Proposed Rule2024-20602
Phasedown of Hydrofluorocarbons: Review and Renewal of Eligibility for Application-Specific Allowances
Primary source
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Published
September 16, 2024
Issuing agencies
Environmental Protection Agency
Abstract
The U.S. Environmental Protection Agency is undertaking this rulemaking to assess the eligibility of six applications to receive priority access to allowances allocated pursuant to the American Innovation and Manufacturing Act of 2020. This rulemaking proposes the framework for how EPA will assess whether to renew the eligibility of applications to receive application-specific allowances; decisions to renew or not renew each of the six applications that currently receive application-specific allowances; revisions to the Technology Transitions regulations as relevant to the specific applications under review; a procedural process for submitting a petition to designate a new application as eligible for priority access to allowances; narrow revisions to the methodology used to allocate allowances to application-specific allowance holders for calendar years 2026 and beyond; and limited revisions to existing regulations. EPA is also proposing to authorize an entity to produce regulated substances for export. Lastly, EPA is proposing certain confidentiality determinations for newly reported information if this rulemaking is finalized as proposed.
Full Text
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[Federal Register Volume 89, Number 179 (Monday, September 16, 2024)]
[Proposed Rules]
[Pages 75898-75943]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20602]
[[Page 75897]]
Vol. 89
Monday,
No. 179
September 16, 2024
Part VII
Environmental Protection Agency
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40 CFR Part 84
Phasedown of Hydrofluorocarbons: Review and Renewal of Eligibility for
Application-Specific Allowances; Proposed Rule
Federal Register / Vol. 89 , No. 179 / Monday, September 16, 2024 /
Proposed Rules
[[Page 75898]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 84
[EPA-HQ-OAR-2024-0196; FRL-10782-01-OAR]
RIN 2060-AV98
Phasedown of Hydrofluorocarbons: Review and Renewal of
Eligibility for Application-Specific Allowances
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The U.S. Environmental Protection Agency is undertaking this
rulemaking to assess the eligibility of six applications to receive
priority access to allowances allocated pursuant to the American
Innovation and Manufacturing Act of 2020. This rulemaking proposes the
framework for how EPA will assess whether to renew the eligibility of
applications to receive application-specific allowances; decisions to
renew or not renew each of the six applications that currently receive
application-specific allowances; revisions to the Technology
Transitions regulations as relevant to the specific applications under
review; a procedural process for submitting a petition to designate a
new application as eligible for priority access to allowances; narrow
revisions to the methodology used to allocate allowances to
application-specific allowance holders for calendar years 2026 and
beyond; and limited revisions to existing regulations. EPA is also
proposing to authorize an entity to produce regulated substances for
export. Lastly, EPA is proposing certain confidentiality determinations
for newly reported information if this rulemaking is finalized as
proposed.
DATES: Comments must be received on or before October 31, 2024. Any
party requesting a public hearing must notify the contact listed below
under FOR FURTHER INFORMATION CONTACT by 5 p.m. Eastern Daylight Time
on September 23, 2024. If a virtual public hearing is held, it will
take place on or before October 1, 2024 and further information will be
provided at <a href="https://www.epa.gov/climate-hfcs-reduction">https://www.epa.gov/climate-hfcs-reduction</a>.
ADDRESSES: The U.S. Environmental Protection Agency (EPA) has
established a docket for this action under Docket ID No. EPA-HQ-OAR-
2024-0196. All documents in the docket are listed on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. Although listed in the index, some
information is not publicly available, e.g., Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the internet and will be publicly available only in hard-
copy form. Publicly available docket materials are available
electronically through <a href="http://www.regulations.gov">http://www.regulations.gov</a> or in hard copy at
the EPA Docket Center, Room 3334, WJC West Building, 1301 Constitution
Avenue NW, Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the EPA Docket Center is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Michelle Graff, U.S. Environmental
Protection Agency, Stratospheric Protection Division, telephone number:
202-564-5387; or email address: <a href="/cdn-cgi/l/email-protection#94f3e6f5f2f2baf9fdf7fcf1f8f8f1d4f1e4f5baf3fbe2"><span class="__cf_email__" data-cfemail="4126332027276f2c282229242d2d24012431206f262e37">[email protected]</span></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 and
abbreviations that are used in this rulemaking that may be helpful
include:
2-BTP--2-bromo-3,3,3-trifluoropropene
AAGR--Average Annual Growth Rate
AES--Automated Export System
AIM Act--American Innovation and Manufacturing Act of 2020
AHRI--Air-Conditioning, Heating, and Refrigeration Institute
APU--Auxiliary Power Unit
ASHRAE--American Society for Heating, Refrigerating, and Air-
Conditioning Engineers
ASA--Application-Specific Allowance
CAA--Clean Air Act
CBI--Confidential Business Information
CBP--U.S. Customs and Border Protection
CF<INF>3</INF>I--Trifluoroiodomethane
CFR--Code of Federal Regulations
CGMP--Current Good Manufacturing Practice
CHIPS Act--Creating Helpful Incentives to Produce Semiconductors Act
of 2022
ClF<INF>3</INF>--Chlorine Trifluoride
CO<INF>2</INF>--Carbon Dioxide
COVID--Coronavirus Disease
CVD--Chemical Vapor Deposition
DFARS--Defense Federal Acquisition Regulation Supplement
DOD--U.S. Department of Defense
DOJ--U.S. Department of Justice
EEI--Electronic Export Information
EV--Exchange Value
EVe--Exchange Value Equivalent
EPA--U.S. Environmental Protection Agency
FAA--Federal Aviation Administration
FAR--Federal Acquisition Regulation
FDA--U.S. Food and Drug Administration
FIFRA--Federal Insecticide, Fungicide, and Rodenticide Act
FSTOC--Fire Suppression Technical Options Committee
FTOC--Flexible and Rigid Foams Technical Options Committee
FR--Federal Register
GHG--Greenhouse Gas
GWP--Global Warming Potential
HCFO--Hydrochlorofluoroolefin
HFC--Hydrofluorocarbon
HFIB--Hexafluoroisobutylene
HFO--Hydrofluoroolefin
ICAO--International Civil Aviation Organization
ICR--Information Collection Request
IPCC--Intergovernmental Panel on Climate Change
ITN--Internal Transaction Number
Kg--Kilogram
MCMEU--Mission-Critical Military End Uses
MCTOC--Medical and Chemicals Technical Options Committee
MDI--Metered Dose Inhaler
MT--Metric Ton
MTEVe--Metric Tons of Exchange Value Equivalent
NAICS--North American Industry Classification System
NF<INF>3</INF>--Nitrogen Trifluoride
ODP--Ozone Depletion Potential
ODS--Ozone-Depleting Substances
OMB--U.S. Office of Management and Budget
PFC--Perfluorocarbon
PII--Personally Identifiable Information
PRA--Paperwork Reduction Act
PU--Polyurethane
RACA--Requests for Additional Consumption Allowance
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
RSV--Respiratory Syncytial Virus
SCPPU--Structural Composite Preformed Polyurethane
SF<INF>6</INF>--Sulfur Hexafluoride
SiN--Silicon Nitride
SiO<INF>2</INF>--Silicon Dioxide
SNAP--Significant New Alternatives Policy
SISNOSE--Significant Economic Impact on a Substantial Number of
Small Entities
TCE--Trichloroethylene
TEAP--Technology and Economic Assessment Panel
TSCA--Toxic Substances Control Act
TSD--Technical Support Document
UMRA--Unfunded Mandates Reform Act
Table of Contents
I. Executive Summary
A. Purpose of the Proposed Regulatory Action
B. Summary of Proposed Actions
II. General Information
A. Does this action apply to me?
B. What is EPA's authority for taking this action?
III. Background
IV. How is EPA assessing whether to extend eligibility for
application-specific allowances?
A. How is EPA interpreting the ``no safe or technically
achievable substitute will be available'' criterion?
B. How is EPA interpreting the insufficient supply of regulated
substances criterion?
C. What is EPA's proposed framework for renewing applications?
[[Page 75899]]
V. Review of the Six Applications Listed in the AIM Act
A. Overview of Total U.S. HFC Consumption
B. Propellants in Metered Dose Inhalers
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
C. Defense Sprays
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
4. Proposed Restriction Under EPA's Technology Transitions
Program
D. Structural Composite Preformed Polyurethane Foam for Marine
Use and Trailer Use
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
4. Proposed Restriction Under EPA's Technology Transitions
Program
E. Etching of Semiconductor Material or Wafers and the Cleaning
of Chemical Vapor Deposition Chambers Within the Semiconductor
Manufacturing Sector
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
F. Mission-Critical Military End Uses
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
G. Onboard Aerospace Fire Suppression
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. What is EPA proposing regarding eligibility for application-
specific allowances?
VI. What are the proposed requirements associated with a petition to
be listed as an application that will receive application-specific
allowances?
VII. Proposed Revisions to Existing Regulations
A. Expected Total HFC Purchases
B. Unique Circumstances
C. Methodology for Entities With Irregular Purchasing History
and Very Small Users
D. Average Annual Growth Rate Calculations
E. Inventory
F. Department of Defense Conferrals
G. Limited Set-Aside for Unique Circumstances Related to MDIs
H. Return of Unneeded Allowances
I. Enabling Auctions of Illegally Imported HFCs
J. Quarterly Exporter Reporting of Internal Transaction Numbers
K. Date of Purchase for Requests for Additional Consumption
Allowances (RACAs)
VIII. Authorization To Produce for Export
A. To what entities is EPA proposing to allocate production for
export allowances?
B. How many production for export allowances is EPA proposing to
issue to Iofina on an annual basis, and for how many years is EPA
proposing to issue these allowances?
C. Would Iofina need to expend consumption allowances for
materials produced with production for export allowances and
subsequently exported?
D. How will this process affect the issuance of other types of
allowances?
E. What are the proposed recordkeeping and reporting
requirements for production for export allowances?
1. Annual Certifications
2. Quarterly Export and Inventory Reporting
3. Recordkeeping
IX. How will EPA handle confidentiality for newly reported
information?
A. Background on Determinations of Whether Information Is
Entitled to Treatment as Confidential Information
B. Data Elements Associated With a Petition To Be Listed as an
Application That Will Receive Application-Specific Allowances
C. Data Elements Related to Proposed Revisions to Existing
Regulations
D. Data Elements Reported to EPA Related to Production for
Export
X. What are the costs and benefits of this action?
XI. Statutory and Executive Order Review
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
I. Executive Summary
A. Purpose of the Proposed Regulatory Action
The U.S. Environmental Protection Agency (EPA) is undertaking this
action to 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 Act directs EPA to implement the phasedown of
hydrofluorocarbons (HFCs) by issuing a limited quantity of
transferrable production and consumption allowances, which entities
must expend to produce or import HFCs. In addition, subsection
(e)(4)(B) of the Act authorizes EPA to allocate allowances exclusively
for the use in specific applications for which there is: (1) no safe or
technically achievable substitute and (2) an insufficient supply of the
HFCs used in the application that can be secured from chemical
manufacturers. The Act listed six applications that would receive
priority access to allowances for a five-year period beginning on
December 27, 2020: propellants in metered dose inhalers (MDIs), defense
sprays, structural composite preformed polyurethane (SCPPU) foam for
marine use and trailer use (hereafter referred to as SCPPU foam for
marine and trailer uses), the etching of semiconductor material or
wafers and the cleaning of chemical vapor deposition (CVD) chambers
within the semiconductor manufacturing sector, mission-critical
military end uses (MCMEU), and onboard aerospace fire suppression. EPA
intends to finalize this proposed rule ahead of the allocation of
calendar year 2026 allowances. Without finalization of this proposed
rule, all applications would be ineligible for allowances for calendar
year 2026.\1\ EPA has created a category of allowances to provide this
priority access, which EPA refers to as application-specific allowances
(ASAs). ASAs are allocated ahead of general pool allowances based on a
methodology intended to determine eligible entities' needs for
regulated substances (see Section VII of this preamble and the
Allocation Framework Rule (86 FR 55116, October 5, 2021) for more
information). After the total ASA quantity is determined, the remaining
allowances are distributed to general pool allowance recipients using a
different methodology.
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\1\ EPA first codified the allocation methodology for general
pool and ASA holders in ``Phasedown of Hydrofluorocarbons:
Establishing the Allowance Allocation and Trading Program Under the
American Innovation and Manufacturing Act'' (hereafter referred to
as the ``Allocation Framework Rule'') (86 FR 55116, October 5,
2021). The methodology for general pool allowance holders was
subsequently updated in ``Phasedown of Hydrofluorocarbons: Allowance
Allocation Methodology for 2024 and Later Years'' (hereafter
referred to as the ``2024 Allocation Rule'' (88 FR 46836, July 20,
2023); the ASA methodology was not updated in the 2024 Allocation
Rule.
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[[Page 75900]]
Subsection (e)(4)(B)(v) of the AIM Act directs EPA to review
applications receiving priority access to allowances not less
frequently than once every five years, and, if the application meets
the criteria above, authorize the eligibility of the application to
receive priority access to allowances for a period of not more than
five years. EPA is proposing how the Agency will interpret these two
criteria to review applications receiving ASAs. EPA is also proposing
decisions to renew or not renew each of the six applications that
currently receive ASAs.
Separately, subsection (i) of the Act authorizes EPA, by
rulemaking, to restrict the use of HFCs in sectors or subsectors where
the regulated substances are used. Under the authority of this
provision, EPA finalized the rule ``Phasedown of Hydrofluorocarbons:
Restrictions on the Use of Certain Hydrofluorocarbons Under the
American Innovation and Manufacturing Act of 2020'' (hereafter referred
to as the ``2023 Technology Transitions Rule''; 88 FR 73098, October
24, 2023), which established restrictions for three sectors and 39
subsectors. The rule exempted applications with a current qualification
for ASAs. As such, if an application is no longer eligible to receive
ASAs, it would become subject to the restrictions established in the
2023 Technology Transitions Rule. EPA is therefore proposing how the
Technology Transitions regulations would apply to applications if EPA
were to determine that those applications are not eligible for renewal
for the full five-year period.
The Act also includes a provision for the public to petition EPA to
designate an application as eligible for priority access to allowances.
EPA is proposing a procedural process for submitting a petition under
this provision and to define minimum required elements of such a
petition. In addition, this rulemaking proposes narrow revisions to the
methodology used to allocate allowances to ASA holders for calendar
years 2026 and beyond as well as other limited revisions to the
existing 40 CFR part 84 regulations. EPA is also proposing to authorize
an entity to produce regulated substances for export for application-
specific uses pursuant to subsection (e)(5). Lastly, EPA is proposing
certain confidentiality determinations for newly reported information
if this rulemaking is finalized as proposed.
B. Summary of Proposed Actions
Application-specific allowance holder review: EPA is describing how
it proposes to interpret the criteria under subsection (e)(4)(B) of the
AIM Act and evaluate the six categories of ASA holders listed in
subsection (e)(4)(B)(v) of the Act. EPA is proposing to renew the
following applications for the full five-year period from 2026-2030:
propellants in MDIs, the etching of semiconductor material or wafers
and the cleaning of CVD chambers within the semiconductor manufacturing
sector, MCMEU, and onboard aerospace fire suppression. EPA is co-
proposing two options for defense sprays: do not renew or renew for a
two-year period through 2027. EPA is co-proposing three options for
SCPPU foams for marine and trailer uses: do not renew, renew for a two-
year period through 2027, or renew for the full five-year period from
2026-2030 with allowance amounts determined based on the exchange value
(EV) of a substitute HFC. In cases where EPA is proposing to change the
status of ASA holders, this proposal also details how the Technology
Transitions regulations would apply to those applications.
Application-specific allowance holder petitions: EPA is proposing
the process and information requirements for submitting petitions under
subsection (e)(4)(B) of the AIM Act which seek the designation of an
application as an essential use.
Application-specific allowance methodology: EPA is proposing
targeted revisions to the existing ASA methodology: to require
companies to provide a total request for allowances for the calendar
year, to expand permissible scenarios that could qualify as unique
circumstances, to use a different allocation methodology for certain
very small users of HFCs and entities with irregular purchasing
history, how to account for inventory in allocation decisions, to
establish a set-aside of allowances for situations that meet the
criteria for unique circumstances related to medical conditions treated
by MDIs, and to allow ASA holders to return a portion of their
allowances voluntarily if they do not intend to use them. EPA is also
proposing new requirements for conferrals of MCMEU allowances and an
opportunity to return unneeded ASAs.
Other regulatory revisions: EPA is proposing other specific
regulatory changes to: clarify the ability of the Federal government to
pursue, if appropriate, auctioning illegally imported HFCs that are
seized by enforcement officials, require exporting companies to report
``Internal Transaction Numbers'' (ITNs) quarterly, and simplify the
reporting on ``date of purchase'' for a Request for Additional
Consumption Allowances (RACA).
Authorization of production for export: EPA is proposing to
authorize an entity to produce for export for application-specific uses
abroad.
Handling of confidentiality for newly reported information: EPA is
proposing certain confidentiality determinations for newly reported
information if this rulemaking is finalized as proposed.
II. General Information
A. Does this action apply to me?
You may be potentially affected by this proposal if you use HFCs in
one of the six applications eligible for an allocation under section
(e)(4)(B)(iv) of the AIM Act. You may also potentially be affected if
you produce, import, export, purify, destroy, reclaim, package, or
otherwise distribute HFCs for end users in one of these six
applications or are a current HFC allowance holder. Potentially
affected categories, North American Industry Classification System
(NAICS) codes, and examples of potentially affected entities are
included in Table 1.
Table 1--NAICS Classification of Potentially Affected Entities
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NAICS code NAICS industry description
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325120....................... Industrial Gas Manufacturing.
325199....................... All Other Basic Organic Chemical
Manufacturing.
325211....................... Plastics Material and Resin
Manufacturing.
325412....................... Pharmaceutical Preparation Manufacturing.
325414....................... Biological Product (except Diagnostic)
Manufacturing.
325998....................... All Other Miscellaneous Chemical Product
and Preparation Manufacturing.
326220....................... Rubber and Plastics Hoses and Belting
Manufacturing.
326150....................... Urethane and Other Foam Product.
326299....................... All Other Rubber Product Manufacturing.
[[Page 75901]]
333415....................... Air-Conditioning and Warm Air Heating
Equipment and Commercial and Industrial
Refrigeration Equipment Manufacturing.
333511....................... Industrial Mold Manufacturing.
334413....................... Semiconductor and Related Device
Manufacturing.
334419....................... Other Electronic Component Manufacturing.
334510....................... Electromedical and Electrotherapeutic
Apparatus Manufacturing.
336212....................... Truck Trailer Manufacturing.
336214....................... Travel Trailer and Camper Manufacturing.
336411....................... Aircraft Manufacturing.
336611....................... Ship Building and Repairing.
336612....................... Boat Building.
336992....................... Military Armored Vehicle, Tank, and Tank
Component Manufacturing.
SIC 373102................... Military Ships, Building, and Repairing.
339112....................... Surgical and Medical Instrument
Manufacturing.
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.
423860....................... Transportation Equipment and Supplies
(except Motor Vehicle) Merchant
Wholesalers.
424690....................... Other Chemical and Allied Products
Merchant Wholesalers.
488510....................... Freight Transportation Arrangement.
541380....................... Testing Laboratories.
541714....................... Research and Technology in Biotechnology
(except Nanobiotechnology).
562111....................... Solid Waste Collection.
562211....................... Hazardous Waste Treatment and Disposal.
562920....................... Materials Recovery Facilities.
922160....................... Fire Protection.
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This table is not intended to be exhaustive, but rather provide a
guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this section could also
be affected. If you have any questions regarding the applicability of
this action to a particular entity, consult the person listed under FOR
FURTHER INFORMATION CONTACT.
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 (42 U.S.C. 7675(k)(1)(A)). 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 in three main ways:
phasing down HFC production and consumption through an allowance
allocation program, facilitating the transition to next-generation
technologies by restricting use of these HFCs in the sector or
subsectors in which they are used, and promulgating certain regulations
for purposes of maximizing reclaiming and minimizing releases of HFCs
from equipment and ensuring the safety of technicians and consumers.
This proposal relates to the first area and addresses restrictions in
the second area for impacted subsectors.
The Act required EPA, for the five-year period beginning on
December 27, 2020, to allocate the full quantity of allowances
necessary, based on projected, current, and historical trends, for the
production or consumption of regulated substances for the exclusive use
in six applications: propellants in MDIs, defense sprays, SCPPU foam
for marine and trailer uses, the etching of semiconductor material or
wafers and the cleaning of CVD chambers within the semiconductor
manufacturing sector, MCMEU, and onboard aerospace fire suppression (42
U.S.C. 7675(e)(4)(B)(iv)(I)). EPA has defined these allowances as ASAs.
EPA intends to finalize this rulemaking ahead of the allocation of
calendar year 2026 allowances. Without finalization of this rulemaking,
all applications would be ineligible for application-specific
allowances for calendar year 2026.
Subsection (e)(4)(B)(v) of the AIM Act requires EPA to review
applications receiving allocations pursuant to subsection (e)(4)(B)(iv)
at least every five years. If pursuant to this review EPA determines
that the requirements of two statutory criteria are met, EPA shall
authorize production or consumption, as applicable, of the exclusive
use of regulated substances in the application for renewable periods of
not more than five years. Specifically, EPA must determine whether: (1)
no safe or technically achievable substitute will be available during
the applicable period for the application; and (2) the supply of the
regulated substance that manufacturers or users of the regulated
substance for that application are capable of securing from chemical
manufacturers is insufficient to accommodate the application.
Separately, an entity may file a petition for an application to
receive ASAs. The AIM Act outlines timeframes and deadlines for EPA to
act on such a petition and how the Agency should assess such a petition
(42 U.S.C. 7675(e)(4)(B)(ii)). Specifically, not later than 180 days
after receiving a petition, EPA must propose and seek public comment on
whether to provide ASAs for the application. Not later than 270
[[Page 75902]]
days after EPA receives a petition, the Agency must take final action
on the petition. Any application determined to be eligible for ASAs
would also be subject to the review requirements in subsection
(e)(4)(B)(v).
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)). However, rules promulgated under subsection (i) ``shall
not apply to . . . an essential use under clause (i) or (iv) of
subsection (e)(4)(B), including any use for which the production or
consumption of the regulated substance is extended under clause (v)(II)
of that subsection'' (42 U.S.C. 7675(i)(7)(B)(i)). Therefore, per
subsection (i)(7)(B)(i), the restrictions promulgated under the
Technology Transitions Program are not currently applicable to any
application receiving an ASA (40 CFR 84.56(a)(2)). To the extent that
this proposal would result in an application no longer receiving an
ASA, this action also proposes the Technology Transitions Program
restrictions that would apply to that application, if any, based on
EPA's consideration of the factors listed in subsection (i)(4) of the
AIM Act, should EPA finalize a determination that an application can no
longer receive an ASA.
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 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. If EPA does not use the negotiated rulemaking
process, subsection (i)(2)(C) requires the Agency to publish an
explanation of the decision not to use that procedure before
commencement of the rulemaking process. 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, namely, whether: (1) there is a need for a
rule; (2) there are a limited number of identifiable interests that
will be significantly affected by the rule; (3) there is a reasonable
likelihood that a committee can be convened with a balanced
representation of persons who can adequately represent the identified
interests and are willing to negotiate in good faith to reach a
consensus on the proposed rule; (4) there is a reasonable likelihood
that a committee will reach a consensus on the proposed rule within a
fixed period of time; (5) the negotiated rulemaking procedure will not
unreasonably delay the notice of proposed rulemaking and the issuance
of the final rule; (6) the agency has adequate resources and is willing
to commit such resources, including technical assistance, to the
committee; and (7) the agency, to the maximum extent possible
consistent with the legal obligations of the agency, will use the
consensus of the committee with respect to the proposed rule as the
basis for the action proposed by the agency for notice and comment.
If a head of agency determines that the use of the negotiated
rulemaking procedure is in the public interest, an agency may convene a
federally chartered advisory committee, and may rely on an appointed
convener under 5 U.S.C. 563(b) to assist with ascertaining the names of
persons who are willing and qualified to represent interests that will
be significantly affected by the proposed rule. If the agency decides
to establish a negotiated rulemaking committee, the agency must publish
in the Federal Register and in relevant publications a notice
announcing the agency's intention to establish a negotiated rulemaking
committee, a description of the subject and scope of the rule, a list
of the interests which are likely to be significantly affected by the
rule, a list of the persons proposed to represent such interests and
the proposed agency representatives, a proposed agenda and schedule for
completing the committee's work, a description of the administrative
and technical support to be provided to the committee by the agency, a
solicitation for comments on the proposal to establish the committee
and on the proposed membership of the committee, and an explanation of
how a person may apply or nominate another person for membership on the
committee. The agency must provide at least 30 calendar days for the
submission of comments and applications related to the membership of
the committee. In establishing and administering such a committee, the
agency shall comply with the Federal Advisory Committee Act, unless an
exception applies. If the committee reaches consensus on a proposed
rule, the committee shall transmit a report containing the proposed
rule to the Federal agency. If the committee does not reach a consensus
on a proposed rule, the committee may transmit a report specifying any
areas upon which consensus was reached. The proposed rule is still
subject to public comment, and for purposes of a rulemaking developed
under the AIM Act, the requirements of CAA section 307(d).
Before proposing the 2023 Technology Transitions Rule, consistent
with AIM Act subsection (i)(2)(A) and (C), EPA considered whether to
negotiate with stakeholders using the negotiated rulemaking procedure
provided for in the Negotiated Rulemaking Act of 1990, decided not to
use such procedures, and published its explanation of that decision in
the Federal Register (86 FR 74080, December 29, 2021).
EPA noted in the final 2023 Technology Transitions Rule that, where
appropriate, EPA will consider 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. EPA
did not, for example, separately consider using negotiated rulemaking
for four petitions that were received after a rulemaking process had
already been commenced regarding the same sectors and subsectors, nor
did EPA consider anew whether or not to use negotiated rulemaking in an
interim final rule (88 FR 88825, December 26, 2023) that amended one
provision of the 2023 Technology Transitions Rule for one subsector.
Similarly, the proposed changes to the Technology Transitions
regulations contemplated in this action would be targeted at a subset
of applications within a subsector subject to those restrictions. EPA
is not addressing a new subsector in this proposal, nor even proposing
a different level of stringency from already promulgated restrictions;
rather, this action proposes only to establish deadlines by which
applications would need to comply with Technology Transitions
regulations in the event that those applications no longer receive
ASAs. EPA does not believe that the public interest would be served by
using the negotiated rulemaking procedure for this limited adjustment
to the Technology Transitions regulations, especially because
timeliness is a concern.
[[Page 75903]]
III. Background
HFCs are anthropogenic \2\ 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 global warming potentials (GWPs) (a measure of the
relative climatic impact of a GHG) that can be hundreds to thousands of
times that of carbon dioxide (CO<INF>2</INF>).
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\2\ 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 and other fluorinated gases.
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HFC use and emissions have been growing worldwide due to the global
phaseout of ozone-depleting substances (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. The United States
ratified the Kigali Amendment on October 31, 2022. Global adherence to
the Kigali Amendment would substantially reduce future emissions,
leading to a peaking of HFC emissions before 2040.
There are hundreds of possible HFC compounds. The 18 HFCs listed as
regulated substances by the AIM Act are some of the most commonly used
HFCs (neat and in blends) and have high impacts as measured by the
quantity of each substance emitted multiplied by their respective GWPs.
These 18 HFCs are all saturated, meaning they have only single bonds
between their atoms, and therefore have longer atmospheric lifetimes
than fluorinated compounds that are unsaturated. More detailed
information on HFCs, their uses, and their impacts is available in the
Allocation Framework Rule (86 FR 55116, October 5, 2021).
IV. How is EPA assessing whether to extend eligibility for application-
specific allowances?
As noted in Section II.B of this preamble, the AIM Act directs EPA
to undertake a review of applications receiving allowances pursuant to
subsection (e)(4)(B)(iv) at least every five years. The statute says
that access to ASAs shall be authorized for a renewed period if two
statutory criteria are met. Specifically: (1) ``no safe or technically
achievable substitute will be available during the applicable period
for that application; and'' (2) ``the supply of the regulated substance
that manufacturers or users of the regulated substance for that
application are capable of securing from chemical manufacturers . . .
including any quantities of a regulated substance available from
production or import, is insufficient to accommodate the application''
(42 U.S.C. 7675(e)(4)(B)(1)). In this section, we outline how EPA
interprets these criteria, what information the Agency will consider in
assessing these criteria, and a proposed framework for evaluating if an
application is eligible for renewal for up to five years. EPA notes
that under the statute, these criteria also apply to new applications
that may be listed, but, aside from Section VI addressing the petition
process, this proposed rulemaking is primarily focused on the renewal
of existing applications. However, EPA's interpretations of the
criteria discussed in this section would apply to future actions to add
new applications. The AIM Act includes additional evaluation
considerations for new applications in subsection (e)(4)(B)(i), but the
Agency is not addressing their interpretation in this rulemaking.
A. How is EPA interpreting the ``no safe or technically achievable
substitute will be available'' criterion?
In order for an application to continue to be eligible to receive
ASAs, EPA must determine ``no safe or technically achievable substitute
will be available'' for the application during the time period under
review (42 U.S.C. 7675(e)(4)(B)(i)(I)). EPA is proposing that the best
interpretation of this criterion is that if there is an available
substitute that is both safe and technically achievable, an application
would not meet this criterion for renewal. EPA acknowledges that the
statutory language could be ambiguous as to whether a substitute must
be both safe and technically achievable. However, reading the statutory
language differently than proposed would seem to create a perverse
outcome. In such a scenario, an application would become ineligible for
ASAs if EPA identified a substitute that was technically achievable,
but not safe. EPA reads the context of subsection (e)(4) as indicating
that Congress intended that listed applications continue to receive
priority access to allowances as long as the application needed to use
regulated substances. In a situation where an identified substitute is
not safe, EPA believes that it would be Congress's intent to continue
to provide priority access to allowances such that the application was
not prematurely forced to transition to an unsafe substitute.
Similarly, it does not seem reasonable to take away access to ASAs when
an identified substitute is safe, but not technically achievable. If
the application cannot technically implement the transition to a
substitute, it seems unrealistic to think that there could be a
transition away from regulated substances. Accordingly, EPA proposes to
interpret the statutory text and surrounding framework such that if EPA
determines there is no safe substitute that is technically achievable
for an application, or a technically achievable substitute is not safe,
the application would meet the first criterion for renewal.
In looking at potential substitutes for an application under
subsection (e)(4)(B)(i)(I), EPA is proposing to consider regulated
substances (i.e., other HFCs), alternative substances (e.g.,
hydrofluoroolefins (HFOs), hydrocarbons), and blends of HFCs and/or HFC
alternatives that can perform the same general function as the current
HFC in use. EPA is proposing that such an interpretation of the term
``substitute'' is most consistent with the statutory language of
subsection (e)(4)(B) as a whole. Specifically, in its direction to EPA
to review applications receiving ASAs every five years, Congress
directed EPA to ``review the availability of substitutes, including any
quantities of the regulated substance available.'' This sentence
structure, indicating that examination of quantities of regulated
substances available would be included as part of analyzing what
substitutes are available, suggests that regulated substances are part
of the universe of substitutes that Congress intended EPA to include in
its review. In addition to EPA's determination that such an approach is
more consistent with the statutory language than an approach of only
looking at non-regulated substances as substitutes, EPA has also
identified other benefits of this interpretation. For example, it would
seem to be a perverse outcome if EPA renewed an application's
eligibility for ASAs at historic quantities where there was an
available substitute that did not require any or required fewer
allowances to procure. Non-HFCs may be able to fill the same role as
the HFC, often functioning as a chemical-for-chemical
[[Page 75904]]
replacement or requiring limited design changes.
EPA is proposing, as part of its assessment of what chemicals may
be determined to be safe as a substitute for applications under review,
to only include substances, including blends of substances, with a
lower GWP than the regulated substance currently in use. As explained
in the Allocation Framework Rule (86 FR 55116, October 5, 2021), the
HFC phasedown's significant benefits are derived from the reduction of
production and consumption of certain chemicals on a GWP-weighted
basis.\3\ Considering higher-GWP substances or blends of substances
would run against this overall objective and could reduce the benefits
of the HFC phasedown, especially if this rulemaking led to the uptake
of higher-GWP non-HFC technologies (e.g., semiconductor manufacturers
transitioning back to using higher-GWP perfluorocarbons (PFCs)). In
addition, this proposed interpretation aligns with the approach under
the 2023 Technology Transitions Rule (88 FR 73098, October 24, 2023),
which established GWP limits for subsectors and considered substitutes
as only those with lower GWPs. Further discussion regarding the sources
EPA is relying on to determine if a substitute is safe (e.g., listed by
EPA's Significant New Alternatives Policy (SNAP) Program) can be found
below.
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\3\ While the AIM Act calls for reduction of HFC production and
consumption on an EV-weighted basis, EV and GWP are numerically
equal. Lower GWP is an important consideration for whether a
substitute is safe, so EPA is using GWP instead of EV in the
discussion in this section of the rule.
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In addition to looking at chemicals that could serve as
substitutes, EPA is also including in its analysis any potentially
available not-in-kind technologies (e.g., finger-pump bottles that
would not use any chemical propellant in lieu of aerosol cans) for
purposes of subsection (e)(4)(B)(i)(I). Such an approach is consistent
with the common understanding of the plain language definition of
``substitute.'' For example, Merriam Webster defines substitute as a
thing that ``takes the place of function of another'' and the Oxford
dictionary similarly notes a substitute is a ``thing acting or serving
in place of another.'' In general, not-in-kind technologies can serve
the need of some applications, so it is appropriate to include them
within the scope of assessing safe and technically achievable
substitutes. It would be unnecessarily limiting to exclude from the
scope of the analysis a technology that performs the same general
function for the application as the current HFC in use does. EPA also
acknowledges that market pressure from the HFC phasedown may encourage
a transition into not-in-kind technologies (and non-HFCs) by limiting
the supply of HFCs on a GWP-weighted basis, while the Technology
Transitions Program prohibits the use of certain HFCs in certain
sectors and subsectors. There is also precedent for considering not-in-
kind technologies under CAA Title VI, such as the SNAP Program and
Nonessential Product Bans, and the AIM Act Technology Transitions
Program, all of which also evaluate not-in-kind substitutes as possible
alternatives to ODS and HFCs, respectively.
EPA is aware that a transition to certain substitutes will require
changes to how the HFCs are used in the application (e.g.,
accommodating a flammable HFC in the manufacturing process). Shifts to
not-in-kind technologies will inherently require a change in
manufacturing and/or the product, so it would be a consistent approach
to also not outright exclude substitute chemicals that would similarly
require a change in manufacturing process or the product.
EPA does not want to unnecessarily limit the scope of the
substitute analysis at this point in time, and therefore is considering
a wide range of possible safe and technically achievable substitutes.
The phasedown of HFCs is still nascent, and, at this point, we cannot
know the full breadth of technologies that will be developed as
replacements for the current HFCs in use.
The Agency is proposing to assess this criterion, specifically that
a substitute is safe, technically achievable, and available, on an
application-wide basis. For applications that use multiple HFCs, a
substitute would need to be able to replace all HFCs used (or multiple
substitutes that replace all individual HFCs would need to be
available). For applications that have sub-applications (e.g., defense
sprays include those intended for humans and those intended for
animals), there would need to be a viable substitute for known sub-
applications. EPA's interpretation is that it would be unreasonable to
consider an application as having met this criterion and thereby
ineligible for renewal unless all known sub-applications can
successfully transition away from their currently used HFC(s).
EPA's evaluation of each application is not intended to be a
company-specific review; the commercialization \4\ of a substitute by
one sub-application suggests the substitute is safe or technically
achievable for the entire application barring evidence, such as testing
data, to the contrary. However, there are additional barriers to
commercialization, which are considered when assessing if the
identified substitute is available for an entire application. In
addition, EPA's interpretation of the statutory language is that
applications are intended to be viewed as a whole and not necessarily
renewed by sub-application. Specifically, the listing of the
applications in subsection (e)(4)(B)(iv)(I) does not break down the
application into sub-applications (e.g., ``defense sprays'' is not
listed as multiple separate applications, e.g., ``personal defense
sprays,'' ``law enforcement defense sprays,'' and ``bear defense
sprays''). Similarly, for applications that use multiple HFCs and have
specific uses for the individual HFCs, it would not be reasonable to
assess this criterion as being met if an application does not have an
available safe and technically achievable substitute for each HFC. It
is EPA's opinion that Congress did not intend for an application to
lose its eligibility for ASAs if it could only transition some, but not
all, of the HFCs currently used in the application.
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\4\ EPA is using the term ``commercialization'' to mean that the
substitute is commercially available and actively being used in an
application's equipment or sold on the market (domestically or
internationally) for use in the application. ``Commercialization''
is not intended to be equated with ``available,'' as explained in
more detail in the main text.
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EPA reviewed a range of sources in developing its assessment of the
availability of safe, technically achievable substitutes for each
application at issue here. Sources include, but are not limited to:
manufacturer announcements; information provided by stakeholders under
part 84 reporting requirements and other communications; relevant
Federal and State regulations; evaluations carried out under the 2023
Technology Transitions Rule (88 FR 73098, October 24, 2023) and the
SNAP Program; standards from industry, standard-setting bodies (e.g.,
American Society for Heating, Refrigerating, and Air-Conditioning
Engineers (ASHRAE)), and the U.S. Government (e.g., the U.S. Food and
Drug Administration's (FDA) standards for MDIs); and peer-reviewed
technical reports. The Technical Support Document (TSD) ``Draft Review
of Applications in the American Innovation and Manufacturing (AIM) Act
Section (e)(4)(B)(4)'' contains a comprehensive array of sources we
looked at for each application, and EPA is taking comment on other
relevant sources that should be considered.
[[Page 75905]]
As noted, EPA is considering the listings under the SNAP Program as
part of its assessment. The SNAP Program has an established history
evaluating substitutes for ODS, many of which are also possible
substitutes for HFCs. Where relevant, in its assessment of the
availability of safe substitutes, EPA considered information from the
SNAP Program, including the listings themselves and the information
underlying SNAP Program decisions. The SNAP Program does not evaluate
substitutes for semiconductor etching and cleaning of CVD chambers.
Some military applications are covered under the SNAP Program. In other
cases, such as MDIs and SCPPU foams, while these applications are
within the scope of the SNAP Program, there may be other sources of
information (e.g., the FDA, company information) that may be more
appropriate.
In its evaluation of substitutes and related decisions (e.g., to
list as acceptable or unacceptable), the SNAP Program carries out a
comparative risk evaluation and considers whether a substitute to an
ozone-depleting substance presents human health and environmental risks
that are lower than or comparable to such risks from other substitutes
that are currently or potentially available for the same uses. The
human health risks analyzed include safety, and in particular,
flammability, toxicity, and exposure (of workers, consumers, and the
general population) to chemicals with direct toxicity; environmental
risks include ozone depletion potential (ODP) and GWP. Information and
data relied upon in the SNAP Program are directly relevant to EPA's
assessment of substitutes in this rulemaking, and therefore EPA has
pulled from and relied upon SNAP Program assessments as appropriate.
EPA evaluates substitutes under the SNAP Program on an ongoing
basis and over time has listed numerous substances as ``acceptable,''
``acceptable, subject to use conditions,'' or ``acceptable, subject to
narrowed use limits.'' ``Acceptable subject to use conditions''
indicates that a substitute is acceptable only if used in a certain
way. Use conditions can include, but are not limited to, warning
labels, compliance with relevant safety standards, and restrictions on
where a substitute is used (e.g., HFC-134a is acceptable for FDA-
approved MDIs for medical purposes but is not acceptable for a majority
of aerosol uses, and some fire suppression substitutes may only be used
in typically unoccupied spaces). EPA can also list substitutes as
``acceptable subject to narrowed use limits'' under SNAP, indicating
that a substitute may be used only within certain specialized
applications within an end use and may not be used for other
applications within that end use (e.g., SNAP has previously listed some
substitutes as acceptable for only narrowed use limits for military or
space- and aeronautics-related applications). In listing of a chemical
as acceptable or acceptable subject to use conditions directly relevant
to the application, the SNAP Program makes an assessment that the
benefits outweigh the risks relative to other alternatives; these
listings are relevant data to support EPA's determination under AIM Act
subsection (e)(4)(B) on whether a substitute is ``safe'' under the
interpretation proposed in this rulemaking.
EPA lists substitutes as ``unacceptable'' under SNAP if the Agency
determines that they may increase overall risk to human health and the
environment, compared to other alternatives that are available or
potentially available for the same use. EPA has listed substitutes as
unacceptable considering the human health criteria described above, as
well as the environmental factors considered under SNAP. For example,
SNAP has listed certain substitutes as unacceptable due to unusually
high ODP, GWP, toxicity and exposure, and flammability (where it is not
clear how to mitigate risks sufficiently). Substitutes listed as
unacceptable in an end use are prohibited for that use and therefore
would not be an available safe or technically achievable substitute for
an application under our proposed interpretation of this criterion.
The Agency is also reviewing the evaluations carried out for the
2023 Technology Transitions Rule (88 FR 73098, October 24, 2023) and
relying on information and assessments done in that rulemaking, as
appropriate. In establishing restrictions, the Technology Transitions
Program factored in the availability of substitutes, considering both
safety and technological achievability, among other factors. The
Technology Transitions Program relied on information from a wide range
of sources when assessing availability, including but not limited to,
SNAP, the Montreal Protocol's Technology and Economic Assessment Panel
(TEAP), standards bodies, and information provided by industry, States,
and environmental non-governmental organizations. Though the Technology
Transitions Program looked subsector-wide, not at specific end uses,
and did not specifically analyze the applications currently receiving
ASAs under subsection (e)(4)(B)(iv), some of these applications (e.g.,
defense sprays and SCPPU foams for marine and trailer uses) have
similarities with the subsectors currently subject to restrictions. As
a result, in carrying out the assessments undertaken in this
rulemaking, EPA is considering relevant information from the Technology
Transition Program's evaluations.
In the assessment undertaken in this rulemaking, EPA is also taking
into account other Federal standards and regulations, both within EPA
and from other U.S. Government agencies. For many applications under
review in this rulemaking, there are applicable regulations and
standards that outline requirements related to the chemicals or
technologies used within an application. In these situations, such
standards and regulations may in some instances limit use of possible
substitutes. In some instances, it may not be possible for a substitute
to ever be used. In other instances, applicable regulations may require
entities to go through a regulatory approval process that would affect
when an application can transition to a substitute. Some examples of
regulations and standards we are considering as part of our proposed
evaluations include EPA's regulations covering pesticides such as bear
spays and dog sprays (sub-applications of defense sprays) under the
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA; 7 U.S.C.
136-136y), the FDA's requirements for MDIs, and the U.S. Federal
Aviation Administration's (FAA) requirements for onboard aerospace fire
suppression. Additional standards and regulations for each application
are discussed further in the relevant chapter of the TSD. EPA invites
comment on any other standards or regulations that entities think EPA
should consider in determining an application's ability to transition
to a substitute.
EPA also considered the work undertaken by the Montreal Protocol's
TEAP in the proposed application assessment given the TEAP's analytical
work on substitutes and alternative technologies to substances
controlled under the Montreal Protocol, including HFCs. TEAP assesses
technical and economic information that serves as the basis for
parties' assessment of control measures of substances under the purview
of the Montreal Protocol. Such information is related to substitutes
that may replace the substances controlled under the Montreal Protocol
and alternative technologies that may be used without adverse impact on
the ozone layer and climate, production and consumption of controlled
substances,
[[Page 75906]]
emissions of controlled substances, potential alternatives for exempted
uses and others, as mandated by the parties. This assessment includes
applications listed in AIM subsection (e)(4)(B)(iv). In addition, TEAP
develops assessments in response to decisions taken by the parties to
the Montreal Protocol, including but not limited to Decision XXVIII/2,
which call for an assessment of alternatives to HFCs every five years.
EPA particularly looked at the 2022 Assessment Reports by the Medical
and Chemical Technical Options Committee, concerning semiconductors,
aerosols, and MDIs; the Flexible and Rigid Foams Technical Options
Committee (FTOC); and the Fire Suppression Technical Options Committee
(FSTOC). TEAP reports have included information on technical
achievability and safety. TEAP reports are developed by experts around
the world and provide insight into the HFC substitutes currently in use
and under development in the United States and globally. As such, EPA
is considering relevant information from these reports when carrying
out the assessment of available safe or technically achievable
substitutes undertaken in this rulemaking.
As described throughout this section, EPA is considering
information from a wide range of sources in its assessment of the
availability of safe or technically achievable substitutes for the
applications receiving ASAs under subsection (e)(4)(B)(iv)(I), and no
one source will be determinative for this criterion. Further
information about sources consulted for each application can be found
in Section V of this preamble and the TSD. EPA invites comment on its
interpretation of ``no safe or technically achievable substitute will
be available'' and the sources it is considering in its assessment of
this criterion.
B. How is EPA interpreting the insufficient supply of regulated
substances criterion?
Under the second criterion for renewal of an application's
eligibility to receive ASAs, EPA must determine that ``the supply of
the regulated substance that manufacturers or users of the regulated
substance for that application are capable of securing from chemical
manufacturers . . . , including any quantities of a regulated substance
available from production or import, is insufficient to accommodate the
application'' (42 U.S.C. 7675(e)(4)(B)(i)(II)). As described here and
in the sections of the proposed rule discussing each of the six
applications, a determination that there is insufficient supply could
be based on a number of different factors, including the available
domestic supply of the HFC(s) at issue, demand for said HFC(s), and
supply chain constraints particular to a given application (e.g.,
federally required purity specifications). Priority access to
allowances through ASAs has the potential to address insufficient
supply of HFCs by allowing entities that use HFCs in an eligible
application to more easily procure HFCs from a domestic supplier by
conferring allowances to authorize production or import or to import
the HFCs themselves.
In this proposed rulemaking, EPA is interpreting this criterion as
requiring an assessment related to the supply of the HFC(s) currently
used in an application's equipment or to manufacture the application's
products for use. Under this proposed interpretation, EPA would not
evaluate HFC(s) currently used exclusively for research and development
in assessing whether there is insufficient supply. EPA recognizes that
the research and development process may find various alternatives to
be unsuitable for an application. Therefore, it would be premature to
consider supply of potentially unsuitable HFC alternatives until such
time as they have been commercialized or are close to
commercialization. Further, it could also have the perverse effect of
limiting research into alternatives if an application's initial
research could prematurely contribute to removal from eligibility for
ASAs.
EPA is proposing to consider regulated substances supplied by
chemical manufacturers in its assessment of supply. EPA interprets the
reference to regulated substances ``from chemical manufacturers'' in 42
U.S.C. 7675(e)(4)(B)(i)(II) as direction from Congress to assess supply
from chemical manufacturers only, and that this direction could cover
both virgin and recovered and reprocessed HFCs. EPA is proposing to
include HFCs produced domestically and those that are produced abroad
and imported in its assessment of supply under this criterion. Congress
directed EPA to consider regulated substances ``from chemical
manufacturers . . . , including any quantities of a regulated substance
available from production or import'' in its assessment under 42 U.S.C.
7675(e)(4)(B)(i)(II). Because of Congress's reference to production and
import of regulated substances, and the lack of any language suggesting
that chemical manufacturers should be read as limited to only U.S.
producers, EPA intends to consider imported material from foreign HFC
producers in addition to regulated substances from domestic producers.
As a result, EPA is proposing not to consider HFC supply held by and
available to entities that do not produce or import HFCs in its
assessment of this criterion. This would exclude quantities of HFCs
held by entities that do not produce or import HFCs with allowances,
potentially including reclaimers, distributors, HFC blenders,\5\ and
HFC repackagers. EPA considers this proposed interpretation to be most
consistent with the statutory language in 42 U.S.C.
7675(e)(4)(B)(i)(II).
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\5\ For a discussion on the difference between producing HFCs
consistent with the AIM Act and blending HFCs to make various
refrigerant blends, see ``Response to Comments'', pg. 193, Docket ID
No. EPA-HQ-OAR-2021-0044, associated with the Allocation Framework
Rule (86 FR 55116) and the discussion in the 2024 Allocation Rule
(88 FR 46863).
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The Agency is proposing to consider multiple sources of data in its
evaluation of whether supply of a regulated substance is insufficient
to accommodate an application. Specifically, in developing the analysis
for each application, EPA has drawn information regarding the total
expected HFC consumption in the United States, global production of
individual HFCs used in the applications, manufacturer announcements
regarding production of specific HFCs, past and projected market trends
for an application that can inform projected demand for the HFC(s) it
uses, and allowance usage by application to date, including conferrals,
imports, and open market purchases by ASA holders, as well as
expenditures of conferred allowances by suppliers to ASA holders. EPA
is intending to consider data from all of these sources collectively in
order to gain a more complete picture of projected supply for the
relevant individual HFC(s), rather than relying on one data point. EPA
is taking comment on these and any other sources the agency should
consider when assessing insufficient supply.
EPA is proposing to assess insufficient supply on an application-
wide basis. If an application uses multiple HFCs, and the supply of at
least one of those HFCs is insufficient to accommodate the application,
EPA would consider the criterion met for the application. EPA
interprets 42 U.S.C. 7675(e)(4)(B)(i)(II) to require the Agency to
review the supply of the regulated substance for each regulated
substance an application uses. If there is an insufficient supply for
one HFC, EPA would determine that this criterion is met, and the
application would continue to be eligible for ASAs, assuming the first
criterion regarding substitutes is also met. EPA is proposing
[[Page 75907]]
that such an approach is the best interpretation of the AIM Act
direction in 42 U.S.C. 7675(e)(4)(B)(i)(II) that if both criteria are
met, ``the Administrator shall authorize the production or consumption,
as applicable, of any regulated substance used in the application.'' A
converse approach would result in EPA not renewing the ASA eligibility
of an application that has no available substitutes and there is an
insufficient supply available of a regulated substance used by that
application. EPA is interpreting the AIM Act to provide ASAs to an
application where at least one regulated substance that manufacturers
are capable of securing is insufficient to accommodate the application,
even if the supply of a different regulated substance is not
insufficient.
In addition to looking generally at the supply of HFCs, EPA is also
considering relevant restrictions, if any, on the type of HFC or
supplier of HFCs that would further limit supply to a particular
application. For example, FDA regulations govern use of pharmaceutical-
grade HFCs by MDI manufacturers. Facilities manufacturing the regulated
substances must comply with FDA regulations, and there are a limited
number of purifiers. EPA is considering any applicable relevant Federal
regulations and standards (examples listed above in Section IV.A.),
including required regulatory approvals and purity levels, that could
limit the supply of the HFC(s) used within an application.
C. What is EPA's proposed framework for renewing applications?
In outlining the requirement that EPA review the applications
eligible for ASAs at least every five years, the AIM Act states that if
EPA determines ``that the requirements described in subclauses (I) and
(II) of clause (i) are met'' then the EPA will renew the application's
eligibility to continue to receive ASAs (42 U.S.C.
7675(e)(4)(B)(v)(II)) (emphasis added). Accordingly, EPA interprets the
statutory language to mean that both criterion (I) of clause (i) (that
a substitute is not available) and criterion (II) (that supply is
insufficient) must be met for an application to be renewed as eligible
for ASAs. If either or both criteria are not met as of January 1, 2026,
EPA proposes to not renew an application's eligibility to receive ASAs.
Put another way, if EPA determines, for example, that supply is not
insufficient to accommodate an application as of January 1, 2026, EPA
would propose to not renew that application's eligibility for ASAs,
regardless of whether a substitute is available.
If both statutory criteria are met as of January 1, 2026, EPA
intends to assess whether an application's fulfillment of a criterion
may change over the following five-year period. The outcome of this
assessment would be determinative of how long EPA will deem an
application eligible to receive ASAs. For example, if EPA determines
that there is no substitute available as of January 1, 2026, but a
substitute will be available by January 1, 2028, EPA would renew the
application's eligibility to receive ASAs for only two years (i.e.,
calendar years 2026 and 2027). Similarly, if supply is deemed
insufficient to accommodate the application as of January 1, 2026, but
the market will change such that supply will not be insufficient to
accommodate the application as of January 1, 2028, EPA would renew the
application's eligibility to receive ASAs for only two years (i.e.,
calendar years 2026 and 2027).
If EPA determines that an application has a safe or technically
achievable substitute available that is a regulated substance, EPA
proposes to evaluate the supply of the substitute HFC and assess if
supply of the substitute HFC is insufficient to accommodate the
application. If the Agency did not do this, the application would not
be eligible for renewal because it had met the substitute criterion,
regardless of the supply of this substitute HFC; EPA sees this as
counter to Congress's intent when it established priority access to
allowances for these applications. Further, it is EPA's assessment that
it would be counterproductive to an application's efforts to transition
away from the currently used HFC(s) if EPA did not consider the supply
of the HFC substitute when assessing eligibility for renewal for ASAs
(i.e., if an application had insufficient supply of the substitute HFC,
an entity may be forced to return to using its original HFC). Under the
framework proposed in this rulemaking, if EPA determines there is an
HFC substitute, but there is insufficient supply of that HFC
substitute, EPA would continue to list the application as eligible for
ASAs. This approach would allow an entity transitioning to a lower-GWP
HFC to remain eligible to receive allowances until supply of that
lower-GWP HFC is no longer insufficient (or a non-HFC substitute is
identified).
EPA is also proposing that if an application is eligible to be
renewed for ASAs for less than five years, the application will not be
reviewed for eligibility for ASAs ahead of the next five-year renewal
period. The direction in the statute under AIM subsection (e)(4)(B)(v)
is to review each ``application receiving an allocation of allowances
under clause (i) or (iv) . . . not less frequently than once every 5
years,'' and, if the criteria are met, EPA shall renew the application
``for renewable periods of not more than 5 years.'' EPA interprets this
language, coupled with the lack of language in the statute directing
EPA to do another review of an application that is no longer eligible
for allowances at the end of its renewal period, as direction that EPA
is not required to re-review this application for eligibility for ASAs
ahead of the next five-year period. Congress's direction to undertake a
renewal is specific to applications receiving ASAs under 42 U.S.C.
7675(e)(4)(B)(i) and (iv). If an application is renewed for only two of
five years at this stage, when the next renewal period arises, it would
not be receiving ASAs under 42 U.S.C. 7675(e)(4)(B)(i) or (iv).
Therefore, EPA is proposing that the best interpretation of the AIM Act
language is that once EPA determines that an application is no longer
eligible for ASAs, EPA would not re-review that application at any
future time. If an application is determined to no longer be eligible
for ASAs and an entity is interested in being considered for
eligibility for ASAs again, the entity would need to petition the
Agency to be evaluated for eligibility, and the Agency would then
undertake the relevant petition review process; see Section VI of this
preamble for further discussion of the petition process requirements.
V. Review of the Six Applications Listed in the AIM Act
EPA reviewed the six applications listed in AIM Act subsection
(e)(4)(B)(iv)(I)--propellant in MDIs; defense sprays; SCPPU foam for
marine use and trailer use; the etching of semiconductor material or
wafers and the cleaning of CVD chambers within the semiconductor
manufacturing sector; MCMEU; and onboard aerospace fire suppression--as
required under 42 U.S.C. (e)(4)(B)(v)(I). Pursuant to that review, in
this rulemaking EPA is proposing and seeking comment on whether the
criteria for renewal described in Section IV of this preamble are met
for any part, or the entirety, of the 2026-2030 time period. This
section begins with an overview of total projected U.S. HFC consumption
and then proceeds into EPA's assessment of the criteria for each
application and proposed decision regarding whether to renew each
application's eligibility to receive ASAs. EPA provides additional
[[Page 75908]]
information in the TSD available in the docket for this rulemaking.
A. Overview of Total U.S. HFC Consumption
This section contains a summary of total projected U.S. HFC
consumption. We assess specific HFC supply considerations on an
application-by-application basis below. EPA provides additional
information regarding this analysis in the TSD.
The global and domestic HFC markets have been rapidly changing
since agreement to the Kigali Amendment to the Montreal Protocol in
2016.\6\ The domestic HFC market has been further changing since the
passage of the AIM Act in 2020 and the subsequent promulgation of
domestic regulations. In 2021, EPA promulgated regulations to implement
the required phasedown of HFC production and consumption in the United
States. Additional regulations coming into effect, as early as January
1, 2025, will also further alter this overall market and impact demand
for certain HFCs. EPA anticipates the market will be dynamic as it
responds to these additional regulations and continues adapting to the
global phasedown of HFCs.
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\6\ The United States ratified the Kigali Amendment in October
2022.
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In the addendum to the HFC Phasedown Regulatory Impact Analysis
(RIA) updated for the 2023 Technology Transitions Rule (88 FR 73098,
October 24, 2023), EPA modeled total HFC consumption to be
significantly lower than the limit established by the statutory
phasedown cap for all years of the phasedown, assuming compliance with
the restrictions. The 2023 Technology Transitions Rule established
subsector-level GWP limits and restrictions on the use of certain
regulated substances. These requirements take effect as early as
January 1, 2025, and as late as January 1, 2028. While some subsectors
already use either HFCs that are below the GWP limit or non-HFC
substitutes, other subsectors will need to transition away from their
currently used HFC to comply with these regulations. In addition, the
proposed rulemaking ``Phasedown of Hydrofluorocarbons: Management of
Certain Hydrofluorocarbons and Substitutes Under Subsection (h) of the
American Innovation and Manufacturing Act of 2020'' (88 FR 72216,
October 19, 2023) (hereafter ``Emissions Reduction and Reclamation
Rule'') has proposed requirements that reclaimed and recycled HFCs be
used for certain equipment in the refrigeration, air-conditioning, and
heat pump sector and fire suppression sector (onboard aerospace fire
suppression, as an application eligible for ASAs, is currently exempt)
as early as early as January 1, 2028. If finalized as proposed, these
requirements are also expected to limit use of virgin HFCs for specific
activities (e.g., servicing for certain refrigeration and air
conditioning subsectors).\7\ In general, there is uncertainty
associated with these estimates, as they are based on expected industry
transitions in response to AIM Act rulemakings and predicted market
dynamics. If HFC consumption is lower than the amount allowed under the
AIM Act in a given year, the result may be that there are more
allowances than are needed to meet market demand in that year.\8\ If
demand for HFCs is lower than the cap, it is possible that general pool
consumption and production allowances, which are currently used to
produce or import HFCs for entities that do not hold allowances and
entities that use HFCs in an application-specific use, would be
available to allow for the production or import of HFCs for use by
entities that historically have relied upon ASAs. While current ASA
holders can access material produced using general pool allowances or
purchase HFCs on the open market, if demand by non-ASA entities is
lower than the cap, it is possible that the ``leftover'' allowances
could be used to supply ASA holders and therefore decrease the need for
ASAs. It is also possible that all allowances are used, and the HFCs
that are not sold in that year are stockpiled in anticipation of future
needs.
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\7\ See Emissions Reduction and Reclamation Rule (88 FR 72216,
72292, October 19, 2023).
\8\ The actions taken pursuant to subsection (h) and (i) of the
AIM Act did not propose to and did not accelerate the HFC phasedown.
The RIAs associated with those actions did not analyze an
acceleration of the HFC phasedown. Rather, HFCs will continue to be
available consistent with the phasedown codified at 40 CFR part 84,
subpart A, and this action does not propose to change that phasedown
schedule. Even if the requirements finalized pursuant to subsections
(h) and (i) in effect reduce the production or consumption of HFCs
used in particular sectors or subsectors faster than the scheduled
reductions under the AIM Act, that does not make those rules an
acceleration under subsection (f).
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The Agency cannot fully predict shifts in chemical production,
domestically and internationally, that may occur. As the HFC phasedown
progresses, EPA anticipates suppliers may focus their business on
supplying lower-GWP HFCs, since production and consumption of these
lower-GWP HFCs requires the expenditure of fewer allowances for the
same volume of substance.\9\ At the same time, sectors that are not yet
ready to transition and are not covered by the 2023 Technology
Transitions Rule (88 FR 73098, October 24, 2023) may continue to use
higher-GWP HFCs and could grow in size.
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\9\ In the Allocation Framework Rule, EPA established a system
whereby allowances are measured on an EV equivalent basis. 86 FR at
55142. To determine the total number of allowances needed, producers
and importers multiply the quantity of the HFC they seek to produce
or import by its EV. For example, an importer would need to expend
143 consumption allowances to import 100 kilograms (kg) of HFC-134a.
Given the variation in EVs, one would need to expend 5.3 allowances
to import 100 kg of HFC-152a.
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EPA also does not yet have data on how the market is reacting to
the 2024 stepdown in HFC allowances (from 90 percent of the HFC
consumption baseline to 60 percent of baseline); at the time of this
proposal the market is only a few months into adjusting to the 2024 HFC
stepdown, and EPA has received only one set of quarterly reports. Among
other things, data on market reactions could inform how the market will
react to the next large stepdown in 2029 (from 60 percent of baseline
to 30 percent of baseline). For example, the decrease in available
consumption allowances could encourage users of HFCs to transition
faster than projected. However, given the significant amount of HFCs in
inventory at the end of 2022, the transition away from HFCs could also
be slower than projected. Though it seems likely that demand could be
below the cap for the 2025-2028 period based on existing regulations,
it is uncertain if 2029 (the fourth year of the five-year renewal
period) will see similar space between consumption and allowed
consumption under the cap. EPA also notes the 2024 stepdown in
permissible production and consumption is unique given its scale and
that it is occurring early in the overall AIM Act implementation. There
will be significantly more information regarding the state of the HFC
market after the January 1, 2024, stepdown at the time EPA is
finalizing this proposal, and EPA intends to analyze available data to
inform its decisions regarding whether supply of individual HFCs is
insufficient to accommodate the individual applications.
In addition, there are also other constraints on supply of specific
HFCs used in the six applications that EPA is taking into consideration
(e.g., purity specifications required by Federal standards and
regulations and limited number of producers), as explained in more
detail in Sections V.B through V.G. of this preamble. Supply chain
dynamics for each of the six
[[Page 75909]]
applications could affect whether general pool allowances would be able
to be used to provide HFCs for each application.
B. Propellants in Metered Dose Inhalers
EPA has been allocating ASAs for regulated substances used for
propellants in MDIs in accordance with subsection (e)(4)(B)(iv)(I)(ff)
of the AIM Act. In the Allocation Framework Rule, EPA defined a
``metered dose inhaler'' as ``a handheld pressurized inhalation system
that delivers small, precisely measured therapeutic doses of medication
directly to the airways of a patient. MDIs treat health conditions such
as asthma and chronic obstructive pulmonary disease and are approved
for such use by the U.S. Food and Drug Administration (FDA)'' (40 CFR
84.3). Patients using MDIs to treat pulmonary conditions work closely
with their healthcare provider to identify the right treatment for
their condition. Pharmaceutical grade HFC-227ea and HFC-134a, purified
from technical grade HFC-227ea and HFC-134a, respectively, are both
used in MDIs as a propellant.
EPA is proposing to determine that no safe or technically
achievable substitute will be available for propellants in MDIs and
that supply of the regulated substance that manufacturers and users are
capable of securing from chemical manufacturers is insufficient to
accommodate this application through calendar year 2030. Therefore, EPA
proposes to renew the eligibility of entities using regulated
substances for propellants in MDIs to receive ASAs for the five-year
period of calendar years 2026 through 2030.
1. Availability of Safe and Technically Achievable Substitutes
EPA has not identified substitutes that it would propose to deem
safe and technically achievable that are available for propellants in
the metered-dose inhalers application at this time. In assessing the
availability of substitutes for MDIs, EPA reviewed information from
sources such as the FDA, the EPA SNAP Program, the TEAP's Medical and
Chemicals Technical Options Committee (MCTOC), industry, scientific
journal articles, and more, which is described in greater detail in the
TSD included in the docket for this proposed action. After reviewing
relevant information and analyses, EPA is aware of two potential
replacements for HFC-134a and HFC-227ea as propellants in MDIs,
specifically HFO-1234ze(E) and HFC-152a.
MDIs, including those containing an alternative propellant other
than HFC-134a or HFC-227ea, are subject to the approval requirements
under section 505 of the Federal Food, Drug and Cosmetic Act. The
process to develop an MDI with a new propellant is complex and will
take time. A sponsor (i.e., MDI manufacturer) will need to reformulate
the MDI product to use the new alternative propellant and conduct a
development program to obtain data, including clinical data, with the
new MDI product. If the development program is successful, a sponsor
will then need to submit an application to the FDA for approval; the
review timeline for a new drug application is 10 to 12 months. The
overall process to develop an MDI product containing a new alternative
propellant is expected to take years.
EPA regularly consulted with the FDA throughout development of this
proposed rule, and the reformulation of the majority of MDIs with an
alternative propellant may extend beyond the end of the renewal period
of 2030. EPA is aware that a few MDI manufacturers have begun the
development process, some of whom are expecting to soon begin Phase 3
trials and FDA has stated that it is possible that they may receive new
drug applications for a small number of MDI products with alternative
propellants by 2030. However, these new drug applications will need to
undergo FDA review. For new drug applications that receive FDA
approval, the commercialization plans for new MDIs are unknown but is
anticipated to take additional time. Unlike for some of the other uses
receiving ASAs where commercialization of substitutes across the entire
application after those products are first available on the market may
take a few years, for MDIs, EPA anticipates that it will take many
years before alternatives are available across the application. That
is, it will take time for reformulation, approval, and
commercialization to occur for each of the individual MDI products used
to treat pulmonary disease. For example, manufacturers of generic MDIs
may face delay in transitioning to alternative propellants, as generic
drug products must be shown to be a duplicate of, and bioequivalent to,
a previously approved drug product and rely on FDA's finding that the
previously approved product is safe and effective. Applicants request
approval for generic drug products, including MDIs, in Abbreviated New
Drug Applications (ANDAs). FDA provides its recommendations for
establishing bioequivalence in its product-specific guidances, which
for orally inhaled products like MDIs, have generally included some
combination of in vitro and in vivo studies, along with recommendations
related to the formulation and device. FDA committed to review 90% of
standard original ANDAs within 10 months from the date of submission,
but often multiple review cycles are necessitated by application
quality. This review time can be extended if a site/facility is not
ready for inspection. The timing of ANDA approval also depends on,
among other things, the patent and exclusivity protections for the
previously approved product.
According to the MCTOC 2022 Assessment Report, the transition from
HFC-134a and HFC-227ea to HFC-152a and HFO-1234ze(E) in MDIs is
expected to begin in non-Article 5 countries \10\ in 2025 and continue
through at least 2032, and no other feasible, lower-GWP MDI propellants
have been identified in the United States and abroad.\11\ HFO-1234ze(E)
and HFC-152a, along with other aerosol propellants, are listed as
acceptable by EPA's SNAP Program and are commercially available and
currently used in commercial and/or technical aerosol products.
Furthermore, they also have most of the requisite physical properties
to function as a propellant in MDIs with significantly lower GWPs than
the current HFCs in use; however, neither propellant has significant
use in pharmaceuticals today and will require extensive clinical
research and FDA approval before they could replace the current HFCs.
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\10\ Non-Article 5 countries are defined as developed countries
under the Montreal Protocol. For a list of Article 5 and non-Article
5 countries see <a href="https://ozone.unep.org/classification-parties">https://ozone.unep.org/classification-parties</a>.
\11\ See <a href="https://ozone.unep.org/system/files/documents/MCTOC-Assessment-Report-2022.pdf">https://ozone.unep.org/system/files/documents/MCTOC-Assessment-Report-2022.pdf</a>.
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In light of the above analysis, it is EPA's assessment that there
is no information before the Agency at the time of this proposal to
suggest that there would be a safe and technically achievable
substitute available prior to the next five-year review.
2. Supply
As previously mentioned, pharmaceutical-grade HFC-134a and HFC-
227ea (also known as HFA-134a and HFA-227ea) are currently used as
propellants in MDIs.
As part of the manufacturing process for MDIs, technical grade HFC-
134a and HFC-227ea are purified into pharmaceutical-grade HFC-134a and
HFC-227ea. Documents the FDA requires as part of the drug approval
process must specify the facility manufacturing the HFC propellant. The
supply of pharmaceutical-grade HFC-
[[Page 75910]]
134a comes from technical grade HFC-134a that is produced at a limited
number of production facilities in other countries, including a single
plant in the United States, and then purified at a single facility in
the United Kingdom and reimported to the United States for consumption
in MDIs. In its analysis of other applications, EPA has noted that HFC-
134a is the most widely available HFC. However, this fact does not
equate to a sizeable supply for the MDI application because MDI
manufacturers are not easily able to switch suppliers of
pharmaceutical-grade HFCs. Unlike other applications, where EPA has
discussed the diverse number of chemical suppliers for HFC-134a
globally, in this instance the options are constrained.
As components of drug products, the use of HFCs in MDIs are subject
to certain FDA requirements. FDA's Current Good Manufacturing Practice
(CGMP) requirements under the statute (21 U.S.C. 351(a)) apply to
drugs, including their components (21 U.S.C. 321(g)(1)), and include
requirements related to methods, facilities, controls, manufacturing,
processing, packing, and holding to assure that drugs meet requirements
for safety, identity, strength, and quality and purity. FDA has also
promulgated CGMP regulations for finished pharmaceuticals in 21 CFR 210
and 211. These CGMP regulations also contain requirements for
manufacturers in their handling, control, storage, and testing of
components used in manufacture of drug products. HFC purification
occurs in dedicated facilities that are subject to FDA CGMP
requirements for drugs and devices, as well as other international
quality standards, as MDI manufacturers may serve markets in addition
to that of the United States. If an MDI manufacturer wanted to change
their supplier of pharmaceutical grade HFC, this would trigger FDA
review. MDI manufacturers who change suppliers of pharmaceutical grade
HFCs would need to provide data to ensure the safety and quality of the
new propellant and submit the data to the FDA for review and approval.
This data may include pharmacology/toxicology data, product quality
data of the new propellant source, and a comparison of the current and
proposed new propellant sources, and quality data that demonstrates the
drug made with the new propellant meets all applicable quality
requirements. Depending upon the comparability of the HFA sources,
additional data may be requested by the FDA (21 CFR 314.70).
There are three suppliers of pharmaceutical-grade HFC-227ea for use
in the United States. One of the suppliers is a producer that purifies
the technical grade HFC-227ea at one of their facilities in the United
States. The second produces and purifies the pharmaceutical-grade HFC-
227ea at their facility in Germany, which is then imported by that
producer for distribution to domestic MDI manufacturers. The third
supplies pharmaceutical-grade HFC-227ea to the United States from their
facility in the United Kingdom. At least two of these facilities also
supply pharmaceutical-grade HFC-227ea globally for MDI manufacture.
Producers of pharmaceutical-grade HFC-227ea must also comply with FDA
requirements as described above, which limits their ability to switch
to other suppliers of HFC-227ea.
3. What is EPA proposing regarding eligibility for application-specific
allowances?
EPA is proposing to renew the eligibility of entities using
regulated substances for propellants in MDIs to receive ASAs for the
five-year period of calendar years 2026 through 2030. EPA is proposing
to determine ``that the requirements described in subclauses (I) and
(II) of clause (i) are met'' in accordance with the requirements of 42
U.S.C. 7675(e)(4)(B)(v)(II). Specifically, for the reasons outlined
earlier in this section, EPA is proposing to determine that no safe or
technically achievable substitute will be available for propellants in
MDIs and that supply of the regulated substance that manufacturers and
users are capable of securing from chemical manufacturers is
insufficient to accommodate propellants in MDIs through calendar year
2030. EPA is proposing to determine that the supply of both HFC-134a
and HFC-227ea is insufficient to accommodate the propellants in MDIs
application.
C. Defense Sprays
Per subsection (e)(4)(B)(iv)(I)(bb) of the AIM Act, EPA has been
allocating ASAs for defense sprays since 2021. EPA defined a ``defense
spray'' as ``an aerosol-based spray used for self-defense, including
pepper spray and animal sprays, and containing the irritant capsaicin
and related capsaicinoids (derived from oleoresin capsicum), an
emulsifier, and an aerosol propellant,'' (40 CFR 84.3). Within this
application, there are four primary uses: bear sprays, dog sprays,
personal defense sprays, and law enforcement sprays. The defense sprays
chapter in the TSD contains more details on these product categories.
HFC-134a is the primary propellant currently used for the majority of
defense sprays and is the only HFC for which EPA has allocated
allowances since 2022. After analyzing information relevant to the
statutory criteria, as outlined in this section and the TSD, EPA is
proposing two options--to not renew the eligibility for entities in
this application to receive ASAs or to renew for two years. EPA is also
taking comment on the possibility of renewing for a full five-year
period.
1. Availability of Safe and Technically Achievable Substitutes
There has already been commercialization of alternatives to HFC-
134a as a propellant in some defense spray uses, and transition is
underway for other parts of the application. Thus, while many defense
sprays currently use HFC-134a as a propellant, EPA is aware of entities
that have already successfully commercialized alternative propellants,
including non-HFCs, in some of their products. The availability of safe
and technically achievable substitutes for this application will
continue to expand, and EPA will take any additional information into
account in the final rulemaking.
All dog defense sprays commercialized in the United States and
registered with EPA under FIFRA use a non-HFC propellant and have never
used an HFC propellant; from company communications, EPA is aware that
at least three dog sprays utilize compressed nitrogen gas. In addition,
EPA is aware from company communications that two bear sprays using
propellants other than HFC-134a are available domestically, one using a
non-HFC, HFO-1234ze(E), and one utilizing a lower-GWP HFC, HFC-152a.
Both products have been available for multiple years. In addition,
there is one bear spray that is manufactured domestically, but sold
into the Canadian market, that also utilizes HFO-1234ze(E). EPA is also
aware of at least one defense spray used on humans available in other
countries, but manufactured in the United States, that uses HFO-
1234ze(E).
The commercialization of defense sprays with alternative
propellants suggests that there are safe and technically achievable
substitutes to HFC-134a available within this application, but it is
not clear that they are immediately available for the entire
application. In other words, there are multiple different uses within
this application, and many of the uses have similar technical
requirements (e.g., large spray volume and distance) and safety
considerations (e.g.,
[[Page 75911]]
flammability). Thus, EPA's assessment is that while there are certain
differences amongst the uses, generally a propellant commercialized for
one use should be safe and technically achievable for another use as
explained in more detail below. It is EPA's understanding that defense
sprays have industry-set technical requirements that differentiate them
from other aerosols, but that outside of FIFRA requirements for bear
sprays,\12\ defense sprays do not need to be certified or comply with
Federal regulatory standards to be sold in the United States. EPA is
aware of some voluntary standards for law enforcement sprays, explained
in more detail in the defense sprays chapter of the TSD, that specify
performance requirements and test methods for the evaluation of these
sprays. EPA's understanding is that defense sprays do not need to be
certified under this standard to be sold into the law enforcement
market.
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\12\ Defense sprays used to deter bears, dogs, and other animals
are considered pesticides under FIFRA, so must comply with related
requirements, including approval for the inert ingredients (e.g.,
the propellant) used in the product. In addition to HFC-134a, both
HFC-152a and HFO-1234ze(E) are approved for use as inert ingredients
for non-food pesticidal use (e.g., animal sprays). Transitioning a
product to another approved propellant is a relatively simple
process that only requires submission of product performance data
(i.e., no tests related to safety, impacts on human health, etc.),
and approval can occur in five to seven months. This action would be
a Pesticide Registration Improvement Act B680 or B681. See <a href="https://www.epa.gov/pria-fees/pria-fee-category-table-biopesticides-and-pollution-prevention-division-bppd-amendments">https://www.epa.gov/pria-fees/pria-fee-category-table-biopesticides-and-pollution-prevention-division-bppd-amendments</a> for more information.
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While some entities have successfully commercialized alternative
propellants, there are steps other entities will need to undertake in
order to use these alternatives, such as their own research and
development process, approval under FIFRA for bear sprays, and
potentially changes to manufacturing facilities. For example, EPA is
aware of at least two defense spray manufacturers that had made
significant investments to potentially transition to a non-HFC as a
propellant that did not pursue the transition due to performance
concerns.\13\ The multiple defense spray products commercialized using
alternative propellants suggests that past challenges can be overcome,
though EPA acknowledges that commercialization of alternative
propellants across this entire application may take a few years.
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\13\ Written testimony submitted for the record from Safariland
and Security Equipment Corporation for the U.S. Senate Committee on
Environment and Public Works hearing on the AIM Act. <a href="https://www.epw.senate.gov/public/index.cfm/2020/3/s-2754-american-innovation-and-manufacturing-act-of-2019-written-testimony-and-questions-for-the-record">https://www.epw.senate.gov/public/index.cfm/2020/3/s-2754-american-innovation-and-manufacturing-act-of-2019-written-testimony-and-questions-for-the-record</a>.
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Outside of what has already been commercialized by some defense
spray companies, EPA is not aware of any other substances under
consideration as safe and technically achievable substitutes for this
application. Multiple propellants, including HFC-152a, HFO-1234ze(E),
and hydrocarbons, have been listed as acceptable under SNAP and
identified as technically and economically feasible alternatives for
propellants in aerosols by the TEAP's MCTOC. However, there are
additional technical demands in the defense spray application that
provide unique challenges as compared to other types of aerosol
applications. For example, given their use for personal protection and
crowd control, defense sprays need to have a larger spray cloud and
longer spray distance, and stakeholders have noted that law
enforcement's use of defense sprays alongside stun guns (e.g., Tasers)
poses specific concerns around flammability. Therefore, alternatives
identified as acceptable for aerosols, such as hydrocarbons, may not be
available for all defense spray uses. SNAP lists substitutes for
aerosols at the end use level, not the application level (e.g., the
Agency has listed substitutes for aerosol propellants, which would
allow for those substitutes in defense sprays), and TEAP's MCTOC has
not specifically discussed or evaluated defense sprays as an individual
use. More information about the specialized nature of defense sprays
can be found in the defense sprays chapter of the TSD.
To inform determinations in this rulemaking, EPA invites comment on
whether the alternatives commercialized for some defense spray uses are
not available for the entire application, including any supporting data
and information; EPA is particularly interested in data regarding
flammability of alternative propellants at the concentrations found in
defense sprays and testing results demonstrating safety risks in the
situations where defense sprays are typically utilized.
2. Supply
The majority of defense sprays currently use HFC-134a as their
propellant. HFC-134a is the most widely produced HFC globally and is
produced in substantial quantities in multiple countries, including the
United States. In 2022, domestic production of HFC-134a was 61,377
metric tons (MT), making up 46 percent of U.S. HFC production on a mass
basis; this production amount is also nearly double the domestic
production amount of the HFC produced in the second highest quantity.
EPA is aware that one domestic producer of HFC-134a is transitioning
its facility to produce a different chemical.\14\ In addition, there
are multiple entities that import HFC-134a. In 2022, 7,363.1 MT of HFC-
134a were imported into the United States. Overall, HFC-134a made up
approximately 32 percent of total U.S. HFC consumption \15\ in 2022 on
a mass basis. This application has very limited demand for HFC-134a in
comparison to U.S. consumption of HFC-134a; allocated ASAs for this
application in 2024 are equivalent to 0.1 percent of calculated
domestic consumption of HFC-134a in 2022, on a metric tons of exchange
value equivalent (MTEVe) basis. In addition, at the end of 2022,
suppliers held 51,902.9 MT of HFC-134a in domestic inventory, which is
equivalent to about 101 percent of calculated consumption of HFC-134a
in 2022, and 1,036.8 MT of HFC-134a was reclaimed; the entities both
holding this material in inventory and reclaiming these HFCs are
broader than EPA's interpretation of chemical manufacturers (see
Section IV.B for more information), so not all of this HFC-134a may be
considered available supply.
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\14\ See <a href="https://www.arkema.com/usa/en/media/news/global/corporate/2022/20221006-two-major-steps-develop-supply-forane-1233zd/">https://www.arkema.com/usa/en/media/news/global/corporate/2022/20221006-two-major-steps-develop-supply-forane-1233zd/</a>.
\15\ Consumption = (Total Production + Production for Feedstock
+ Imports [Virgin and Used])-(Exports [Virgin and Used] +
Destruction).
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However, as described in more detail in Section V.A of this
preamble, the overall market for HFCs and for HFC-134a in particular is
likely to continue changing in light of the AIM Act and other
restrictions. There is uncertainty regarding how the market is reacting
to the stepdown of the level of permissible production and consumption
of HFCs that took effect on January 1, 2024, and EPA anticipates
further market changes as a result of the stepdown taking effect on
January 1, 2029. However, global production capacity is expected to
remain substantial over the coming years, given production will
continue in countries on later HFC phasedown schedules, and EPA expects
continued domestic and global demand for HFC-134a. EPA will analyze any
available information on market adjustment to the January 1, 2024,
stepdown and regulations effective January 1, 2025, in finalizing this
rulemaking.
In considering supply of the regulated substance currently used by
this application, EPA also notes that the Agency is unaware of any
reason why this application cannot use recovered and reprocessed HFCs.
For example, EPA is not aware of any specific purity
[[Page 75912]]
requirements for HFCs used in this application. As a result, the supply
of recovered and reprocessed HFCs that can be secured from chemical
manufacturers is relevant when assessing whether the supply of HFC-134a
is insufficient to accommodate this application. The likeliest source
of these reprocessed HFCs for defense sprays would be reclaimed
refrigerants, which must meet specific purity requirements.\16\ Since
there are no Federal purity requirements or industry purity standards
for HFCs used in aerosols, the purity of reclaimed HFCs is likely the
same or higher than the virgin HFCs used in this application. The
supply of reclaimed HFC-134a in the United States is substantial and
increases the supply of HFC-134a available to this application.
However, as is true in many other parts of EPA's supply analysis, there
is uncertainty regarding the overall supply and demand for reclaimed
HFCs.
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\16\ In alignment with the definition in 42 U.S.C. 7675(b)(9),
EPA defined reclaim as ``the reprocessing of regulated substances to
all of the specifications in appendix A to 40 CFR part 82, subpart F
(based on Air-Conditioning, Heating, and Refrigeration Institute
(AHRI) Standard 700-2016) that are applicable to that regulated
substance and to verify that the regulated substance meets these
specifications using the analytical methodology prescribed in
section 5 of appendix A to 40 CFR part 82, subpart F'' (40 CFR
84.3). Thus, HFC-134a refrigerant that is reclaimed and used by a
different user than the one recovering the refrigerant must meet the
purity requirements of AHRI 700, Standard for Specifications for
Refrigerants. That standard, among other things, requires that
reclaimed HFC-134a must be visibly clean (that is, no visible solids
or particulate), no more than 1.5 percent by volume of air in the
vapor phase, no more than 10 parts per million of water by weight,
and no more than 0.5 percent by weight of other volatile impurities.
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There is additional uncertainty around the supply and demand for
HFC-134a as a result of the 2023 Technology Transitions Rule (88 FR
73098, October 24, 2023). GWP restrictions under the 2023 Technology
Transitions Rule begin taking effect January 1, 2025, with the latest
restriction taking effect on January 1, 2028. Overall demand for HFC-
134a could fall since all subsectors subject to Technology Transitions
restrictions will not be permitted to use neat HFC-134a, as its GWP of
1,430 is greater than the highest GWP limit (i.e., 700). However, many
subsectors subject to Technology Transition restrictions already use
chemicals that fall below the GWP restriction levels, and where this is
the case EPA does not anticipate any change in demand of HFC-134a.
Additionally, some sectors may use blends with HFC-134a as a component
where the GWP is below the applicable limit. Moreover, HFC-134a will
likely continue to be used in other applications not subject to these
restrictions (e.g., heavy-duty trucks), as well as for servicing
existing equipment (e.g., light-duty motor vehicle air conditioning).
HFC suppliers may also shift their production and import practices,
such that supply of HFC-134a changes. EPA intends to review available
information on market shifts that occur when the first set of
Technology Transition restrictions take effect on January 1, 2025, and
where possible will incorporate any relevant information into the
analysis underpinning finalization of this rulemaking. Based on this
additional information, at finalization of this proposed rule, EPA may
be in a position to determine that the supply of HFC-134a is not
insufficient to accommodate this application once all of the Technology
Transition restrictions take effect as of January 1, 2028, if not
earlier (i.e., as early as January 1, 2026).
EPA also intends to finalize a rulemaking under subsection (h) of
the AIM Act, the Emissions Reduction and Reclamation Rule (88 FR 72216,
October 19, 2023), in the summer of 2024. EPA proposed a number of
requirements including those concerning use of reclaimed HFCs for
certain activities. In addition, EPA intends to finalize a rulemaking,
``Trichloroethylene (TCE); Regulation Under the Toxic Substances
Control Act (TSCA)'' (88 FR 74712, October 31, 2023), later this year;
this rulemaking has proposed to ban the use of TCE due to unreasonable
risk of injury to human health. If finalized as proposed, this would
prohibit TCE from being used as a feedstock to manufacture HFC-134a
within eight and a half years from when that rule is finalized. While
this could end the production of HFC-134a in the United States,\17\ it
is unclear how this change would affect overall supply of HFC-134a, as
there is currently still global supply of HFC-134a that could be
imported into the United States. EPA anticipates being able to consider
the projected effects of these other rules prior to finalizing this
rulemaking.
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\17\ Though there are other pathways to produce HFC-134a, the
pathway using TCE is the primary production pathway in the United
States, and it is EPA's understanding that it is complex to change
production pathways.
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Entities do not need to seek or receive ASAs in order to use HFC-
134a in defense sprays. Further, entities do not have to expend an
allowance to purchase HFC-134a from another entity that has imported or
produced the regulated substance. EPA notes that of the six defense
spray entities that have received ASAs at some point for calendar years
2022, 2023, and 2024, three did not receive ASAs in at least one of
those years. EPA is also aware of at least two entities selling bear
sprays that use HFC-134a that have never applied for, and therefore
never received, ASAs. This suggests that at least those two entities
were able to acquire HFC-134a on the open market without having ASAs.
These facts could suggest that ASAs may not be imperative for entities
in this application to access HFC-134a.
In sum, HFC-134a is currently more widely available than other
HFCs, and defense sprays' need for HFC-134a is small compared to the
overall demand for HFC-134a across a range of sectors. At the same
time, there is inherent uncertainty in the HFC market due to future
stepdowns and new regulations coming into effect. Further information
regarding EPA's assessment of the supply of HFC-134a related to the
needs of the defense sprays application can be found in the defense
sprays chapter of the TSD.
EPA is also considering the supply of HFC-152a, as it is used in at
least one defense spray product, as noted above. HFC-152a is produced
in substantial quantities, though the current domestic production of
HFC-152a is about half that of HFC-134a, on a mass basis.\18\ In 2022,
domestic production of HFC-152a was 29,654.9 MT, about 22 percent of
U.S. HFC production by mass. There is currently only one U.S. HFC-152a
production facility, and that producer has announced plans to increase
production by approximately 20 percent by mid-2024.\19\ At the time of
this proposal, the facility expansion is not yet complete, so EPA
cannot say with certainty when it will be available. However, there is
also substantial global production of HFC-152a, which also supplies the
U.S. market. Multiple entities imported HFC-152a in 2022, importing a
total of 5,810.1 MT. Overall, HFC-152a made up approximately 20 percent
of total U.S. HFC consumption in 2022 on a mass basis. In addition, at
the end of 2022, suppliers held 5,076.3 MT of HFC-152a in domestic
inventory, which is equivalent to about 16 percent of calculated
consumption of HFC-152a in 2022. The company that has commercialized
the bear spray using HFC-152a has never received allowances for HFC-
152a, which suggests that at least this entity is able
[[Page 75913]]
to acquire HFC-152a on the open market without having ASAs.
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\18\ See <a href="https://www.epa.gov/climate-hfcs-reduction/hfc-data-hub/expanded-hfc-data">https://www.epa.gov/climate-hfcs-reduction/hfc-data-hub/expanded-hfc-data</a>.
\19\ See <a href="https://www.chemours.com/en/news-media-center/all-news/press-releases/2023/chemours-announces-capacity-increase-of-hfc-152a-providing-reliable-domestic-supply-of-low-global-wa">https://www.chemours.com/en/news-media-center/all-news/press-releases/2023/chemours-announces-capacity-increase-of-hfc-152a-providing-reliable-domestic-supply-of-low-global-wa</a>.
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In addition, HFC-152a has one of the lowest EVs relative to other
regulated HFCs, so fewer allowances are needed to import or produce
HFC-152a in comparison to the same volume of higher-EV HFCs. For
example, an importer would need to expend 143 consumption allowances to
import 100 kg of HFC-134a compared to 12.4 allowances to import 100 kg
of HFC-152a--a greater than 90% reduction. This means that, from a
strictly allowance-focused view, HFC-152a will be easier to acquire
than most other HFCs as the phasedown progresses and the number of HFC
allowances is reduced. Allowances allocated to an end user may
therefore not be necessary to secure production or import of HFC-152a.
Future projections suggest that there could be increased demand for
HFC-152a, although there is inherent uncertainty with how industry will
respond to the phasedown of HFCs at this early stage. HFC-152a has a
GWP that is below all the GWP limits for sectors and subsectors subject
to the 2023 Technology Transitions Rule (88 FR 73098, October 24,
2023). The 2023 Technology Transitions Rule identified HFC-152a as an
available or potentially available substitute for all 13 foam
subsectors, aerosol propellants, motor vehicle air conditioning, and
household refrigerators and freezers.\20\ However, there are also
multiple other acceptable alternatives, including non-HFCs, and, for
subsectors where a transition to another substitute has already
occurred (e.g., motor vehicle air conditioning, household refrigerators
and freezers), it is highly unlikely that a new transition to HFC-152a
would be considered. For subsectors where HFC-152a neat or in blends is
likely under consideration, it is not yet known if there will be any
significant shift toward use of HFC-152a, particularly as many relevant
subsectors have begun to move out of HFCs entirely. For example, the
MCTOC 2022 Assessment report notes that a significant proportion of
aerosols already use non-HFCs as propellants. Similarly, the FTOC 2022
Assessment Report highlights that fluorocarbon use in foams has been
falling for decades, and foams are largely expected to continue
transitioning to non-HFCs, including hydrocarbons, HFOs, and
hydrochlorofluoroolefins (HCFOs). Demand for HFC-152a may therefore
change in future years as subsectors transition to alternatives from
their currently used HFC.
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\20\ See 2023 Technology Transitions Rule (88 FR 73098, October
24, 2023) TSD ``American Innovation and Manufacturing Act of 2020--
Subsection (i)(4) Factors for Determination: List of Substitutes.''
This list is not exhaustive, so it is possible HFC-152a is an
available alternative for other subsectors. In addition, EPA did not
identify information for products or equipment containing certain
substitutes, which may indicate a lack of current commercial demands
for the substitutes in those products or equipment. However, this
did not automatically remove those substitutes from the list of
available substitutes, as commercial demands is only one subfactor
that needed to be considered under subsection (i)(4)(B).
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In sum, while there is a reasonably large supply of HFC-152a that
is expected to increase over the coming years relative to other HFCs,
there is uncertainty around future demand for the reasons described
above.
3. What is EPA proposing regarding eligibility for application-specific
allowances?
Given the rapidly changing landscape for HFC supply and EPA's
assessment of substitute availability application-wide, EPA is
proposing two options based on our current analysis and in anticipation
of additional available information before this proposed rule is
finalized. Specifically, EPA is proposing to finalize one of the
following outcomes: (1) No renewal, such that the application will not
receive ASAs or (2) Renew eligibility for ASAs for two years, such that
ASAs are available for calendar years 2026 and 2027.\21\ EPA is also
seeking comment on renewing eligibility for the full five-year period.
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\21\ The proposed amendatory text included in this Federal
Register notice shows only one of the co-proposed options. This is
for illustrative purposes and should not be read as EPA favoring one
co-proposal over another.
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As explained earlier in this proposal, an application must meet
both criteria to be eligible to receive ASAs. For the reasons described
earlier in this section, EPA is proposing to determine that there is
not a safe and technically achievable substitute that is immediately
available for the entire application, but a safe or technically
achievable substitute will be available for the entirety of the defense
spray application by January 1, 2028. In other words, EPA proposes to
determine that the criterion in subsection (e)(4)(B)(i)(I) is not met
for defense sprays starting January 1, 2028. Under this proposed
determination, even if EPA received information to determine that
supply of the currently used regulated substance was insufficient,
defense sprays would not be eligible for renewal as of January 1, 2028,
unless they have insufficient supply of a substitute HFC, as discussed
in more detail below.
EPA is also proposing to determine that either (1) the supply of
HFC-134a is not insufficient to accommodate this application; or (2)
the supply of HFC-134a will not be insufficient to accommodate this
application as of January 1, 2028. In other words, EPA proposes to
determine that the criterion in subsection (e)(4)(B)(i)(I) is either:
(1) not met at all for this application for HFC-134a, and therefore the
application would not be eligible to receive ASAs starting January 1,
2026; or (2) not met as of January 1, 2028, and therefore the
application would not be eligible to receive ASAs starting January 1,
2028. Under the first option, this means that even if the application
does not have a safe or technically achievable substitute available,
ASAs would not be available for defense spray manufacturers as of
January 1, 2026. For the second option, defense sprays would not be an
eligible application for ASAs as of January 1, 2028, regardless of the
availability of substitutes.
EPA does not have sufficient information to make a definitive
determination on whether supply of HFC-152a is insufficient to
accommodate this application at the time of this proposal. We are
monitoring this issue and will be seeking information on the
alternatives that subsectors subject to Technology Transitions
restrictions transition into and how much additional domestic
production capacity of HFC-152a comes online in the coming year.
EPA is also taking comment on whether defense sprays should be
eligible to receive ASAs for the full five-year period from 2026-2030.
A full five-year renewal could be without restriction or could be based
on and tailored only to the application's need to purchase HFC-152a. As
explained earlier, HFC-152a is used commercially in one bear spray
product, so this latter scenario could be relevant if HFC-152a is an
available safe and technologically achievable substitute for the entire
defense spray application by 2028. Under this scenario, EPA would
follow an approach similar to the option proposed for SCPPU foams for
marine and trailer uses in Section V.D.3.
EPA intends to review comments and other relevant information
received on this proposal to further understand how the market
surrounding this application evolves and the availability of
substitutes application-wide before EPA finalizes this proposed rule.
Specifically, we intend to review additional information on how the HFC
market adjusts to the 2024 stepdown, defense sprays' research into
alternative propellants and related trials (including relevant data on
flammability), what alternatives consumer aerosols transition to (as
they are subject to the
[[Page 75914]]
Technology Transitions restrictions starting in 2025), and research
into alternative propellants intended to be used in technical aerosols
(which are subject to the Technology Transitions restrictions starting
in 2028). EPA invites submission of comment and additional data related
to these data gaps. EPA will consider this new information, in addition
to public comments, in making a final determination for this
application.
4. Proposed Restriction Under EPA's Technology Transitions Program
The 2023 Technology Transitions Rule (88 FR 73098, October 24,
2023) restricts the manufacture and import of all aerosol products that
use HFCs or HFC blends that have a GWP greater than 150. This
restriction begins January 1, 2025, for all aerosols except for those
specifically listed in the final rule as technical aerosols, which have
manufacture and import restrictions starting January 1, 2028. The
listed technical aerosols are applications for which EPA received
sufficient information through the comment period or through EPA's own
analysis indicating that additional time is needed to transition to
substitutes due to various technical requirements, such as non-
flammability and/or a specific vapor pressure. The list of technical
aerosols does not include defense sprays.
The 2023 Technology Transitions Rule exempts applications that
receive ASAs (40 CFR 84.56(a)(2)). However, as finalized in the October
24, 2023, rule, if an application no longer qualifies for ASAs, the
Technology Transitions restrictions then apply.
While most aerosols are required under the Technology Transitions
Program to meet a 150 GWP limit starting on January 1, 2025, the EPA
provided additional time to comply with this limit for some technical
aerosol uses. Most of the U.S. aerosol industry subject to the January
1, 2025, compliance date has already transitioned to using propellants
that meet the 150 GWP limit,\22\ and therefore has available
substitutes for use based on EPA's consideration of the factors listed
in subsection (i)(4)(B) (e.g., technological achievability, commercial
demands, safety, consumer costs, etc.). By contrast, the uses that
received an extension for compliance with the 150 GWP limit until
January 1, 2028, 40 CFR 84.54(a)(16)(i)(A)-(O), currently use HFC-134a
(most often as a propellant) and have limitations that require
additional time ``to reformulate, test, and transition'' to ensure
availability of substitutes under subsection (i)(4)(B) for these
technical uses.
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\22\ See Household and Commercial Products Association (HCPA)
and National Aerosols Association (NAA) Technology Transitions
Petition to EPA dated July 6, 2021. Available in the public docket
at EPA-HQ-OAR-2021-0289-0037.
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EPA is proposing that defense sprays would be considered under the
Technology Transitions Program consistent with technical aerosols, with
the corresponding compliance deadlines on the manufacture and import of
defense sprays using HFCs and blends containing HFCs with a GWP of 150
or greater beginning January 1, 2028, with a three-year sell-through of
those products. Thus, defense sprays manufactured or imported prior to
January 1, 2028, could continue to be sold until January 1, 2031. As
discussed in Section V.C.1 of this preamble, while some defense spray
uses may have substitutes available in the near term that are
technically achievable and safe, EPA's proposed assessment under
subsection (e)(4)(B) is that such substitutes are not immediately
available across all defense spray uses. In particular, the
flammability or specific vapor pressure of potential substitute
propellants present availability concerns for some uses in the near
term. Consideration of technological achievability and safety, as well
as other subsection (i)(4)(B) factors, indicates that a compliance date
of January 1, 2025, for transition of all defense spray uses is not
appropriate, but the approval of substitute propellants as safe under
SNAP and TEAP analyses (see Section V.C.1), as well as EPA's assessment
that many propellant uses in this subsector have been able to
successfully transition to substitutes, provides support for EPA's
proposed finding that all defense sprays will have available
substitutes by January 1, 2028. We invite comment on whether
availability of substitutes for use in defense sprays, particularly
considering those factors enumerated under subsection (i)(4)(B),
indicates that defense sprays could in fact meet the existing 150 GWP
limit restriction if the application ceased being eligible for ASAs on
January 1, 2026. We note that given the January 1, 2028, compliance
date for the transition of the remaining aerosol sector, comments
urging the Agency to provide additional time for compliance beyond that
date will need to provide very specific and detailed information in
support of that request, speaking to the statute's factors under
subsection (i)(4) and in particular the subsection (i)(4)(B) factors.
Under the 2023 Technology Transitions Rule, the labeling
requirements are effective at the same time as the manufacture and
import restrictions, which, if EPA finalizes this action as proposed,
would be January 1, 2028. Recordkeeping and reporting provisions are
effective for all sectors and subsectors under the 2023 Technology
Transitions Rule starting January 1, 2025. EPA proposes that the
recordkeeping requirements would apply to defense spray manufacturers
and importers beginning January 1 of the year that use no longer
qualifies for ASAs, and the first report would be due March 31 of the
following year. For example, if defense sprays are no longer eligible
for ASAs in 2026, manufacturers and importers would need to keep
records as required by the 2023 Technology Transitions Rule starting
January 1, 2026, and submit their first Technology Transitions report
to EPA by March 31, 2027, even if EPA finalizes its proposal that the
150 GWP limit for the manufacture and import of defense sprays using
HFCs would not apply until January 1, 2028.
EPA requests comment on the proposal to consider defense sprays
consistent with technical aerosols for purposes of the Technology
Transitions Program and the restrictions that result from such a
classification, such as the GWP limit that would take effect on January
1, 2028, use restrictions, a three-year sell-through window for
inventory ending January 1, 2031, and labeling and reporting
requirements.
EPA has previously determined that available substitutes for use as
aerosol propellants include HFC-152a (GWP 124) and HFO-1234ze(E) (GWP
<1) (88 FR 73098, October 24, 2023). EPA is also interested in any
supporting data and information related to the availability of
substitutes and whether a different timeline is more appropriate for
transitioning in this application or for a subset of products in this
application.
D. Structural Composite Preformed Polyurethane Foam for Marine Use and
Trailer Use
The third application to which EPA has been allocating ASAs to
since 2022 is SCPPU foam for marine and trailer uses, in accordance
with subsection (e)(4)(B)(iv)(I)(cc) of the AIM Act. In the Allocation
Framework Rule (86 FR 55116, October 5, 2021), EPA defined this
application as ``a foam blown from polyurethane that is reinforced with
fibers and with polymer resin during the blowing process, and is
preformed into the required shape (e.g., specific boat or trailer
design) to increase structural strength while reducing the weight of
such structures'' (40 CFR 84.3). SCPPU foam is different from other
types of
[[Page 75915]]
polyurethane (PU) foams due to its specialized structural properties,
and it is preformed into required shapes (e.g., specific boat or
trailer design). HFC-134a is the current HFC used in the blowing
process for SCPPU foam. After analyzing information relevant to the
statutory criteria, as outlined in this section and the TSD, EPA is
proposing a range of options--to not renew the eligibility for entities
in this application to receive ASAs, to renew for two years, or to
renew access to ASAs for five years with allowances determined based on
the use of a lower-GWP HFC substitute for HFC-134a. EPA is also taking
comment on the possibility of renewing for a full five-year period
consistent with the current allowance allocation approach.
1. Availability of Safe and Technically Achievable Substitutes
EPA anticipates that SCPPU foam for marine and trailer uses'
commercialization of formulations using alternatives to HFC-134a as
blowing agents is well underway and will evolve significantly between
issuance of this proposed rulemaking and its finalization. The Agency
will consider information collected from regulated entities and other
relevant sources through the public comment period and the current
reporting requirements to inform a final determination.
EPA is aware, from manufacturer communications and reporting, of
two substitutes currently under development for this application--an
HFC-152a/cyclopentane blend and an HFO. EPA notes that SNAP has listed
both HFC-152a and cyclopentane as acceptable for all PU foams,
including rigid PU uses in both marine flotation and commercial
refrigeration (the two respective end uses for this application). Based
on information from the manufacturers of SCPPU foam for marine and
trailer uses, EPA understands that the research and development phase
for both potential substitutes is nearing completion and that companies
are nearing a phase where they will be able to commercialize use of
substitutes. If commercialization occurs as companies anticipate and as
shared with EPA, the entire application would be able to use a
substitute different from HFC-134a before January 1, 2026. According to
the information shared with EPA, one substitute seems close to being
commercialized for SCPPU foam for marine use, and the other substitute
seems close to being commercialized for SCPPU foam for trailer use. The
company that is close to commercializing use of the HFC-152a/
cyclopentane blend performed multiple early trial runs with HFOs, all
of which failed to meet their needs, so the company decided to pursue
the HFC-152a blend. On this basis, we are proposing to determine that
the HFO is not an available substitute application-wide for the five-
year period from 2026-2030, given additional research and development
trials are needed, as well as the subsequent ramp up to
commercialization. EPA understands that often different companies use
different blowing agents to produce the same foam. At this time, it is
unclear why an HFC-152a/cyclopentane blend cannot be used across the
entirety of the application and similarly whether at some future date
another blowing agent (e.g., an HFO) might be used application-wide. To
inform determinations in this rulemaking, EPA invites comment on any
potential reasons why an HFC-152a/cyclopentane blend might not be safe
and technically achievable for the entire application, including any
supporting data and information, such as trial data. While there are
two different end uses in this application, the foam used in both sub-
applications is the same (i.e., it is an SCPPU foam).
Other than an HFO and an HFC-152a/cyclopentane blend, EPA is not
aware of other safe and available alternatives at this time. There are
currently a range of alternatives identified as acceptable by SNAP and
as technically proven by the TEAP's FTOC for other PU foams, including
rigid PU uses in both marine flotation and commercial refrigeration.
Alternatives include a lower-GWP HFC (i.e., HFC-152a), hydrocarbons,
and HFOs. However, alternatives identified as acceptable for PU foams
are not necessarily available for SCPPU foam, given the unique
technical requirements for this foam (e.g., specialized structural
properties). SNAP generally lists substitutes at the sector and end use
level, not the application level (e.g., the Agency has listed
substitutes for rigid PU foam, which would allow for those substitutes
in SCPPU foam, but it has not evaluated the use of these substitutes
for SCPPU foam in particular), and TEAP's FTOC did not specifically
discuss or evaluate SCPPU foam as an individual use in its 2022
assessment report. More information about the specialized nature of
SCPPU foam can be found in the SCPPU foam chapter of the TSD.
Aside from the limitations noted above, EPA is not aware of
significant Federal regulatory restrictions on the type of substitutes
that could be considered for this application. EPA is also not aware of
any required standards that SCPPU foam needs to meet to be manufactured
and sold in the United States. The SCPPU foam chapter of the TSD
contains further information on sources consulted, and EPA invites
comment on any additional information the Agency should consider in
analyzing substitutes for this application.
After reviewing the available information, including reports on
progress made by manufacturers of SCPPU foam for marine and trailer
use, EPA has not identified a safe and technically achievable
substitute that is available at the time of this proposal, but
anticipates that substitutes will likely be available soon. We are
monitoring this issue and are seeking information from the entities
that use HFCs in this application on whether progress continues as
anticipated to inform our final determination.
2. Supply
Entities manufacturing SCPPU for marine and trailer uses currently
use an HFC-134a formulation. As described in more detail in Section
V.C.2 of this preamble, HFC-134a is the most widely produced of all
HFCs. There is substantial domestic and global production of HFC-134a.
This application's demand for HFC-134a is very small compared to
domestic consumption; allocated ASAs for this application in 2024 are
equivalent to 0.1 percent of calculated domestic consumption of HFC-
134a in 2022, on an MTEVe basis. However, as noted earlier, the global
and domestic HFC markets are continuing to adapt to regulations
promulgated pursuant to the AIM Act, including the implementation of
the phasedown of production and consumption of HFCs, and other
authorities. EPA anticipates this market will continue to change, and
EPA will analyze additional information as it becomes available ahead
of finalizing this rulemaking. Such additional information will include
whether there were immediate market shifts as a result of both the
stepdown of the level of permissible production and consumption of HFCs
that took effect on January 1, 2024, and regulations effective January
1, 2025.
In addition to changes in the HFC market due to the overall
phasedown of production and consumption, other AIM Act regulatory
programs are expected to take effect both between proposal and
finalization of this rulemaking and during the applicable period under
review in this rulemaking, as described in more detail in Section
V.C.2. These requirements may reduce demand for HFC-134a domestically
for
[[Page 75916]]
certain other uses, though EPA expects continuing demand for HFC-134a
in applications not subject to restrictions will continue. There may
also be new or expanded use of blends with HFC-134a as a component
designed to meet new restrictions. In addition, other EPA regulations
may impact domestic supply of HFC-134a, but global supply should remain
substantial in comparison to this application's demand for HFC-134a.
EPA is currently not aware of any applicable restrictions on where
this application could purchase HFCs, including any purity requirements
or regulatory restrictions on supply. As such, it is EPA's assessment
that this application may be able to use recovered and reprocessed HFCs
supplied by chemical manufacturers. This is relevant in assessing what
supply of regulated substance may be available to an application, since
in such a case EPA does not need to limit its analysis to only virgin
chemicals. The likeliest source of reprocessed HFCs for this
application would be reclaimed refrigerants, which are held to AHRI 700
standards (see footnote 17 in Section V.C.2). Since there are no
Federal purity requirements for HFCs used in foams or any industry
requirements, the purity of reclaimed HFCs is likely the same or higher
than the virgin HFCs used in this application. While EPA is not aware
of specific purity requirements for this application, EPA notes that
efficacy of blowing agents can be influenced by their composition and
purity. As described in more detail in Section V.C.2, the supply of
reclaimed HFC-134a in the United States is significant, though there is
uncertainty regarding the future demand for this material.
As part of this proposed analysis, EPA is also considering the
supply of HFC-152a. As further explained in Section IV.C, as part of
the framework for its analysis EPA is proposing to evaluate the supply
of a substitute HFC if that HFC is a safe or technically achievable
substitute for an application. As outlined in the prior section
(Section V.D.1), EPA's analysis suggests that HFC-152a blended with
cyclopentane appears to be a safe and technically achievable substitute
for this application. EPA is therefore evaluating the supply of HFC-
152a to determine whether it would be insufficient to accommodate this
application. As described in more detail in Section V.C.2, other AIM
Act regulations may increase demand for HFC-152a domestically for
certain uses, though EPA notes that many sectors where HFC-152a is a
technically achievable substitute have already transitioned to other
alternatives. Domestic production capacity is also expected to
increase, but EPA cannot say with certainty when it will be available.
Global supply should also remain substantial in comparison to this
application's demand for HFC-152a.
3. What is EPA proposing regarding eligibility for application-specific
allowances?
In light of the rapid evolution of information regarding both the
availability of substitutes for this sector (including all companies in
this application's stated plans to transition away from HFC-134a before
2026) and HFC supply, EPA is proposing a range of options based on the
current Agency analysis and in anticipation of increased available
information before this proposed rule is finalized. Specifically, EPA
is proposing to finalize any of the following outcomes: (1) no renewal,
such that the application will not receive ASAs, (2) renew eligibility
for ASAs for two years, such that ASAs are available for calendar years
2026 and 2027, or (3) renew eligibility to continue receiving ASAs for
the full five-year period with allowance amounts determined based on
the EV of HFC-152a.\23\
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\23\ The proposed amendatory text included in this Federal
Register document shows only one of the co-proposed options. This is
for illustrative purposes and should not be read as EPA favoring one
co-proposal over another.
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Before finalization of this rule, we anticipate new information to
become available on the supply of HFCs and availability of substitutes
for the application, as outlined in detail in this section. EPA will
consider this new information, in addition to public comments, in
making a final determination for this application.
As explained earlier in this section, the development of safe or
technically achievable substitutes for this application is a rapidly
evolving space, such that multiple possible outcomes can reasonably be
expected to occur through 2030. All entities that have received ASAs
for SCPPU foam for marine and trailer uses to date have told EPA that
they plan to transition to substitutes before January 1, 2026. One
potential outcome at rule finalization is that EPA depends on these
statements to determine that a ``safe or technically achievable
substitute is available for the applicable period'' for this
application. Statements from all of the companies that use regulated
substances to manufacture SCPPU foam that they will transition to
substitutes before the next ASA period could serve as a reasonable
basis to determine that safe and technically achievable substitutes are
available. There are also specific milestones that these entities have
reached, such as one company receiving a final air permit for an
expansion of the manufacturing facility that will use the HFC-152a/
cyclopentane blend, indicating the company is able to move forward with
full-scale testing and commercialization. If the entities' plans shared
with EPA remain the same at the time when EPA is finalizing this
proposed rule, particularly if they have already commercialized use of
the substitutes, it is likely that EPA would determine that a safe or
technically achievable substitute is available for this application. If
EPA makes this determination, SCPPU foam for marine and trailer uses
will not be eligible for ASAs as of January 1, 2026, even if EPA
receives information to determine that supply of the currently used
regulated substance is insufficient, unless the application has
insufficient supply of a substitute HFC, as discussed in more detail
below in this section. However, EPA recognizes there is uncertainty as
to whether plans to commercialize will remain the same, be delayed, or
be subject to unanticipated hurdles that could require additional
evaluation of this alternative. EPA also has less information regarding
the deployment of the HFO alternative outside of statements from the
entity working toward its development and commercialization. Before
finalization of this proposed rule, EPA intends to review and consider,
as appropriate, all available information, specifically regarding
expected timelines and testing data. EPA invites comment regarding the
availability of safe or technically achievable substitutes for this
application. The Agency will continue to collect information from
regulated entities and other relevant sources through the public
comment period and the current reporting requirements to inform a final
determination of whether the criterion in subsection (e)(4)(B)(i)(I) is
met.
EPA is also proposing to determine either: (1) the supply of HFC-
134a is not insufficient to accommodate this application; or (2) the
supply of HFC-134a is not insufficient to accommodate this application
as of January 1, 2028. In other words, EPA proposes to determine that
the criterion in subsection (e)(4)(B)(i)(I) is either: (1) not met at
all for this application for HFC-134a, and therefore the application
would not be eligible to receive ASAs with allowances calculated based
on HFC-134a use starting January 1, 2026; or (2) not met as of January
1, 2028, and therefore the application would not be
[[Page 75917]]
eligible to receive ASAs with allowances calculated based on HFC-134a
use starting January 1, 2028. Under the first option, this means that
even if the application did not have a safe or technically achievable
substitute available, ASAs would not be available for manufacturers of
SCPPU foam for marine and trailer uses as of January 1, 2026. For the
second option, SCPPU foam for marine and trailer uses would not be an
eligible application for ASAs as of January 1, 2028, regardless of the
availability of substitutes. However, if the available substitute is an
HFC with insufficient supply, EPA may determine SCPPU foam for marine
and trailer uses are eligible for renewal for that substitute HFC.
Given the current uncertainty over which EPA anticipates having
more clarity ahead of finalization of this proposed rule, at this time
EPA contends that it could determine that the criterion in subsection
(e)(4)(B)(i)(I) is met now, met as of January 1, 2028, or is not met at
all through the entire renewal period with respect to HFC-152a. Under
the first possible determination (supply of HFC-152a is not
insufficient now), even if the application did not have a safe or
technically achievable non-HFC substitute available as of January 1,
2026, the application would not be eligible for renewal as of that
date. Under the second possible determination (supply of HFC-152a is
not insufficient as of January 1, 2028), the application would not be
eligible for ASAs as of January 1, 2028, even if the application did
not have a safe or technically achievable non-HFC substitute. Under the
third possible determination (supply of HFC-152a is insufficient), the
application would be eligible for ASAs if there was no safe or
technically achievable non-HFC substitute for the entire application.
EPA will monitor reported data over the next year on the noted areas of
uncertainty and invites comment on this issue.
In light of the range of outcomes EPA has proposed regarding its
determinations on whether the criteria in subsection (e)(4)(B)(i)(I)
and (II) are met, EPA is proposing three potential outcomes on whether
and how SCPPU foam for marine and trailer uses may be eligible for
future ASAs: (1) not eligible to receive ASAs; (2) eligible to receive
calendar year 2026 and 2027 ASAs; and (3) eligible to receive ASAs for
the five-year period of calendar years 2026-2030 with allowance amounts
determined based on the EV of HFC-152a. EPA is also taking comment on
SCPPU foam for marine and trailer uses eligibility to receive ASAs
consistent with the current approach through calendar year 2030 ASAs.
EPA also could finalize different outcomes based on how the transition
to substitutes progresses between this proposal and rule finalization.
Under outcome (3), EPA is proposing to allocate allowances based on
an expectation that the application can use HFC-152a. To achieve this,
EPA is proposing to base the calculation of allowance allocations on
the estimated total mass of HFCs needed by the application and allocate
at the level necessary to purchase HFC-152a on an EV-weighted basis.
For example, if a company used 1,000 kg of HFC-134a and 500 kg of HFC-
152a in Year 3 (as defined by the regulatory formula; see Section VII
for further discussion of regulatory formula and proposed revisions),
and HFC-152a substituted for HFC-134a one-for-one on a gram basis for
this application, EPA would multiply 1,500 kg by the applicable average
annual growth rate (AAGR) and then by the EV of HFC-152a to calculate
the company's allowance allocation for the following year. EPA would
not limit which HFCs could be purchased for use in the application once
the allowances are issued. EPA is taking comment on whether the Agency
should apply any relevant mass conversions in this calculation (i.e.,
if an application needed more or less HFC-152a on a gram-by-gram basis
when substituting for HFC-134a) where the total mass of HFCs used would
be multiplied by a mass ratio, as appropriate, then multiplied by the
AAGR.
As outlined in detail elsewhere in this section, before EPA
finalizes this proposed rule, the Agency intends to review available
information and comments received on this proposal to get further
clarity on progress toward commercialization of substitutes, how the
overall HFC market has adjusted to the 2024 stepdown, what alternatives
are adopted by subsectors subject to 2025 Technology Transitions
Program restrictions, and how much additional domestic HFC-152a
production capacity comes online.
4. Proposed Restriction Under EPA's Technology Transitions Program
The 2023 Technology Transitions Rule (88 FR 73098, October 24,
2023) restricts the manufacture and import of foam products that use as
a blowing agent HFCs or HFC blends that have a GWP of 150 or greater
(hereafter, ``foam products''). This restriction begins January 1,
2025. Examples of items subject to this restriction include products
that are foams, such as extruded polystyrene boardstock; products for
blowing foam, such as two-part foam systems for blowing PU foam; and
products that are manufactured using foam, such as boats or
refrigerated trailers.
The 2023 Technology Transitions Rule exempts applications which
receive ASAs (40 CFR 84.56(a)(2)). However, as finalized in the October
24, 2023, rule, if an application no longer qualifies for ASAs, the
Technology Transitions restrictions would apply.
As discussed in the preamble to the 2023 Technology Transitions
Rule, the transition to non-HFC and lower-GWP substitutes is already
well underway or completed for much of the foams sector (see 88 FR
73184). EPA therefore established a uniform GWP limit of 150 for the
entire foams sector starting January 1, 2025. The sole exception to
this restriction for the foams sector was SCPPU foam for marine and
trailer uses, per their receipt of ASAs. As discussed above in Section
V.D.1, EPA proposes that while there are no safe and technically
achievable alternatives available at this time under subsection
(e)(4)(B) specifically for use in SCPPU foams for marine and trailer
uses, we anticipate, based on currently available information, that the
development of substitutes for these uses is progressing rapidly, such
that by the time EPA finalizes this action, substitutes meeting the
(e)(4)(B)(i)(I) criterion may be available. While the list of
considerations under subsection (i)(4)(B) that EPA is to factor in, to
the extent practicable, when considering availability of substitutes
for issuing restrictions under subsection (i) includes factors beyond
those characteristics listed in subsection (e)(4)(B)(i)(I), in this
instance EPA's view is that technological achievability of lower-GWP
substitutes in marine and trailer uses is the primary barrier to
transitioning away from the use of HFC-134a in these two uses. Many of
the factors listed in subsection (i)(4)(B) are not relevant to EPA's
assessment of availability of substitutes for these two uses, such as
building codes, appliance efficiency standards, and contractor training
costs. As noted in Section V.D.1 of this preamble, EPA's SNAP Program
has already listed as acceptable the potential substitutes under
consideration and the entities actively developing the substitutes and
working to bring those substitutes to market are almost certainly
considering costs to consumers and affordability for small business
consumers as part of their efforts.
We propose that the applicability of the restriction on HFC foam
blowing
[[Page 75918]]
agents in the 2023 Technology Transitions Rule to SCPPU foam for marine
and trailer uses will depend entirely on which of the three co-
proposals EPA ultimately finalizes. That is, under co-proposal (1),
where EPA would not renew ASAs for SCPPU for marine and trailer uses as
of the effective date of a final rule based on this proposal,
requirements of the Technology Transitions Program, which include
labeling, reporting, recordkeeping, and restrictions on HFCs, would
apply beginning January 1, 2026. Under co-proposal (2), where EPA would
renew ASAs for SCPPU for marine and trailer uses for 2026 and 2027,
requirements of the Technology Transitions Program would apply
beginning January 1, 2028. For both co-proposals (1) and (2), EPA
proposes that the recordkeeping requirements would apply to
manufacturers of SCPPU foams for marine and trailer uses beginning
January 1 of the year those uses no longer qualify for ASAs, and the
first report would be due March 31 of the following year, as discussed
above in Section V.C.4. For example, under co-proposal (1),
manufacturers would need to keep records as required by the 2023
Technology Transitions Rule starting January 1, 2026, and submit their
first Technology Transitions report to EPA by March 31, 2027; under co-
proposal (2), manufacturers would need to keep such records starting
January 1, 2028, and would submit their first Technology Transitions
report by March 31, 2029. Under co-proposal (3), where EPA would renew
ASAs for SCPPU for marine and trailer uses based upon the use of HFC-
152a instead of HFC-134a, SCPPU for marine and trailer uses would
continue to be exempt from the 2023 Technology Transitions Rule. The
requirements under each co-proposal for SCPPU for marine and trailer
uses are summarized in Table 2 below. EPA is interested in data and
information related to the availability of substitutes and the proposed
timeline for transitioning in this application.
Table 2--Applicability of Technology Transitions Requirements Under Co-Proposals for SCPPU for Marine and
Trailer Uses
----------------------------------------------------------------------------------------------------------------
Technology transitions Date technology Date technology
Co-proposal GWP limit and transitions labeling transitions reporting
compliance date requirements begin requirements begin
----------------------------------------------------------------------------------------------------------------
(1) No renewal of ASAs............... GWP limit of 150 January 1, 2026........ First report due March
beginning January 1, 31, 2027, including
2026. data from January 1,
2026, through December
31, 2026.
-------------------------------------------------
(2) Renew eligibility for ASAs for GWP limit of 150 First report due March 31, 2029, including data
2026 and 2027. beginning January 1, from January 1, 2028, through December 31,
2028. 2028.
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(3) Renew eligibility for 2026-2030 Because application continues to be eligible for ASAs, it is exempt from
with allowance amounts determined Technology Transitions requirements.
based on the EV of HFC-152a.
----------------------------------------------------------------------------------------------------------------
E. Etching of Semiconductor Material or Wafers and the Cleaning of
Chemical Vapor Deposition Chambers Within the Semiconductor
Manufacturing Sector
EPA has been allocating ASAs for regulated substances used for the
etching of semiconductor material or wafers and the cleaning of CVD
chambers within the semiconductor manufacturing sector in accordance
with subsection (e)(4)(B)(iv)(I)(dd) of the AIM Act. In the Allocation
Framework Rule, EPA defined ``etching'' in the context of semiconductor
manufacturing as ``a process type that uses plasma-generated fluorine
atoms and other reactive fluorine-containing fragments that chemically
react with exposed thin films (e.g., dielectric, metals) or substrate
(e.g., silicon) to selectively remove portions of material. This
includes semiconductor production processes using fluorinated GHG
reagents to clean wafers.'' (40 CFR 84.3). EPA defined ``chemical vapor
deposition chamber cleaning'' (hereafter referred to as ``chamber
cleaning'') in the context of semiconductor manufacturing as ``a
process type in which chambers used for depositing thin films are
cleaned periodically using plasma-generated fluorine atoms and other
reactive fluorine-containing fragments'' (40 CFR 84.3). At the time of
this proposal, EPA is aware of three HFCs that are used for this
application in manufacturing. HFC-23 is commonly used for selective dry
etching of silicon dioxide (SiO<INF>2</INF>) and silicon nitride (SiN),
while HFC-32 and HFC-41 are used in high-aspect-ratio hole etching.
HFC-23, HFC-32, and HFC-41 may also be minimally used in chamber
cleaning processes.
EPA is proposing to determine that no safe or technically
achievable substitute will be available for the semiconductor
application and that supply of the regulated substance that
manufacturers and users are capable of securing from chemical
manufacturers is insufficient to accommodate the semiconductor
application through calendar year 2030. Therefore, EPA proposes to
renew the eligibility of entities using regulated substances for the
defined semiconductor application to receive ASAs for the five-year
period of calendar years 2026 through 2030.
1. Availability of Safe and Technically Achievable Substitutes
EPA has not identified any substitutes that it would propose to
deem safe and technically achievable that are available for the
entirety of the defined semiconductor application.
In developing this assessment, EPA reviewed information from
industry trade groups, the TEAP's MCTOC, the Intergovernmental Panel on
Climate Change (IPCC), scientific journal articles, and more. The
sources examined by EPA are outlined in greater detail in the TSD
included in the docket for this proposed action.
The MCTOC 2022 Assessment report reviewed HFC gases commonly used
in semiconductor manufacturing, along with their alternatives, using
the following criteria: commercially available, technically proven,
environmentally sound, economically viable and cost effective, safe to
use in industrial applications considering flammability and toxicity
issues, and easy to use and maintain.\24\ Based on this report and
other sources, EPA is
[[Page 75919]]
aware that semiconductor manufacturers currently utilize other
fluorinated gases, such as sulfur hexafluoride (SF<INF>6</INF>),
nitrogen trifluoride (NF<INF>3</INF>), some saturated PFCs (i.e.,
CF<INF>4</INF>, C<INF>2</INF>F<INF>6</INF>, c-
C<INF>4</INF>F<INF>8</INF>), and some unsaturated PFCs (i.e.,
C<INF>4</INF>F<INF>6</INF>, C<INF>5</INF>F<INF>8</INF>) for the
processes of etching and chamber cleaning. The MCTOC 2022 Assessment
report lists these chemicals as both commercially available and
technically proven and can be used as substitutes for etching and
chamber cleaning. In developing its proposed determination regarding
substitutes, however, EPA did not consider many of these chemicals in
its proposed consideration of the availability of safe and technically
achievable substitutes because of their higher GWPs, lower utilization
rates (i.e., higher emission rates), or higher toxicity than HFCs.
Sulfur hexafluoride (SF<INF>6</INF>), which is used in the etching of
silicon, silicon dioxide (SiO<INF>2</INF>), and silicon nitride (SiN),
as well as chamber cleaning, has a 100-year GWP of 22,800. Nitrogen
trifluoride (NF<INF>3</INF>), which is used in the etching of silicon
and silicon nitride (SiN), as well as for chamber cleaning, has a 100-
year GWP of 17,200. Saturated PFCs, used in the etching of silicon,
silicon dioxide (SiO<INF>2</INF>), and other materials, have a 100-year
GWP ranging between 7,390 to 12,200. Saturated PFCs are also difficult
to abate and have relatively low utilization rates.
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\24\ See <a href="https://ozone.unep.org/system/files/documents/MCTOC-Assessment-Report-2022.pdf">https://ozone.unep.org/system/files/documents/MCTOC-Assessment-Report-2022.pdf</a>.
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Unsaturated PFCs are used in high-aspect-hole-ratio etching. They
have GWPs of less than two; however, these compounds have not been
widely adopted at least in part since these chemicals can only be used
in certain processes and are not necessarily viable for all types of
etching, etching all materials, or chamber cleaning. For example,
unsaturated PFCs are not known to be used in chamber cleaning, so the
Agency does not consider unsaturated PFCs as available for the entire
application.
The MCTOC 2022 Assessment report also lists other compounds that
are currently being studied for use but are not yet technically proven,
are not considered safe or easy to use, and may have additional
toxicity concerns. These chemicals include carbonyl sulfide, HFO-
1336mzz(E), PFC-1216, chlorine trifluoride (ClF<INF>3</INF>),
hexafluoroisobutylene (HFIB), and trifluoroiodomethane
(CF<INF>3</INF>I). Carbonyl sulfide, used in certain etching
applications, is also highly flammable and toxic. HFO-133mzz(E) is
being considered as a replacement for certain etching chemicals. PFC-
1216 is being studied for use in etching silicon dioxide
(SiO<INF>2</INF>). Chlorine trifluoride (ClF<INF>3</INF>) may be used
for chamber cleaning for Low Pressure CVD chambers but is extremely
flammable and is not considered safe or easy to use. Although not known
to currently be used, hexafluoroisobutylene (HFIB) could be used in
certain etching applications for silicon containing material.
Trifluoroiodomethane (CF<INF>3</INF>I) is used for etching of silicon
dioxide (SiO<INF>2</INF>) and silicon nitride (SiN), but the MCTOC 2022
Assessment report does not list it as safe or easy to use.
EPA is aware of certain HFCs that may be in the early stages of
research for high-aspect-ratio hole etching, such as HFC-134a and HFC-
125. ASA holders have stated that research on lower-GWP alternatives is
ongoing and there are currently no known alternatives to HFCs, PFCs,
and nitrogen trifluoride (NF<INF>3</INF>), and any alternatives would
not be commercially available until at least 2030.
In light of the above analysis, EPA has not identified a safe and
technically achievable substitute that is available at the time of this
proposal. When a substitute or substitutes are identified for the
entirety of the application, it would still take significant time to
replace the current HFC(s) with the substitute(s). One industry trade
group has stated that semiconductor technologies require at least 10
years from fundamental research to high volume manufacturing to
innovate and implement new technologies and their associated raw
materials. Given that no promising substitutes have been identified,
there is no information before the Agency at the time of this proposal
to suggest that there would be a safe and technically achievable
substitute available prior to the next five-year review.
2. Supply
HFC-23, HFC-32, and HFC-41 are all currently used in the etching of
semiconductor material or wafers and the cleaning of CVD chambers
within the semiconductor manufacturing sector. As described earlier in
Section IV.B of the preamble, EPA is proposing to determine that an
application meets this criterion if EPA determines that any of the HFCs
currently used in an application's equipment or to manufacture the
application's products for use have insufficient supply.
As described above in Section E of this preamble, HFC-23 is used in
the etching of silicon dioxide (SiO<INF>2</INF>) and silicon nitride
(SiN) and is also used minimally in chamber cleaning. In 2022, domestic
producers produced approximately 1,049.3 MT of HFC-23. 876.2 MT were
subsequently destroyed, and one producer sold 5.2 MT of this HFC-23 for
consumptive uses, which could be used for semiconductors as well as
other uses. In addition, there were about a half dozen entities that
imported HFC-23 with total amount of imports equaling 125.6 MT.
Overall, HFC-23 made up only 0.07 percent of total U.S. HFC consumption
in 2022 on a mass basis. Moreover, as HFC-23 has the highest EV, it may
be possible that this supply is further constricted in the future as
the phasedown progresses and the number of available allowances is
reduced. As stated elsewhere in this proposed rule, EPA recognizes that
there is inherent uncertainty regarding HFC production, and in
particular for HFCs with a more limited number of production facilities
and/or higher GWPs than other regulated HFCs, this uncertainty may be
greater. Therefore, EPA understands there will be changes to the market
conditions resulting from the domestic and global phasedown of HFC
production and consumption.
In addition, the use of HFC-23 in the semiconductor manufacturing
application is large compared to the annual consumption of HFC-23. In
2022, semiconductor ASA holder purchases \25\ of HFC-23 accounted for
about 81 percent of calculated consumption of HFC-23. Furthermore, at
the end of 2022, suppliers held 304.0 MT of HFC-23 in domestic
inventory, which is equivalent to about 293 percent of calculated
consumption of HFC-23 in 2022; not all of this HFC-23 may be considered
available supply, as the entities both holding this material in
inventory and reclaiming these HFCs are broader than EPA's
interpretation of chemical manufacturers (see Section IV.B for more
information).
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\25\ For this calculation, EPA is using purchases in 2022
instead of allowances allocated so that percent of consumption can
be calculated for each HFC.
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EPA also analyzed the supply of HFC-32. In 2022, the one domestic
producer of HFC-32 produced 17,744.3 MT of HFC-32. There were also over
a dozen entities that imported HFC-32, with total import quantities
equaling 9,885.3 MT. Overall, HFC-32 made up approximately 17 percent
of total U.S. HFC consumption in 2022 on a mass basis. The use of HFC-
32 in the semiconductor manufacturing application is small compared to
the annual consumption of HFC-32. In 2022, semiconductor ASA holder
purchases of HFC-32 accounted for less than 0.035 percent of calculated
consumption of HFC-32. At the end of 2022, suppliers held 21,435 MT of
HFC-32 in domestic inventory, which is equivalent to about 80 percent
of calculated consumption of HFC-32 in 2022; similar to considerations
for
[[Page 75920]]
supply of HFC-23 and for other applications, not all of this inventory
may be considered available.
Another factor EPA is considering is the impact that other
regulatory actions may have for the available supply of HFC-32. As
described in more detail above in Section V.A, the overall market for
HFCs is likely to continue changing in light of AIM Act and potentially
other restrictions. There is particular uncertainty regarding demand
for HFC-32. The 2023 Technology Transitions Rule (88 FR 73098, October
24, 2023) set a GWP threshold of 700 for certain sectors and subsectors
where previously higher-GWP HFCs or HFC blends have been used. HFC-32
has a GWP of 675 and may be a suitable alternative in those sectors and
subsectors. In other cases, the 2023 Technology Transitions Rule set a
GWP threshold of 150 and thus HFC-32 could not be used unless as a
component of blends. The first set of restrictions under the 2023
Technology Transitions Rule have compliance dates of January 1, 2025,
with the latest compliance dates taking effect on January 1, 2028.
Additionally, the proposed Emissions Reduction and Reclamation Rule (88
FR 72216, October 19, 2023) proposes requirements for the use of
recycled or reclaimed HFCs for certain uses, as discussed elsewhere in
this preamble. When finalized, that rule may affect the use of
reclaimed HFC-32.
EPA also analyzed the supply of HFC-41. There is one domestic
supplier of HFC-41 that produced 22.2 MT of HFC-41 in 2022. In
addition, there were multiple entities that imported HFC-41, with total
import quantities equaling 38.3 MT. Overall, HFC-41 made up only 0.03
percent of total U.S. HFC consumption in 2022 on a mass basis. The use
of HFC-41 in the semiconductor manufacturing application is moderately
large compared to the annual consumption of HFC-41. In 2022,
semiconductor ASA holder purchases of HFC-41 accounted for 21.5 percent
of calculated consumption of HFC-41. At the end of 2022, suppliers held
26.7 MT of HFC-41 in domestic inventory, which is equivalent to about
60 percent of calculated consumption of HFC-41 in 2022; as noted for
the supply of HFC-23 and HFC-32 and for other applications, not all of
this inventory may be considered available.
One factor that plays into the sufficiency of supply of these HFCs
is the purity specifications used by individual companies in the
semiconductor manufacturing sector. While there is no Federal standard
or regulation governing the purity of HFCs used in semiconductor
manufacturing, EPA is aware that individual companies in this sector
set their own requirements. HFCs purchased for use in semiconductor
manufacturing is produced at around 95-97 percent purity and then
typically is purified to 99.999-99.9999 percent purity before it is
used by semiconductor manufacturers. Supplying refined HFCs to end
users can take up to one year, as purifiers require long lead times.
These purity requirements are also relevant when considering if
reclaimed HFCs can be used in this application. EPA notes that virgin
HFCs produced for semiconductor use are typically only at 95-97 percent
purity, so EPA is not aware of why reclaimed HFCs cannot also be
purified to industry specifications; EPA invites comments on this. Of
the three HFCs utilized by the semiconductor industry, only HFC-23 and
HFC-32 were reclaimed in 2022 and thereby could be a source of supply
for this application, though the amount of reclaimed material is small.
In addition, it is possible to capture the unreacted process gases used
in semiconductor manufacturing, but the reclamation of fluorinated
gases from the semiconductor manufacturing process is not currently
economically viable.
There are other factors that may further impact the supply of HFCs
for this application. The Creating Helpful Incentives to Produce
Semiconductors Act of 2022 (CHIPS Act) has allocated over 50 billion
dollars to semiconductor research, development, manufacturing, and
workforce development in the United States, which has led to additional
investment by semiconductor manufacturers. The U.S. market share of
memory chip production is projected to grow from less than 2 percent to
up to 10 percent over the next decade.<SUP>26 27</SUP>
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\26\ See <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/21/fact-sheet-biden-harris-administration-bringing-semiconductor-manufacturing-back-to-america-2/">https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/21/fact-sheet-biden-harris-administration-bringing-semiconductor-manufacturing-back-to-america-2/</a>.
\27\ See <a href="https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/semiconductor-fabs-construction-challenges-in-the-united-states">https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/semiconductor-fabs-construction-challenges-in-the-united-states</a>.
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3. What is EPA proposing regarding eligibility for application-specific
allowances?
EPA is proposing to renew the eligibility of entities using
regulated substances for the etching of semiconductor material or
wafers and the cleaning of CVD chambers within the semiconductor
manufacturing sector to receive ASAs for the five-year period of
calendar years 2026 through 2030. EPA is proposing to determine ``that
the requirements described in subclauses (I) and (II) of clause (i) are
met'' in accordance with the requirements of 42 U.S.C.
7675(e)(4)(B)(v)(II). Specifically, for the reasons outlined earlier in
this section, EPA is proposing to determine that no safe or technically
achievable substitute will be available for the etching of
semiconductor material or wafers and the cleaning of CVD chambers
within the semiconductor manufacturing sector for the entire five-year
period. EPA is also proposing to determine that supply of the regulated
substance that manufacturers and users are capable of securing from
chemical manufacturers is insufficient to accommodate this application
through calendar year 2030. As explained earlier, EPA is proposing to
determine the supply criterion is met if supply of one HFC used by the
application is insufficient to accommodate the application. EPA
proposes to determine that the supply of HFC-23 and HFC-41 are
insufficient to accommodate the application for the reasons outlined in
the prior section.
F. Mission-Critical Military End Uses
EPA has been allocating ASAs for regulated substances used for
MCMEU in accordance with subsection (e)(4)(B)(iv)(I)(ee) of the AIM
Act. In the Allocation Framework Rule, EPA defined ``mission-critical
military end uses'' as ``those uses of regulated substances by an
agency of the Federal Government responsible for national defense which
have a direct impact on mission capability, as determined by the U.S.
Department of Defense (DOD), including, but not limited to uses
necessary for development, testing, production, training, operation,
and maintenance of Armed Forces vessels, aircraft, space systems,
ground vehicles, amphibious vehicles, deployable/expeditionary support
equipment, munitions, and command and control systems'' (40 CFR 84.3).
In the Allocation Framework Rule, EPA finalized an approach that treats
the allocation of MCMEU allowances differently than the other
applications given the ``complex nature of the way DOD sources and uses
HFCs for mission-critical applications,'' (e.g., significantly larger
networks of sites and users, including contractors, of HFCs than others
covered by ASAs) (86 FR 55116, 55153, October 5, 2021). EPA set up a
system whereby DOD must provide the amount of HFCs needed for mission-
critical military use and that the two agencies would ``work together
to ensure the amount necessary is available for mission-critical
military applications'' (86 FR 55116, 55153, October 5, 2021).
[[Page 75921]]
As the definition states, DOD has discretion to identify which uses
of HFCs have a direct impact on mission capability. DOD is required to
report to EPA ``the broad sectors of use covered by current mission-
critical military end uses in the next calendar year,'' per 40 CFR
84.31(h)(3)(iv). Given the complex nature of the way DOD sources and
uses HFCs for mission-critical applications, EPA has always maintained
that DOD should have discretion to request the amount of allowances
necessary to meet its mission-critical end uses and the Agency is not
altering that approach through this rulemaking.
Recognizing the sensitive nature of the application, as well as the
expert judgement that DOD has in identifying which uses of HFCs have a
direct impact on mission capability, EPA consulted with DOD throughout
development of this proposed rule, including in advance of interagency
review, and received input to support EPA's evaluation of the statutory
criteria described in Section IV of this preamble.
After analyzing information relevant to the statutory criteria, as
outlined in this section, and based on input from DOD, EPA is proposing
to determine that no safe or technically achievable substitute will be
available for the MCMEU application and that the supply of the
regulated substances that the application is capable of securing from
chemical manufacturers is insufficient to accommodate the MCMEU
application through calendar year 2030. Therefore, EPA proposes to
renew the eligibility of the MCMEU application to receive ASAs for the
five-year period of calendar years 2026 through 2030.
1. Availability of Safe and Technically Achievable Substitutes
As discussed earlier in the preamble, in situations where there are
not safe and technically achievable substitutes available for the
entirety of the application, EPA would consider the statutory criterion
regarding substitutes as being met. In public technical reports DOD
(included in the rulemaking docket), DOD identified mission-critical
end uses that do not have safe and technically achievable substitutes
available. For example, DOD uses a mixture of HFC-227ea and sodium
bicarbonate dry chemical in automatic fire extinguishing systems that
protect the crew compartments of ground vehicles. DOD has tested
potential replacements but has not identified a viable alternative to
date. There are distinct technical specifications for some mission-
critical end uses that are distinct from civil standards for the same
category of use (e.g., refrigerants and fire suppression agents). For
example, automatic fire suppression systems in ground vehicles must
meet unique military requirements for inhalation toxicity that allow
personnel to stay within the protected space for at least five minutes
after fire suppression.
Furthermore, because Congress defined this application as what is
``mission-critical,'' EPA has always acknowledged that this application
is more fluid in terms of what particular HFC uses fall within the
application. DOD may change which end uses it determines to be mission-
critical over time. This further feeds into EPA's proposed assessment
that the Agency cannot determine at this time that there will be safe
and technically achievable substitutes available for the entirety of
the application.
2. Supply
In 2021, DOD sent a letter to EPA with information regarding
mission-critical end uses at the time, including a list of six HFCs
used in the application (HFC-125, -134a, -143a, -227ea, -236fa, and -
32). EPA has determined through communications with DOD that at least
some of these HFCs continue to be utilized in mission-critical end
uses. As described in section IV.B of the preamble, EPA is proposing to
determine that an application meets this criterion if EPA determines
that any of the HFCs currently used to manufacture products or systems
for use in the application have insufficient supply.
In the analysis of other applications in this proposal, EPA has
evaluated the supply of five out of six HFCs that DOD identified as
using in 2021 (i.e., all but HFC-143a). EPA is proposing to determine
that supply of some of these HFCs is insufficient to accommodate the
application. For example, in the evaluation of supply for the onboard
aerospace fire suppression application, EPA is proposing to determine
that the supply of HFC-227ea and HFC-236fa is insufficient to
accommodate the application. This is in addition to the unique
restrictions that apply to the Defense Logistics Agency and DOD
purchasing requirements that impact the available supply of HFCs to DOD
for MCMEUs. For example, there are Buy America requirements in Federal
Acquisition Regulation (FAR) 25.1 and Defense Federal Acquisition
Regulation Supplement (DFARS) 225.1 which may restrict how DOD can
procure goods, which may include HFCs. Furthermore, as noted in the
substitutes discussion for the MCMEU application, EPA has always
acknowledged that this application is more fluid in terms of what HFC
uses fall within the application. DOD may change which end uses it
determines to be mission-critical over time. The fact that DOD may
determine that different HFCs and different annual quantities of those
HFCs are necessary for mission-critical end uses further feeds into
EPA's proposed assessment that the supply of HFCs will be insufficient
to accommodate the application.
3. What is EPA proposing regarding eligibility for application-specific
allowances?
EPA proposes to renew eligibility for DOD to receive MCMEU ASAs for
the five-year period of calendar years 2026 through 2030. EPA is
proposing to determine ``that the requirements described in subclauses
(I) and (II) of clause (i) are met'' in accordance with the
requirements of 42 U.S.C. 7675(e)(4)(B)(v)(II). Specifically, for the
reasons outlined earlier in this section, EPA is proposing to determine
that no safe or technically achievable substitute will be available for
the entirety of the application and that the supply of the regulated
substance that manufacturers and users are capable of securing from
chemical manufacturers is insufficient to accommodate the application
through calendar year 2030.
G. Onboard Aerospace Fire Suppression
EPA has been allocating ASAs for regulated substances used for
onboard aerospace fire suppression in accordance with subsection
(e)(4)(B)(iv)(I)(ff) of the AIM Act. In the Allocation Framework Rule,
EPA defined ``onboard aerospace fire suppression'' as the ``use of a
regulated substance in fire suppression equipment used on board
commercial and general aviation aircraft, including commercial-
derivative aircraft for military use; rotorcraft; and space vehicles.
Onboard commercial aviation fire suppression systems are installed
throughout mainline and regional passenger and freighter aircraft,
including engine nacelles, auxiliary power units (APUs), lavatory trash
receptacles, baggage/crew compartments, and handheld extinguishers''
(40 CFR 84.3). At the time of this proposal, EPA is aware of only one
area, lavatory trash receptacles, in which HFCs (specifically HFC-227ea
and HFC-236fa) are used in commercial aviation. For military uses, HFC-
125 has been used in engine nacelles and APUs, and HFC-236fa has been
used in a streaming application (i.e., a portable
[[Page 75922]]
extinguisher).\28\ In addition to HFC uses in commercial and military
aviation, EPA is aware that HFCs have limited usage in general
aviation, which consists of private and/or business aircraft. The
Agency seeks additional information on how HFCs are used for general
aviation and how widespread the use is.
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\28\ See <a href="https://www.epw.senate.gov/public/_cache/files/d/1/d152a591-878f-4a4d-b9c1-dc7121c06eca/9D366FF1E61F7EFFD6A71C37C92924A5.04.03.2020-boeing.pdf">https://www.epw.senate.gov/public/_cache/files/d/1/d152a591-878f-4a4d-b9c1-dc7121c06eca/9D366FF1E61F7EFFD6A71C37C92924A5.04.03.2020-boeing.pdf</a>.
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After analyzing information relevant to the statutory criteria, as
outlined in this section and the TSD, EPA is proposing to determine
that no safe or technically achievable substitute will be available for
the entirety of onboard aerospace fire suppression and that supply of
the regulated substance that manufacturers and users are capable of
securing from chemical manufacturers is insufficient to accommodate the
onboard aerospace fire suppression application through calendar year
2030. Therefore, EPA proposes to renew the eligibility of entities
using regulated substances for onboard aerospace fire suppression to
receive ASAs for the five-year period of calendar years 2026 through
2030.
1. Availability of Safe and Technically Achievable Substitutes
Identification of available safe and technically achievable
substitutes in this application requires considering a range of
factors, including fire suppression effectiveness, toxicity, and space
and weight considerations. EPA has not identified available substitutes
that it would propose to deem safe and technically achievable for the
entirety of the onboard aerospace fire suppression application. As
discussed earlier in the preamble, in situations where there are not
safe and technically achievable substitutes available for the entirety
of the application, EPA would not consider this statutory criterion
met.
HFCs are used in onboard aerospace fire suppression in fixed
systems for total flooding applications and in portable equipment for
streaming uses (e.g., handheld fire extinguishers). Fire suppression
agents must satisfy environmental and safety criteria, including but
not limited to acceptable ODPs and GWPs, be effective extinguishants,
and, for spaces where people would be present, have sufficiently low
toxicity such that under normal use the discharge of agent in occupied
spaces would not harm people. Other important features that are
sometimes relevant for onboard aerospace fire suppression include being
electrically non-conductive, and ``clean'' in certain applications such
as for high-value electronics, controls, or other critical systems in
the protected spaces where it is important to leave no non-volatile
residue that could damage the equipment.
As noted at the start of this section, HFCs are used in limited
areas within the application. Because there are potentially overlapping
ASAs available for a military use of HFCs, EPA has focused its analysis
of substitute availability primarily on commercial aviation. EPA is
aware of only one application where HFCs are used in commercial
aviation: lavatory trash receptacle fire extinguishing systems.
Lavatory trash receptacle systems are total flooding systems; total
flooding systems are designed to automatically discharge a fire
extinguishing agent throughout a confined space. EPA has not identified
any safe and technically achievable substitutes for lavatory trash
receptacle systems. In coming to this proposed determination, EPA
reviewed information from multiple sources including FAA, the EPA SNAP
Program, FSTOC, and the International Civil Aviation Organization
(ICAO) which is outlined in greater detail in the TSD included in the
docket for this proposed action. The FSTOC 2022 Assessment Report noted
that it is not aware of any research to develop an HFC substitute in
lavatory trash receptacle fire extinguishing systems. Furthermore,
FSTOC noted that identifying substitutes for lavatory trash receptacles
is a low priority for industry given that it makes up less than one
percent of the installed fire suppression base on board aircraft.
In developing its proposed determination, given the global effort
to find viable halon alternatives, EPA did not consider halons in its
proposed consideration of the availability of safe and technically
achievable substitutes. However, both Halon 1301 and Halon 1211 are
technically achievable and continue to be used in onboard aerospace
fire suppression. Although the onboard aerospace fire suppression
industry has relied on halons for fire suppression for decades, the
United States phased out the production and import of virgin halons in
1994 due to their high ODP. Recycled halons have been the only supply
of halons in the United States for nearly 30 years and still comprise
the majority of installed fire suppression capacity on most aircraft.
Industry has made extensive efforts to identify alternatives to halons
particularly with recent estimates from the TEAP's FSTOC that the
dwindling supply of recycled halons could lead to shortages in the next
decade.
In assessing whether there was a safe and technically achievable
substitute available, EPA also considered what alternatives are listed
for use under SNAP for fire suppression that would be relevant for
these applications. EPA notes that 2-bromo-3,3,3-trifluoropropene (2-
BTP) is listed as an acceptable substitute subject to use conditions
for use as a streaming agent in handheld extinguishers and for certain
total flooding applications (e.g., engine nacelles and APUs). FAA has
approved the use of 2-BTP in handheld extinguishers, and commercial
aircraft manufacturers have begun replacing Halon 1211 with 2-BTP
extinguishers on newly designed aircraft. As noted above, the SNAP
Program listed 2-BTP as acceptable as a total flooding agent in engine
nacelles and APUs; however, 2-BTP has not been listed as acceptable in
lavatory trash receptacles and the factors for consideration are
different from other acceptable SNAP-listed uses. For examples, use in
lavatory trash receptacles would be in a space occupied by people,
whereas use in engine nacelles and APUs are in unoccupied spaces.
Furthermore, FAA has not approved 2-BTP for any total flooding systems
to date.
As noted in the introduction to this section, in addition to the
use of HFCs for lavatory trash receptacles in commercial aviation, HFC-
125 has been used in engine nacelles and APUs on commercial-derivative
aircraft for military use. Industry has explored several other fire
suppression agents in engine nacelles and APUs, but none have proven to
be a viable solution. For example, the industry previously explored FK-
5-1-12 for use as a fire suppression agent in engine nacelles, but it
failed an FAA-required live fire test. As a result, for the purposes of
its evaluation under the AIM Act subsection (e), EPA has not identified
safe and technically achievable substitutes that are available for use
in engine nacelles or APUs.
In addition to the areas in which HFCs are used in total flooding
systems, HFC-236fa is used as a streaming agent in commercial-
derivative aircraft for military use. As previously noted in this
section, 2-BTP has been listed as acceptable by SNAP, is FAA-approved,
and commercial aircraft manufacturers have begun transitioning to 2-BTP
extinguishers on newly produced aircraft. While EPA analysis suggests
that 2-BTP is available as a safe and technically achievable
substitute, as explained elsewhere in this proposal, EPA would only
determine the statutory
[[Page 75923]]
criterion in subsection (e)(4)(B)(i)(I) is not met if the Agency
determines substitutes are available for the entirety of the
application.
If a substitute were identified for the entirety of the
application, it would still take significant time for transition to the
substitute to occur for this application. FAA has testing requirements
and minimum performance standards that a new fire suppression agent
must meet before it can be used commercially. While there is no
prescribed amount of time it takes to meet these requirements, a
stakeholder indicated to EPA in a November 2023 public stakeholder
meeting that the certification process can take three to five years.
Another stakeholder described the FAA process as arduous and noted that
it could take many years to receive certification for a new fire
suppression agent. There is no information before the Agency at the
time of this proposal to suggest that there would be a safe and
technically achievable substitute available prior to the next five-year
review.
2. Supply
As previously discussed, HFC-227ea, HFC-236fa, and HFC-125 are all
currently used in onboard aerospace fire suppression. As described in
Section IV.B of the preamble, EPA is proposing to determine that the
requirements of 42 U.S.C. 7675(e)(4)(B)(i)(II) are met for this
application if EPA determines that any of the HFCs currently used in a
commercial product or to manufacture products for use in the
application have insufficient supply.
HFC-227ea is the only regulated substance for which onboard
aerospace fire suppression allowances have been expended to date. As
previously stated, HFC-227ea is used in commercial aviation whereas
HFC-236fa and HFC-125 are used in commercial-derivative aircraft for
military use. As intended in the Allocation Framework Rule, there is
overlap between the onboard aerospace fire suppression application and
the MCMEU application. EPA is not reopening this approach through this
rulemaking, so as long as DOD continues to classify the operation of
Armed Forces aircraft as mission-critical, then DOD may use MCMEU
allowances for fire suppression equipment installed on commercial-
derivative aircraft. Therefore, in addition to HFC-227ea being the only
regulated substance for which onboard aerospace fire suppression
allowances have been expended, the uses of HFC-227ea are the only uses
for which the onboard aerospace fire suppression application is the
sole pathway to receive allowances. In 2022, the sole domestic producer
of HFC-227ea produced 1,324.7 MT of HFC-227ea, comprising one percent
of U.S. HFC production on a mass basis. In addition, there were nine
entities that imported HFC-227ea with the total amount of imports
equaling 454.2 MT. Overall, HFC-227ea made up only 0.2 percent of all
U.S. HFC consumption in 2022 on a mass basis. At the end of 2022,
suppliers held 1,008.3 MT of HFC-227ea in domestic inventory, which is
equivalent to about 323 percent of calculated consumption of HFC-227ea
in 2022; as noted in the supply discussions for the other applications
above (Sections B-E), not all of this HFC-227ea may be considered
available supply, as the entities holding this material are broader
than EPA's interpretation of chemical manufacturers. As stated
elsewhere in this proposed rule, EPA recognizes that there is inherent
uncertainty regarding HFC production, and in particular for HFCs with a
more limited number of production facilities and/or higher GWPs than
other regulated HFCs, this uncertainty may be greater; HFC-227ea has
one of the highest GWP
[…truncated; see source link]Indexed from Federal Register on September 16, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.