Rule2025-16357
Phasedown of Hydrofluorocarbons: Review and Renewal of Eligibility for Application-Specific Allowances
Primary source
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Published
August 26, 2025
Effective
September 25, 2025
Issuing agencies
Environmental Protection Agency
Abstract
The U.S. Environmental Protection Agency (EPA) is finalizing, pursuant to the statutory framework established in the American Innovation and Manufacturing Act of 2020 (AIM Act), the eligibility of six applications to continue to receive priority access to allowances to produce or import hydrofluorocarbons. In this final rule, EPA establishes the framework for how EPA interprets the statutory criteria for assessing whether to renew the eligibility of applications to receive application-specific allowances and sets out determinations to renew or not renew each of the six applications that currently receive application-specific allowances. EPA is also finalizing revisions to the Technology Transitions regulations 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, the methodology used to allocate allowances to application-specific allowance holders for calendar years 2026 and beyond, and limited revisions to existing regulations. In addition, EPA is authorizing an entity to produce regulated substances for export. Lastly, EPA is finalizing certain regulatory confidentiality determinations for newly reported information.
Full Text
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<title>Federal Register, Volume 90 Issue 163 (Tuesday, August 26, 2025)</title>
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[Federal Register Volume 90, Number 163 (Tuesday, August 26, 2025)]
[Rules and Regulations]
[Pages 41676-41724]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-16357]
[[Page 41675]]
Vol. 90
Tuesday,
No. 163
August 26, 2025
Part III
Environmental Protection Agency
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40 CFR Part 84
Phasedown of Hydrofluorocarbons: Review and Renewal of Eligibility for
Application-Specific Allowances; Final Rule
Federal Register / Vol. 90, No. 163 / Tuesday, August 26, 2025 /
Rules and Regulations
[[Page 41676]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 84
[EPA-HQ-OAR-2024-0196; FRL-10782-02-OAR]
RIN 2060-AV98
Phasedown of Hydrofluorocarbons: Review and Renewal of
Eligibility for Application-Specific Allowances
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The U.S. Environmental Protection Agency (EPA) is finalizing,
pursuant to the statutory framework established in the American
Innovation and Manufacturing Act of 2020 (AIM Act), the eligibility of
six applications to continue to receive priority access to allowances
to produce or import hydrofluorocarbons. In this final rule, EPA
establishes the framework for how EPA interprets the statutory criteria
for assessing whether to renew the eligibility of applications to
receive application-specific allowances and sets out determinations to
renew or not renew each of the six applications that currently receive
application-specific allowances. EPA is also finalizing revisions to
the Technology Transitions regulations 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, the methodology used to allocate allowances to
application-specific allowance holders for calendar years 2026 and
beyond, and limited revisions to existing regulations. In addition, EPA
is authorizing an entity to produce regulated substances for export.
Lastly, EPA is finalizing certain regulatory confidentiality
determinations for newly reported information.
DATES: This rule is effective on September 25, 2025.
ADDRESSES: 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="https://www.regulations.gov">https://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#dabda8bbbcbcf4b7b3b9b2bfb6b6bf9abfaabbf4bdb5ac"><span class="__cf_email__" data-cfemail="85e2f7e4e3e3abe8ece6ede0e9e9e0c5e0f5e4abe2eaf3">[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
ACE--Automated Commercial Environment
AD/CVD--Anti-dumping and Countervailing Duties
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
CFR--Code of Federal Regulations
CGMP--Current Good Manufacturing Practice
CO<INF>2</INF>--Carbon Dioxide
COVID--Coronavirus Disease
CRA--Congressional Review Act
CVD--Chemical Vapor Deposition
DOC--U.S. Department of Commerce
DOD--U.S. Department of Defense
EEI--Electronic Export Information
EV--Exchange Value
EVe--Exchange Value Equivalent
EPA--U.S. Environmental Protection Agency
FDA--U.S. Food and Drug Administration
FIFRA--Federal Insecticide, Fungicide, and Rodenticide Act
FR--Federal Register
GDP--Gross Domestic Product
GHG--Greenhouse Gas
GWP--Global Warming Potential
HCFC--Hydrochlorofluorocarbon
HFA--Hydrofluoroalkane
HFC--Hydrofluorocarbon
HFO--Hydrofluoroolefin
HHS--U.S. Department of Health and Human Services
HVM--High Volume Manufacturing
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
OMB--U.S. Office of Management and Budget
PFAS--Per- and Polyfluoroalkyl Substances
PFC--Perfluorocarbon
PII--Personally Identifiable Information
PRA--Paperwork Reduction Act
PU--Polyurethane
RACA--Request for Additional Consumption Allowance
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
RSV--Respiratory Syncytial Virus
SCPPU--Structural Composite Preformed Polyurethane
SNAP--Significant New Alternatives Policy
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 Regulatory Action
B. Summary of Final 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 framework for renewing applications?
V. Review of the Six Applications Listed in the AIM Act
A. Propellants in Metered Dose Inhalers
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. Final Determination on Application-Specific Allowance
Eligibility
B. Defense Sprays
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
3. Final Determination on Application-Specific Allowance
Eligibility
4. Restriction Under 40 CFR Part 84, Subpart B
C. Structural Composite Preformed Polyurethane Foam for Marine
Use and Trailer Use
1. Availability of Safe and Technically Achievable Substitutes
2. Supply
[[Page 41677]]
3. Final Determination on Application-Specific Allowance
Eligibility
D. 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. Final Determination on Application-Specific Allowance
Eligibility
E. Mission-Critical Military End Uses
F. Onboard Aerospace Fire Suppression
VI. What are the requirements associated with a petition to be
listed as an application that will receive application-specific
allowances?
VII. Revisions to Existing Regulations
A. Expected Total HFC Purchases
B. Unique Circumstances
1. Healthcare System Needs
2. Economic Disruptions
3. Stockpiling
C. Inventory
D. Methodology for Small Purchasers of HFCs, Entities That Do
Not Purchase HFCs Every Year, and Entities With Irregular HFC Usage
E. Department of Defense Conferrals
F. Limited Set-Aside for Unique Circumstances Related to Metered
Dose Inhalers
G. Return of Unneeded Allowances
H. Enabling Auctions of Illegally Imported HFCs
I. Quarterly Exporter Reporting of Internal Transaction Numbers
J. Date of Purchase for Requests for Additional Consumption
Allowances (RACAs)
VIII. Authorization To Produce for Export
A. To what entities is EPA finalizing provisions to allocate
production for export allowances?
B. How many production for export allowances will EPA issue to
Iofina on an annual basis, and for how many years will EPA issue
these allowances?
C. Will 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 final 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. Data Elements Associated With a Petition To Be Listed as an
Application That Will Receive Application-specific Allowances
B. Data Elements Related to Proposed Revisions to Existing
Regulations
C. Data Elements Reported to EPA Related to Production for
Export
X. What are the costs and benefits of this action?
XI. Judicial Review
XII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 14192: Unleashing Prosperity Through
Deregulation
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
J. National Technology Transfer and Advancement Act
K. Congressional Review Act (CRA)
I. Executive Summary
A. Purpose of 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 production
and consumption allowances, which entities must expend to produce or
import HFCs. Subsection (e)(4)(B) of the Act authorizes EPA to allocate
allowances exclusively for the use of HFCs in specific applications for
which there is (1) no safe or technically achievable substitute during
the applicable period and (2) an insufficient supply of the HFCs used
in the application that can be secured from chemical manufacturers to
accommodate the application. The Act listed six applications to receive
these 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.\1\ EPA has created a category for
these allowances, which EPA refers to as application-specific
allowances (ASAs). ASAs provide priority access for eligible
applications and 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 for more information).\2\ After the total ASA
quantity is determined, the remaining allowances are distributed to
general pool allowance recipients using the methodology codified in
regulation.
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\1\ EPA codified that application-specific allowances are
available to entities using regulated substances in the statutorily
listed applications for calendar years 2022, 2023, 2024, and 2025 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). 40 CFR 84.13(a).
Accordingly, EPA made the final allocation under the preexisting
regulations when it allocated calendar year 2025 allowances on
October 1, 2024. See ``Phasedown of Hydrofluorocarbons: Notice of
2025 Allowance Allocations for Production and Consumption of
Regulated Substances Under the American Innovation and Manufacturing
Act of 2020, and Notice of Final Actions Establishing Administrative
Consequences'' (89 FR 84583, October 23, 2024).
\2\ EPA first codified the allocation methodology for general
pool and ASA holders in the Allocation Framework Rule. 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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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 establishes statutory
criteria under which EPA is to review the applications. If an
application is deemed to meet the statutory criteria, EPA is to renew
the eligibility of the application to receive priority access to
allowances for a period of not more than five years. As explained in
the proposed rule, 89 FR 75898 (September 16, 2024), EPA is undertaking
this review in this rulemaking, and therefore this final rule
establishes how the Agency is interpreting the statutory criteria for
reviewing applications receiving ASAs. EPA is also making 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. Based on this provision, EPA
promulgated a final rule entitled ``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
numerous
[[Page 41678]]
subsectors. The rule exempted applications currently eligible to
receive ASAs for the year or years in which that application receives
an ASA. 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. Therefore, as part of this
rulemaking, EPA considered whether there are any appropriate changes to
make specific to applications under review in this rule, and if so,
whether to finalize those modifications to the Technology Transitions
regulations, codified at 40 CFR part 84, subpart B.\3\
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\3\ Through a separate rulemaking, EPA announced reconsideration
of the Technology Transitions requirements for certain refrigeration
applications, including in supermarket systems and at semiconductor
fabrication plants. See <a href="https://www.epa.gov/newsreleases/trump-epa-takes-action-lower-costs-american-families-grocery-store-reconsidering">https://www.epa.gov/newsreleases/trump-epa-takes-action-lower-costs-american-families-grocery-store-reconsidering</a>.
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The Act also allows members of the public to petition EPA to
designate an application as eligible for priority access to allowances.
EPA is finalizing a procedure for submitting a petition under this
provision and defining minimum required elements of such a petition. In
addition, EPA is making narrow revisions in this final rule 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, subpart A regulations.
EPA is also authorizing an entity to produce regulated substances
for export for application-specific uses pursuant to subsection (e)(5)
of the Act, which authorizes EPA to permit the production in excess of
allowances held by an entity so long as the excess production is solely
for export purposes and meets additional requirements in the Act.
Lastly, EPA is finalizing certain regulatory confidentiality
determinations for newly reported information.
B. Summary of Final Actions
Application-specific allowance eligibility review: EPA is
finalizing its interpretation of the criteria under subsection
(e)(4)(B) of the AIM Act and applying that interpretation to evaluate
the six categories of ASA holders listed in subsection (e)(4)(B)(v) of
the Act. EPA is renewing the following applications for the full five-
year period from 2026-2030: propellants in MDIs, SCPPU foams 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. EPA is also
finalizing the option set out in the proposed rule of not renewing the
eligibility of defense sprays for ASAs beginning with calendar year
2026 allowances,\4\ and is excluding defense sprays from Technology
Transitions restrictions that would otherwise apply under the current
regulation.
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\4\ Entities without ASAs can continue to purchase and use HFCs
in accordance with the overall requirements established in 40 CFR
part 84.
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Application-specific allowance eligibility petitions: EPA is
finalizing 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 eligible for priority allowance access
consistent with EPA's proposal.
Application-specific allowance methodology: EPA is making targeted
revisions to the existing ASA methodology as proposed: 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 HFC usage history,
to account for inventory in allocation decisions, and to establish a
set-aside of allowances for situations that meet the criteria for
unique circumstances related to medical conditions treated by MDIs. EPA
is also finalizing new requirements for conferrals of MCMEU allowances
in line with the proposed rule.
Other regulatory revisions: EPA is finalizing amendments to
existing regulations as proposed 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: As proposed, EPA is
authorizing an entity to produce regulated substances for export for
application-specific uses abroad.
Handling of confidentiality for newly reported information: EPA is
finalizing certain regulatory confidentiality determinations for newly
reported information.
II. General Information
A. Does this action apply to me?
You may be potentially affected by this action 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.
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.
[[Page 41679]]
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) (42
U.S.C. 7607(d)(1)(I)), which 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, promulgating certain regulations for purposes of
maximizing reclaiming and minimizing releases of HFCs from equipment
and ensuring the safety of technicians and consumers, and facilitating
the transition to next-generation technologies by restricting use of
these HFCs in the sector or subsectors in which they are used. This
rulemaking relates to the first area and also addresses restrictions in
the third area solely 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.
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 regulated
substances for exclusive use 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 describes 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 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 periodic eligibility review
established 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
[[Page 41680]]
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 Technology Transitions regulations are not currently
applicable to any application receiving an ASA (40 CFR 84.56(a)(2)). In
this final rule, EPA is clarifying how the 40 CFR part 84, subpart B
restrictions will apply to an application no longer receiving an ASA,
based on EPA's consideration of the factors listed in subsection (i)(4)
of the AIM Act.
III. Background
HFCs are anthropogenic \5\ 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 have 100-year global warming
potentials (GWPs) \6\ (a measure of the relative climatic impact of a
greenhouse gas (GHG)) that can be hundreds to thousands of times that
of carbon dioxide (CO<INF>2</INF>). 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). 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.
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\5\ 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.
\6\ EPA notes that the exchange values (EVs) listed in the AIM
Act for each regulated HFC are numerically identical to the 100-year
GWPs of each substance, as given in the Errata to Table 2.14 of the
Intergovernmental Panel on Climate Change's (IPCC) Fourth Assessment
Report (AR4). See IPCC, 2007: Summary for Policymakers. In: Climate
Change 2007: The Physical Science Basis. Contribution of Working
Group I to the Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen,
M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)].
Cambridge University Press, Cambridge, United Kingdom and New York,
NY, USA. Available at <a href="https://www.ipcc.ch/report/ar4/wg1">https://www.ipcc.ch/report/ar4/wg1</a>.
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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
provides 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)(i), (e)(4)(B)(v)). In this
section, we outline how EPA interprets these criteria, what information
the Agency considers in assessing these criteria, and establish a
framework for evaluating if an application is eligible for renewal and
for what time period. EPA notes that under the statute, these criteria
also apply to new applications that may be listed; however, aside from
the discussion of the petition process in section VI., this final rule
only considers the renewal of existing applications. 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 final rule.
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 proposed to interpret this
criterion to mean that if there is an available substitute that is both
safe and technically achievable, an application would not meet this
criterion for renewal. In other words, if EPA determines there is a
safe substitute, but it is not technically achievable, or the only
technically achievable substitutes are not safe, the application would
meet the first criterion for renewal. EPA included further explanation
regarding this proposed interpretation in the notice of proposed
rulemaking (89 FR 75898, September 16, 2024).
In the proposal, EPA explained its intent to consider a wide range
of possibilities in assessing whether there was a safe and technically
achievable substitute for an application under subsection
(e)(4)(B)(i)(I). Specifically, EPA proposed 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 function as the current HFC in
use; of these substances, EPA proposed to assess only those with a
lower GWP than the regulated substance currently in use. EPA proposed
to include substitute chemicals that are both a chemical-for-chemical
replacement and those that would require a change in manufacturing
process or the product.
In addition to looking at chemicals that could serve as
substitutes, EPA also proposed to include 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).
The Agency proposed to assess this criterion, specifically whether
a safe and technically achievable substitute(s) is available, on an
application-wide basis. For applications that use multiple HFCs, a safe
and technically achievable 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 safe and
technically achievable substitute for known sub-applications that have
been relying on ASAs to date.
EPA proposed that its evaluation of each application is not
intended to be a company-specific review; the commercialization \7\ of
a substitute in 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, EPA noted at proposal
that if there are additional barriers to commercialization, those would
be considered when assessing if the identified substitute is available
for an entire application and the renewal period, as applicable. In
addition, EPA's interpretation of the statutory language is that
applications are intended to be viewed as a whole and not renewed by
sub-application.
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\7\ 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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One commenter requested further clarification regarding EPA's
interpretation of ``technically achievable
[[Page 41681]]
substitute.'' \8\ The commenter noted its support of the sources of
information that EPA outlined in the proposed rule in determining the
availability of substitutes, specifically noting Significant New
Alternatives Policy (SNAP) Program listings (pursuant to section 612 of
the CAA) and 2023 Technology Transitions Rule evaluations. However, the
commenter stated a need for more clarity on how EPA plans to interpret
the phrase ``technically achievable substitute.''
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\8\ All comments referenced in this preamble can be found in the
``Response to Comments'' document in the docket for this rulemaking.
EPA has responded to the most significant comments in the final rule
preamble. All other comments are only addressed in the Response to
Comments document.
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EPA disagrees with the commenter that the proposed action lacked
sufficient clarity and notes that the commenter does not specify what
was unclear in the proposal. As the commenter acknowledges, EPA listed
numerous sources of information the Agency intended to draw from in
developing its assessment of the availability of a technically
achievable substitute for individual applications. How EPA incorporates
information from these sources is necessarily source-specific and will
vary depending on the information received from the source. For
example, EPA listed manufacturer announcements as an information
source. If a company within an application has announced that it is
commercializing a product using a substitute chemical, that would be
meaningful for EPA's assessment. Conversely, if a company announces it
is starting the first stage of testing for use of a substitute
chemical, that will also be information EPA will take into account, but
the analysis will be different. Similarly, many peer-reviewed technical
reports discuss whether substitutes are currently and/or expected to be
technically achievable, and how EPA will account for that information
will depend on the content of the report.
Moreover, the Technical Support Document (TSD), ``Review of
Applications in the American Innovation and Manufacturing (AIM) Act
Subsection (e)(4)(B)(4),'' accompanying the proposed rule demonstrated
exactly how this variation would play out. EPA took information from
cited sources and then developed an assessment of the availability of
substitutes for each individual application. EPA received no adverse
comment on its more general approach to analyzing substitute
availability in the TSD for the applications as a whole. To the extent
any commenter raised concerns about this application-specific
assessment, EPA has accounted for that in the individual application
decisions contained in section V. of this preamble to the final rule.
Finally, as the commenter acknowledges, EPA explained in the
proposal its intent to consider the listings under the SNAP Program and
evaluations carried out for the 2023 Technology Transitions Rule as
part of its assessment. This includes listings themselves and the
information underlying those decisions. In 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 analysis undertaken when evaluating a
proposed substitute includes ozone depletion potential, GWP, local air
quality, toxicity, flammability, and occupational and consumer health/
safety. 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. The 2023 Technology Transitions
Rule applied a list of criteria that are similar, but not identical, to
the ASA review process (e.g., the availability of substitutes,
considering both safety and technological achievability), and EPA has
also considered the information prepared for that rule, which is
available in the relevant docket.
Another commenter stated that the criteria ``no available
substitute that is both safe and technically achievable'' is ambiguous
and restrictive and does not provide an incentive for applications to
explore substitutes. EPA acknowledges this comment, but notes that the
language cited by the commenter comes directly from the AIM Act. The
Agency has no authority to alter the statutory language enacted by
Congress. EPA's role, as an executive branch agency, is to implement
the language in such a way to give effect to the text provided by the
legislature.
EPA did not receive any further adverse comments on this part of
its proposal, including what can be considered a substitute (i.e., the
various chemicals that will be considered along with not-in-kind
substitutes), the proposal to assess the availability of substitutes on
an application-wide basis, and the proposal to not determine
availability of substitutes on a company-specific basis. EPA is
therefore finalizing its interpretation of the ``no safe or technically
achievable substitute will be available'' criterion as proposed, which
EPA views as the best reading of the statutory text.
In the proposed rule, EPA outlined a range of sources of
information it intended to, and did, review in developing the
assessment of the availability of safe, technically achievable
substitutes for applications under review. EPA's TSD that accompanied
the proposed rule also included detailed information of the substitute
assessment for each individual application, including citations to all
sources of information considered. Sources include, but are not limited
to: manufacturer announcements; information provided by stakeholders
under reporting requirements of part 84 of the CFR and other
communications; relevant federal and state regulations; evaluations
carried out under the 2023 Technology Transitions Rule 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) regulations and guidance for MDIs); and
peer-reviewed technical reports. EPA did not receive general comment on
additional sources to consider, but we note that the Agency may
consider additional information as relevant when assessing this
criterion in future actions. The TSD accompanying this final rule has
detailed information on the sources used in analyzing substitutes for
each individual application in this final rulemaking. To the extent any
commenter suggested additional sources of information for particular
applications, EPA has considered these additional sources and
incorporated that information as warranted into the analyses of the
individual applications, as outlined in detail in the TSD.
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.
[[Page 41682]]
7675(e)(4)(B)(i)(II)). In the proposal, EPA described its intention to
look at a number of different factors to assess whether an application
met this second criterion, 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., federal
requirements related to purity specifications).
EPA proposed to evaluate only the supply of the HFC(s) currently
used in an application's equipment or to manufacture the application's
products for use; this excludes any HFC(s) currently used exclusively
for research and development. For applications that use multiple HFCs,
EPA proposed to individually evaluate each HFC for which ASAs are being
expended to assess if supply of that HFC is insufficient. EPA proposed
to assess insufficient supply on an application-wide basis. In other
words, if the supply of at least one of the HFCs evaluated is
insufficient to accommodate the application, EPA proposed to consider
the criterion met for the application.
EPA discussed in the proposed rule that in assessing supply, the
Agency would also consider 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.
In addition, per the Agency's best interpretation of the statutory
language to consider regulated substances ``from chemical manufacturers
. . . , including any quantities of a regulated substance available
from production or import'' in 42 U.S.C. 7675(e)(4)(B)(i)(II), EPA
proposed to consider only regulated substances that are supplied by
chemical manufacturers in its assessment of supply. EPA proposed this
assessment covers both virgin and recovered and reprocessed HFCs, and
includes both imported material from foreign HFC producers and
regulated substances from domestic producers. Relatedly, EPA proposed
that ``chemical manufacturers'' excludes entities that do not produce
or import HFCs and therefore that EPA would not consider HFC supply
held by and available to entities that do not produce or import HFCs in
its assessment of this criterion. This excludes quantities of HFCs held
by entities that do not produce or import HFCs with allowances,
potentially including reclaimers, distributors, HFC blenders,\9\ and
HFC repackagers. Further explanation about EPA's interpretation of this
statutory language can be found in the proposed rule.
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\9\ 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 and the discussion in the 2024 Allocation Rule.
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EPA did not receive comments related to the Agency's proposed
interpretation of the statutory language in subsection
(e)(4)(B)(i)(II). EPA is therefore finalizing its interpretation of the
supply criterion as proposed, which EPA views as the best reading of
the statutory text.
EPA also discussed in the proposed rule the sources of data it
would consider in its evaluation of whether supply of a regulated
substance is insufficient to accommodate an application. These include
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 an
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. To the extent available, EPA
will 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. While EPA did
not receive general comment on additional sources to consider, we note
this list is not exhaustive and that the Agency may consider additional
information as relevant when assessing this criterion. The TSD
accompanying this final rule has detailed information on the sources
used in analyzing supply related to each individual application. To the
extent any commenter suggested supply data to be considered in an
individual application's renewal decision, EPA has considered the data
sources and incorporated that information as warranted into the
analysis of the individual application, as outlined in detail in the
TSD.
C. What is EPA's 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 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 explained in
the proposed rule that the Agency considered the best interpretation of
the statutory language to be 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. EPA further proposed that an application will no longer be
eligible for ASAs at the time at which EPA has determined it does not
fulfill one of these criteria.
In practice, this means that if either or both criteria are not met
at the beginning of the renewal period, EPA will not renew an
application's eligibility to receive ASAs. For example, if, for this
review cycle, the Agency determines that supply is not insufficient to
accommodate an application as of January 1, 2026 (the beginning of this
renewal period), EPA will not renew that application's eligibility for
ASAs, regardless of whether a substitute is available.
If both statutory criteria are met as of the beginning of the
renewal period, EPA proposed it would 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 would determine an application eligible to receive ASAs. For
example, if, for this renewal cycle, EPA determines that there is no
substitute available as of January 1, 2026, but a substitute will be
available by January 1, 2028, then 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 determined to be 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, then EPA would renew the
application's eligibility to receive ASAs for only two years (i.e.,
calendar years 2026 and 2027).
The Agency also proposed that if EPA determines that an application
has a safe or technically achievable substitute available that is a
regulated substance, EPA would also evaluate the supply of the
substitute HFC and assess if supply of the substitute HFC is
insufficient to accommodate the application. Further information
regarding the Agency's
[[Page 41683]]
reasoning can be found in the notice of proposed rulemaking for this
action. Under this proposed framework, 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 allows 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 available).
EPA also proposed that if an application is renewed for ASAs for
less than five years, the application would not be reviewed for
eligibility for ASAs again as part of the statutorily mandated schedule
(i.e., once EPA determines that an application is no longer eligible
for ASAs, EPA would not re-review that application), given the
direction in the statute. In such a situation, an entity may petition
the Agency to be evaluated for ASA eligibility, and the Agency would
then undertake the relevant petition review process; see section VI.
for further discussion of the petition process requirements.
One commenter suggested that EPA should review applications more
frequently than every five years. The commenter points to the statutory
text in the AIM Act in subsection (e)(4)(B)(v) that directs EPA to
review applications receiving ASAs ``not less frequently than once
every 5 years'' and to authorize renewals of not more than five years.
The commenter states that this text allows EPA to review applications
more frequently than every five years. The commenter alleges that EPA's
proposal to not do so is inconsistent with EPA's expectation the HFC
market will be dynamic given EPA's statement at proposal that the
Agency ``cannot know the full breadth of technologies that will be
developed as replacements for the current HFCs in use,'' (89 FR 75898,
75904).
EPA notes that the commenter itself acknowledges that the language
in the AIM Act is merely permissive of EPA reviewing applications more
frequently than every five years and that the commenter does not
provide any argument that the best interpretation of the statutory
language is that EPA is required to review applications more frequently
than every five years. Congress set a clear directive that the Agency
review applications receiving ASAs ``not less frequently than once
every 5 years,'' and EPA's approach clearly aligns with this language.
The statute provides EPA discretion to determine the appropriate review
period, as long as the Agency reviews at least once every five years.
To the extent the commenter intended to raise a policy or
programmatic rather than a legal argument, EPA disagrees with the
commenter's contention that adopting a five-year review period in this
final rule is inconsistent with statements EPA made at proposal. The
quotation of the proposal language provided by the commenter is from
the portion of EPA's proposal that discusses how EPA will analyze the
substitute availability criterion, and specifically what types of
chemicals and technologies should be considered as potential
substitutes. In that passage of the proposed rule, EPA explained why it
would be appropriate to consider various types of chemicals as well as
not-in-kind technologies in assessing whether an application had an
available substitute. This is distinct from the question of whether EPA
has sufficient information to prognosticate whether and how an
individual application may meet the two statutory criteria for ASA
renewal over the next five-year review period adopted in this final
rule. As explained in detail in the proposed rule and the TSD
accompanying the proposal, EPA examined the availability of substitutes
for each individual application and, if not currently available, when a
substitute would be expected to become available for the entire
application. While EPA expects the market to be dynamic, based on
analysis done for this rulemaking and as detailed in the TSD, EPA has
explained why a substitute currently unknown is not reasonably expected
to be available within the five-year renewal period, thus making an
earlier assessment earlier than the five-year period unnecessary. EPA
has demonstrated how this assessment plays out for individual
applications in the TSD accompanying the proposal and final rule. In
determining a final approach, EPA has taken this in balance with the
desire to provide certainty to applications for which Congress provided
priority access to HFC allowances.
One commenter suggested that ``because the proposed extension
period for some applications overlaps the next phasedown year (2029),
it may be appropriate to reevaluate the transition to lower GWP
alternatives in these applications and adjust allocations
accordingly.'' Although the intended meaning of this comment is not
entirely clear, EPA interprets this comment to suggest that if an
application has a safe and technically achievable substitute available
that is a lower-GWP HFC, either at the present time or at some point
within the five-year renewal period, EPA should base the application's
allocation levels on that lower GWP-HFC. EPA had proposed this as a
possibility for applications that may have had a lower-GWP HFC
substitute become available (see, e.g., 89 FR 75898, 75917). However,
as described in section V., EPA is not determining this factual
situation to be occurring for any application within this renewal
period. Therefore, the commenter's suggestion is not relevant for this
particular action at this time. If this situation arises within the
next renewal period, EPA may consider whether to adjust allocation
levels to meet a lower-GWP HFC substitute.
EPA did not receive comments on the following aspects of its
proposal: that applications must meet both criteria to be renewed as
eligible for ASAs, that EPA will review the supply of substitute HFCs
if they are determined to be available for an application, that EPA
will base the renewal timeline on less than five years if an
application will fulfill a criterion within the five-year period, and
that if an application is renewed as eligible 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.
After considering all comments, EPA is finalizing all aspects of
this portion of the rule as proposed.
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 subsection (e)(4)(B)(v)(I). Pursuant to that review, EPA
evaluated 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 contains EPA's assessment of the criteria for
each application and EPA's decision regarding whether to renew each
application's eligibility to receive ASAs. EPA provides additional
information in the TSD available in the docket for this rulemaking. EPA
views the decision made for each individual application to be severable
from the decisions made for the other applications, as each application
determination is based on facts and assessment specific to that
application. In the event that a reviewing court overturns EPA's
[[Page 41684]]
determination for an individual application, EPA intends that the
determinations for the remaining applications should be considered as
severable and stand.
A. 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)(aa)
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, more
commonly referred to as hydrofluoroalkane (HFA)-227ea and HFA-134a in
the pharmaceutical industry, are purified from technical grade HFC-
227ea and HFC-134a, respectively, and are both used in MDIs as
propellants.
1. Availability of Safe and Technically Achievable Substitutes
In the proposed rulemaking, EPA proposed to determine that through
calendar year 2030, no safe or technically achievable substitute will
be available for propellants in MDIs and that supply of the regulated
substances that manufacturers and users are capable of securing from
chemical manufacturers is insufficient to accommodate this application.
Therefore, EPA proposed 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.
Many commenters were supportive of EPA's proposed determination
that no safe or technically achievable substitute will be available for
the MDI application. EPA acknowledges the commenters' support.
One commenter was a chemical producer who shared that they are
actively developing HFO-1234ze(E) as a low-GWP propellant for use in
MDIs and the alternative is currently undergoing clinical trials to
prepare for regulatory approvals and marketing authorizations by FDA
and other authorities. The commenter also stated that the chemical is
an available substitute and described their planned largescale
production capabilities of medical-grade HFO-1234ze(E). The commenter
also said that based on the SNAP evaluation of HFO-1234ze(E), this
chemical should be considered a safe alternative to high-GWP HFCs in
MDIs.
EPA responds that while the chemical producer stated that ``HFO-
1234ze is an available substitute,'' their comment focused on
largescale production of the chemical, which speaks to its available
supply as opposed to how EPA is evaluating substitutes for the MDI
application. EPA notes that while it has listed HFO-1234ze(E) as an
acceptable substitute under the SNAP program for many applications, EPA
has not evaluated this substance for applications that concern
inhalation, including use as a propellant in MDIs, under the SNAP
program. Other than the reference to SNAP's listings for non-MDI
applications, the commenter does not discuss how EPA has said it would
assess whether a substitute is available. As outlined in the proposed
rule in section IV.A., in the Agency's assessment of safe or
technically achievable substitutes, EPA takes into account Federal
regulations, including from other U.S. Government agencies. For the MDI
application, EPA specifically references FDA's requirements for MDIs,
and thus considers an alternative to be available for a particular MDI
drug product once an MDI containing the alternative propellant has been
approved by FDA. Consistent with the proposal, for an assessment of a
``safe'' alternative for use as a propellant in MDIs, EPA relies on
FDA, as FDA takes these considerations into account in their review, as
described in more detail in the TSD. Since FDA has not yet approved
MDIs containing any propellant substitutes to HFC-134a and HFC-227ea,
EPA does not consider HFO-1234ze(E) to be available within the
applicable renewal period. Further, based on experience with the ozone-
depleting substance MDI transition, we expect that companies will seek,
and FDA will evaluate, applications for MDIs that use alternative
propellants, on an individual MDI product-by-product basis, and thus it
is unlikely there will be approvals for all MDIs within the application
within the five year timeframe. In other words, EPA does not intend to
consider that FDA's approval of a single MDI product containing an
alternative propellant to mean that the alternative propellant is
therefore available for the entire application.
For the reasons outlined here and in the proposed rule, and based
on information available in the TSD, EPA is finalizing the
determination that no safe or technically achievable substitute will be
available for propellants in MDIs.
2. Supply
EPA proposed to determine that the 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. 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. These pharmaceutical-grade
HFC propellants are produced at a limited number of production
facilities domestically and abroad. In its analyses 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 there are a limited number of HFC-134a
production and purification facilities that meet FDA's Current Good
Manufacturing Practice (CGMP) regulations and 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. Producers of pharmaceutical-grade HFC-227ea must also
comply with FDA requirements as described in the proposed rule, which
limits their ability to switch to other suppliers of HFC-227ea. The two
additional years of reported consumption and production data for the
United States since the publication of the proposed rulemaking do not
change EPA's proposed assessment due to the limitations summarized here
and described in more detail in the proposed rule.
Commenters were supportive of the determination that supply of the
regulated substance that manufacturers and users are capable of
securing from chemical manufacturers is insufficient to accommodate the
MDI application through calendar year 2030, and there has been no
further information EPA has been made aware of that would change the
Agency's proposed determination. Therefore, EPA is finalizing as
proposed the determinations that the supply of both HFC-134a and HFC-
227ea is insufficient to accommodate the propellants in MDIs
application.
[[Page 41685]]
3. Final Determination on Application-Specific Allowance Eligibility
All but one commenter were supportive of EPA's determination to
renew the eligibility of entities in this application to continue
receiving ASAs for the full five-year period of calendar years 2026
through 2030. One commenter stated their opposition to the federal
government's ``green inhaler mandate'' due to their concerns about lack
of medical benefits and cost of generics and that the Agency should
commit that it is the policy of the federal government that neither EPA
nor FDA should ever ban, phase out, or refuse to approve HFC inhalers
based on their GHG emissions. The commenter also stated that any
rulemaking should permanently exempt inhalers from the phasedown of
HFCs and the administration should seek a change in law so that the
permanent exemption need not be reviewed by EPA every five years.
EPA responds that the AIM Act in subsection (b)(4)(B)(v) instructs
EPA to extend the eligibility of any application that meets the
statutory criteria ``for renewable periods of not more than 5 years.''
In this action, EPA is extending the eligibility of the MDI application
for the maximum length of time permitted by the statute. Further,
nothing in this rulemaking nor in the AIM Act mandates or requires that
MDI manufacturers transition to alternative propellants. In fact, EPA
is continuing to provide flexibility for manufacturers of MDIs to use
the propellant that they choose. Under the AIM Act, EPA is required to
implement an 85 percent phasedown of HFCs on an EV-weighted basis from
historic levels by 2036. This is not a complete phaseout as was
required under the CAA for ozone-depleting substances, meaning
production and import of HFCs is permitted indefinitely at a reduced
level. EPA anticipates the continued production and import of HFCs will
include applications where alternatives are not available and/or where
the transition is more challenging. In other words, there is nothing in
this rulemaking, in the AIM Act, or in any current EPA regulation that
would prevent MDI manufacturers from continuing to use the current HFCs
they are using after 2036.
In addition, the AIM Act authorizes EPA under subsection
(e)(4)(B)(iv) to provide priority access to allowances for certain
applications, including propellants in MDIs. EPA must provide the
``full quantity of allowances necessary, based on projected, current,
and historical trends, for the production or consumption of a regulated
substance for the exclusive use of the regulated substance in an
application.'' This rulemaking maintains eligibility for MDI
manufacturers to receive ASAs for another five years (i.e., through
2030) at which time, the Agency will conduct another review, consistent
with the Congressional mandate.
Regarding the request for EPA to permanently exempt MDIs from the
phasedown of HFCs, that is outside the scope of this rulemaking and
likely is not consistent with the AIM Act. However, as stated above,
the AIM Act calls for a phasedown and not a phaseout. Given the nature
of the phasedown, EPA does not foresee restricting access to all HFCs
for MDI manufacturers. EPA can and is finalizing to continue providing
priority access to HFCs through eligibility for ASAs for use as a
propellant in MDIs.
MDIs provide important, life-saving medications, and the
flexibilities described in this rule allow for continued production and
import of HFCs for use in MDIs. As discussed elsewhere in this rule,
EPA is finalizing additional flexibility to allow for continued
priority access to HFCs for the manufacture of MDIs at a level that
meets their need (see sections VII.B. and VII.F.).
One commenter stated that even after FDA grants approvals of MDIs
containing alternative propellants, eligibility for receiving ASAs may
still be needed as one of the potential alternatives, HFC-152a, is a
regulated substance under the AIM Act. The commenter requested that
when FDA grants approvals to MDIs containing HFC-152a and HFO-
1234ze(E), that the Agency does not encourage the use of one propellant
over the other, and that such determinations should be left with FDA.
Regarding the first part of the comment regarding eligibility for
receiving ASAs for HFC-152a, EPA responds that since FDA has not yet
approved any MDIs containing HFC-152a as a propellant, EPA has not yet
assessed providing ASAs based on the potential approval of MDIs
containing HFC-152a in this application. Regarding the second part of
the comment, EPA responds that since FDA has not approved any MDIs
containing either alternative propellant, treatment of the two
potential alternatives is beyond the scope of this rulemaking.
EPA is finalizing as proposed the determination 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. Therefore, EPA is finalizing the proposal 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.
B. Defense Sprays
Per subsection (e)(4)(B)(iv)(I)(bb) of the AIM Act, EPA has been
allocating ASAs for use of regulated substances in defense sprays. 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 (which
includes military sprays). The defense sprays chapter in the TSD
contains more details on these product categories. HFC-134a is the
propellant predominantly used for defense sprays and is the only HFC
for which defense spray ASAs have ever been expended.
1. Availability of Safe and Technically Achievable Substitutes
EPA proposed that there would not be a safe and technically
achievable substitute available for the entire application at the time
of rule finalization, but a safe or technically achievable substitute
would be available for the entirety of the defense spray application by
January 1, 2028. EPA's proposed substitutes determination was based on
knowledge at the time of proposal that some entities in the defense
sprays application had already successfully commercialized alternative
propellants, including non-HFCs, in some of their products. In
addition, 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 Montreal Protocol's Technology and Economic
Assessment Panel (TEAP) Medical and Chemicals Technical Options
Committee (MCTOC). EPA's Technology Transitions restrictions will also
require that all aerosols, including technical aerosols, transition out
of HFC-134a by January 1, 2028. EPA's assessment at the time of
proposal was that the commercialization of substitutes in some defense
spray sub-applications suggests these substitutes are viable
application-wide.
[[Page 41686]]
Comments on the proposed renewal options were all focused on
availability of substitutes. Some commenters requested that defense
sprays continue to be eligible for ASAs for the full five-year period
because there is no safe or technically achievable substitute for
specific sub-applications of defense sprays and explained their
concerns. One commenter suggested a two-year renewal also based on the
availability of substitutes. Another commenter supported a two-year
renewal but provided no explanation or additional information that can
inform EPA's assessment. Finally, one commenter supported no renewal of
ASAs given the availability of alternatives, though did not provide
additional information beyond EPA's initial assessment.
As discussed in section IV.C., which outlines the application
review framework, an application must meet both criteria to be eligible
for renewal of ASAs. EPA discusses in the next subsection that EPA is
finalizing a determination that the criterion in subsection
(e)(4)(B)(i)(II) is not met for this application beginning January 1,
2026. This outcome is determinative, standing alone, for EPA to
finalize that defense sprays will not be eligible for ASAs beginning
January 1, 2026. As a result, EPA is not making a final determination
regarding the availability of substitutes in the context of ASAs.
Because EPA is not making a final determination in this rule with
respect to the availability of substitutes for this application, the
comments filed are not significantly adverse to the outcome in this
rule. Therefore, EPA is not responding to comments specific to the
substitute criterion of the review of the defense spray application.
However, the proposed rulemaking also requested comment on the
treatment of defense sprays under the 40 CFR part 84, subpart B
Technology Transitions restrictions. Responses to comments regarding
availability of substitutes as relevant to the Technology Transitions
restrictions are addressed in section V.B.4. of this final rule.
2. Supply
As explained, HFC-134a is the propellant predominantly used for
defense sprays and is the only HFC for which defense spray ASAs have
ever been expended. Therefore, EPA is analyzing the supply of HFC-134a
in assessing whether this application meets the second criterion to be
renewed as eligible for ASAs. EPA co-proposed two supply
determinations: (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 this final rulemaking EPA did not consider the supply of HFC-
152a in assessing whether the defense spray application meets the
statutory criteria for renewed eligibility for ASAs. EPA noted in the
proposal that assessment of HFC-152a supply could be relevant if HFC-
152a is an available safe and technologically achievable substitute for
the entire defense spray application. EPA did not receive any comments
regarding if HFC-152a is an available safe and technically achievable
substitute for the entire defense sprays application. Comments from
defense spray manufacturers instead highlighted the concerns around the
use of flammable propellants in law enforcement and military settings,
where defense sprays are often used in conjunction with ``Conducted
Energy Weapons'' (e.g., Tasers). As described in more detail below in
section V.B.3., EPA agrees with commenters regarding the human safety
concerns of using stun guns alongside flammable propellants, such that
HFC-152a, given its flammability, is not an available safe and
technically achievable substitute application-wide. Thus, in this final
rulemaking EPA did not consider the supply of HFC-152a as it pertains
to the defense sprays application.
In the proposal, EPA explained that there is a large available
supply of HFC-134a, and demand for HFC-134a from the defense sprays
application is very small relative to overall supply. Given its broad
use in other applications (e.g., refrigeration and air conditioning),
HFC-134a is the most widely produced HFC globally and is produced in
substantial quantities in multiple countries, including the United
States. At the time of proposal, domestic production of HFC-134a was
nearly 50 percent of total U.S. HFC production, but EPA also noted at
the time of proposal that one domestic producer indicated it was
transitioning its facility to produce a different chemical; \10\ as of
the time of this final rulemaking, this retrofit was completed.
Significant amounts of HFC-134a were also imported in 2022, such that
HFC-134a made up approximately 32 percent of total U.S. HFC consumption
in 2022. In addition, suppliers held quantities of HFC-134a in
inventory that were approximately 100 percent of calculated consumption
of HFC-134a in 2022. EPA had also noted in the proposed rulemaking that
it was not aware of any reason this application could not use recovered
and reprocessed HFCs, and the supply of reclaimed HFC-134a (the
likeliest source of recovered and reprocessed HFCs) was significant and
further increased the available supply of HFC-134a.\11\ At the time of
proposal, EPA had not yet finalized 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
referred to as the ``2024 Emissions Reduction and Reclamation Rule''),
which had proposed requirements that reclaimed HFCs be used for certain
equipment to support maximizing reclamation. Despite the large supply
of HFC-134a, EPA recognized the uncertainty regarding future supply
given the stepdown in permissible production and consumption of HFCs
taking place in 2024 and that the Agency did not have complete
production, consumption, or inventory data available for 2024 when the
proposed rulemaking was issued. In addition, at the time of this
proposed rulemaking, EPA had not yet finalized another rulemaking
related to the use of trichloroethylene (TCE) in the production of HFC-
134a; the TCE pathway is the primary production pathway used to produce
HFC-134a in the United States.
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\10\ 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>.
\11\ EPA publishes annual data submitted under CAA section 608
showing trends in the reclamation market for ozone-depleting
substances and HFC refrigerants. Over 2.5 million pounds of HFC-134a
were reclaimed in 2023 and HFC-134a was one of the primary drivers
for the 20% year-over-year increase in the reclamation market
between the 2022 and 2023. See <a href="https://www.epa.gov/section608/summary-refrigerant-reclamation-trends">https://www.epa.gov/section608/summary-refrigerant-reclamation-trends</a>.
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Regarding demand of HFC-134a, EPA's models project 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.\12\ This is due in part, as explained
in the proposal, to an expected decrease in demand for HFC-134a over
time as a result of the 2023 Technology Transitions Rule, which
established sector and subsector-level GWP limits and restrictions on
the use of certain regulated substances. GWP restrictions under the
2023 Technology
[[Page 41687]]
Transitions Rule began taking effect on January 1, 2025, with the
latest restriction taking effect on January 1, 2028. The majority of
sectors or 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 relevant GWP limit for those sectors or
subsectors (i.e., 700), so demand for this chemical should relatedly
fall over time. Many, perhaps most, of these sectors or subsectors were
transitioning away from using HFC-134a before the enactment of the AIM
Act (e.g., light-duty motor vehicle air conditioning and consumer
aerosols). However, EPA also noted that some sectors may transition to
blends with HFC-134a as a component where the GWP is below the
applicable limit, and that HFC-134a will likely continue to be used in
other applications not subject to these restrictions (e.g., air
conditioning for heavy-duty vehicles), as well as for servicing
existing equipment (e.g., older light-duty motor vehicle air
conditioning). In addition, EPA noted in the proposal that of the six
defense spray entities that had received ASAs at some point for
calendar years 2022, 2023, and 2024, three did not receive ASAs in at
least one of those years and only three requested allowances for 2025.
EPA was also aware of at least one entity selling bear sprays that use
HFC-134a that has never applied for, and therefore never received,
ASAs.
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\12\ See HFC Phasedown Regulatory Impact Analysis (RIA) updated
for the 2023 Technology Transitions Rule at <a href="https://www.epa.gov/system/files/documents/2024-11/epa-hq-oar-2021-0643-0227_attachment_1.pdf">https://www.epa.gov/system/files/documents/2024-11/epa-hq-oar-2021-0643-0227_attachment_1.pdf</a>.
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There were no comments on EPA's proposed assessment for the
insufficient supply criterion related to defense sprays.
In preparing this final rulemaking, EPA analyzed data that has
become newly available since the time of proposal related to supply of
regulated substances for this application. In 2024, domestic production
of HFC-134a was 34,119.4 metric tons (MT), making up 33 percent of U.S.
HFC production on a mass basis; this production amount is nearly
equivalent to the HFC produced in the highest quantity in that year.
While domestic production of HFC-134a has decreased since 2022, global
production of this chemical remains high,\13\ and there are multiple
entities that import HFC-134a. In 2024,\14\ 7,791.1 MT of HFC-134a were
imported into the United States. Overall, HFC-134a made up
approximately 22 percent of total U.S. HFC consumption in 2024 on a
mass basis. The defense sprays application has very limited demand for
HFC-134a in comparison to U.S. consumption of HFC-134a; allocated ASAs
for this application in 2025 are equivalent to 0.5 percent of
calculated domestic consumption of HFC-134a in 2024, on a metric tons
of exchange value equivalent (MTEVe) basis. In addition, at the end of
2024, suppliers held 24,598.1 MT of HFC-134a in domestic inventory,
which is equivalent to 92 percent of calculated consumption of HFC-134a
in 2024; however, EPA notes that the entities holding this material in
inventory 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 under the statutory
review criteria in AIM Act subsection (e)(4)(B)(i)(II).
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\13\ Global production of HFC-134a is estimated to have risen by
approximately 20 percent since 2020. See <a href="https://ozone.unep.org/system/files/documents/TEAP-May2024-Progress-Report.pdf">https://ozone.unep.org/system/files/documents/TEAP-May2024-Progress-Report.pdf</a>.
\14\ All data for 2024 in this preamble is preliminary and
includes all data from reports verified as of July 25, 2025.
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EPA recognizes that the overall market for HFCs is likely to
continue changing in light of the AIM Act and other restrictions.
However, the market behavior to date suggests that over the first three
years of the AIM Act-directed HFC phasedown, there have not been
dramatic shifts in the supply of HFC-134a. On January 1, 2024, the
second stepdown of the level of permissible production and consumption
of HFCs took effect. This stepdown was unique in scale, with a cap of
60% of historic baseline levels and a decrease of 30% compared to 2022
and 2023 permissible production and consumption. Imports and production
of HFC-134a remained high, albeit with a decrease in total consumption
relative to levels in 2023. While consumption of HFC-134a has decreased
relative to 2022 and 2023, this aligns with projected decreases in
demand for HFC-134a as products transition to new HFC and non-HFC
substitutes. In addition, 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 notes it is unclear whether there may be impacts on domestic
production of HFC-134a from the recently finalized rulemaking,
``Trichloroethylene (TCE); Regulation Under the Toxic Substances
Control Act (TSCA)'' (89 FR 102568, December 17, 2024). This rulemaking
bans, through a phasedown, the use of TCE due to unreasonable risk of
injury to human health, including prohibiting TCE from being used as a
feedstock to manufacture HFC-134a within eight and a half years from
when that rule was finalized (i.e., by mid-June 2033). The HFC-134a
production pathway using TCE is the primary production pathway in the
United States, and while there are other pathways to produce HFC-134a,
it is EPA's understanding that it is complex to change already existing
domestic manufacturing infrastructure built for the TCE production
pathways such that transitions may not occur immediately but rather
over the course of the eight-and-a-half year TCE phaseout. However, at
the end of this ASA five-year renewal period in 2030, production of TCE
for use as a feedstock in the manufacture of HFC-134a will still be
allowed at 50% of baseline TCE levels. In addition, given entities
using TCE to produce HFC-134a can use any 12 consecutive months in the
three years preceding the December 2024 publication of the final TCE
rule to calculate their TCE feedstock baselines for compliance with the
TCE requirements under TSCA, the baseline TCE level could be based on
TCE use early in the HFC phasedown when greater levels of HFC-134a
production were allowed. Specifically, the AIM Act limit on HFC
consumption and production in 2022 and 2023 was 90% of historic HFC
baseline levels; in 2030, HFC consumption and production will be
limited to 30% of the HFC baseline. The TCE rule under TSCA is not
expected to be a limiting factor during the period covered by this rule
and will likely allow for substantial U.S. HFC-134a production levels
relative to demand, as discussed in more detail below in this section.
Further, while the complete phaseout of TCE for the production of HFC-
134a may impact production of HFC-134a in the United States, it is
unlikely to limit available supply of HFC-134a, as there is still
global supply of HFC-134a from foreign producers that could be imported
into the United States. The complete prohibition on TCE being used in
the domestic production of HFC-134a will occur after the five-year
renewal period assessed in this rulemaking. Therefore, when combined
with consideration of global supply, the TCE phasedown does not change
EPA's determination in this rulemaking that supply of HFC-134a is not
insufficient to accommodate the defense spray application.
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 requirements for
HFCs used in this application. EPA did not receive any comments
suggesting that recovered and
[[Page 41688]]
reprocessed HFCs cannot be used in this application. One commenter
suggested that EPA not rely on the use of reclaimed HFCs for defense
sprays because reclaimed HFCs should be utilized in applications where
the material is able to be recaptured multiple times, thereby extending
the usefulness of the substance. In response, EPA notes that this
rulemaking does not require the use of reclaimed HFCs in defense sprays
but rather notes that reclaimed HFCs may provide a potential source of
supply for this application. Requirements for the use of reclaimed HFCs
in equipment, and further information on the related authority to do so
under the AIM Act and EPA's relevant analyses, can be found in the
recently finalized 2024 Emissions Reduction & Reclamation Rule (89 FR
82682, October 11, 2024).
In light of the lack of relevant comments and following on the
explanation provided in the proposed rule, EPA is considering the
supply of recovered and reprocessed HFCs that can be secured from
chemical manufacturers as 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.\15\ 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 overall supply of HFC-134a available to this application.
HFC-134a is the most reclaimed single-component HFC refrigerant since
HFC reclamation reporting under CAA section 608 began in 2017 and
continues to see growth within the reclamation market due to its
prevalence as a refrigerant in various appliances. Annual reported
volumes of reclaimed HFC-134a have continued to grow since the
beginning of the HFC phasedown under the AIM Act; preliminary HFC
reclamation data for reporting year 2024 indicate a quantity of 1,175.6
MT, an increase of approximately 40 percent since 2021. Discussion on
reclaim market trends and future growth potential for reclaimed HFCs
can be found in EPA's Analysis of the U.S. Hydrofluorocarbon
Reclamation Market: Stakeholders, Drivers, and Practices \16\ report in
the docket for the 2024 Emissions Reduction and Reclamation Rule. EPA
expects growth in HFC reclamation, and specifically HFC-134a, to
continue due to several factors, such as (1) the increase in
refrigeration and air-conditioning appliances using HFC refrigerants
reaching their end-of-life--making more HFCs potentially available for
recovery and reclamation, (2) provisions established in the 2024
Emissions Reduction and Reclamation Rule intended to maximize reclaim,
(3) the overall HFC phasedown's limits on how much virgin HFC can be
imported and produced, and (4) increased capacity from EPA-certified
reclaimers to reprocess recovered refrigerant. EPA notes that while
reclaimed HFC-134a serves as an additional source of available supply,
the Agency's assessment that supply of HFC-134a is not insufficient
would be the same with or without including the available supply of
reclaimed HFC-134a given the significant amounts of HFC-134a available
globally and in the United States and other data described in this
section.
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\15\ 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 original owner of the recovered 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.
\16\ See 2024 Emissions Reduction & Reclamation Rule's Analysis
of the U.S. Hydrofluorocarbon Reclamation Market: Stakeholders,
Drivers, and Practices report at <a href="https://www.regulations.gov/document/EPA-HQ-OAR-2022-0606-0169">https://www.regulations.gov/document/EPA-HQ-OAR-2022-0606-0169</a>.
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Restrictions established in the 2023 Technology Transitions Rule
began taking effect at the beginning of this year. There has been no
further information EPA has been made aware of that would change the
Agency's assessment that demand for HFC-134a will continue to fall in
part because of these restrictions.
Entities do not need to seek or receive ASAs in order to use HFC-
134a in defense sprays, barring requirements under other related
regulations. Further, entities do not have to expend an allowance to
purchase HFC-134a from another entity that has imported or produced the
regulated substance. The number of entities requesting allowances for
this application has decreased over the years; only three entities
requested calendar year 2025 allowances for this application as
compared to four for 2024 and five for 2022. As explained earlier in
this section, EPA is also aware of at least one entity selling bear
spray that uses HFC-134a that has never applied for, and therefore
never received, ASAs. This suggests that at least this one entity, as
well as the others who have stopped applying for allowances, were able
to acquire HFC-134a on the open market without having ASAs. In
addition, updated EPA modeling conducted for the 2024 Emissions
Reduction & Reclamation Rule continues to support that total projected
HFC consumption will be significantly lower than the limit established
by the statutory phasedown cap for all years of the phasedown, assuming
compliance with the restrictions.\17\ If HFC consumption is lower than
the amount allowed under the AIM Act in a given year, there should be
more allowances than are needed to meet market demand in that year.\18\
If demand for HFCs is lower than the cap, 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. Together, these facts support the conclusion
that the supply of HFC-134a is not insufficient to accommodate entities
in this application.
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\17\ See HFC Phasedown RIA Addendum at <a href="https://www.regulations.gov/document/EPA-HQ-OAR-2022-0606-0175">https://www.regulations.gov/document/EPA-HQ-OAR-2022-0606-0175</a>.
\18\ 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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In sum, HFC-134a is currently more widely available than other
HFCs, demand for HFC-134a is decreasing, and defense sprays' need for
HFC-134a is small compared to the overall demand for HFC-134a across a
range of sectors. 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. As a
result of this review, EPA is finalizing the proposed determination
that the
[[Page 41689]]
criterion in subsection (e)(4)(B)(i)(II) is not met for this
application beginning January 1, 2026, i.e., the supply of HFC-134a is
not insufficient to accommodate this application for the full five-year
period from 2026-2030.
3. Final Determination on Application-Specific Allowance Eligibility
EPA co-proposed two renewal options for the defense sprays
application--to not renew the eligibility for entities in this
application to receive ASAs, such that the application is ineligible
for ASAs beginning January 1, 2026, or to renew for two years, such
that the application is ineligible to receive ASAs beginning January 1,
2028--and took comment on a full five-year renewal. EPA explained that
these renewal options flowed out of how the Agency would land on a
range of proposed determinations for the statutory criteria.
Specifically, as described earlier in this section, EPA proposed that
there would not be a safe and technically achievable substitute
available for the entire application at the time of rule finalization,
but a safe or technically achievable substitute would be available for
the entirety of the defense spray application by January 1, 2028. EPA
co-proposed two supply determinations: (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. EPA's co-proposals were based on uncertainty at the
time of the proposed rulemaking, for which EPA expected to have
additional information at the time of this final rulemaking that would
inform a final determination. These co-proposals and the related
information that supported each co-proposal are discussed in more
detail earlier in this section and in the proposal.
EPA also took comment on a full five-year renewal based on and
tailored only to the application's need to purchase HFC-152a. No
defense spray ASAs have been expended for HFC-152a to date, but EPA
asked for comment in the proposal on whether HFC-152a could be an
available safe and technologically achievable substitute for the entire
defense spray application within the renewal period. EPA explained that
this proposed option, to renew allowances tailored to the application's
need to purchase HFC-152a, could be relevant if HFC-152a was determined
by EPA in the final rule to be an available safe and technologically
achievable substitute for the entire defense spray application within
the renewal period.
Comments on the proposed renewal options were all focused on
availability of substitutes. EPA responds to these comments in section
V.B.1. and section V.B.4. EPA is finalizing a determination that the
criterion in subsection (e)(4)(B)(i)(II) is not met for this
application beginning January 1, 2026. EPA is not making a final
determination regarding the availability of substitutes in the context
of ASAs, as described in more detail in section IV.B.3. Because the
defense sprays application does not meet both criteria as of January 1,
2026 (i.e., it fails to meet the insufficient supply criterion), EPA is
finalizing that defense sprays are not eligible for ASAs beginning
January 1, 2026.
4. Restriction Under 40 CFR Part 84, Subpart B
In this final rule, EPA is excluding defense sprays from the
provisions of 40 CFR part 84, subpart B. Thus, under this final rule
they can continue to be manufactured in the United States and imported
into the United States using current propellants indefinitely.
The 2023 Technology Transitions Rule restricts the manufacture and
import of aerosol products that use HFCs or HFC blends that have a GWP
greater than 150. This restriction began January 1, 2025, for all
aerosols except for those specifically listed in the rule as technical
aerosols, which have manufacture and import restrictions starting
January 1, 2028. Sectors and subsectors subject to the GWP limit are
also subject to labeling, reporting and recordkeeping requirements. 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 also exempted applications while they are receiving
ASAs (40 CFR 84.56(a)(2)). If an application no longer qualifies for
ASAs, the restrictions would then apply.
Most of the U.S. aerosol industry subject to the January 1, 2025,
compliance date had already transitioned to using propellants that meet
the 150 GWP limit as indicated in the information provided by industry
and trade associations in the development of the 2023 Technology
Transitions Rule,\19\ 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 aerosol uses that have
a January 1, 2028, compliance date (see 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. EPA determined in the 2023
Technology Transitions Rule that available substitutes for use as
aerosol propellants include HFC-152a and HFO-1234ze(E).
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\19\ 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
to the 2023 Technology Transitions Rule at EPA-HQ-OAR-2021-0289-
0037.
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In the proposed rule, EPA requested comment on treating defense
sprays consistent with how technical aerosols are treated under 40 CFR
part 84, subpart B and the codified restrictions that would therefore
apply, such as the GWP limit starting January 1, 2028, a three-year
sell-through window for inventory ending January 1, 2031, and labeling,
recordkeeping, and reporting requirements. EPA also requested data and
information related to the availability of substitutes for use in
defense sprays and whether a different timeline would be more
appropriate for the transition of defense sprays or for a subset of
products in this application.
EPA received comments on the use of HFC-134a in defense sprays.
First, commenters raised concerns about using a flammable propellant in
law enforcement and military applications. These defense sprays could
be used by law enforcement or military personnel in combination with a
taser, which commenters stated poses a safety risk, as well as a cost
to users to retrain personnel to mitigate these risks. The commenters
requested an exemption for these uses until a non-flammable alternative
propellant is available.
EPA received a comment requesting that the Agency provide
additional time for compliance with the provisions of 40 CFR part 84,
subpart B for bear sprays to transition to new alternatives. The
commenter stated that new formulations of bear sprays must gain
approval by EPA under the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA) as well as every state where those products are
sold. EPA also received comments from a defense spray
[[Page 41690]]
manufacturer and a propellant supplier stating that alternative
propellants have been commercialized already and are effective in
defense spray applications where flammability is not a concern, e.g.,
bear repellents.
EPA acknowledges these comments regarding the safety, efficacy, and
availability of substitute propellants used in defense sprays. The
Agency agrees that the circumstances in which law enforcement and
military defense sprays may be used warrants proceeding with caution.
Almost all currently identified substitutes to HFC-134a as a propellant
are either flammable or mildly flammable. While dog sprays use
compressed nitrogen gas, which is a non-flammable propellant, technical
limitations limit its suitability for use in other types of defense
sprays. For example, products using compressed nitrogen gas will
steadily reduce in pressure as the contents of the aerosol are used,
whereas liquified gas propellants maintain a more constant pressure.
Apart from nitrogen gas, we are not aware of available non-flammable
substitutes, nor active, in-process development of such substitutes. Of
particular concern is that law enforcement or military use of defense
sprays in combination with tasers would be applied directly at or on
humans, heightening safety risks. We therefore agree with commenters
that, at this time, there is no available substitute for the HFCs
employed in defense sprays that can safely be used across all uses.
Therefore, the Agency is finalizing that defense sprays as defined
in 40 CFR 84.3, are excluded from the provisions under 40 CFR part 84,
subpart B because there are not available substitutes, per AIM Act
section (i)(4)(B), across all defense spray applications. As such,
defense sprays are not subject to the restrictions on the manufacture
or import at 40 CFR 84.54(a)(16), and subsequent sale and distribution
at 40 CFR 84.54(b). The labeling, reporting, and recordkeeping
requirements are also not applicable. In other words, defense spray
manufacturers will not have to comply with any of the 2023 Technology
Transitions Rule aerosol requirements that would otherwise apply to
them once they are no longer eligible for ASAs and can purchase HFC-
134a to manufacture defense sprays the same way nearly all other
entities purchase HFCs, i.e., on the open market.
C. Structural Composite Preformed Polyurethane Foam for Marine Use and
Trailer Use
The third application to which EPA has been allocating ASAs 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,
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 polyurethane (PU) foams due to its specialized
structural properties, and it is preformed into required shapes (e.g.,
specific boat or trailer design). At the time of proposal, HFC-134a was
the HFC used commercially in the blowing process for SCPPU foam.
Transitions have developed such that at the time of this final
rulemaking, HFC-152a, in addition to HFC-134a, is a regulated substance
used in this application.
1. Availability of Safe and Technically Achievable Substitutes
With respect to the statutory criterion regarding availability of
substitutes, EPA explained in the proposed rule that commercialization
of substitutes is well underway in this application, and the Agency
anticipated that the availability of substitutes would evolve
significantly between the proposed and final rule. EPA noted that it
would consider information collected from regulated entities and other
relevant sources through public comment and regulatory reporting to
inform a final decision on this criterion. At the time of proposal, EPA
was aware, from manufacturer communications and reporting, of two
substitutes under development for this application--an HFC-152a/
cyclopentane blend and an HFO. Information from the manufacturers of
SCPPU foam for marine and trailer uses suggested that the research and
development phase for both potential substitutes could be nearing a
phase where they would be able to commercialize use of substitutes.
According to the information shared with EPA prior to the proposed
rule, one substitute seemed close to being available for SCPPU foam for
marine use, and the other substitute seemed close to being
commercialized for SCPPU foam for trailer use. EPA noted that if
commercialization occurred as the companies anticipated and as shared
with EPA, the entire application would be able to use a chemical or
blend of chemicals different from HFC-134a before January 1, 2026. EPA
proposed to determine that the HFO is not an available substitute
application-wide for the five-year period of 2026-2030, given
additional research and development trials would be needed along with a
ramp up to commercialization, before the sub-application could possibly
use the HFO as a substitute. With respect to the other substitute under
development, EPA noted in its proposal that the Agency was unclear on
why the HFC-152a/cyclopentane blend cannot be used across the whole
application, and EPA invited comment on reasons why, including
supporting data and information. EPA noted that often different
companies use different blowing agents to produce the same foam, and
that there are two different end uses in this application, but the foam
used in both sub-applications is the same (i.e., it is an SCPPU foam).
EPA noted that it was not aware of any other safe and available
alternatives other than an HFO and the HFC-152a/cyclopentane blend.
As noted earlier in this section, at the time of proposal, EPA
explained that transitions were well underway in this application, and
the Agency anticipated that the commercial processes used in this
application could evolve significantly between the proposed and final
rule. To that end, one commenter in the trailer sub-application stated
that as of October 2024, the company had nearly completed a full
transition to using the HFC-152a/cyclopentane blend and anticipated the
transition to be finalized by early 2025 at the latest. On the basis of
this statement, as well as regulatory reporting to EPA, the factual
framework for the assessment of this application has shifted from the
proposal in this final rulemaking. Specifically, EPA is now considering
HFC-152a to be commercially used in the SCPPU foam application.
Therefore, EPA will be assessing the SCPPU foam application in
accordance with the review framework outlined in section IV., and
specifically considering this application as one that uses two HFCs,
instead of just one.
As described at the proposal, beside the HFC-152a/cyclopentane
blend that EPA is now considering as an HFC used within this
application for purposes of the analysis in this final rule, EPA only
identified one other potential substitute to analyze with specificity
in considering whether this application met the first statutory
criterion for renewal. Specifically, EPA noted testing that had
occurred within the application
[[Page 41691]]
for a potential transition to an HFO. EPA received comments from
entities operating within the SCPPU foam application, both in the
marine sub-application and trailer sub-application, that all agreed
with EPA's proposal that HFOs are not a safe and technically achievable
substitute available within the renewal period for this application.
The entity operating within the trailer sub-application noted that they
had completed nearly 190 trials over close to seven years, which were
unsuccessful, regarding transition to an HFO. This is consistent with
information EPA had on hand in developing the proposal. With respect to
the sub-application for marine uses, multiple commenters raised
skepticism about the availability of safe and technically achievable
substitutes for the marine uses sub-application. One commenter in the
SCPPU foams for marine uses sub-application noted that while it has
been working with its key supplier on substitutes for several years,
that work has been unsuccessful, and no viable substitute has been
identified. The commenter stated that it has not invested heavily into
pursuing HFOs as an alternative due to perceived risk of those
chemicals being under state-level regulatory scrutiny. Another
commenter, the supplier for the marine foams sub-application, provided
detailed technical information on the challenges of HFOs as compared to
HFC-134a. For example, they note ``HFO-containing PU [foam] is much
more challenging to formulate and process to reach the same level of
processability even with adjustments to processing equipment due to the
fact that all the components and chemistries such as polyols,
surfactants, catalysts etc. are optimized for HFC blown formulations
and processes.'' They noted the transition to HFOs will require ``more
time to optimize and scale for commercial use.'' Another commenter, a
recreational marine trade associate, stated that while manufacturers
are actively pursuing alternatives to HFC-134a, none of those
alternatives are currently viable as they have not yet met the
stringent technical and safety requirements for marine applications. No
stakeholder operating within the application commented that a safe and
technically achievable substitute is available in the application nor
would be available within the renewal time period.
EPA acknowledges the support from the commenters of EPA's proposed
determination that there is no HFO alternative that is or will be a
safe and technically achievable substitute for this application within
the renewal period. To the extent commenters provided data to support
this conclusion beyond what was included in the TSD for the proposed
action, EPA has incorporated that information into the TSD accompanying
this final action. Regarding commenters' allegation that considering
transition to HFOs is inadvisable due to regulatory action related to
per- and polyfluoroalkyl substances (PFAS), EPA notes that the federal
government has not adopted a specific definition of PFAS and has not
included HFCs or HFOs in any PFAS-related restrictions. Although EPA
does not have a consensus definition of PFAS, the Agency has applied
certain criteria or definitions to advance program-specific efforts in
specific rules (see section 3.4 of the accompanying TSD). As was
detailed in the proposed action and accompanying TSD, HFOs may
eventually be considered a safe alternative that is otherwise
technically achievable and available. However, for this particular
application, as detailed in response to an earlier comment, the Agency
is determining that HFOs are not available substitutes at this time.
Entities working within the marine sub-application also provided
comments regarding a transition from HFC-134a to HFC-152a. However,
given that EPA has updated its assessment in this final rule to
consider HFC-152a a regulated substance used within the application, as
opposed to a potential substitute subject to evaluation, these comments
are not significant nor adverse to the action being taken here.
However, EPA acknowledges the information provided by the commenter and
will incorporate it into future Agency deliberations, as relevant and
appropriate.
EPA is finalizing a determination that no safe or technically
achievable substitute will be available for the SCPPU foams for marine
and trailer uses application for the full five-year period from 2026-
2030. Further information about EPA's determination regarding available
substitutes for this application can be found in the proposed rule and
the SCPPU foam chapter of the TSD.
2. Supply
As explained, entities manufacturing within the SCPPU foam
application have historically used an HFC-134a formulation. Between EPA
proposing this rule and its finalization, the application has changed
such that the trailer sub-application is now using an HFC-152a
formulation. Therefore, EPA is analyzing the supply of both HFCs in
assessing whether this application meets the second criterion to be
renewed as eligible for ASAs.
In the proposed rulemaking, EPA stated its assessment that this
application may be able to use recovered and reprocessed HFCs supplied
by chemical manufacturers. As a result, EPA did not limit its analysis
to only virgin chemicals in assessing what supply of regulated
substance may be available to this application at the proposal stage.
EPA noted in the proposed rulemaking that it was not aware of any
purity requirements or other regulatory restrictions that would
prohibit the use of recovered and reprocessed HFCs in this application.
However, EPA also noted in the proposed rulemaking that efficacy of
blowing agents can be influenced by their composition and purity.
Comments on the use of recovered and reprocessed HFCs primarily
focused on the challenges of using this material, but one commenter
noted it is exploring using reclaimed HFCs. Commenters asserted that
impurities can impact the efficacy of blowing agents. Specifically,
commenters highlighted how oils can act as defoamers and that
impurities can lead to ``inconsistent foam formation and cell
structure, which will result in products with inconsistent insulation
performance, mechanical strength and integrity.'' One commenter stated
how these inconsistencies might require changing formulation and
process conditions with each batch of HFCs. Another commenter asserted
their HFC supply must be free of impurities because otherwise the
product would ``likely be compromised, rendering the product
ineffective and unusable,'' but did not provide any testing data or
purity standards.
Reclaimed HFCs, the likeliest source of recovered and reprocessed
HFC-134a, are required to be at a very high, but not 100 percent,
purity (see footnote 15 in section V.B.). While no commenter suggested
that these contaminants cannot be fully removed, EPA recognizes that it
may be impractical or infeasible, as EPA is not aware of any purifiers
for the SCPPU foams (or other) application that currently purify
reclaimed HFC-134a, and commenters did not note any. As described in
further detail below, EPA has determined to not incorporate any supply
of used HFCs in its assessment of supply for this application at this
time, given that inclusion of such used HFCs is not determinative of
the supply outcome. However, EPA may take a different approach in
future rulemakings and welcomes ongoing stakeholder input regarding the
ability to use recovered and reprocessed HFCs for this application.
[[Page 41692]]
EPA proposed 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. As outlined in further detail in EPA's proposed rule and the
accompanying TSD, 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 2025 are equivalent
to 0.2 percent of calculated domestic consumption of HFC-134a in 2024,
on an MTEVe basis. In addition, global supply should remain substantial
in comparison to this application's demand for HFC-134a. EPA had also
noted in the proposed rulemaking that it was not aware of any purity
requirements or other regulatory restrictions that would prohibit the
use of recovered and reprocessed HFCs. However, EPA also noted in the
proposed rulemaking that efficacy of blowing agents can be influenced
by their composition and purity.
With respect to the supply of HFC-134a, one commenter stated
uncertainty about the future availability of HFC-134a to meet the
application's needs given the reduction in production and consumption
allowances under the AIM Act. In response, EPA notes that the commenter
did not provide any specific comments on the data EPA presented nor
counter data to support a determination that the supply of HFC-134a
will be insufficient to accommodate this application. As noted in
section V.B., global production of HFC-134a is expected to continue for
the foreseeable future. EPA also notes this application uses a very
small amount of HFC-134a (the commenter characterized it as
``infinitesimal'') as compared to total domestic consumption. EPA notes
this is further evidence that the large supply of HFC-134a is not
insufficient to accommodate this application. Further, EPA responds
that the commenter's concern does not align with Congress's direction
to EPA to review all applications receiving ASAs at least every five
years and instruction to consider the supply of regulated substances as
part of a determination on whether to renew the eligibility of an
application to continue to receive ASAs. In crafting this system,
Congress knew that this review would occur against the backdrop of the
overall phasedown in production and consumption of HFCs. While EPA
acknowledges the commenter's concern that the phasedown creates some
uncertainty for an evolving HFC market, the best interpretation of the
HFC supply criterion cannot be that it is always met simply because of
the HFC phasedown occurring.
After considering comments received and reviewing additional data
available regarding the supply of HFC-134a, EPA is finalizing a
determination that supply of HFC-134a is not insufficient to
accommodate the SCPPU foams application as of January 1, 2026. To take
a conservative approach, EPA is not including recovered and reprocessed
HFC-134a in its assessment of the available supply of HFC-134a to
accommodate this application, given the potential concerns raised by
commenters about the impacts of even small levels of impurities in the
HFCs used as blowing agents. Due to the significant global production
of virgin HFC-134a, the exclusion of recovered and reprocessed HFC-134a
does not change EPA's conclusion regarding available supply of HFC-
134a.
With respect to HFC-152a, EPA stated in the proposed rule that in
light of uncertainty, EPA did not make a proposed determination about
the supply of HFC-152a. EPA stated that the Agency could determine in
the final rulemaking that supply of HFC-152a is not insufficient to
accommodate the SCPPU foams for marine and trailer uses application for
the full five-year period, is not insufficient as of January 1, 2028,
or is insufficient for the entire renewal period. This was based on
multiple facts regarding supply and demand of this chemical that are
outlined in significant detail in the proposed rule and the TSD
accompanying the proposal. Specifically, domestic production and
imports of HFC-152a were substantial, with HFC-152a being produced in
the second highest quantities domestically of any HFC and production
equal to about 22 percent of U.S. HFC production by mass.\20\ Domestic
production capacity was also expected to increase by approximately 20
percent by mid-2024 due to one manufacturer's facility expansion, but
EPA could not say with certainty at the time of proposal when that
expansion would be complete.\21\ Overall, HFC-152a made up
approximately 20 percent of total U.S. HFC consumption in 2022 on a
mass basis. Domestic inventory of HFC-152a equaled 3,228.4 MT of HFC-
152a at the end of 2022, equivalent to about 10 percent of calculated
consumption of HFC-152a that year. Demand, however, was less certain.
For example, certain HFC restrictions that would take effect as of
January 1, 2025, could increase demand for HFC-152a domestically for
certain uses. HFC-152a has a GWP that is below all the GWP limits for
sectors and subsectors subject to restrictions under 40 CFR part 84,
subpart B. The 2023 Technology Transitions Rule identified HFC-152a as
an available or potentially available substitute for foams, aerosols,
motor vehicle air conditioning, and household refrigerators and
freezers.\22\ While some of the affected sectors and subsectors
transitioned to other substitutes (e.g., motor vehicle air
conditioning, household refrigerators and freezers), there are
subsectors where HFC-152a neat or in blends is a substitute, and it was
unknown at the time of proposal if there would be any significant shift
toward use of HFC-152a in 2025. EPA also noted that this application's
demand for HFC-152a was minimal compared to global supply.
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\20\ 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>.
\21\ 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>.
\22\ See 2023 Technology Transitions Rule 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.
---------------------------------------------------------------------------
One commenter stated general uncertainty regarding the supply of
HFC-152a related to the HFC phasedown. The commenter asserted with the
40% phasedown step in 2025 and the 70% stepdown in 2029, it is ``very
reasonable to assume that the supply of HFC-152a will be reduced by a
similar degree.'' This commenter also highlighted their sub-
application's growing demand for HFC-152a as compared to previous
years.
EPA responds in a similar fashion as to the concerns raised
regarding the supply of HFC-134a relative to the HFC phasedown,
specifically that Congress could not have intended for the supply
criterion to be meaningless in the face of the overall AIM Act
phasedown of regulated substances. Additionally, EPA has analyzed data
that has become newly available since the time of proposal related to
supply of HFC-152a for this application. In 2023, domestic production
of HFC-152a increased to 33,905.9 MT, about 26 percent of U.S. HFC
production by mass. Preliminary data for 2024 shows that production
remained similar in 2024, increasing slightly to 34,154.9 MT. The
facility expansion that EPA described in the proposed rule has been
completed. There is continued substantial global
[[Page 41693]]
production of HFC-152a, which also supplies the U.S. market. Multiple
entities imported HFC-152a in 2024, and imports have remained at
significant levels. In 2024, entities imported a total of 5,886.5 MT,
an approximately 8 percent decrease compared to 2023 imports and 1
percent increase compared to 2022 imports. Overall, HFC-152a made up
approximately 22 percent of total U.S. HFC consumption in 2023 on a
mass basis and 30 percent in 2024, approximately a 50 percent increase
relative to 2022. These data trends taken together suggest that what
the commenter termed as a reasonable assumption that HFC-152a supply
will be reduced in amounts proportional to reductions in the HFC
production and consumption caps appears to be incorrect.
In addition to considering the comment filed on this issue, EPA
analyzed two additional years of reported data since the publication of
the proposed rulemaking to determine how the new information impacts
EPA's proposed determinations regarding the supply of HFC-152a. Despite
the increase in domestic production and imports, there are factors that
limit supply of HFC-152a. Inventory of this chemical is substantially
lower than that of other HFCs, such as HFC-134a. At the end of 2024,
suppliers held just 5,650.4 MT of HFC-152a in domestic inventory, which
is equivalent to approximately 15 percent of calculated consumption of
HFC-152a in 2024. A lack of available inventory could indicate
increased use in this market as the phasedown progresses as compared to
HFCs where there is more inventory available, such as for HFC-134a.
In addition, there is continued uncertainty regarding the demand
for HFC-152a as other manufacturers transition. As noted earlier in the
section, HFC-152a has a GWP that is below all the GWP limits for
sectors and subsectors subject to restrictions under 40 CFR part 84,
subpart B. At the time of this final rulemaking, it is still not known
if there will be a significant shift toward use of HFC-152a neat or in
blends. The continued global HFC phasedown could encourage a shift to
lower GWP HFCs, like HFC-152a, and Technology Transitions restrictions
may also result in some sectors transitioning to HFC-152a. EPA's
Vintaging Model shows a projected decreased demand for HFC-152a in the
coming years, but, as described above, consumption of HFC-152a has been
increasing, suggesting an increased demand for HFC-152a, potentially in
new blends. This differing information and projections further
highlight the uncertainty regarding the near-term market demand for
HFC-152a as a substitute. In addition, EPA is also aware that HFC-152a
is used as a feedstock to produce other chemicals, which could
contribute to variations in demand for HFC-152a for use as a feedstock.
In sum, while there is currently a reasonably large supply of HFC-152a
that is expected to increase over the coming years relative to other
HFCs, there is significant uncertainty around supply and demand for
HFC-152a. As a result of this uncertainty, EPA is finalizing a
determination that the supply of HFC-152a is insufficient to
accommodate the SCPPU foams for marine and trailer uses application for
the full five-year period from 2026-2030, i.e., the criterion in
section (e)(4)(B)(i)(II) is met for HFC-152a.
3. Final Determination on Application-Specific Allowance Eligibility
In light of the range of outcomes EPA proposed regarding its
determinations on whether the criteria in subsection (e)(4)(B)(i)(I)
and (II) are met, EPA proposed 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 also took comment on SCPPU
foam for marine and trailer uses eligibility to receive ASAs consistent
with the current approach through calendar year 2030. EPA also noted
that it could finalize different outcomes based on how the transition
to substitutes progressed between the proposal and rule finalization.
Comments regarding the proposed renewal determinations were mixed.
Two commenters supported a full five-year renewal without restriction
on how allowances are calculated; one of these commenters, a
manufacturer of SCPPU foam for marine uses, requested renewal for the
full five-year period for HFC-134a because it would be unable to comply
with the relevant Technology Transitions restrictions if it was not
eligible for ASAs. Another commenter supported a five-year renewal with
allowance amounts determined based on the EV of HFC-152a but also
supported no restriction on allowance calculations. One commenter
supported a two-year renewal ending January 1, 2027.\23\ Finally, one
commenter supported a hybrid approach--a two-year renewal with no
restriction on allowance calculations and renewal for the remaining
three years with allowance amounts determined based on the EV of HFC-
152a--based on availability of alternatives.
---------------------------------------------------------------------------
\23\ EPA notes a two-year renewal period, as EPA co-proposed,
would end January 1, 2028, so EPA is interpreting this comment as
being consistent with EPA's co-proposal.
---------------------------------------------------------------------------
Based on the analysis provided in the prior subsections, as further
detailed in the TSD accompanying this final action, EPA is finalizing
determinations that the SCPPU foams for marine and trailer uses
application meets both criteria in subsection (e)(4)(B)(i) for the full
five-year renewal period. As such, EPA is finalizing to renew the
eligibility of entities using regulated substances for SCPPU foams for
marine and trailer uses application for the five-year period of
calendar years 2026 through 2030. Regarding the commenter's request for
a full five-year renewal for HFC-134a so as to not be held to relevant
Technology Transitions restrictions, EPA's decision to finalize a
renewal addresses this comment; because this application is eligible
for ASAs through 2030, it will continue to be exempt from relevant
Technology Transitions restrictions through at least 2030.
D. 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 final rule, EPA is aware of three
[[Page 41694]]
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 proposed to determine that this application met both statutory
criteria for the full five-year renewal period. Specifically, EPA
proposed to find that, through calendar year 2030, (1) 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; and (2) that the supply
of regulated substances that manufacturers and users are capable of
securing from chemical manufacturers is insufficient to accommodate
this application. Therefore, EPA proposed 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
With respect to whether safe and technically achievable
substitute(s) are or will be available for this application, EPA
explained in the proposed rule that while there are a number of
alternative chemicals currently used for etching and chamber cleaning
in semiconductor manufacturing, EPA proposed to not consider any of
these chemicals to be safe and technically achievable substitutes based
on consideration of these chemicals having some or a combination of
higher GWPs, higher emission rates (also referred to as lower
utilization rates in this application), or higher toxicity than the
HFCs for which ASAs are currently used. EPA also identified other
compounds that are being studied for use in etching and chamber
cleaning, and are either not yet technically achievable or are not
considered safe. All the details of EPA's assessment regarding
substitutes can be found in the proposed rule and accompanying TSD.
Some commenters were supportive of EPA's proposed determination
that there will be no available safe and technically achievable
substitutes for the semiconductor application by the end of the renewal
period. One commenter encouraged EPA to consider gas use, gas
utilization, and byproduct generation rates within its evaluation of
alternatives' technical feasibility. The commenter noted that within
the semiconductor application, gases have different utilization and
byproduct emission factors, citing 40 CFR part 98, subpart I: Mandatory
Greenhouse Gas Reporting: Electronics Manufacturing tables I-3 through
I-7.
EPA acknowledges these comments in support of the Agency's proposed
determination regarding availability of safe and technically achievable
substitutes. When the commenter references ``gas use,'' they do not
specify what they mean by this phrase. EPA understands that this term
could mean gas consumption (i.e., the quantity of each gas used for a
particular process), how the gas is used (i.e., for which processes or
technologies), or some other meaning. The Agency reviewed a variety of
sources in developing its assessment of substitutes, some of which
included consideration of the factors listed by the commenter. For
example, the TEAP's MCTOC 2022 Assessment report considers utilization
rates and byproduct generation in its review. The Agency did not
consider many of the potential alternatives listed in the MCTOC 2022
Assessment report as available substitutes. As one example, EPA did not
consider saturated perfluorocarbons (PFCs) as a technically available
and safe substitute for this application for a variety of reasons,
including that they have relatively low gas utilization rates. Based on
the data at hand and the information available to the Agency at the
time, EPA has not identified any substitute or substitutes that could
be considered an available alternative under EPA's definition of a
``safe and technically achievable substitute.'' EPA may consider
additional factors in the review of their potential substitute
chemicals in future reviews, including the ones cited by the commenter,
as additional data becomes available.
One commenter stated that there has been ``promising work''
demonstrating low-GWP, affordable alternative recipes that do not
include HFC-23, HFC-32, and HFC-41 and these alternative recipes would
not introduce use of substances that may be considered PFAS. The
commenter added that in-house testing at semiconductor manufacturers
has lagged as limited incentives exist, and that providing a five-year
renewal will further disincentivize the semiconductor industry from
developing lower-GWP etch processes using alternative etch molecules.
The commenter said an incentive for the semiconductor industry to
proactively demonstrate the ``HVM performance'' (EPA understands the
commenter to mean high volume manufacturing in their use of the acronym
HVM) of alternative, lower-GWP etch recipes replacing HFC-23, HFC-32,
and HFC-41 should be provided, which they suggest could be done by
limiting the renewal to one year.
While the commenter has stated that there is promising work in the
development of alternative etch chemistries, the commenter has not
provided specific data to inform EPA's determination regarding whether
there are substitutes available for this application now. As explained
elsewhere in this section and detailed in the TSD accompanying this
final rule, EPA has analyzed all available information in coming to a
determination that substitutes are not available for this application.
The commenter suggests that EPA could renew this application for only a
single year to incentivize the HVM performance of alternative, lower-
GWP etch recipes to replace HFC-23, HFC-32, and HFC-41, but does not
provide any data to support such an outcome, i.e., that substitutes
will become available within a year and therefore both statutory
criteria for renewal are no longer met. EPA invites the commenter to
review section IV. of this rule for more information about how EPA is
making decisions regarding application eligibility, including the
determination of how long an application will be eligible to receive
ASAs.
Another commenter stated that EPA's proposed determination that
there is no substitute available for HFC-23 deserves close attention.
The commenter stated that the Agency should not wait five years to re-
visit the determinations for the availability of substitutes for HFC-
23. The commenter asserted that lower-GWP, affordable alternatives to
HFC-23 have been demonstrated in various semiconductor applications.
The commenter, a chemical manufacturer, described efforts to
collaborate with a partner on an unspecified near-zero GWP alternative
for use in this application. According to the commenter, this chemical
has been demonstrated for etching and is ready for use in the field.
The commenter expressed that with its high GWP and incomplete
destruction resulting in potent emissions, the stakes are particularly
high for the continued use of HFC-23, and the Agency should not be
incentivizing its continued use. The commenter quotes AIM Act
subsection (e)(4)(B)(v), which directs EPA to review applications ``not
less frequently than once every 5 years'' and suggests that EPA is free
to review the applications more frequently than every five years.
[[Page 41695]]
In response to the commenter regarding the availability of
potential substitutes for HFC-23, while the commenter has stated that a
near-zero GWP alternative has been demonstrated for etching and chamber
cleaning use and is ready for use in the field, their comment indicates
this alternative has not been commercialized or otherwise adopted by
the semiconductor industry. EPA met with the commenter to further
discuss the status of the alternative and determined that the
alternative would not replace all uses of HFC-23 for etching. Even if
this alternative were to become available as an HFC-23 substitute
within the next five years, EPA still has not identified substitutes
that would meet the substitute criteria on an application-wide basis.
As described earlier in this section and finalized in section IV.A.,
determinations on whether a substitute is available and whether the
statutory criterion is met are made on an application-wide basis.
Therefore, if EPA agreed with the commenter's statements and could
determine that an alternative would be available for HFC-23 within the
five-year renewal period, there still is no evidence that there would
be an available substitute for the entire application. EPA responds to
the comment regarding the frequency of review of these applications in
section IV.C.
In addition to the information provided by the commenters, EPA also
reviewed existing sources of information for potential updates on the
Agency's assessment of whether substitutes are available for this
sector. EPA found no significant updates, which is outlined in more
detail in the TSD accompanying this final rule. Therefore, for the
reasons outlined, EPA is finalizing the determination 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 at least the next
five years.
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 finalizing the approach described
in the proposed rule to determine that an application meets the supply
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. EPA proposed to determine that the
supply of HFC-23 and HFC-41 are insufficient to accommodate the
application. Therefore, EPA proposed 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.
In the proposed rulemaking, EPA noted that it is not aware of why
reclaimed HFCs cannot be purified to industry specifications and
invited comment on the topic. EPA noted that 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, EPA
noted that 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.
One commenter stated that reclaimed refrigerants cannot be used to
supply the semiconductor industry, stating that both purity and
chemical consistency of each batch of HFCs are critical, and
accordingly each HFC source must be approved by purifiers and/or
semiconductor customers and a consistent chemical fingerprint must be
demonstrated. The commenter added that this assures purifiers that they
will be able to effectively and economically produce material for the
semiconductor industry, and it assures fabrication plants they will not
be introducing unexpected contaminants to their processes. The
commenter further asserted that reclamation cannot offer the same
consistency between each batch. The commenter added that many different
sources, with many different impurities, may contribute to reclaimed
HFCs, and this complicates the purification process, making it more
expensive, and puts semiconductor fabrication plants at risk. They
concluded that it would thus be inappropriate for EPA to include
reclaimed material in assessing availability of HFCs for the
semiconductor sector pursuant to the ASA program. Another commenter
described similar challenges associated with purifying HFC-23 from
semiconductor fabrication facility recapture. The commenter stated that
virgin HFC material contains known purities, and that purification and
distillation processes are therefore calibrated to handle these
predefined impurity levels. These purification methods are able to
purify HFC-23 to a quality of 99.999% with stable metrology solutions
for monitoring. Conversely, the commenter cited challenges with
purifying HFC-23 from semiconductor fab recapture, including the
variation in the concentration of HFC-23 and other molecules between
tools, the variability in the chamber effluent output across tools, the
low concentrations of HFC-23 in effluent gas due to dilution from other
substances introduced downstream to sweep impurities, and cost-
effectiveness issues associated with removal of toxic substances and
movement of the gases.
EPA notes that these two commenters are describing concerns related
to recovered HFCs from two different pathways--the purification of
generally reclaimed gas and the recapture of HFC-23 from a
semiconductor fab facility. However, commenters raised similar concerns
with both types of material, and therefore EPA is responding to the
comments in a single response. EPA notes that the commenters state that
purification and subsequent use of reclaimed HFC material at this time
may not be feasible for the purposes of semiconductor manufacturing due
to quality control concerns in addition to the other technical and cost
limitations outlined in these comments. EPA has added this information
to the TSD. In addition, EPA notes that the quantities of reclaim
available for these specific HFCs are currently very small and may be
limited. In 2024, only HFC-23 and HFC-32 were reclaimed in small
quantities, and there were no quantities of reclaimed HFC-41 reported.
EPA also acknowledges that the reuse of such material in etching and
chamber cleaning may not be feasible at this time due to concerns
regarding variability in recaptured HFC-23 material and cost concerns
associated with purification of this material to a level of purity high
enough for the semiconductor industry. As described in further detail
below, EPA has determined to not incorporate any supply of used HFCs in
its assessment of supply for this application at this time, given that
inclusion of such used HFCs is not determinative of the supply outcome.
However, EPA may take a different approach in future rulemakings and
welcomes ongoing stakeholder input regarding the ability to use
recovered and reprocessed HFCs in this application.
With respect to HFC-23, in the proposed rule, EPA evaluated 2022
data. Domestic producers produced approximately 1,049.3 MT of HFC-23.
876.2 MT were subsequently destroyed,
[[Page 41696]]
and one producer sold 5.2 MT of HFC-23 for consumptive uses. In
addition, there were about a half dozen entities that imported HFC-23
with total amount of imports equaling 125 MT. In the proposed rule, EPA
explained that there is particular uncertainty for HFCs with a more
limited number of production facilities and/or higher GWPs than other
regulated HFCs. In addition, EPA noted in the proposed rule that the
demand for HFC-23 from the semiconductor manufacturing application is
large relative to the annual consumption of HFC-23. In 2022,
semiconductor ASA holder purchases of HFC-23 accounted for about 76
percent of calculated consumption of HFC-23. At the end of 2022,
suppliers held 301 MT of HFC-23 in domestic inventory; not all of this
HFC-23 may be considered available supply for purposes of this
analysis, as the entities holding this material in inventory may be
broader than EPA's interpretation of chemical manufacturers (see
section IV.B. for more information).
One commenter requested that the Agency revisit the determination
for HFC-23 on insufficient supply. Citing numbers from the TSD, the
commenter stated that ASA allowance holders acquired only approximately
59 MT of HFC-23 in both 2022 and 2023 compared to the approximate
calendar year 2022 values from domestic producers of 1,000 MT produced
and 880 MT destroyed. The commenter concluded that with the potential
available supply far exceeding the semiconductor demand, it was
difficult for it to see how the amount of HFC-23 available from
manufacturers is insufficient.
EPA responds that domestic producers generate HFC-23 in the United
States exclusively as an unintended byproduct of other chemical
production. Quantities of byproduct HFC-23 are not necessarily
equivalent to supply of HFC-23 that could be available for use in
semiconductor manufacturing due to technical and economic constraints.
EPA's understanding is that most facilities that produced HFC-23 in the
United States generated HFC-23 in low concentrations in operations that
are not designed to, and in some cases cannot, isolate and process the
HFC-23 into a viable product. These quantities are destroyed or
emitted. Therefore, without alterations to the equipment and processes
run at these facilities, HFC-23 produced cannot always be made
available for consumptive uses. Additional information regarding the
unique aspects of by-production of HFC-23 can be found in the TSD
accompanying this final rule. Therefore, EPA considered the quantities
of HFC-23 produced for consumptive uses (5.2 MT in 2022) when
considering domestic production figures for the supply analysis at
proposal. EPA also considered factors like the limited number of
importers.
In addition to considering information provided by the commenters,
EPA analyzed two additional years of reported data that became
available since the publication of the proposed rulemaking to determine
how the new information impacts EPA's proposed determinations. The 2023
and 2024 data confirm many of the supply constraints described in the
proposed rulemaking. The number of producers and importers remained
similar in 2024 compared to 2022 and 2023. Production for consumptive
uses increased to 9.3 MT in 2024 from 6.2 MT in 2023. Virgin imports of
HFC-23 decreased, from 127.0 MT in 2023 to 91.6 MT in 2024. In 2024,
reported semiconductor ASA holder purchases of HFC-23 were 1.3 times
higher than calculated U.S. consumption overall of HFC-23, compared to
2023, where purchases represented about 73 percent of calculated
consumption. There was about a 2 percent increase in the quantity of
HFC-23 held in inventory at the end of the year in 2024 compared to
2023, while exports of virgin HFC-23 increased by about 11 percent.
EPA also analyzed the supply of HFC-32 in the proposed rule. In
2022, there was one domestic producer of HFC-32 and over a dozen
entities that imported HFC-32. 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 20,908 MT of HFC-32 in domestic
inventory, which is equivalent to about 78 percent of calculated
consumption of HFC-32 in 2022; similar to considerations for supply of
HFC-23 and for other applications, not all of this inventory may be
considered available. EPA also considered the impact other regulatory
actions may have for the available supply of HFC-32. As described in
more detail in the proposed rule, EPA stated that the overall market
for HFCs is likely to continue changing in light of AIM Act and
potentially shifts to HFC-32 neat or in blends, and thus there is
particular uncertainty regarding demand for HFC-32.
One commenter stated that EPA's assessment of the available supply
of HFC-32 for semiconductors must account for continued demand in the
refrigerant sector. The commenter added that unlike the proposed rule,
which found ``particular uncertainty'' regarding the HFC-32 market, the
commenter projected robust demand in the refrigerant sector for the
foreseeable future, as several original equipment manufacturers have
selected HFC-32 as a standalone refrigerant to replace R-410A.
Additionally, they said that HFO/HFC blends needed to replace higher-
GWP materials will utilize HFC-32 in significant quantities, which
would thus indicate a growing need for HFC-32 into the 2030s.
EPA notes the commenter projection of robust demand for HFC-32 and
identification of certain drivers of this demand, and the Agency has
incorporated the information into the TSD accompanying this final rule,
as appropriate.
Additionally, EPA has analyzed data that has become newly available
since the publication of the proposed rule related to the supply of
HFC-32 for this application. The 2023 and 2024 data confirm many of the
supply considerations described in the proposed rulemaking of HFC-32.
The number of producers and importers decreased in 2024 compared to
2023, and the production of HFC-32 decreased by about 22 percent to
17,558.8 MT from 2023 to 2024. By 2024, HFC-32 accounted for 17 percent
of all U.S. production. U.S. consumption of HFC-32 decreased nearly 30
percent from 37,870.3 MT in 2023 to 27,782.1 MT in 2024. Exports of
virgin HFC-32 increased by nearly 67 percent from 2023 (1,660 MT) to
2024 (2,773 MT). Suppliers held 21,174 MT of HFC-32 in domestic
inventory at the end of 2024, which is equivalent to 76 percent of 2024
calculated consumption of HFC-32. In 2024, semiconductor ASA holder
purchases of HFC-32 accounted for about 0.03 percent of calculated
consumption of HFC-32, an increase from about 0.02 percent from the
previous year. There is continued substantial global production of HFC-
32, which also supplies the U.S. market. Multiple entities continued to
import HFC-32 in 2024, and imports have remained relatively high. In
2024, entities imported a total of 13,000.4 MT, an approximately 24
percent decrease from 2023 imports but 31 percent increase over 2022
imports.
As noted in the proposed rule, there is continued uncertainty
regarding the demand for HFC-32 as the overall market for HFCs is
likely to continue
[[Page 41697]]
changing in light of AIM Act and market shifts to HFC-32 and HFC
blends. The 2023 Technology Transitions Rule set a GWP threshold of 700
for certain sectors and subsectors. HFC-32 has a GWP of 675 and may be
a suitable alternative in those sectors and subsectors which could
result in increased demand. For other sectors and subsectors where
other HFCs, HFC blends, or non-HFCs (e.g., HFC-152a, HFO-1234yf) are
used, the GWP threshold is lower (e.g., 300, 150). The first set of
restrictions under the 2023 Technology Transitions Rule have compliance
dates of January 1, 2025, with additional later compliance dates.
Additionally, the final 2024 Emissions Reduction and Reclamation Rule
could also affect the use and availability of new and reclaimed HFC-32.
EPA's Vintaging Model shows consistent levels of demand for HFC-32
through 2030, but, as described above, consumption of HFC-32 has been
increasing, suggesting an increased demand for HFC-32. This differing
information further highlights the uncertainty regarding the overall
market for HFC-32. In sum, while there is currently a reasonably large
supply of HFC-32 that is expected to increase over the coming years
relative to other HFCs, there is significant uncertainty around supply
and demand for HFC-32.
EPA analyzed the supply of HFC-41 in 2022 in the proposed rule.
There was one domestic producer of HFC-41 and multiple entities that
imported HFC-41. 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 percent of calculated consumption of HFC-41. At the end of 2022,
suppliers held 27 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.
EPA did not receive any comments regarding the supply of HFC-41.
The 2023 and 2024 data regarding the supply of HFC-41 confirm many
of the supply constraints described in the proposed rulemaking. The
number of producers and importers remained the same in 2024 compared to
2023. Production of HFC-41 decreased about 24 percent from 2023 to 2024
while virgin imports decreased by about 1 percent in the same time
period. In 2024, semiconductor ASA holder purchases of HFC-41 accounted
for about 95 percent of calculated consumption of HFC-41, nearly
equivalent to the previous year. Exports of virgin HFC-41 decreased by
about 14 percent, and there was a 17 percent increase in the quantity
of HFC-41 held in inventory at the end of the year from 2023 to 2024.
Due to the reasons outlined here, EPA is finalizing the
determination that at least the supply of HFC-23 and HFC-41 is
insufficient to accommodate the application.
3. Final Determination on Application-Specific Allowance Eligibility
EPA proposed 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. Several
commenters were generally supportive of the proposed determination to
renew the eligibility of entities in the semiconductor application to
continue receiving ASAs for the full five-year period of calendar years
2026 through 2030.
EPA is finalizing as proposed the determination 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 finalizing the
proposal 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.
E. 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).
EPA proposed to renew eligibility for DOD to receive MCMEU ASAs for
the five-year period of calendar years 2026 through 2030. EPA proposed
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, EPA proposed 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. EPA is aware that there are various end
uses that DOD considers mission-critical, and DOD uses different HFCs
across these end uses. The docket for this rulemaking includes
technical reports in which DOD identifies indicative uses of regulated
substances which DOD has deemed to be mission-critical. In the proposed
rule, EPA outlined its analysis relative to these uses underpinning the
proposed determination that technically achievable and safe substitutes
do not exist across the entirety of this application. EPA also outlined
its assessment of HFCs that have been used by DOD for mission-critical
purposes where EPA proposed to determine that there was insufficient
supply to accommodate the application. EPA also described in the
proposal how this application is more fluid in terms of which
particular HFC uses fall within the application, and DOD may change
which end uses it determines to be mission-critical over time. DOD has
informed EPA that it will continue to need HFCs for mission-critical
end uses through at least 2030.
One commenter supported EPA's proposal to renew eligibility for the
MCMEU application for the five-year period from 2026 through 2030. EPA
did not receive any adverse comments on its proposal to renew the
eligibility of this application for ASAs or on the assessments outlined
at the time of proposal to underpin that proposed outcome. EPA is not
aware of any developments in the identification of safe and technically
achievable substitutes to the currently used HFCs for mission-critical
end uses. For the supply criterion, EPA evaluated HFCs used by DOD in
its assessment of other applications and has determined that the 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 finalizing the determination that the
supply of HFC-227ea is insufficient to accommodate the application.
This is
[[Page 41698]]
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 MCMEU. Therefore, EPA is finalizing
renewal through the entire period for the MCMEU application as
proposed.
F. 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 proposal, EPA was aware of only one area,
lavatory trash receptacles, in which HFCs are used in commercial
aviation. For military uses, HFCs have been used in engine nacelles,
APUs, and a streaming application (i.e., a portable extinguisher).\24\
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. HFC-227ea is the only HFC for
which onboard aerospace fire suppression ASAs have ever been expended.
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\24\ 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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In the proposed rulemaking, EPA proposed to determine that no safe
or technically achievable substitute will be available for the entirety
of onboard aerospace fire suppression. While EPA suggested in the
proposed rulemaking that 2-bromo-3,3,3-trifluoropropene (2-BTP) is a
safe and technically achievable substitute for portable extinguishers,
EPA did not identify a safe and technically achievable substitute
available for other HFC uses including for lavatory trash receptacle
systems, engine nacelles, or APUs. EPA also proposed that 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. Therefore, EPA proposed 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.
EPA only received one comment regarding EPA's proposal. The
commenter supported EPA's proposal to renew the application for the
full five years but did not provide any additional data that could be
used to inform EPA's analysis on the two statutory criteria.
EPA is not aware of any additional information since the
publication of the proposed rule that would alter the Agency's analysis
of the substitutes criterion that was presented in the proposed rule
and accompanying TSD. For the Agency's assessment of the supply
criterion, as explained in section IV.B., EPA is individually
evaluating each HFC for which ASAs are being expended. HFC-227ea is the
only regulated substance for which onboard aerospace fire suppression
ASAs have been expended to date. Therefore, in this final rule EPA only
considered the supply of HFC-227ea in assessing whether the onboard
aerospace fire suppression application meets the statutory criteria for
renewed eligibility for ASAs. EPA analyzed two additional years of
reported data since the publication of the proposed rulemaking to
determine whether the new data supports EPA's proposed determination
that the supply of HFC-227ea is insufficient to accommodate the
application. The 2023 and 2024 data confirm many of the supply
constraints on HFC-227ea described in the proposed rulemaking.
Production of HFC-227ea has remained fairly even since 2022, while the
quantity imported has declined year over year from 494.3 MT in 2022 to
50.7 MT in 2024. Suppliers also held less HFC-227ea in inventory at the
end of 2024 than either of the previous two years, dropping from a high
of 1,173.3 MT in 2023 to 744.0 MT in 2024. The supply chain for HFC-
227ea remains more fragile than supply chains for other HFCs given it
has one of the highest EVs of the regulated HFCs and there are a
limited number of producers in the United States and abroad.
Consistent with the analysis completed for the proposed rule and
described in more detail in the TSD, EPA is finalizing renewed
eligibility for the full five-year period from 2026 to 2030 as
proposed.
VI. What are the requirements associated with a petition to be listed
as an application that will receive application-specific allowances?
The Agency proposed a procedural framework for a petition filed
pursuant to 42 U.S.C. 7675(e)(4)(B)(ii) requesting the designation of
an application as eligible for ASAs. Subsection (e)(4)(B)(ii) outlines
requirements that apply if the Administrator receives a petition
requesting consideration of eligibility for ASAs. In the event a
complete petition is received, the Agency would make a determination on
whether to designate the application as eligible for ASAs after
considering the criteria listed in subsection (e)(4)(B)(i). The AIM Act
specifies a timeline by which the Agency must consider these petitions.
Within 180 days, the Agency must make the complete petition available
to the public and propose and seek comment on whether to designate the
application as eligible for ASAs and if so, the requisite number of
allowances. Within 270 days of receiving the petition, the Agency must
take final action on the petition. The Agency envisions that petitions
could be submitted by a single entity, such as a company or trade
association, or a group of entities.
In order to have sufficient information to evaluate a petition
based on the criteria in subsection (e)(4)(B)(i), EPA proposed to
require that certain information must be included in order for a
petition to be considered complete. This proposed required list was not
meant to be comprehensive, but rather a minimum threshold after which
the Agency would consider a petition complete.
EPA received two comments regarding the elements which EPA proposed
to require as part of a complete petition. One commenter suggested that
the Agency should be flexible in what information is required so that a
new application (i.e., an end use newly using HFCs) would be able to
satisfy the requirements and submit a complete petition. The commenter
stated as an example that it may be difficult for a new application to
include the total quantity of regulated substances acquired for the
application in the past three years.
[[Page 41699]]
EPA responds that the elements which EPA proposed to require are
achievable regardless of the length of time a petitioner has been using
HFCs. EPA clarifies that, for elements for which EPA is requesting
three years of data, an entity would still be able to submit three
years of data even if that entity has been using HFCs for less time; an
entity can indicate zero for any years for which regulated substances
were not used in the application and, as with all provided data,
assuming the information is accurate, the petitioner would satisfy the
requirement. Similarly, EPA proposed that entities submitting the
petition must include certain information on their HFC suppliers for
the past three years. If an entity has been using HFCs for one year,
then the entity should indicate that in the submission and provide the
required supplier information for that one year.
Another commenter, while expressing general support for outlining
petition requirements, suggested that these requirements should focus
on the essentiality of the use and that requirements for completeness
of a petition should be limited to what is relevant and necessary. The
commenter provided, as an example, that requiring the cost of the
product or system that reflects the cost of regulated substances,
should not be required.
In developing this final rule, EPA revisited the proposed
requirements to determine whether any elements would be extraneous in
the development of a well-informed position on a petition. The Agency
was deliberate in proposing to require information that would be
critical for reviewing a petition consistent with the criteria in
subsection (e)(4)(B)(i) of the AIM Act. EPA considered proposing to
require certain other elements that in the Agency's view did not rise
to the level of critical for evaluating a petition; some of these were
included in the proposed rulemaking as optional elements which the
Agency may find helpful in evaluating a petition. Upon review, EPA
reaffirms that all the proposed requirements would meaningfully inform
whether a petition meets the statutory criteria. For example, the
commenter indicated that EPA should not need data on the proportion of
the overall cost of the product or system that reflects the cost of
regulated substances. EPA responds that this element would meaningfully
inform the Agency's assessment of the criteria listed in subsection
(e)(4)(B)(i) of the AIM Act, in particular affordability for
residential and small business consumers. If a high proportion of a
product's cost is due to the cost of the currently used regulated
substance, and a potential alternative is vastly more expensive, then
the Agency may consider whether that poses affordability concerns for
residential and small business consumers. EPA responds that this is a
key data point which may not be easily retrievable based on public data
alone, and therefore it is appropriate to require as one element of a
complete petition.
After considering the comments received, EPA is finalizing the list
of petition requirements as proposed with minor modifications for
clarity. Therefore, a complete petition must include, at a minimum:
<bullet> A description of the application, including an explanation
of what the application is, what purpose or function it achieves, and
what populations or commercial products benefit from the application;
<bullet> A list of regulated substance(s) and description of their
use(s) in the application and an explanation as to why HFCs are
required in the application;
<bullet> Evidence that no safe or technically achievable
substitute, including not-in-kind technologies, is or is expected to be
available, and that the petitioner has conducted research to evaluate
substitutes for the HFC(s). Examples of evidence that may be accepted
include, but are not limited to, third-party analyses and technical
reports by recognized experts in the field, test results evaluating
potential substitutes on safety and technical achievability, decisions
by EPA to list alternatives under the SNAP Program, or federal
regulatory standards that inhibit the ability of the application to
transition to a substitute;
<bullet> Evidence that supply of the regulated substance(s) used in
the application is insufficient to accommodate the application.
Examples of evidence that may be accepted include, but are not limited
to, signed and notarized \25\ communication from responsible corporate
officers at multiple representative suppliers or potential suppliers
for the sector or related sectors that the application falls in stating
that the currently used HFCs cannot be sourced; signed and notarized
communication from responsible corporate officers at 10 or more
allowance holders, including at least three of the 10 largest
consumption allowances holders, stating that the currently used HFCs
cannot be sourced;
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\25\ Notarization ensures authenticity of the signature and
deters fraud.
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<bullet> A signed certification from a responsible corporate
officer at the requesting entity that the application cannot use
recovered and reprocessed HFCs in conjunction with or in place of
virgin HFCs, either due to demonstrated lack of technical achievability
or insufficient supply, and an explanation and evidence documenting why
recovered and reprocessed HFCs cannot be used for the application;
<bullet> Total quantity (in kilograms (kg)) of all regulated
substances acquired for the application specified in the petition in
each of the previous three years, including a copy of the sales
records, invoices, or other records documenting that quantity; if
multiple entities are submitting a joint petition, they must each
provide EPA with unaggregated entity-specific information, which may be
transmitted jointly or individually;
<bullet> The name of the entity or entities supplying regulated
substances for and contact information for those suppliers over the
past three years; if multiple entities are submitting the petition,
they must each provide this information individually to EPA;
<bullet> Total quantities (in kg) of regulated substances held in
inventory for use in the application specified in the petition as of
the date the petition is submitted; if multiple entities are submitting
the petition, they must each provide this information individually to
EPA;
<bullet> An estimate of the total quantity of HFCs the petitioner
expects to purchase for use in the application specified in the
petition in the first year it would be eligible for ASAs;
<bullet> Data on the proportion of the overall cost of the product
or system that reflects the cost of regulated substances; if multiple
entities are submitting the petition, they must each provide this
information individually to EPA;
<bullet> Historic and projected sales of the product or system; if
multiple entities are submitting the petition, they must each provide
this information individually to EPA;
<bullet> Evidence of research into design changes to decrease the
amount of HFCs used in the product or system;
<bullet> An explanation regarding whether the use of the regulated
substance is necessary for the health, safety, or is critical for the
functioning of society (encompassing cultural, intellectual, and
economic aspects);
<bullet> An explanation regarding steps taken to minimize the use
of the regulated substance and any associated emission of the HFC(s);
and
<bullet> Information on regulatory restrictions related to possible
alternatives and substitutes.
Consistent with the proposal, EPA is also providing a non-
exhaustive list of
[[Page 41700]]
other elements that are optional, and the Agency may find compelling or
helpful in making a determination on a petition:
<bullet> Market research on the application, which could include:
an estimate of the number of domestic entities within the application;
an estimate of the amount of bulk HFCs used domestically within the
application; an estimate of the projected annual growth rate for the
duration of the period for which the application is seeking eligibility
to receive ASAs, with supporting evidence by third-party sources;
<bullet> Economic research on the elasticity of demand for products
or systems within the application, with supporting evidence by third-
party sources;
<bullet> Research on whether products or systems in the application
outside of the United States have had success in transitioning to
substitutes or otherwise reducing use of HFCs; and
<bullet> Other information that may be relevant as the Agency
evaluates the petition, based on the factors listed in subsection
(e)(4)(B)(i).
In addition to establishing minimum required elements of a complete
petition, EPA proposed some framework elements on how EPA would process
petitions received. EPA proposed to consider the statutory timeline
triggered upon the filing of a complete petition. In the event that an
entity filed an incomplete petition, EPA would notify that entity that
their petition was incomplete, but not process the petition any
further. EPA proposed to consider a petition re-submitted if the
petitioner supplements the petition, and the statutory timelines for
action would restart. Comments on EPA's proposed determination on a
petition would not restart the statutory timelines unless the
petitioner formally requested to supplement or revise their petition.
EPA did not receive any comments on the framework under which a
petition would be considered and is therefore finalizing as proposed.
EPA notes that for an entity to be eligible to receive ASAs in a
given calendar year, a complete petition should be submitted no later
than January 31 two calendar years prior to provide the Agency
sufficient time to review a petition and be able to issue allowances in
advance of the statutory deadline of October 1 each year. For example,
if an entity would like to receive allowances in calendar year 2028,
the entity should submit a complete petition no later than January 31,
2026. Earlier submission and/or discussion with the Agency is
encouraged to allow for timely reviews. EPA is setting this clear
expectation so entities can factor this into their planning when
deciding to petition EPA to be added to the list of eligible
applications. This timeline will allow the Agency the requisite time to
review and take final action on the petition, consistent with the
statutory timeline in subsection (e)(4)(B)(ii), and also issue a final
rule to effectuate that decision in 40 CFR 84.13.
EPA proposed to allocate allowances to entities in a new
application through the same manner as other entities receiving ASAs,
per 40 CFR 84.13 and 40 CFR 84.31(h). In other words, entities within a
new application would need to request ASAs by July 31 like all other
applications (per 40 CFR 84.13(b)). This may mean that in cases where
there is a final rule pending to add an application to the list of
entities eligible for ASAs at 40 CFR 84.13, any entity wishing to be
eligible for ASAs in the next calendar year would need to provide the
information required at 40 CFR 84.13(h)(2) by July 31. EPA did not
receive comment on this proposal and is finalizing as proposed.
EPA proposed that if a petition is granted and a new application is
listed as eligible to receive ASAs, that eligibility would apply until
the end of the five-year review cycle during which its petition was
granted. Per subsection (e)(4)(B)(v), EPA must review each ASA use
receiving an allocation of allowances not less frequently than once
every five years. EPA also proposed that, at the end of each five-year
review cycle, it will review any applications listed in 40 CFR 84.13(a)
at the time of review, regardless of how they were initially included
on the list. For example, the five-year review period covered in this
rule includes calendar years 2026 through 2030. If a petition were
granted to receive ASAs starting for calendar year 2028, that
application would be eligible for calendar year 2028, 2029, and 2030
allowances, and then EPA would review the eligibility for that
application to continue receiving ASAs starting with calendar year 2031
allowances. EPA did not receive comment on these proposals and is
finalizing as proposed.
Consistent with the reporting requirements under 40 CFR 84.31(a),
EPA proposed that for an entity that is eligible for ASAs as the result
of EPA granting a petition, all reports, petitions, and any related
supporting documents must be submitted electronically in a format
specified by EPA,\26\ and quantities of regulated substances must be
stated in terms of kilograms unless otherwise specified. EPA also
proposed that these records and copies of reports required by this
section must be retained for three years. EPA did not receive comment
on these proposals and is finalizing as proposed.
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\26\ Currently, most HFC reports under the AIM Act are submitted
through HAWK, the HFC reporting system.
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VII. Revisions to Existing Regulations
EPA finalized an approach under the Allocation Framework Rule for
issuing ASAs for the initial years after enactment of the AIM Act. As
explained in more detail in the Allocation Framework Rule, EPA
allocates ASAs differently for MCMEU, given the complex nature of the
way DOD sources and uses HFCs in the mission-critical context. The 2024
HFC Allocation Rule did not reopen the methodology for issuing ASAs but
noted that the Agency had begun development of this rule to review and
consider whether to renew eligibility for each of the six applications
for ASAs and would herein consider revisions to existing regulatory
requirements. As EPA foreshadowed in the 2024 HFC Allocation Rule, the
Agency proposed targeted regulatory changes after considering whether
any changes should be made to the existing regulatory requirements
governing ASAs based on implementation over the past several years. EPA
also proposed one specific regulatory change to clarify how EPA's
regulations would apply to any illegally imported HFCs that are seized
and auctioned by enforcement officials, proposed to require exporting
companies to report ITNs quarterly, and proposed to simplify the ``date
of purchase'' requirement for a RACA.
Under the current regulations established in the Allocation
Framework Rule, EPA issues ASAs based on multiplying the company's HFC
use in the prior year by the higher of:
[cir] The Average Annual Growth Rate (AAGR) of use for the company
over the past three years; or
[cir] The AAGR of use by all entities requesting that type of ASA
(e.g., for MDIs) over the past three years.
For the calculation of AAGR, EPA calculates the growth rate between
the first and second year plus the growth rate between the second and
third year, divided by two. The formula is as follows:
[[Page 41701]]
[GRAPHIC] [TIFF OMITTED] TR26AU25.000
EPA relies on activity from July 1 to June 30 for each of the three
preceding years prior to the annual allocation because of the biannual
reporting deadlines and to include the most recent year of data prior
to the October 1 allocation deadline in the allowance allocation
determinations. EPA established the information an entity requesting
ASAs must provide in 40 CFR 84.31(h)(2). EPA proposed to codify the
existing practice such that entities reporting on or applying for ASAs
provide supporting documentation to verify reported data on total
quantities of HFCs acquired through conferring allowances, expending
allowances for direct import, purchases without expending allowances,
and quantity held in inventory above zero. EPA did not receive any
comments on this proposal, and therefore is finalizing as proposed.
In the Allocation Framework Rule, EPA also established that the
Agency would consider unique circumstances that are not reflected by
the rates of growth calculated in the methodology outlined above that
are factually documented when determining allowance allocations. EPA
codified the following circumstances as potentially meriting an
increased allocation to an individual company beyond historical growth
rates: (1) additional capacity will come on line in the next year, such
as a new manufacturing plant, expanded manufacturing line, or launch of
a new product within the scope of the application, (2) a domestic
manufacturer or some of its manufacturing facilities has been acquired,
and (3) a global pandemic or other public health emergency increases
demand for use of HFCs in an application, such as an increase in
patients diagnosed with medical conditions treated by MDIs. These
scenarios could provide reasons to increase allowance allocations to
affected companies in the affected years. If a company wanted to make a
claim that it qualifies for individualized treatment due to one of
these unique circumstances, the company must sufficiently document in a
verifiable way why it qualifies. Acceptable documentation includes, but
is not limited to, recent invoices for new tools; permit documentation
for new facilities, facility expansion, or installation of equipment
related to retooling; agency or company press releases for the launch
of new products; documentation reflecting the hiring of additional
employees or adding additional shifts; or Securities and Exchange
Commission filings documenting facility acquisitions or expansions.
Ultimately, accommodating documented unique circumstances that are not
reflected by the recent rates of growth, in addition to an amount of
allowances based on verified use in the past three years, supports the
Agency in fulfilling Congress's mandate that EPA ``allocate the full
quantity of allowances necessary, based on projected, current, and
historical trends,'' (86 FR 55116, 55151, October 5, 2021).
As a result of the lessons learned from multiple years of issuing
HFC allocations, EPA proposed limited changes to these existing
regulations. Specifically, EPA proposed: to require companies provide
the total expected amount of HFCs they intend to purchase in the
calendar year, to expand permissible scenarios that could qualify as
unique circumstances, 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, new
requirements for conferrals of MCMEU allowances, to establish a pool of
set-aside 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 proposed other specific
regulatory changes to: clarify how EPA's regulations would apply to any
illegally imported HFCs that are seized and auctioned by enforcement
officials, require exporting companies to report ITNs quarterly, and
simplify the ``date of purchase'' requirement for a RACA. This section
discusses each of these elements in detail, specifically, what EPA
proposed; what, if any, comment the Agency received on the proposal;
and whether and how EPA is finalizing the proposed changes. In the
instance that a reviewing court determines any of these changes to be
unlawful, EPA intends each of these regulatory revisions to be
severable from the others, as each is based on individual reasoning and
bases that is distinct from the other revisions.
A. Expected Total HFC Purchases
EPA proposed to amend the regulations to require all entities to
provide their total expected HFC purchases for the next calendar year
as a component of overall applications due July 31 for ASAs for the
following calendar year. Entities would be required to provide the
total quantity of HFCs they expect to purchase next year based on their
expected eligibility for allowances. EPA proposed to allocate at that
level if it is lower than what that entity is eligible for based on the
regulatory formula. EPA's rationale for making this proposal were
detailed in the proposed rule.
EPA received only one comment on this proposal, which was
supportive of the requirement that entities provide a total request for
allowances for the next calendar year and for EPA to allocate ASAs to
that level if lower than what the entities are otherwise eligible for
based on the regulatory formula.
Therefore, EPA is finalizing this approach as proposed. Entities
must report this quantity, in MTEVe, by the July 31 deadline to request
ASAs. The total request should be the total expected HFC purchases for
the next calendar year, so would be inclusive of any HFCs an entity
anticipates purchasing as a result of a unique circumstance(s). The
amount should be equal to the full quantity of allowances an entity
believes EPA should allocate and that the entity wants to have on hand
to expend or confer. Accordingly, EPA will not apply a 10 percent
purification loss multiplier when allocating to the total request level
for an entity in the semiconductor application.\27\
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\27\ In the Allocation Framework Rule, EPA created a 10 percent
purification loss allowance for the semiconductor industry, which is
applied after EPA calcu
[…truncated; see source link]Indexed from Federal Register on August 26, 2025.
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.