a specified date, such as the date this rule is
published in the Federal Register as a final rule, if such substance is
specifically listed in that table. EPA is aware of two potential
substances that might be included as components of blends containing
regulated substances that are not listed in these three sources, trans-
dichloroethylene (HCO-1130(E)) and HCFO-1224yd(Z) and is proposing to
set these GWPs to be five \34\ and one,\35\ respectively, for purposes
of this rulemaking. For any other substance not listed in the above
three source documents, EPA is proposing that the default GWPs as shown
in Table A-1 to 40 CFR part 98, as it exists on a specified date, such
as the date this rule is published in the Federal Register as a final
rule, shall be used. In the event that the hierarchy outlined in this
section does not provide a GWP (i.e., the substance in question is not
listed in the three documents, is not one of the two for which EPA is
proposing GWPs, is not listed in Table A-1 to 40 CFR part 98 and does
not fit within any of the default GWPs provided in Table A-1 to 40 CFR
part 98), EPA is proposing to use a GWP of zero. In any case where a
GWP value is preceded with a less than (<), very less than (<<),
greater than (>), approximately (~), or similar symbol in the source
document which is used to determine the GWP, EPA is proposing that the
value shown shall be used. As such, petitioners should provide GWP
values of the components of a blend based on the hierarchy proposed in
this section. The GWP of a blend would then be calculated as the sum of
the nominal composition (in mass proportions) of each component
multiplied by the GWP of each component.
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\31\ EPA noted in section III.A of this preamble that the
exchange values for the regulated HFCs listed in subsection (c) of
the AIM Act are numerically identical to the 100-year GWPs of each
substance, as given in the Errata to Table 2.14 of the IPCC's Fourth
Assessment Report (AR4) and Annexes A, C, and F of the Montreal
Protocol. Available at: <a href="https://www.ipcc.ch/site/assets/uploads/2018/05/ar4-wg1-errata.pdf">https://www.ipcc.ch/site/assets/uploads/2018/05/ar4-wg1-errata.pdf</a>.
\32\ Hereafter referred to as ASHRAE Standard 34.
\33\ WMO, 2018.
\34\ 81 FR 32244 (May 23, 2016).
\35\ 84 FR 64766 (November 25, 2019).
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EPA is proposing that petitioners must indicate the sector or
subsector for which restrictions on use of the regulated substance
would apply. EPA is proposing definitions for ``sectors'' and
``subsectors'' in section VII.A of this preamble that generally reflect
how these terms are historically used and EPA's understanding of
sectors and subsectors where HFCs are currently or can be used.
However, EPA is not limiting sectors or subsectors to a specific list,
recognizing there may be additional uses of HFCs today or that may be
developed in the future, and thus additional sectors or subsectors for
which it could be appropriate to restrict use.
EPA is proposing that petitions must include a date that the
requested restrictions would go into effect and information concerning
why the date or dates is appropriate. Petitioners should recognize that
subsection (i)(6) of the AIM Act restricts the effective date of rules
promulgated under subsection (i) to no earlier than one year after the
date of the final rule.
Before proposing a rule for the use of a regulated substance for a
sector or subsector under subsection (i)(1), subsection (i)(2)(A)
directs EPA to consider negotiating with stakeholders in accordance
with the Negotiated Rulemaking Act of 1990 (i.e., negotiated rulemaking
procedure). Subsection (i)(3)(A) requires petitioners to ``include a
request that the Administrator negotiate with stakeholders in
accordance with paragraph (2)(A)'' (42 U.S.C. 7675(i)(3)(A)).
Therefore, EPA is proposing that petitioners include such a request in
their petition. However, we are seeking comment on whether, in the
alternative, it is reasonable for EPA to interpret the petition process
under subsection (i)(3) as requiring petitioners to address whether EPA
use the negotiated rulemaking procedure, rather than requiring them to
affirmatively request that the Agency pursue negotiated rulemaking.
Most petitions received to date by the Agency complied with the
statute's requirement to request that EPA use negotiated

[[Page 76751]]

rulemaking; however, those petitioners unanimously expressed a
preference that EPA not use this procedure in promulgating its
restrictions. Allowing petitioners to express their views as to whether
EPA should engage in negotiated rulemaking for a subsection (i)
rulemaking, as opposed to requiring them to request something they may
disagree with, provides more value to EPA as we consider, per
subsection (i)(2)(A), whether to use the negotiated rulemaking
procedure before proposing a restriction under subsection (i).
Otherwise, EPA could be misled as to the petitioners' views and could
elect to use the negotiated rulemaking procedure when no stakeholder
sought that outcome. The unwarranted use of time and resources to
undergo that procedure could be counterproductive to meeting the
statutory deadlines to complete a final rule. Regardless of whether we
finalize a requirement that petitioners affirmatively request
negotiated rulemaking or whether we finalize a requirement that
petitioners address negotiated rulemaking, EPA proposes that
petitioners must provide an explanation of their position on the use of
the negotiated rulemaking procedure and any considerations that would
either support use of a negotiated rulemaking process or disfavor it.
If a petition is granted, EPA intends to consider the petitioner's
statement on negotiated rulemaking as it determines whether to use the
procedure.
Lastly, EPA is proposing to require petitioners to submit, to the
extent practicable, information related to the ``Factors for
Determination'' listed in subsection (i)(4) of the AIM Act to
facilitate EPA's review of the petition.\36\ Given the relatively short
180-day statutory timeframe for EPA to grant or deny a petition, this
proposed requirement would ensure that information is available to EPA
at the start of its review, to the extent the petitioner has relevant
available information. This proposed requirement would clarify that EPA
may deny a petition where no information had been provided that would
allow the Agency to act on the petition.
---------------------------------------------------------------------------

\36\ Section VII.E of this preamble provides information on
EPA's interpretation of these factors for this proposed action.
---------------------------------------------------------------------------

Petitioners must, to the extent practicable, provide best available
data on substitutes that could be used in lieu of the petitioned
substance(s), addressing the subfactors (e.g., technological
achievability, safety, commercial demands, etc.) that may affect the
availability of those substitutes. Other information submitted by
petitioner could include estimates of the economic costs and
environmental impacts. In particular, providing EPA with a sense of the
scale of impacts (e.g., whether the suggested restriction would have a
significant environmental impact, or whether the suggested restriction
would be likely to impose costs or savings on regulated entities or
consumers) using quantitative, accurate data to support that assessment
will be more likely to result in a timely, well-reasoned response to
the petitioner's request.

B. What happens after a petition is submitted?

Subsection (i)(3)(C)(iii) instructs EPA to make petitions publicly
available within 30 days after EPA receives the petition. As stated in
another Agency action (see ``Notice of Data Availability Relevant to
Petition Submissions Under the American Innovation and Manufacturing
Act of 2020,'' 86 FR 28099 (May 25, 2021)), EPA intends to continue to
post technology transitions petitions at <a href="http://www.regulations.gov">www.regulations.gov</a>, in Docket
ID No. EPA-HQ-OAR-2021-0289, as well as on the Agency's website at
<a href="https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act">https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act</a>. Making the petitions available allows the
public to provide additional data and relevant material to aid in EPA's
evaluation of petitions, based on the factors specified in subsection
(i) of the AIM Act.
In accordance with the statutory directive, EPA intends to act on
petitions no later than 180 days after the date of receipt of the
petition. EPA notes that a petition granted under subsection (i) of the
AIM Act does not necessarily mean the Agency will propose or finalize
requirements identical to a petition's request. Rather, granting a
petition means that the requested restriction contained in a granted
petition warrants further consideration through rulemaking. During the
rulemaking process, EPA will determine what restrictions on the use of
HFCs to propose and finalize based on multiple considerations,
including its consideration of the ``Factors for Determination'' listed
in subsection (i)(4) to the extent practicable. This approach provides
interested stakeholders with the opportunity to review and comment on a
regulatory proposal restricting the use of HFCs prior to restrictions
going into effect.

C. Can I revise or resubmit my petition?

As stated in section V.B of this preamble, receipt of a completed
petition received by EPA triggers two statutory deadlines: the posting
of the petition within 30 days of receipt and the granting or denying
the of petition within 180 days of receipt. Because there is little
purpose in EPA continuing to take action on the original petition when
the petitioner has revised (i.e., makes edits to an original request)
or resubmitted (i.e., makes edits to an original request and presents
it as a new petition) it, EPA's view is that a petition revision or
resubmittal made by petitioners is typically intended to supersede or
replace the original petition and would thus restart these timelines.
However, depending on the timing of the resubmission and the nature of
the revision and the request, EPA may be able to act more quickly on a
revised or resubmitted petition, for example, if the Agency had already
developed familiarity with the request through its consideration of the
original petition. Therefore, EPA intends to address petition revisions
and resubmittals on a case-by-case basis. If petitioners do not intend
for their submission to supersede or replace their original petition,
rather revising or resubmitting their petition, they should instead
submit supplemental or clarifying information regarding their petitions
to the docket created for additional information and material related
to petitions under consideration. In making a determination to grant or
deny petitions, EPA plans to consider relevant and timely information
provided in this docket, as the Agency did with the petitions in this
rulemaking, including information provided by petitioners and from
other stakeholders, for those petitions under review. Once a petition
is granted or denied, any revised or resubmitted petitions will likely
be treated as a new petition.

VI. How is EPA considering negotiated rulemaking?

In this section, EPA is providing a summary of the AIM Act's
directive to consider negotiating with stakeholders prior to proposing
a rule under subsection (i) of the Act. This section also provides
information regarding how EPA intends to consider negotiating with
stakeholders for future rulemakings, based on EPA's consideration to
use negotiating rulemaking procedures prior to this proposal.

A. Summary of the AIM Act's Directive on Negotiated Rulemaking

Prior to proposing a rule, subsection (i)(2)(A) of the Act directs
EPA to consider negotiating with stakeholders in the sector or
subsector subject to the potential rule in accordance with

[[Page 76752]]

negotiated rulemaking procedures established under subchapter III of
chapter 5 of title 5, United States Code (commonly known as the
``Negotiated Rulemaking Act of 1990''). If EPA makes a determination to
use the negotiated rulemaking procedures, subsection (i)(2)(B) requires
that EPA, to the extent practicable, give priority to completing that
rulemaking over completing rulemakings under subsection (i) that are
not using that procedure. For additional information on negotiated
rulemaking procedures, see subchapter III of chapter 5 of title 5,
United States Code. If EPA does not use the negotiated rulemaking
process, subsection (i)(2)(C) requires the Agency to publish an
explanation of the decision to not use that procedure before
commencement of the rulemaking process.

B. How does EPA intend to consider negotiating with stakeholders under
the AIM Act?

Prior to this proposed rulemaking, EPA issued a document informing
the public of the Agency's consideration of using the negotiated
rulemaking procedure and the Agency's decision to not use these
procedures for this proposed rulemaking (86 FR 74080, December 29,
2021). The Agency found that using negotiated rulemakings was not in
the best interest of the public in the document and thus decided not to
use negotiated rulemaking. In making this decision, EPA considered
information provided by the petitions, including statements made by
petitioners on the use of negotiated rulemaking procedures, and
information provided by other stakeholders on the petitions. Further,
the Negotiated Rulemaking Act of 1990, 5 U.S.C. 563, provides seven
criteria that the head of an agency should consider when determining
whether a negotiated rulemaking is in the public interest. EPA believes
these criteria are informative for purposes of making a determination
under AIM Act subsection (i) of whether to use the procedures set out
in the Negotiated Rulemaking Act for proposed rulemakings and,
therefore, also considered these criteria in its decision.
Going forward, EPA intends to use a similar process in making its
determination on whether to use negotiated rulemaking procedures for
any rulemaking being considered under subsection (i) in response to
granted petitions. This includes reviewing the petitions themselves and
statements from petitioners on the use of negotiated rulemaking
procedures, considering information provided by stakeholders commenting
on petitions, and considering the seven criteria listed in the
Negotiated Rulemaking Act of 1990, 5 U.S.C. 563, that the head of an
agency should consider when determining whether a negotiated rulemaking
is in the public's interest. For rulemakings initiated by EPA (i.e.,
not in response to granted petitions), EPA anticipates that our review
would focus on just these seven criteria.
Furthermore, where appropriate, EPA will also take into account
recent Agency actions and decisions related to restrictions on the use
of HFCs in sectors and subsectors for its consideration on using
negotiated rulemaking procedures. For example, EPA received four
petitions that were not included in the Agency's consideration of using
negotiated rulemaking procedures for petitions granted on October 7,
2021.\37\ However, these petitions requested restrictions on the use of
HFCs in the same sectors and subsectors covered by petitions granted on
October 7, 2021, for which EPA made a determination not to use
negotiated rulemaking. Subsection (i)(2)(A) states that, ``[b]efore
proposing a rule for a sector or subsector under paragraph (1), the
Administrator shall consider negotiating with stakeholders in the
sector or subsector subject to the potential rule. . .'' EPA will not
issue a separate notice to consider using negotiated rulemaking for
these four petitions because these petitions were received well ahead
of this proposed action, and the requested restrictions are in the same
sectors and subsectors contained in petitions granted on October 7,
2021, for which the Agency considered using negotiated rulemaking
procedures and decided not to use them. Nothing in these four petitions
caused EPA to reconsider that decision. Therefore, it is unnecessary
for the Agency to reconsider whether to use negotiated rulemaking
procedures for this rulemaking. EPA encourages future petitioners to
consider petitions under review or recently granted before submitting a
new petition and to consider submitting information to the docket for
an existing petition in lieu of submitting a new petition on the same
uses of HFCs that are already under consideration by the Agency.
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\37\ These petitions were received from AHRI and IIAR and are
discussed in section VII.D.2 of this preamble. Copies of these
petitions are located at <a href="http://www.regulations.gov">www.regulations.gov</a>, under Docket ID No.
EPA-HQ-OAR-2021-0289, or at <a href="https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act">https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act</a>.
---------------------------------------------------------------------------

VII. What is EPA's proposed action concerning restrictions on the use
of HFCs?

This section details the Agency's proposal for restricting HFCs in
accordance with the granted petitions, including: defining terms that
are new to 40 CFR part 84; presenting two approaches for the form that
prohibitions could take; describing the proposed applicability of the
prohibitions; providing EPA's interpretation and application of the
``Factors for Determination'' contained in subsection (i)(4) of the AIM
Act; and listing the specific restrictions on the use of HFCs by sector
and subsector.

A. What definitions is EPA proposing to implement subsection (i)?

The Allocation Framework Rule established regulatory definitions at
40 CFR part 84, subpart A to implement the framework and begin the
regulatory phasedown of HFCs under the AIM Act. To maintain
consistency, except as otherwise explained in this rulemaking, EPA
intends to use terms in this rulemaking, and in the new subpart B which
is to be established by this rule, as they were defined in the
Allocation Framework Rule. Thus, for terms not defined in this subpart
but that are defined in 40 CFR 84.3, the definitions in 40 CFR 84.3
shall apply. A few terms (export, exporter, and importer) currently
exist in 40 CFR 84.3 in the context of bulk regulated substances. EPA
is proposing subpart B definitions for those terms that would clarify
how those terms apply to regulated substances that are used by or
contained in products under subpart B. Other than that proposed change,
these proposed definitions would mirror the text in the 40 CFR 84.3
definitions of export, exporter, and importer. As EPA explained in the
Allocation Framework Rule, whether products using or containing HFCs
are admitted into or exiting from a foreign-trade zone or other duty
deferral program under U.S. Customs and Border Protection (CBP)
regulations does not affect whether they are being imported or exported
for purposes of part 84. See 86 FR 55133 (October 5, 2021) (discussing
definitions of export and import under 40 CFR 84.3).
EPA is also proposing to establish definitions for new terms that
are applicable only under 40 CFR part 84, subpart B and do not have a
counterpart in the definitions under 40 CFR part 84, subpart A. These
terms are: blend containing a regulated substance, manufacture,
product, regulated product, retrofit, sector, subsector,

[[Page 76753]]

substitute, and use. The definitions that EPA is proposing to include
in 84.52 for application to 40 CFR part 84, subpart B are as follows:
Blend containing a regulated substance. EPA is proposing to
establish restrictions on the use of HFCs, whether neat or used in a
blend. Blends containing a regulated substance are used in multiple
sectors and subsectors including refrigeration, air conditioning and
heat pump, foam blowing, and fire suppression. EPA is proposing to
define this term as ``any mixture that contains one or more regulated
substances used in a sector or subsector.'' EPA would consider any
quantity of a regulated substance within a mixture to qualify the
mixture as a ``blend containing a regulated substance.''
EPA is not proposing that a blend that uses one or more regulated
substances is itself a regulated substance. Rather, the Agency is
proposing use restrictions on the regulated substance(s) used in
certain blends, such that the use restriction on the regulated
substance(s) would also affect use of that blend. Most HFCs used in the
sectors and subsectors addressed by this proposed rule are components
of blends that contain other HFCs, HFOs, and hydrocarbons. As discussed
in section V.A of this preamble, where the proportion of a regulated
substance multiplied by its GWP, along with the proportion of the other
components multiplied by their respective GWPs, causes the blend to
exceed the GWP limit, the use of that HFC in that blend would be
prohibited.
Export. For purposes of subpart B, EPA is proposing to define this
term to mean the transport of a regulated product from inside the
United States or its territories to persons outside the United States
or its territories, excluding United States military bases and ships
for onboard use.
Exporter. For purposes of subpart B, EPA is proposing to define
this term to mean the person who contracts to sell any regulated
product for export or transfers a regulated product to an affiliate in
another country.
Importer. For purposes of subpart B, EPA is proposing to define
this term to mean any person who imports any regulated product into the
United States. Importer includes the person primarily liable for the
payment of any duties on the merchandise or an authorized agent acting
on his or her behalf. The term also includes:
(1) The consignee;
(2) The importer of record;
(3) The actual owner; or
(4) The transferee, if the right to withdraw merchandise from a
bonded warehouse has been transferred.
This proposed definition of importer, specifically paragraphs (3)
and (4), would more closely align with the definition of ``importer''
at 19 CFR 101.1. Though the definition would vary in non-substantive
ways from that in subpart A of 40 CFR part 84, no difference in
interpretation between subparts is intended.
Manufacture. EPA is proposing to define this term as to complete a
product's manufacturing and assembly processes such that it is ready
for initial sale, distribution, or operation. For equipment that is
assembled and charged in the field, manufacture means to complete the
circuit holding the regulated substance, charge with a full charge, and
otherwise make functional for use for its intended purpose.
This proposed definition is intended to apply similarly to how this
term is applied in certain other use restrictions under title VI of the
CAA and 40 CFR part 82. Because those restrictions bear certain
similarities to restrictions proposed in this document, EPA is drawing
on its past experience in implementing those provisions in this
proposal, including for the definition of ``manufacture.'' EPA
established restrictions on products, including appliances, foams, and
aerosols under section 610 of the CAA (Nonessential Products Bans). EPA
also established use prohibitions under section 605(a) of the CAA that
addressed the use of certain ODS as a refrigerant in the manufacture of
new appliances, including field charged appliances. See e.g., 40 CFR
82.15(g)(4)(i), 40 CFR 82.15(g)(5)(i); see also 85 FR 15267 (March 17,
2020) (describing the use restriction and when a field charged
appliance is manufactured). The proposed definition of manufacture in
this rulemaking is intended to address both products that are
manufactured at a factory, including factory-charged appliances, and
the assembly of field charged appliances. It is also intended to
address field-charged equipment beyond appliances in the RACHP sector
to include fire suppression equipment or other equipment that is
assembled and charged on-site.
Appliances used in commercial refrigeration, such as large chillers
and industrial process refrigeration (IPR), typically involve more
complex installation processes, which may require custom built parts,
and typically are manufactured on-site (or field charged). Consistent
with EPA's view of the term ``manufacture'' in its prior experience
under title VI of the CAA and its implementing regulations, appliances
such as these that are field charged or have the refrigerant circuit
completed on-site are manufactured at the point when installation of
all the components and other parts are completed, and the appliance is
fully charged with refrigerant and able to operate (see, e.g., 85 FR
15267, (March 17, 2020)).
EPA is seeking comment on whether it should expand the definition
for ``manufacture'' to include the manufacturing process, prior to the
completion of the product containing or manufactured with a regulated
substance or blend using a regulated substance.
Product. EPA is proposing to define this term as ``an item or
category of items manufactured from raw or recycled materials which is
used to perform a function or task. The term product includes, but is
not limited to: equipment, appliances, components, subcomponents,
foams, foam blowing systems (e.g., pre-blended polyols), fire
suppression systems or devices, aerosols, pressurized dispensers, and
wipes.'' This definition is based on the definition of the term
``product'' in regulations established under title VI of the CAA in 40
CFR part 82 subparts C and E. EPA's view of what constitutes a product
for purposes of use restrictions under subsection (i) mirrors its view
under those provisions. Maintaining the same definition will provide
clarity for the regulated community, as many are already familiar with
the existing definitions in part 82. One difference from the part 82
definition is the proposed addition of two examples: fire suppression
systems and foam blowing systems. There had been confusion during the
ODS phaseout whether these systems were a product or a bulk substance.
For example, some aircraft lavatory fire suppression systems consist of
trash containers equipped with a fire extinguisher, a discrete product
that automatically discharges the extinguishant in the event of a fire,
whereas more integrated fire suppression systems use a reservoir of gas
in a detachable cylinder and piping to discharge into the protected
space. EPA is proposing to clarify that the self-contained systems
would be considered products, while system cylinders independent of the
system would continue to be considered bulk. Polyol foam blowing
systems consist of two cylinders, one of which contains the foam
material and the other containing a blowing agent such as an HFC. The
cylinder containing an HFC is not considered a bulk gas as the two are
sold together and used as a single system.

[[Page 76754]]

Regulated product. EPA is proposing to define this term as ``any
product in the sectors or subsectors identified in Sec. 84.56 that
contains or was manufactured with a regulated substance or a blend that
contains a regulated substance, including products intended to be used
with a regulated substance, or that is otherwise subject to the
prohibitions of this subpart.'' EPA intends for this definition to
broadly cover all products that use HFCs, whether they are high-GWP
HFCs that are prohibited or lower-GWP HFCs that are subject to labeling
and reporting provisions.
Retrofit. The AIM Act defines ``retrofit'' as ``to upgrade existing
equipment where the regulated substance is changed, which--(i) includes
the conversion of equipment to achieve system compatibility; and (ii)
may include changes in lubricants, gaskets, filters, driers, valves, o-
rings, or equipment components for that purpose.'' EPA is proposing to
adopt the definition contained in subsection (i)(7)(A) of the AIM Act
with the addition of examples of equipment. The definition in the AIM
Act is similar to, but broader than EPA's definition of retrofit that
was codified in 40 CFR part 82, subpart F. The AIM Act definition
refers to ``regulated substance'' and ``equipment'' whereas the
regulatory definition in Part 82 refers to ``refrigerant'' and
``appliances.'' As such, in this context, EPA finds it reasonable to
interpret this term as applying not just to refrigeration and air-
conditioning appliances, but all equipment that uses a regulated
substance. EPA is proposing to add a non-inclusive list of examples--
such as air conditioning and refrigeration, fire suppression, and foam
blowing equipment--recognizing that petitioners may seek, or EPA may
establish, restrictions on other types of equipment using HFCs in the
future.
Sector. EPA is proposing to define this term as ``a broad category
of applications including but not limited to: refrigeration, air
conditioning and heat pumps; foam blowing; aerosols; chemical
manufacturing; cleaning solvents; fire suppression and explosion
protection; and semiconductor manufacturing.'' These categorizations
and groupings would be similar to how the term ``sector'' is used in
other contexts, such as EPA's Significant New Alternatives Policy
(SNAP) Program, the Montreal Protocol Parties' Technology and Economic
Assessment Panel (TEAP), the statutory language, and EPA's Vintaging
Model. Entities potentially subject to rulemakings proposed under
subsection (i) of the AIM Act are often the same entities affected by
CAA title VI, including the CAA section 612 SNAP program, and may be
familiar with the way EPA traditionally categorizes and groups sectors
in that context. Moreover, TEAP is a globally recognized advisory body
to the Montreal Protocol Parties, which provides technical information
related to alternative technologies that use HFCs in sectors and
subsectors. Entities with a global market presence and other
stakeholders may be familiar with how TEAP defines sectors, and EPA's
proposed definition of sector would be relatable to their understanding
of the term.
Subsector. EPA is proposing to define this term as ``processes,
classes of applications, or specific uses that are related to one
another within a single sector or subsector.'' Where appropriate, each
sector can be subdivided into different subsectors which more narrowly
highlights how the HFC is used. Entities potentially subject to
rulemakings proposed under subsection (i) of the AIM Act are often the
same entities affected by CAA title VI, including the CAA section 612
SNAP program and may be familiar with the way EPA categorizes and
groups sectors and subsectors, in that context. Therefore, EPA is
proposing that the term ``subsectors'' include the concepts of ``end-
uses'' and ``applications'' under the SNAP Program (40 CFR 82.172). An
example subsector is cold storage warehouses under the refrigeration,
air conditioning and heat pump sector. Another example is the integral
skin polyurethane subsector under foams.
Substitute. EPA is proposing to define this term as ``any
substance, product, or alternative manufacturing process, whether
existing or new, that is used, or intended for use, in a sector or
subsector with a lower global warming potential than the regulated
substance, whether neat or used in a blend, to which a use restriction
would apply.'' Under this proposed definition, substitutes would
include regulated substances (e.g., HFC-32 used in lieu of R-410A in
commercial unitary AC), blends containing regulated substances (e.g.,
R-454B used in lieu of R-410A in residential unitary AC), blends that
do not use a regulated substance (e.g., R-441A used in lieu of R-410A
in window ACs), alternative substances (e.g., HFOs, hydrocarbons, R-
717, and R-744 (CO<INF>2</INF>)), and not-in-kind technologies (e.g.,
finger-pump bottles in lieu of aerosol cans, or vacuum panels in lieu
of foam insulation).
Use. EPA is proposing to define this term as ``for any person to
take any action with or to a regulated substance, regardless of whether
the regulated substance is in bulk, contained within a product, or
otherwise, except for the destruction of a regulated substance. Actions
include, but are not limited to, the utilization, deployment, sale,
distribution, discharge, incorporation, transformation, or other
manipulation.''
EPA welcomes comment on these proposed definitions. EPA
acknowledges that historical contexts may not fully capture all the
ways that regulated substances are being used and is seeking comment on
additional sectors and subsectors where regulated substances are used
that would fit under this regulatory program.

B. How is EPA proposing to restrict the use of HFCs in the sector or
subsector in which the HFCs are used?

Subsection (i) authorizes EPA to by rule restrict, fully,
partially, or on a graduated schedule, the use of a regulated substance
in the sector or subsector in which the regulated substance is used.
The provision grants EPA authority to fashion restrictions on the use
of regulated substances in the sectors that use those substances and
does not specify a particular approach as to how restrictions must be
structured but lists a number of considerations EPA is to factor in, to
the extent practicable, when promulgating restrictions. EPA is
considering two possible approaches to structuring those restrictions
in this proposal but recognizes that other approaches could be
considered in the future that would also fit within the authority
granted by this statutory provision.
In considering the two approaches, we have taken into account the
statutory text, feasibility, consistency with similar programs being
implemented in the states and internationally, impacts on the regulated
community and on innovation, efficiency of implementation, and other
factors. Subsection (i)(4)'s ``Factors for Determination'' provides
factors that EPA is to consider ``[i]n carrying out a rulemaking''
under subsection (i)(1). As a general matter, we interpret subsection
(i)(1) to apply where EPA is deciding whether to impose a restriction
on the use of a regulated substance in a sector or subsector and what
that restriction should be (e.g., a full restriction or a partial
restriction and on what timeframe). However, we also think the factors
listed in subsection (i)(4) are informative in our consideration of how
to structure restrictions, as some approaches may provide advantages
with respect to some of the factors listed in subsection (i)(4) over
others.

[[Page 76755]]

We also note that while subsection (i)(1) identifies that EPA may
restrict the use of a regulated substance ``in the sector or subsector
in which the regulated substance is used,'' we think that, given EPA's
authority to issue partial restrictions, the provision allows EPA to
establish restrictions for particular uses of HFCs, such as products or
applications, and that such restrictions do not need to apply uniformly
across entire sectors or subsectors. Interpreting EPA's authority in
this manner allows the Agency to tailor restrictions in accordance with
the best available data and to consider relevant differences in, for
example, the availability of substitutes with respect to technological
achievability or affordability. For example, EPA is proposing
restrictions for HFCs used in chillers for comfort cooling. However,
chillers for comfort cooling with evaporating temperatures less than -
58 [deg]F are not included in this proposal due to limits in lower-GWP
technology to meet the proposed restriction at this time.
The two approaches to structuring subsection (i) restrictions that
we are considering at this time were identified in the subsection (i)
petitions granted by the Agency to date. They are: (1) to set GWP
limits for HFCs used within a sector or one or more subsectors; and (2)
to restrict specific HFCs, whether neat or used in a blend, by sector
or one or more subsectors.\38\ For purposes of the restrictions
proposed in this document, which largely respond to the subsection (i)
petitions granted to date by the Administrator, we propose to primarily
employ the GWP limit approach, with some exceptions where we think the
specific-listing approach is more appropriate. We seek comment on both
approaches and have provided sufficient information in this proposal
and the docket to allow the Agency to finalize restrictions using
either approach.\39\
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\38\ The restrictions on the use of an HFC under subsection (i)
of the AIM Act proposed in this rulemaking are intended to
complement and not conflict with existing restrictions established
through other authorities. Other authorities would still apply.
\39\ EPA provides a summary of sectors and subsectors affected
by the proposed action, along with the proposed restriction in the
form of GWP limits for most subsectors in section VII.F.2 of this
preamble. The docket contains a list of specific substances that EPA
is proposing to restrict should EPA finalize a specific listing
approach to establish use restrictions rather than a GWP limit
approach.
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GWP Limit Approach
This proposed approach would restrict the use of HFCs by
establishing GWP limits for HFCs used in each sector or subsector,
whether neat or used in a blend. By establishing GWP limits, only HFCs
with GWPs below the proposed limit or HFCs used in blends with GWPs
below the proposed limit for a particular sector or subsector could be
used in that sector or subsector. If used neat, HFCs with GWPs at or
above the GWP limit would be prohibited from use in that sector or
subsector. If the HFC is used in a blend in the sector or subsector,
compliance with the GWP limit would be determined based on the GWP of
the blend. Blends containing an HFC with GWPs at or above the GWP limit
would be prohibited from use in that sector or subsector.
For HFCs used in a blend, EPA is proposing that the GWP of the
blend would be calculated to incorporate all components of the blend,
whether an HFC, HFO, HC or other constituent, using the 100-year
integrated AR4 values. We note that the 100-year integrated GWP values
in Table 2.15 of AR4 for the HFCs are equivalent to the exchange values
listed in the AIM Act and thus what we plan to use here without change.
For further details about determining the GWP of compounds that are not
listed in AR4, see section V.A of this preamble.
In most cases it is the specific HFC and the proportion of that HFC
within the blend that determines the GWP of the blend as a whole. Under
this proposal, EPA is not restricting the use of all HFC blends. For
instance, if a GWP limit of 150 is established for regulated substances
used in a particular sector or subsector, HFC-134a, which has a GWP of
1,430, could not be used. However, R-451A, which is a blend of HFC-134a
and HFO-1234yf, has a GWP of 146 and could be used in a sector or
subsector with a GWP limit of 150. This approach would allow for the
continued use of an HFC with a GWP above the limit EPA establishes when
it is used in a blend with a GWP below the limit. There may be certain
characteristics associated with a higher-GWP HFC that makes use of that
substance in a blend particularly advantageous, such as reducing
flammability. Making available substitutes that would not otherwise be
available under an approach that did not permit the use of higher-GWP
HFCs, even when in a lower-GWP blend, would achieve beneficial
environmental impacts sooner, smooth the transition, and support
innovation. This approach is consistent with the approach used by other
governments including the European Union (EU). EPA notes that this
approach would not change in any way the calculation established under
40 CFR part 84, subpart A for determining the quantity of production
and consumption allowances required for regulated substances used in
blends.
Even where petitions have asked EPA to restrict specific regulated
substances or blends containing an HFC in various sectors and
subsectors, EPA can translate those requests into restrictions using
the GWP limit approach. EPA would select GWP limits that would, in
effect, prohibit the use of named HFCs (neat) and named blends in the
specified sector. For example, in its granted petition, Natural
Resources Defense Council et. al. (NRDC) requested that the Agency
restrict the use of R-507A (GWP 3,990), R-404A (GWP 3,920), R-428A (GWP
3,610), R-422C (GWP 3,390), R-434A (GWP 3,250), HFC-227ea (GWP 3,220),
R-421B (GWP 3,190), R-422A (GWP 3,140), R-407B (GWP 2,800), and R-422D
(GWP 2,730) for new remote condensing units. In this example, EPA's
starting point for considering a GWP limit for new remote condensing
units would be 2,730, to include within the prohibition the blend with
the lowest GWP among those in the petition. EPA then would use the
considerations laid out in subsection (i)(4) to determine the
appropriate GWP limit restriction that would also account for available
substitutes in the remote condensing unit subsector; by definition,
that proposed GWP limit would prohibit (or fully restrict) the specific
named HFCs and blends containing HFCs requested by the petitioner.
One benefit of the GWP limit approach is that the regulatory
certainty it would provide would encourage the continued development
and implementation of HFC substitutes with lower GWPs. Under this
approach, companies would be free to innovate so long as the substitute
did not exceed the GWP limit. Where EPA has established a GWP limit for
a particular sector or subsector, based on available and
technologically achievable substitutes, new HFCs or blends containing
an HFC used in that sector or subsector would need to meet that
threshold. This approach would also provide a more efficient and
streamlined process for companies to employ these lower-GWP substitutes
for new uses, because the existing restrictions would make clear
permissible uses. A substance-specific listing approach could create
hesitancy to innovate because it would be less clear whether EPA might
restrict a particular blend containing an HFC after a company had
already invested resources in developing it for a particular use. By
establishing GWP limits, this program would foster

[[Page 76756]]

innovation to next-generation substitutes.
Perhaps recognizing these same advantages, other governments
undertaking programs to restrict HFCs have embraced this approach,
including the state of California, Canada, and EU member countries.
Many of the granted petitions including those submitted by
environmental advocates, industry trade associations, and state
governments, demonstrated broad support for using GWP limits.
Furthermore, many of the businesses in the potentially affected sectors
or subsectors are familiar with this approach already and may already
comply with GWP limits in certain markets. Therefore, EPA's use of the
GWP limit approach, which is familiar to companies operating in other
jurisdictions, could potentially support innovation, transition, and
compliance.
Specific Listing Approach
The second approach EPA is considering would be to list
specifically restricted HFCs and blends containing HFCs by sector or
subsector. Using the NRDC petition example described previously, under
this approach EPA would prohibit the use of the ten blends contained in
the petition (R-507A, R-404A, R-428A, R-422C, R-434A, HFC-227ea, R-
421B, R-422A, R-407B, and R-422D) in new remote condensing units. The
NRDC petition appears to be based on the SNAP Program's use of
acceptable, acceptable subject to use conditions, and unacceptable
lists and requests restrictions that would be equivalent to the changes
of status in SNAP Rules 20 and 21 which were partially vacated and
remanded to the Agency (80 FR 42870, July 20, 2015 and 81 FR 86778,
December 1, 2016, respectively).\40\
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\40\ After a court challenge, the D.C. Circuit partially vacated
the SNAP 2015 Rule ``to the extent it requires manufacturers to
replace HFCs with a substitute substance,'' and remanded to EPA for
further proceedings. Mexichem Fluor, Inc. v. EPA, 866 F.3d 451, 464
(D.C. Cir. 2017) (``Mexichem I''). However, the court upheld EPA's
decisions in that rule to change the listings for certain HFCs in
certain SNAP end-uses from acceptable to unacceptable as being
reasonable and not arbitrary and capricious. Id. at 462-64. The same
court later issued a similar partial vacatur for portions of the
SNAP 2016 Rule. See Mexichem Fluor, Inc. v. EPA, 760 Fed. Appx. 6
(Mem) (per curiam) (D.C. Cir. 2019) (``Mexichem II'').
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While EPA's experience implementing the SNAP program under section
612 of the CAA provides some insight into the advisability of using a
substance specific listing approach to structure restrictions under
subsection (i), EPA recognizes that Congress provided separate
authority under subsection (i) of the AIM Act. Section 612(c) of the
CAA requires EPA to promulgate rules making it unlawful to replace ODS
with any substitute that it determines may present adverse effects to
human health or the environment where it has identified an alternative
that (1) reduces the overall risk to human health and the environment
and (2) is currently or potentially available. Section 612(c) further
requires EPA to ``publish a list of (A) the substitutes prohibited
under this subsection for specific uses and (B) the safe alternatives
identified under this subsection for particular specific uses.'' Under
SNAP, EPA evaluates substances that can be used as alternatives based
on a number of criteria and accordingly lists them as acceptable,
unacceptable, acceptable subject to use conditions, acceptable subject
to narrowed use limits, or pending. See 40 CFR 82.180(a)(7) (listing
criteria for review) and 40 CFR 82.180(b) (describing types of listing
decisions). EPA has considered more than 450 alternatives for eight
industry sectors and more than 40 end-uses since 1994.\41\
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\41\ As noted in section VII.A of this preamble, there is
significant overlap between the sectors and subsectors identified in
this proposal and how sectors and ``end-uses'' are categorized under
the SNAP program.
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Based on EPA's experience with using the substance-specific lists
to establish use conditions or narrowed use limits under SNAP, we
anticipate that using substance-specific lists to communicate the
restrictions established under subsection (i) could be unwieldy and
less advantageous. We note that in contrast to section 612(c) of the
CAA, subsection (i)(1) does not expressly mention publication of a list
for substances that are restricted. Moreover, the substance-specific
approach could present the challenge of needing to continually update
the list of HFCs and blends containing an HFC as they are introduced.
For example, if EPA has already restricted one particular use of an HFC
in a blend for a given use, a company could reformulate the blend
slightly, even increasing the high-GWP HFC component, and start using
it for that same use. EPA would then need to initiate a rulemaking to
restrict that new HFC formulation for that use, even though it was
clear from the outset that lower-GWP alternatives already existed.
However, we acknowledge that the substance-specific listing
approach may be simpler to implement in some instances, particularly
when there are only one or a few regulated substances used or
restricted in a specific sector or subsector. Listing these restricted
substances explicitly would provide specificity to the regulated
community as to exactly what is prohibited. It also allows anyone to
compare the regulated substance used to the list of restricted
substances and know whether the product is in compliance, avoiding the
intermediate step of determining the GWP of the HFC or blend containing
an HFC before knowing whether that particular substance meets the
established limit.
This approach may also be preferable when substitutes continue to
be in development. It may be beneficial to allow additional time before
establishing a GWP limit while still restricting those substances that
have the highest environmental impact. This approach would allow for
the adoption of multiple transitional substitutes and allow for the
development of additional substitutes.
We think both approaches could also be used in combination, with
some subsectors having a GWP limit and others where specific substances
are restricted. We note that petitions granted under subsection (i)
requested restrictions using both of these approaches, and one possible
approach for the final rule would be to establish, if appropriate, the
type of restriction (GWP limit or substance-specific) requested in the
petitions for that particular subsector. For example, most petitions
regarding the RACHP subsectors requested GWP limit restrictions. EPA
suspects that this may be due to the number of HFCs and blends
containing an HFC used in those subsectors. However, in some cases not
all petitioners were in agreement on the structure of the restriction.
For example, some petitions regarding the cold storage warehouse
subsector requested that EPA establish a GWP limit of 150 while others
requested EPA to prohibit the use of listed HFCs and blends containing
an HFC.
The Agency is proposing to establish restrictions on the use of
HFCs by establishing GWP limits by sector or subsector in most
instances. As discussed further in section VII.F.3.e of this preamble,
EPA is proposing to restrict specific HFCs, whether neat or used in a
blend, in some instances where the situation making the substance
specific listing approach is advantageous. EPA is seeking comment on
the GWP limit approach, the specific listing approach, other possible
regulatory models that the Agency should consider, and a combination of
approaches either for this proposed rule or for future rulemakings
under subsection (i) of the AIM Act.

C. Applicability

The AIM Act provides that the Administrator may by rule restrict,

[[Page 76757]]

fully, partially, or on a graduated schedule, the use of a regulated
substance in the sector or subsector in which the regulated substance
is used. HFCs are used in a wide variety of applications, including
refrigeration and air conditioning, foam blowing agents, solvents,
aerosols, and fire suppression. In these applications, HFCs are often
used as a refrigerant, foam blowing agent, and fire suppression agent
or may be contained and used within a product. HFCs can also be used in
processes such as solvent cleaning, blowing open cell foam,
semiconductor manufacturing, or chemical usage.
The AIM Act does not define ``use.'' The dictionary definitions for
that term include ``to put into action or service'' \42\ and ``to take,
hold, or deploy (something) as a means of accomplishing a purpose or
achieving a result; employ.'' \43\ For several reasons, we think
``use,'' in the context of subsection (i)(1), was intended to include
actions taken with respect to regulated substances that occur at the
market or industry level, such as manufacture, distribution, sale,
offer for sale--i.e., to cover the presence of HFCs in products and
processes in the U.S. market as a way of addressing their use in
sectors and subsectors.
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\42\ Merriam-Webster. Available at: <a href="https://www.merriam-webster.com/dictionary/use">https://www.merriam-webster.com/dictionary/use</a>.
\43\ <a href="http://Lexico.com">Lexico.com</a>. Available at: <a href="https://www.lexico.com/en/definition/use">https://www.lexico.com/en/definition/use</a>.
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First, subsection (i) grants EPA authority to restrict the use of a
regulated substance ``in the sector or subsector in which the regulated
substance is used.'' While sectors and subsectors are not defined in
the AIM Act, those terms suggest groupings or categories of related
activity at an industry level, and as discussed in section VII.A of
this preamble, EPA is proposing definitions for ``sectors'' and
``subsectors'' that are consistent with historical usage of those terms
in other programs--grouping together similar or related industrial or
market uses in distinct sectors, for example, refrigeration and air
conditioning, or foam blowing, or aerosols. ``Use of a regulated
substance in the sector or subsector in which the regulated substance
is used'' indicates that the grant of authority under subsection (i)
was intended to cover a sector or subsector's use of a regulated
substance, and that use certainly covers the inclusion of a regulated
substance in a product \44\ to achieve a particular purpose or the
employment of a regulated substance in a process, as those are
prototypical uses for sectors that are most likely to be using
regulated substances, such as the inclusion of an HFC as a refrigerant
in a refrigerator or air conditioner for cooling purposes.
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\44\ Similarly, subsection (i)'s authority extends to regulated
substances contained in a blend and the use of that regulated
substance within a blend by the sector or subsector in a product or
process to achieve a particular purpose. In order to address the
regulated substance within a blend, it may be appropriate to
establish requirements that apply to use of the blend, although the
blend itself is not a regulated substance.
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Second, because subsection (i) and the subsection (i)(4) factors
are focused on broad, sector-level information, it is reasonable to
interpret ``use'' broadly, in a way that would reach uses on a sector-
level basis. The subsection is titled ``Technology Transitions,'' and
in subsection (i)(4), the Act directs EPA to consider certain factors,
to the extent practicable, in issuing a rulemaking or making a
determination to grant or deny a petition regarding use restrictions.
The factors listed under subsection (i)(4) task the Agency with
examining information relevant to industry-level sectors or subsectors
that would inform consideration of the feasibility and advisability of
a transition away from the use of a regulated substance in that sector
or subsector, as well as consideration of whether that transition
should be full, partial, or on a graduated schedule. For example, in
subsection (i)(4)(B), the Act directs EPA to factor in ``the
availability of substitutes for use of the regulated substance that is
the subject of the rulemaking or petition, as applicable, in a sector
or subsector, taking into account technological achievability,
commercial demands, safety, consumer costs, building codes, appliance
efficiency standards, contractor training costs, and other relevant
factors, including quantities of regulated substances available from
reclaiming, prior production, or prior import.'' The various subfactors
in (i)(4)(B) help EPA to determine whether there are adequate available
substitutes for a regulated substance that a sector or subsector could
use, indicating feasibility, readiness, advisability, and degree of a
sector or subsector transition away from the regulated substances in
use. Similarly, the other factors in (i)(4)--to use best available
data, to consider overall economic costs and environmental impacts, as
compared to historical trends, and to consider the remaining phasedown
period for regulated substances under the phasedown rule issued under
subsection (e), if applicable--also fit with this understanding of
EPA's task: to determine whether, when, and to what degree it is
appropriate to establish a use restriction to facilitate the transition
away from the use of regulated substances in a sector or subsector.
Third, Congress provided EPA authority to issue restrictions that
are full, partial, or on a graduated schedule. Fully restricting the
use of a regulated substance in the sector or subsector in which it is
used, by its terms, implies a full transition away from the use of that
regulated substance in the given sector or subsector. We therefore
understand the term ``use'' to be broad enough to achieve a full
transition. In order to effectuate a full transition, we would have to
be able to address all the aspects where the regulated substance is
present in that sector or subsector of the market. There may be
situations where a restriction is best targeted at points in the life
cycle or market chain of the regulated substance that are subsequent to
the incorporation of the regulated substance in a product or process,
as well as points in the chain that are proximate to ultimate use.
Thus, we interpret the term ``use'' as being broad enough to reach
points such as transport or offer for sale.
EPA therefore proposes to interpret use of a regulated substance in
the sector or subsector for purposes of subsection (i) as ``for any
person to take any action with or to a regulated substance, regardless
of whether the regulated substance is in bulk, contained within a
product, or otherwise, except for the destruction of a regulated
substance. Actions include, but are not limited to, the utilization,
deployment, sale, distribution, discharge, incorporation,
transformation, or other manipulation.'' EPA's proposed definition of
``use'' covers all of the links on the chain representing how regulated
substances would be introduced, incorporated into products or
processes, circulated, and made available in the U.S. market. To the
extent EPA has determined, considering the (i)(4) factors, such as the
availability of substitutes, that it is appropriate and possible to
fully restrict the use of an HFC in a particular sector or subsector,
we think that restriction must be able to extend across all the points
in the chain. For example, if stakeholders submit a petition to EPA
asserting that the Agency should fully restrict use of a certain HFC or
HFCs over a certain GWP in motor vehicle air conditioning (MVAC), and
EPA agrees such restriction is appropriate, based on consideration of
the (i)(4) factors to the extent practicable, we interpret subsection
(i) to authorize the restriction of such use of HFCs in every part of
the market chain. A narrower interpretation could hamper EPA's ability
to

[[Page 76758]]

effectively implement a full restriction on HFC use in a sector or
subsector. For example, if EPA were to define ``use'' as only the
manufacture of a product containing an HFC but not sale of that
product, then the manufacture of a MVAC system with the restricted HFC
would be prohibited, because the air conditioning sector would be
restricted from that ``use'' of the HFC. Sale of MVAC systems
manufactured with the restricted HFC would not be considered part of
the sector's ``use'' of an HFC and would therefore be permissible,
either because the unit had been imported or because it had made it to
store shelves, despite a restriction on its manufacture. This would
circumvent the intended full transition of the MVAC subsector away from
use of HFC. Covering all points in the chain of ``use in the sector or
subsector'' ensures that the use restrictions we establish achieve
their intended purpose. However, even though EPA's proposed definition
of ``use'' is broad in order to facilitate a full transition to HFC
substitutes where appropriate, that does not mean that in every
instance the restrictions promulgated under subsection (i) will
exercise that full authority. In many cases, including in this proposed
action, EPA may issue partial restrictions that target only certain
uses.
The AIM Act also provides EPA other authorities to issue certain
regulations for the purpose of maximizing reclamation and minimizing
release of regulated substances from equipment and to ensure the safety
of technicians and consumers.\45\ We have not yet established
regulations under those provisions and therefore do not intend to apply
our authority under (i) to actions associated with steps in the
disposal or reclamation chain such as recovery, recycling, and
reclamation of a regulated substance at this point.
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\45\ As explained in the Allocation Framework Rule that in the
context of allocating and expending allowances, EPA interprets the
word ``consume'' as the verb form of the defined term
``consumption.'' See 86 FR 55122, n. 7 Oct. 5, 2021); see also
definition of ``consumption'' in subsection (b)(3) of the AIM Act
and 40 CFR 84.3. The distinct term ``consumer'' is not defined in
the AIM Act. In the context of subsection (i) of the AIM Act, we
understand and are using the term ``consumer'' in a more general
way, consistent with its everyday dictionary meaning, for example to
refer to a person who purchases goods or services for personal use
or the ultimate consumer of a product.
---------------------------------------------------------------------------

We also do not intend that this rule apply to the ordinary
utilization or operation of a regulated product by an ultimate
consumer. Given that this is the outset of the phasedown of HFCs, there
is an opportunity to efficiently achieve significant emission
reductions by limiting the introduction of new products to the U.S.
market and restricting the circulation of those products (e.g., sale
and distribution) before they reach the ultimate consumer. We therefore
are proposing restrictions on the manufacture, import, export, sale,
and distribution of products, rather than on restricting ongoing,
ordinary operation and utilization by ultimate consumers.\46\
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\46\ We note, however, that in some cases the ultimate consumer
may have purchased a product where the first incorporation of the
regulated substance occurs when the product is in the ultimate
consumer's ownership, and in those cases that incorporation would be
covered by the proposed requirements.
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Further, in this rule, EPA is not proposing to apply the
requirements established through this rulemaking to certain
applications of HFCs eligible for application-specific allowances under
40 CFR 84.13. Under subsection (i)(7)(B)(i) of the AIM Act, a rule
promulgated under subsection (i) ``shall not apply to . . . an
essential use under clause (i) or (iv) of subsection (e)(4)(B)'' of the
AIM Act, ``including any use for which the production or consumption of
the regulated substance is extended under clause (v)(II) of that
subsection'' of the Act. Subsection (e)(4)(B)(iv) lists six
applications which are to ``receive the full quantity of allowances
necessary, based on projected, current, and historical trends'' for the
five-year period after enactment of the AIM Act. EPA has codified these
six applications at 40 CFR 84.13 and established a framework for
allocation of allowances for these application-specific needs. Under
the implementing regulations at 40 CFR 84.13, the following
applications are currently eligible to receive application-specific
allowances for calendar years through 2025: (1) as a propellant in
metered dose inhalers; (2) in the manufacture of defense sprays; (3) in
the manufacture of structural composite preformed polyurethane foam for
marine use and trailer use; (4) in the etching of semiconductor
material or wafers and the cleaning of chemical vapor deposition
chambers within the semiconductor manufacturing sector; (5) for
mission-critical military end uses; and (6) for onboard aerospace fire
suppression. Therefore, EPA is not proposing to apply the requirements
under this rulemaking to these uses of HFCs in these six specific
applications at this time, since they are currently receiving
application-specific allowances under 40 CFR 84.13. This aspect of the
proposal is reflected in the proposed exemption in section 84.58.
Further, EPA has not at this point designated any essential uses under
subsection (e)(4)(B)(i). If EPA makes such a designation in the future,
EPA would consider at that point how to ensure consistency with
subsection (i)(7)(B)(i).
1. Which uses is EPA proposing to restrict in this proposal?
Under the proposed definition of ``use'' EPA would be exercising
its authority under subsection (i) to cover a broad chain of activities
associated with regulated products. In this rule, EPA's proposed
restrictions on that broad chain of activities are designed to apply
only at certain points in this chain, consistent with the direction
that EPA ``may by rule restrict, fully, partially, or on a graduated
schedule.'' With respect to the specific sector and subsector
restrictions proposed in this document, EPA proposes to adopt a uniform
understanding of when the restrictions would begin to apply and
explains in this section how the commencement of EPA's restrictions
would apply to both regulated products manufactured in the United
States and imported regulated products.
For purposes of this rule, EPA is proposing restrictions on newly
manufactured products (and the subsequent sale, distribution, export,
and offer for sale or distribution of those products) and is not
proposing to apply the specific use restrictions that are the subject
of this action to existing products or equipment and used products or
equipment, except as to the import of existing or used products or
equipment. For additional discussion regarding products for export, see
section VII.C.2 of this preamble. For additional discussion regarding
existing products or equipment, see section VII.C.3 of this preamble.
We think the most efficient and effective way to encourage
transition from the use of these HFCs is to restrict the incorporation
of HFCs into products entering the U.S. market for the first time. This
restriction would primarily be borne by original equipment
manufacturers (OEMs) and importers of products, as these are the
entities that introduce products into the U.S. market. Given that this
is the first rulemaking under subsection (i), and there are many
products that are currently being manufactured or imported using HFCs
and blends containing HFCs (or are intended to use HFCs and blends
containing HFCs) in the sectors and subsectors for which EPA is
proposing restrictions, the use restrictions in this proposed rule are
intended to only apply to the manufacture and import of regulated
products and the subsequent sale, distribution, export, and offer for
sale or distribution of those products.

[[Page 76759]]

EPA is proposing that the compliance date for the restrictions on
the sale, distribution, or export of a regulated product be one year
after the compliance date for the prohibition on production and import.
Most of the proposed restrictions on the manufacture and import of
products using HFCs have a proposed compliance date of January 1, 2025.
As such, restrictions on the sale and distribution of those products
would be January 1, 2026. Providing one year to sell existing inventory
should be sufficient given that compliance date would be more than two
years from the date of the final rule and many manufacturers are
anticipating this action. EPA prefers a time-limited period during
which products can continue to be sold over an approach that
indefinitely exempts the sale of existing inventory. Having a date
certain for the sale and distribution of regulated products facilitates
enforcement of the manufacturing and import restriction. Manufacturers,
importers, and distributors can avoid stranding inventory by promptly
beginning their transitions. EPA welcomes comment on the effect of a
one-year sell through, including the potential for stranding inventory
or disadvantaging entities that have completed their transitions.
As noted, for the most part, EPA is designing its restrictions to
apply to newly manufactured products and equipment rather than existing
or used products and equipment (both addressed below). However, EPA is
proposing to restrict the import of existing and used products that do
not meet the proposed GWP limits or other restrictions. EPA does not
interpret the AIM Act's restriction on EPA's authority to regulate
equipment in existence in the sector or subsector prior to December 27,
2020, as applying to imports of equipment that was manufactured prior
to that date but was not imported until after that date (see section
VII.C.3 of this preamble for additional discussion). EPA is electing to
apply its GWP limit restrictions or other restrictions to imports of
existing and used products and equipment because failing to prohibit
the import of these products could have the effect of undermining the
transition from higher-GWP HFCs in the sectors and subsectors that are
the subject of this proposal. Permitting the import of existing and
used products that did not meet the proposed restrictions could shift
market share away from domestically manufactured products that use
conforming lower-GWP HFCs or substitutes, towards imported products
that continue to use higher-GWP HFCs. The goal of restricting the use
of regulated substances (i.e., higher-GWP HFCs) in the named sectors
and subsectors would be undermined if those sectors and subsectors
simply shifted use to imported existing or used products containing
higher-GWP HFCs. EPA is seeking comment on its proposal to apply
restrictions on the use of HFCs to the import of existing and used
products.
The AIM Act defines ``import'' as ``to land on, bring into, or
introduce into, or attempt to land on, bring into, or introduce into,
any place subject to the jurisdiction of the United States, regardless
of whether that landing, bringing, or introduction constitutes an
importation within the meaning of the customs laws of the United
States,'' and we have proposed to codify that definition into our
subpart B regulations. We note that this statutory definition contains
no threshold volume of business an entity would need to undertake in
order to qualify as an importer. As such, EPA intends its proposed
restrictions to cover any importation of regulated products. The
Agency's intention is to cover the activities of importers bringing
large shipments of products or equipment into the country, as well as
activities of entities bringing smaller groups of regulated products
into the country (e.g., driving a truckload of air conditioning units
across the Canadian or Mexican border for sale in the United States).
As discussed above, because EPA proposes to interpret ``use'' to
include activities in the market chain involving regulated products
that occur subsequent to manufacture or import, the proposed use
restrictions would also apply to any person who sells, distributes,
offers for sale or distribution, makes available for sale or
distribution, or exports any regulated product in the sectors or
subsectors controlled under subsection (i). Applying the restriction in
this way ensures that the goal of restricting the use of regulated
substances in the sectors or subsectors in which the regulated
substances are used can be achieved, because the sector and subsector's
use of the regulated substance is present in all these aspects of the
market chain, and EPA's intention in this proposal is to restrict use
across that chain. Therefore, even if a manufacturer or importer
improperly introduces a regulated product that does not meet the
proposed restriction into the U.S. market, distributors and retailers
offering that product for sale, including online retailers, are also
restricted from covered activities related to that product. The intent
of the proposed restriction is to remove products that do not meet the
proposed limits from circulation in the U.S. market.
However, EPA is proposing not to apply its GWP limit restrictions
or other restrictions to the sale or distribution, or offer for sale or
distribution, of used products. By used products, we mean products that
have been in the ownership of an ultimate consumer and have experienced
ordinary operation or utilization by an ultimate consumer. Some
regulated products, such as air-conditioning and refrigerated
appliances, are often conveyed with the sale of a building and could
not reasonably be excluded from that conveyance. Other regulated
products may be incorporated into a larger good, such as an MVAC in a
motor vehicle, which may be sold multiple times during the useful life
of the good. Restricting the sale of used products or equipment that
use HFCs likely would significantly decrease the value of those goods
and impact the market for used products (e.g., trading in a used motor
vehicle during the purchase of a new one). Extending the proposed
restriction to the sale of used products could have overall detrimental
environmental effects, by requiring consumers to discard products or
equipment before the end of the product's useful life, and could
negatively impact affordability for consumers by eliminating options to
purchase used products. EPA typically has not restricted the sale of
used products containing ODS and proposes to maintain a similar
approach for this rule. We note that our proposed exemption for the
sale or distribution, or offer for sale or distribution, of used
products is intended to cover both individuals selling products they
have used (e.g., an appliance they have owned and used for a period of
time) as well as entities that do volume business in used products
(e.g., stores selling second-hand goods or car-dealerships selling pre-
owned vehicles). However, this used products exemption is not intended
to cover entities that purchase products that are subject to the
proposed restrictions on manufacture and import, hold those products
for a period of time, and then re-sell the products. We have
accordingly specified that products must have experienced ordinary
operation or utilization by an ultimate consumer for a period of time
in order to qualify for the proposed used product exemption.

[[Page 76760]]

2. Would the proposed use restrictions also apply to products that are
manufactured for export?
As discussed above, EPA interprets a sector or subsector's ``use''
to cover not only manufacture and import of a regulated product, but
also the subsequent activities in the market chain related to regulated
products. Specifically, we interpret export to be included in the
meaning of ``use.'' Where EPA has determined, consistent with
consideration of the factors listed in subsection (i)(4), that it is
appropriate to restrict the use of HFCs, we believe it would be
reasonable for restrictions on domestically manufactured products
intended for the U.S. market to apply equally to domestically
manufactured products intended for export. Applying the proposed
restrictions to all domestically manufactured regulated products treats
materially similar uses of HFCs in the same manner. Including exports
as one of the activities subject to the proposed rule's prohibitions
would prevent the limited supply of HFCs in the United States from
being exported in products that could use substitutes. A company cannot
file for a request for additional consumption allowances based on the
export of a product containing regulated substances; requests for
additional consumption allowances are limited to the export of bulk
HFCs. 40 CFR 84.17. As with products manufactured for domestic use, one
intent of this regulation is to ensure that sectors and subsectors that
are currently using HFCs and that are well-positioned, per EPA's
determination under the (i)(4) factors, to transition to substitutes,
actually make that transition, leaving more of the limited supply of
HFCs for those sectors and subsectors that currently cannot use
substitutes. In addition, including exports as a prohibited activity
also supports global efforts to address HFC uses in light of the Kigali
Amendment, and could be welcomed by countries that have or intend to
also restrict the use of HFCs in a similar manner.
3. Would restrictions apply to existing equipment?
Under subsection (i)(7)(B)(ii) of the Act, ``a rule promulgated
under this subsection shall not apply to, . . . except for a retrofit
application, equipment in existence in a sector or subsector before the
date of enactment of this Act.'' 42 U.S.C. 7675(i)(7)(B)(ii). As such,
EPA's proposed restrictions would not apply to the sale or
distribution, or offer for sale or distribution, or export of any
equipment that was in existence in the sector or subsector prior to
December 27, 2020, the date on which the AIM Act was enacted.
EPA is codifying the statutory exemption for equipment in existence
in a sector or subsector prior to December 27, 2020, into the proposed
regulations. We propose that modifications, servicing, or repairs to
equipment in existence prior to December 27, 2020, would not be
considered ``manufacture'' under this proposed rule, and that these
actions with respect to existing equipment would therefore not change
the status of whether this equipment ``existed'' prior to December 27,
2020, and render such equipment subject to the proposed restrictions.
Subsection (i)(7)(B)(ii) of the Act refers to equipment in existence
before December 27, 2020. ``Equipment'' could encompass not just a
product or appliance, but also components or parts of that product or
appliance. Even if a person were to service, repair, or replace parts
of a product or appliance, other parts of that equipment would still
have been in existence prior to December 27, 2020, and would arguably
be outside the scope of EPA's regulatory authority under subsection
(i)(7)(B)(ii). In limited cases, where every part of a piece of
equipment had been altered or replaced after December 27, 2020, such
equipment would fall outside the statutory and regulatory exemption. In
addition, under the AIM Act subsection (i)(7)(B)(ii), EPA retains
authority to apply its restrictions to ``retrofit applications,'' where
existing equipment is upgraded by changing the regulated substance
used. See AIM Act subsection (i)(7)(A). The Act specifies that
``retrofit'' is where upgrades are made to existing equipment where the
regulated substance is changed and which ``(i) include the conversion
of equipment to achieve system compatibility and (ii) may include
changes in lubricants, gaskets, filters, driers, valves, o-rings, or
equipment components for that purpose.'' EPA is not at this time
proposing provisions addressing retrofits.
EPA interprets subsection (i)(7)(B)(ii)'s limit on authority to
regulate existing equipment to be applicable to equipment that existed
before December 27, 2020, but is proposing that equipment be in the
United States to qualify for that exception. Subsection (i)(7)(B)(ii)
provides an exception for ``equipment in existence in a sector or
subsector before December 27, 2020,'' (emphasis added) which EPA is
proposing to interpret as a sector or subsector in the United States.
In general, where those terms appear in the AIM Act, EPA understands
them to mean the domestic sector or subsector, not the sector or
subsector as it exists, operates, and functions in another country. For
example, in assessing the availability of substitutes in a sector or
subsector under subsection (i)(4)(B), EPA is proposing to, in general,
analyze the various subfactors--consumer costs, building codes,
appliance efficiency standards, contractor training costs--vis a vis
the domestic impacted sector or subsector.\47\ Therefore, EPA is
proposing that a product that was manufactured in another country and
existed prior to December 27, 2020, but was not imported to the United
States until after that date is not subject to subsection (i)(7)(B)'s
limitation, because until it is imported into the United States, it is
not ``in existence in the sector or subsector.'' EPA therefore proposes
that its prohibitions on import would apply to all regulated products
imported after the effective date of the rule, even if those products
existed in another country prior to December 27, 2020.
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\47\ EPA is examining international information for some of the
analyses, such as research from international organizations about
technological achievability, because such information has relevance
for the sector or subsector in the United States.
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4. Effective and Compliance Dates of Rules Promulgated Under Subsection
(i)
Subsection (i)(6) of the AIM Act states that ``[n]o rule under this
subsection may take effect before the date that is 1 year after the
date on which the Administrator promulgates the applicable rule under
this subsection.'' EPA interprets this provision as applying to the
establishment of restrictions on use of HFCs under subsection (i)(1) of
the Act. Therefore, EPA is proposing compliance dates for the proposed
restrictions on the manufacture and import of regulated products that
are at least one year from the date the rule is promulgated, in
accordance with this statutory provision. Factors that may affect these
compliance dates include the timing for availability of substitutes,
the HFC phasedown schedule, and other factors such as building code
updates.
The proposed provisions that are focused on program administration
and petitions processing (i.e., Sec. 84.64), do not include a delayed
compliance date, so EPA proposes that those provisions come into effect
30 days after publication of the final rule in the Federal Register.
This approach is based on an interpretation that (i)(6) does not apply
to those provisions because ``applicable rules'' in (i)(6) are

[[Page 76761]]

limited to rules that apply use restrictions under (i)(1). As a
practical matter, the regulated industry to which a use restriction
rule is being applied may need a full year to come into compliance with
that restriction. While a petitioner may need some amount of time to
collect the information this action proposes to impose, we think 30
days is a reasonable timeframe in which to do so. EPA is soliciting
comment on this interpretation and is also soliciting comment on
whether it should instead interpret subsection (i)(6) to apply to the
other provisions under subsection (i) and provide at least a year to
come into compliance with those provisions as well.

D. How is EPA proposing to address restrictions on the use of HFCs
requested in petitions granted?

EPA is addressing three sets of petitions in this proposed action:
the 11 petitions granted or partially granted on October 7, 2021;
additional petitions submitted by the Air-Conditioning, Heating and
Refrigeration Institute (AHRI) which updated previously submitted
petitions; and two petitions granted by EPA on September 19, 2022. EPA
is addressing these granted petitions in a single rulemaking rather
than through separate proposals. In some instances, particularly where
the petitioned sectors and subsectors overlap, responding through a
single rulemaking allows for a complete analysis in a single location.
Consistent with EPA's authority under subsection (i)(1) of the AIM Act,
EPA is also proposing restrictions on the use of HFCs in certain
sectors and subsectors that were not included in petitions received by
the Agency to date.
1. Petitions Granted on October 7, 2021
On October 7, 2021, EPA granted ten petitions and partially granted
one petition under subsection (i) of the AIM Act (86 FR 57141, October
14, 2021). Copies of petitions granted (including the full list of
petitioners and co-petitioners), a detailed summary of each petition,
and EPA's rationale for granting these petitions are available under
Docket ID EPA-OAR-2021-0643. Five of the granted petitions specifically
requested that EPA replicate, in varying degrees, certain restrictions
on use of HFCs based on the changes of status contained in EPA's SNAP
Rules 20 and 21. These five petitions were received from the Natural
Resources Defense Council et al. (hereby, ``NRDC''); DuPont (two
petitions); American Chemistry Council's Center for the Polyurethanes
Industry (hereby, ``CPI''); and the Household & Consumer Product
Association and National Aerosol Association (hereby, ``HCPA''). These
petitions requested restrictions on the use of specific HFCs or blends
containing HFCs in refrigeration, air conditioning, and heat pump,
foams, and aerosols sectors.\48\ Another five petitions requested that
EPA establish GWP limits for HFCs used in certain stationary AC and/or
refrigeration subsectors. These petitions were received from the
Environmental Investigation Agency et al. (hereby, ``EIA''), AHRI (two
petitions), Association of Home Appliance Manufacturers (hereby,
``AHAM''), and International Institute of Ammonia Refrigeration et al.
(hereby, ``IIAR''). The one partially granted petition, submitted by
California Air Resources Board et al. (hereby, ``CARB''), requested two
types of restrictions: (1) certain restrictions on the use of HFCs
contained in EPA's SNAP Rules 20 and 21 in the RACHP, foams, and
aerosols sectors and (2) restrictions on the use of HFCs based on GWP
limits in certain stationary AC and refrigeration subsectors. CARB also
requested EPA regulations should not limit states' ability to further
limit or phase out the use of HFCs in their jurisdictions.
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\48\ EPA notes that while these petitioners requested that EPA
establish restrictions on the use of HFCs by restricting specific
HFCs or blends containing HFCs, it does not necessarily mean that
these petitioners preferred this restriction format over
establishing restrictions on the use of HFCs by establishing GWP
limits. EPA believes that these petitioners requested restrictions
on the use of specific HFCs and blends containing HFCs in this way
to replicate the format presented in SNAP Rules 20 and 21.
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2. How is EPA proposing to address additional petitions that cover
similar sectors and subsectors?
EPA received two additional petitions from AHRI on August 19, 2021,
and October 12, 2021. The first petition requested that EPA establish
transition dates for ``New Refrigeration Equipment'' \49\ for certain
commercial refrigeration subsectors listed, along with the associated
maximum GWP. AHRI requested that the transition dates be at least two
years after the adoption of safety standards and building codes.\50\
AHRI's second petition in this category requested that EPA establish
transition dates for ``New Refrigeration Equipment'' for specific
chiller applications listed, along with the associated maximum GWP.
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\49\ AHRI suggests a definition for ``New Refrigeration
Equipment'' as follows: equipment built with new components and
equates to a nominal compressor capacity increase across the
refrigeration appliance or an increase of the CO<INF>2</INF>
equivalent of the refrigerant in the refrigeration appliance. Under
this suggested definition, the replacement of components in Existing
Refrigeration Systems would be permissible if the nominal compressor
capacity is not increased across the refrigeration appliance or the
CO<INF>2</INF> equivalent of the refrigerant in the refrigeration
appliance is not increased.
\50\ A discussion on the status of safety standards and building
codes that may impact compliance dates is in section VII.E of this
preamble.
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EPA is treating these two AHRI petitions as addenda to their
October 7, 2021, granted petitions, and not as separate petitions,
since the subsectors listed in these petitions are contained in the
granted AHRI petitions and AHRI refers to these as further steps in the
transition for these uses. The main difference between the requested
action in these two petitions and the granted petitions is the lower
GWP limits with later compliance dates. Since EPA is considers these
two petitions as addenda to petitions granted on October 7, 2021, this
proposed rulemaking addresses these requests.
3. Petitions Granted on September 19, 2022
On September 19, 2022, EPA granted two additional petitions that
requested EPA establish restrictions on the use of HFCs in certain
commercial refrigeration subsectors based on GWP limits. These
petitions were received from AHRI and IIAR and covered similar
commercial refrigeration subsectors contained in petitions granted on
October 7, 2021. One difference to note is that both the AHRI and IIAR
petitions requested restrictions on the use of HFCs for equipment types
beyond what was covered in many of the petitions granted on October 7,
2021 (i.e., all equipment with refrigerant charge capacities less than
200 pounds) in listed subsectors. EPA granted these petitions based on
its consideration of the (i)(4) factors in light of the information
then available. Given the Agency was already developing this proposed
rulemaking which addresses restrictions the use of HFCs in the sector
and subsectors contained in these newer petitions, recognizing the
extensive overlap with the petitions granted on October 7, 2021, and in
an effort streamline rulemakings, EPA is addressing these newer
petitions in this proposal, as well. Copies of the AHRI and IIAR
petitions can be found in the docket for this proposal.

E. Subsection (i)(4) Factors for Determination

Subsection (i)(4) of the AIM Act directs EPA to factor in, to the
extent practicable, a number of considerations in evaluating petitions
and in carrying

[[Page 76762]]

out a rulemaking. EPA is not proposing regulatory text regarding these
factors at this point; however, this section provides a summary of how
the Agency interprets the (i)(4) factors and how EPA considered them
for the current proposal. EPA's consideration of the (i)(4) factors
served as the basis for the restrictions the Agency is proposing for
each sector and subsector covered by this proposal (for additional
discussion see section VII.F.1 of this preamble).
1. How is EPA considering best available data?
Subsection (i)(4)(A) of the AIM Act directs the Agency to use, to
the extent practicable, the best available data in making a
determination to grant or deny a petition or when carrying out a
rulemaking under subsection (i). In this context, EPA interprets the
reference to best available data as an instruction with respect to the
other factors under (i)(4) rather than as an independent factor. EPA
notes best available data may not always mean the latest data. For
example, the latest data may benefit from peer review. This should not
be interpreted as meaning EPA would only consider best available data
to be peer-reviewed data, but that peer review is one consideration
that could inform our understanding of what is the best available data
in particular situations.
The best available data that the Agency is considering for this
proposal includes, but is not limited to, the following: SNAP program
listing decisions; Montreal Protocol reports by TEAP and its Technical
Options Committees, and Temporary Subsidiary Bodies (e.g., Task
Forces); \51\ TSDs from states with HFC restrictions; \52\ information
from other federal agencies and departments (e.g., Department of
Energy); proceedings from technical conferences; and journal articles.
For some of the factors and subfactors, EPA developed TSDs that provide
information from these sources and others that EPA believes to be the
best available data. Furthermore, EPA is considering information
provided to the Agency from industry, trade associations, environmental
non-governmental organizations, academia, standard-setting bodies,
petitioners, stakeholder meetings that the Agency hosted, and other
sources in response to EPA making the petitions publicly available
through Docket ID No. EPA-HQ-OAR-2021-0289, to the extent that we think
such information represented best available data. EPA welcomes comment
on these and other sources that the Agency should consider concerning
the (i)(4) factors.
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\51\ The Technical Economic Assessment Panel is an advisory body
to the parties to the Montreal Protocol and is recognized as a
premier global technical body; reports available at: <a href="https://ozone.unep.org/science/assessment/teap">https://ozone.unep.org/science/assessment/teap</a>.
\52\ An example is CARB's Initial Statement of Reasons and
Standardized Regulatory Impact Assessment (SRIA) report. Available
at: <a href="https://ww2.arb.ca.gov/rulemaking/2020/hfc2020">https://ww2.arb.ca.gov/rulemaking/2020/hfc2020</a>.
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2. How is EPA considering the availability of substitutes?
Subsection (i)(4)(B) of the AIM Act directs EPA to factor in, to
the extent practicable, the availability of substitutes for use of the
regulated substance that is the subject of the rulemaking or petition,
as applicable, in a sector or subsector. Several factors inform the
availability of substitutes for use in sectors and subsectors, based on
the statutory language in subsection (i)(4)(B). As part of EPA's
consideration of availability of substitutes, the AIM Act directs us to
take into account, to the extent practicable, the following subfactors:
technological achievability, commercial demands, affordability for
residential and small business consumers, safety, consumer costs,
building codes, appliance efficiency standards, contractor training
costs, and other relevant factors, including the quantities of
regulated substances available from reclaiming, prior production, or
prior import.
EPA is not proposing definitions for each of these subfactors but
is providing an interpretation of how consideration of the subfactors
relates to the consideration of the availability of substitutes. EPA is
considering the (i)(4)(B) subfactors collectively, with no one
subfactor solely governing the restrictions proposed for any sector or
subsector. EPA is not required to weigh all subfactors equally when
considering the availability of substitutes. Subsection (i)(4) directs
the Agency to consider the factors listed in (i)(4), including
availability of substitutes, ``to the extent practicable.'' EPA
interprets this phrase to extend to its consideration of the subfactors
in (i)(4)(B), given that these subfactors are to be taken into account
in considering the availability of substitutes ``to the extent
practicable.'' Furthermore, not all the subfactors in (i)(4)(B) may be
applicable to each sector or subsector. For example, appliance
efficiency standards would not be applicable to aerosols. Similarly, it
may not be practicable to consider some subfactors in some situations;
for example, there may not be sufficient available data regarding a
specific subfactor. Likewise, EPA anticipates that in most situations,
no single subfactor will be dispositive of its consideration of the
availability of substitutes under subsection (i)(4)(B). For this
proposal, the Agency's consideration of the availability of substitutes
took into account, to the extent practicable, the relevant subfactors
using the best available data. Additional information on some of these
subfactors is available in the docket.
Lower-GWP HFCs and substitute substances and technologies that can
be used in place of higher-GWP HFCs have been the subject of evaluation
for decades. EPA, state and foreign governments, industry standards
organizations, and international advisory panels have long been
identifying and assessing substances that can be used in lieu of
higher-GWP HFCs and their predecessors, often for uses within the
sectors and subsectors subject to this proposal. EPA has therefo

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