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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 84

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

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

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice of proposed rulemaking and advance notice of proposed rulemaking.

SUMMARY:

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

DATES:

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

https://www.epa.gov/climate-hfcs-reduction.

ADDRESSES:

You may send comments, identified by docket identification number EPA-HQ-OAR-2021-0643, by any of the following methods:

•

Federal eRulemaking Portal:

https://www.regulations.gov

(our preferred method). Follow the online instructions for submitting comments.

•

Mail:

U.S. Environmental Protection Agency, EPA Docket Center, Air and Radiation Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460.

•

Hand Delivery or Courier (by scheduled appointment only):

EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. The Docket Center's hours of operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal Holidays).

Instructions:

All submissions received must include the Docket ID No. for this rulemaking. Comments received may be posted without change to

https://www.regulations.gov,

including any personal information provided. For information on EPA's Docket Center, please visit us online at

https://www.epa.gov/dockets.

You may find the following suggestions helpful for preparing your comments: Direct your comments to specific sections of this proposed rulemaking and note where your comments may apply to future separate actions where possible; explain your views as clearly as possible; describe any assumptions that you used; provide any technical information or data you used that support your views; provide specific examples to illustrate your concerns; offer alternatives; and, make sure to submit your comments by the comment period deadline. Please provide any published studies or raw data supporting your position. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (

e.g.,

on the web, cloud, or other file sharing system).

Do not submit any information you consider to be Confidential Business Information (CBI) through

https://www.regulations.gov.

For submission of confidential comments, please work with the person listed in the

FOR FURTHER INFORMATION CONTACT

section. For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit

https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT:

Allison Cain, Stratospheric Protection Division, Office of Atmospheric Programs (Mail Code 6205A), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: 202-564-1566; email address:

cain.allison@epa.gov.

You may also visit EPA's website at

https://www.epa.gov/climate-hfcs-reduction

for further information.

SUPPLEMENTARY INFORMATION:

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

AC—Air Conditioning

AHAM—Association of Home Appliance Manufacturers

AHRI—Air-Conditioning, Heating, and Refrigeration Institute

AIM Act—American Innovation and Manufacturing Act of 2020

ANSI—American National Standards Institute

ASHRAE—American Society of Heating, Refrigerating and Air-Conditioning Engineers

ASTM—American Society for Testing and Materials

CAA—Clean Air Act

CARB—California Air Resources Board

CAS Reg. No.—Chemical Abstracts Service Registry Identification Number

CBI—Confidential Business Information

CBP—U.S. Customs and Border Protection

CDR—Chemical Data Reporting

CDX—Central Data Exchange

CFC—Chlorofluorocarbon

CO

2

—Carbon Dioxide

DX—Direct Expansion

DOE—U.S. Department of Energy

EAV—Equivalent Annualized Value

ECHO—Enforcement and Compliance History Online

e-GGRT—Electronic Greenhouse Gas Reporting Tool

EIA—Environmental Investigation Agency

EPA—U.S. Environmental Protection Agency

EU—European Union

FR—

Federal Register

GDP—Gross Domestic Product

GHG—Greenhouse Gas

GHGRP—Greenhouse Gas Reporting Program

GSHP—Ground-source Heat Pump

GVWR—Gross Vehicle Weight Rating

GWP—Global Warming Potential

HD—Heavy-duty

HC—Hydrocarbon

HCFC—Hydrochlorofluorocarbon

HCFO—Hydrochlorofluoroolefin

HCPA—Household and Commercial Products Association

HFC—Hydrofluorocarbon

HFO—Hydrofluoroolefin

HPWH—Heat Pump Water Heater

IAM—Integrated Assessment Model

IAPMO—International Association of Plumbing and Mechanical Officials

ICC—International Code Council

ICR—Information Collection Request

IPR—Industrial Process Refrigeration

IIAR—International Institute of Ammonia Refrigeration

IPCC—Intergovernmental Panel on Climate Change

IWG—Interagency Working Group on the Social Cost of Greenhouse Gases

LD—Light-duty

LFL—Lower Flammability Limit

MAC—Marginal Abatement Cost

MDPV—Medium-duty Passenger Vehicle

MMTCO

2

e—Million Metric Tons of Carbon Dioxide Equivalent

MVAC—Motor Vehicle Air Conditioning

MY—Model Year

NAA—National Aerosol Association

NAICS—North American Industry Classification System

NATA—National Air Toxics Assessment

NFPA —National Fire Protection Association

NRDC—Natural Resources Defense Council

OEM—Original Equipment Manufacturer

ODS—Ozone-depleting Substance

OMB—U.S. Office of Management and Budget

PRA—Paperwork Reduction Act

PTAC—Packaged Terminal Air Conditioner

PTHP—Packaged Terminal Heat Pump

PV—Present Value

RACHP—Refrigeration, Air Conditioning, and Heat Pumps

RFA—Regulatory Flexibility Act

RIA—Regulatory Impact Analysis

RTOC—Refrigeration, Air Conditioning and Heat Pumps Technical Options Committee

SBREFA—Small Business Regulatory Enforcement Fairness Act

SC-HFCs—Social Costs of Hydrofluorocarbons

SNAP—Significant New Alternatives Policy

TEAP—Technology and Economic Assessment Panel

TLV-TWA—Threshold Limit Value-Time-Weighted Average

TRI—Toxics Release Inventory

TSD—Technical Support Document

UL—Underwriters Laboratories Inc

VRF—Variable Refrigerant Flow

WSHP—Water-source Heat Pump

WMO—World Meteorological Organization

Table of Contents

I. Executive Summary

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

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

C. What is the summary of the costs and benefits?

II. General Information

A. Does this action apply to me?

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

III. Background

A. What are HFCs?

B. How do HFCs affect public health and welfare?

C. How is EPA evaluating environmental justice?

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

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

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

B. What happens after a petition is submitted?

C. Can I revise or resubmit my petition?

VI. How is EPA considering negotiated rulemaking?

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

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

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

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

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

C. Applicability

1. Which uses is EPA proposing to restrict in this proposal?

2. Would the proposed use restrictions also apply to products that are manufactured for export?

3. Would restrictions apply to existing equipment?

4. Effective and Compliance Dates of Rules Promulgated Under Subsection (i)

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

1. Petitions Granted on October 7, 2021

2. How is EPA proposing to address additional petitions that cover similar sectors and subsectors?

3. Petitions Granted on September 19, 2022

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

1. How is EPA considering best available data?

2. How is EPA considering the availability of substitutes?

3. How is EPA considering overall economic costs and environmental impacts, as compared to historical trends?

4. How is EPA considering the remaining phase-down period for regulated substances under the final rule issued under subsection (e)(3) of the AIM Act?

F. For which sectors and subsectors is EPA proposing to establish restrictions on the use of HFCs and blends containing HFCs?

1. How did EPA determine the degree of the proposed restrictions for each sector and subsector?

2. Summary of Proposed Restrictions on the Use of HFCs

3. Refrigeration, Air conditioning, and Heat Pump

4. Foam Blowing

5. Aerosols

G. For what additional sectors or subsectors is EPA requesting advance information on the use of HFCs?

VIII. What are the proposed enforcement and compliance provisions?

A. What is EPA proposing for labeling requirements?

B. What potential auditing and third-party testing programs is EPA seeking advance information on?

1. Who should be subject to the independent third-party testing and audits?

2. What elements and criteria should be included in the third-party auditors and/or accreditation body requirements?

IX. What are the proposed recordkeeping and reporting requirements?

A. What reporting is EPA proposing to require?

B. What recordkeeping is EPA proposing?

X. What are the costs and benefits of this proposed action?

A. Assessment of Costs and Additional Benefits Utilizing Transition Options

B. Scoping Analysis of Imports of Regulated Products

XI. Statutory and Executive Order Review

I. Executive Summary

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

The U.S. Environmental Protection Agency (EPA) is proposing regulations that would implement certain provisions of the American Innovation and Manufacturing Act of 2020, codified at 42 U.S.C. 7675 (AIM Act or the Act). The AIM Act authorizes EPA to address hydrofluorocarbons (HFCs) in three main ways: phasing down HFC production and consumption through an allowance allocation program;

1

promulgating certain regulations for purposes of maximizing reclamation and minimizing releases of HFCs and their substitutes from equipment; and facilitating sector-based transitions to next-generation technologies. This proposal focuses on the third area—facilitating the transition to next-generation technologies by restricting use of HFCs in the sectors or subsectors in which they are used.

1

EPA has issued regulations establishing and codifying a framework for phasing down HFC production and consumption through an allowance allocation program, “

Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing Act”

(86 FR 55116, October 5, 2021). That rule is referred to as the “Allocation Framework Rule” throughout this document. EPA is currently undertaking a separate rulemaking to update certain aspects of that regulatory framework.

Subsection (i) of the Act, entitled “Technology Transitions,” authorizes EPA, by rulemaking, to restrict the use of regulated substances (used interchangeably with “HFCs” in this document) in sectors or subsectors where the regulated substances are used.

2

The Act also includes provisions for the public to petition EPA to initiate such a rulemaking. On October 7, 2021, and September 19, 2022, EPA granted 12 petitions and partially granted one petition (hereby referred to as “granted petitions”) requesting restrictions on the use of HFCs in various sectors and subsectors (86 FR 57141, October 14, 2021). The Act directs EPA to promulgate a final rule within two years after the date on which the Agency grants a petition. Thus, this proposed

rulemaking, in part, addresses the granted petitions.

2

The Act lists 18 saturated HFCs, and by reference any of their isomers not so listed, that are covered by the statute's provisions, referred to as “regulated substances” under the Act.

This proposed rulemaking further addresses the framework for how EPA intends to implement its authority to restrict the use of HFCs in sectors and subsectors where they are used. Additionally, it proposes provisions to support implementation of, compliance with, and enforcement of statutory and regulatory requirements under subsection (i) of the Act. To provide the public with additional information about this new program, this document also includes a description of how EPA intends to implement certain aspects of the program, such as the processing of petitions to restrict the use of HFCs in sectors and subsectors in which they are used under subsection (i) of the Act.

Lastly, EPA is seeking advance information on certain topics that may be helpful for developing a future proposed rule. Specifically, EPA is seeking advance information on the application of restrictions on the use of HFCs to heat pump water heaters and to certain retrofitted equipment in the refrigeration, air conditioning, and heat pump (RACHP) sector. EPA is also seeking advance information on a third-party auditing program to verify substances used in products. EPA does not intend to finalize an auditing program or restrictions on the use of HFCs for those sectors and subsectors on which it is seeking advance information as part of this rulemaking process. Accordingly, EPA does not intend to respond to any advance information received on the options discussed in these sections in any final rulemaking for this proposal.

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

Technology transitions petitions:

EPA is proposing the process for petitions submitted under subsection (i) of the AIM Act and describes how the Agency intends to evaluate petitions. EPA is proposing that petitions be submitted electronically with required minimum information. Upon receiving a petition, the Agency will consider, to the extent practicable, the factors listed in subsection (i)(4) of the AIM Act in making a determination to grant or deny the petition. Consistent with the Act, EPA also considered these factors to the extent practicable in establishing the restrictions on the use of HFCs in this proposed rulemaking.

Restrictions on the use of HFCs:

EPA is proposing restrictions on the use of certain HFCs within new products in the following sectors and subsectors: refrigeration, air conditioning, and heat pumps; foam blowing; and aerosols. All proposed restrictions would occur in two stages; the manufacture or import of products would be prohibited by either 2025 or 2026, depending on the sector or subsector, followed a year later by a prohibition on the sale, distribution, offer for sale or distribution, export, and other activities pertaining to those products.

Enforcement and compliance:

To support compliance with the proposed prohibitions on the use of HFCs with high global warming potentials (GWPs) in specific sectors and subsectors, EPA is proposing labeling, reporting, and recordkeeping requirements for products imported or manufactured using an HFC. The Agency is proposing to use the same reporting platform used in prior AIM Act rules and the Greenhouse Gas Reporting Program (GHGRP).

3

3

The GHGRP requires reporting of greenhouse gas (GHG) data and other relevant information from large GHG emission sources, fuel and industrial gas suppliers, and carbon dioxide (CO

2

) injection sites in the United States. The program generally requires reporting when emissions from covered sources are greater than 25,000 metric tons of CO

2

e per year. Publicly available information includes facility names, addresses, and latitude/longitude information.

C. What is the summary of the costs and benefits?

EPA is providing information on the costs and benefits of restricting use of HFCs consistent with this proposed rule. The analyses, presented in the

Costs and Environmental Impacts

technical support document (TSD) and in a regulatory impact analysis (RIA) addendum to the Allocation Framework RIA, are contained in the docket to this proposed rule. These analyses—as summarized below—highlight economic cost and benefits, including benefits from HFC consumption and emissions reductions. While significant, the benefits presented in this summary are considered incidental and secondary to the rule's statutory objective of facilitating the transition to next-generation technologies by restricting use of HFCs in the sectors or subsectors in which they are used.

Given that the provisions EPA is proposing concern HFCs, which are subject to the overall phasedown of production and consumption under the AIM Act, EPA relied on previous analyses conducted for the Allocation Framework Rule (86 FR 55116, October 5, 2021) and the proposed 2024 Allocation Rule, “Phasedown of Hydrofluorocarbons: Allowance Allocation Methodology for 2024 and Later Years” 87 FR 66372, November 3, 2022) as a starting point for the assessment of costs and benefits of this rule. In this way, EPA analyzed the potential incremental impacts of the proposed rule, attributing benefits only insofar as they are additional to those already assessed in the Allocation Framework RIA and proposed 2024 Allocation Rule RIA addendum (collectively referred to as “Allocation Rules” in this discussion).

As detailed in the RIA addendum and the

Costs and Environmental Impacts

TSD, additional benefits of the proposed rule relative to the Allocation Rules may vary depending on the mix and timing of industry transitions made in order to achieve compliance in affected subsectors. In its analysis of the Allocation Rules, EPA estimated that regulated entities would adopt specific technology transition options to achieve compliance with the statutory allowance cap step-downs. Industry is already making many of these transitions, and we expect that achieving the allowance cap step-downs will require many of the same subsector-specific technology transitions that would also be required by this proposed rule. However, the rule may in some cases require regulated entities to further accelerate transitions in specific subsectors, relative to what EPA previously assumed in its analysis of the Allocation Rules. Conversely, entities in a discrete set of subsectors not covered by this proposed rule could conceivably forgo or delay adopting abatement options that were assumed to be undertaken to comply with the Allocation Rules.

Given this uncertainty, EPA analyzed two scenarios to represent the range of potential incremental impacts resulting from the proposed rule: a “base case” and “high additionality case.” Both scenarios use the results from the Allocation Rule as a starting point, and count benefits in terms of reductions of consumption and emissions only in cases where the proposed rule would result in additional reductions in HFC consumption. The “base case” represents a conservative assessment of benefits and assumes that any industry activity not necessary for compliance is excluded. In other words, the scenario excludes consumption reductions not covered by a GWP restriction in the proposed rule and not needed to reach the phasedown cap (so long as the phasedown caps are otherwise met through consumption reductions in subsectors that are covered by the proposed rule restrictions). By contrast, the “high additionality case” is a less conservative scenario and assumes that HFC consumption reduction activities not covered by the proposed rule would remain consistent with the Allocation

Rule reference scenario (

i.e.,

neither increase nor decrease in response to this proposed rule). Based on the results of these two scenarios, which are detailed further in the

Costs and Environmental Impacts

TSD and the RIA addendum, EPA estimates that additional emission reductions through 2050 would be 5 to 35 million metric tons of carbon dioxide equivalent (MMTCO

2

e) annually.

4

These emission reductions generally lag the anticipated incidental consumption reductions, which range from 735 to 1,121 MMTCO

2

e for 2025-2050 at an annual average of 28 to 43 MMTCO

2

e.

4

As noted in the Allocation Framework Rule, the exchange values provided in the AIM Act are numerically equivalent to the 100-year integrated global warming potentials provided in IPCC (2007). EPA provides values in CO

2

e and notes here that the same values would be used if expressed in exchange value equivalents.

Table 1 summarizes the reductions in both consumption and emissions as described in the RIA addendum. The table shows the incremental annual reductions—that is, the difference in reductions compared to the Allocation Rule reference scenario—from the proposed rule for selected years in the time period 2025-2050. Both the base case and high additionality case results show a net reduction in consumption and emissions on a cumulative basis through 2050. Emissions under the proposed rule would decrease compared to the business-as-usual estimates shown in the RIA, however they would not decrease as much as under the Allocation Rule reference scenario for certain model years. For these years, incremental emission reductions are therefore shown as negative numbers in the table. This effect is due to assumptions about the technological solutions used to comply with each rule. Specifically, the base case excludes actions not required by this proposed rule, such as improved leak reduction and enhanced recovery of HFCs, which are assumed to otherwise yield relatively rapid emission reductions. Since the Allocation Rule reference scenario includes those actions, incremental emission reductions in the base case accrue more slowly (and therefore are shown as negative in certain years) while still yielding a net reduction on a cumulative basis.

Table 1—Incremental Consumption and Emission Reductions in the Technology Transitions Rule Base Case and High Additionality Case

Incremental consumption

reductions (MMTCO

2

e)

Year

Technology

transitions

rule base

case

Technology

transitions

high

additionality

case

Incremental emission

reductions

(MMTCO

2

e)

Technology

transitions

rule base

case

Technology

transitions

high

additionality

case

2025

9

42

−52

8

2029

27

53

−13

34

2034

35

49

2

43

2036

34

42

−3

36

2040

21

29

27

40

2045

35

44

27

37

2050

37

46

30

38

Total (cumulative)

735

1121

134

903

As reflected in the RIA addendum, however, although the base case is a reasonable projection of the potential impacts of the proposed rule, there is reason to believe that it is a conservative one, and that the incremental emission reductions associated with this proposal could be far greater than reflected in the base case scenario. Previous regulatory programs to reduce chemical use in the affected industries show that regulated entities do not limit their response to the required compliance level; rather, regulated entities may take additional actions that transform industry practices for various reasons, including the anticipation of future restrictions, strengthening their competitive position, and supporting overall environmental goals. For example, U.S. production and consumption of ozone-depleting substances (ODS) during their phaseout was consistently below the limits established under the Montreal Protocol. For this reason, in the high additionality case we assumed certain abatement options not covered by the proposed rule—but which were assumed in the prior accounting of benefits for the Allocation Rules—continue to be undertaken. Based on the two scenarios, on a cumulative basis the rule is expected to yield incremental emission reductions ranging from 134 to 903 MMTCO

2

e through 2050 (respectively, about 3 percent and 20 percent of the total emissions over that same time period in the Allocations Rules analyses). In the RIA addendum, we estimate the present value of these incremental benefits to be between $5 billion and $51 billion in 2020 dollars.

EPA also estimates that the proposed rule would result in lower compliance costs relative to the Allocation Rules. These additional savings stem largely from assumed energy efficiency gains and lower cost refrigerants associated with the technological transitions necessary to meet the proposed requirements. The present value of these cumulative incremental savings from 2025-2050 is estimated to be between $2.2 billion and $4.2 billion, using a 7 percent discount rate, or between $5.1 billion and $8 billion, using a 3 percent discount rate (in 2020 dollars).

Table 2 summarizes key findings from the RIA addendum, including the incremental annual climate benefits, costs, and net benefits of the rule for selected years in the time period 2025-2050, with the climate benefits discounted at 3 percent, for the base case and high additionality case. The table also provides the present value (PV) and equivalent annualized value (EAV) of the annual costs under a 3% and 7% discount rate. We note that the climate benefits and net benefits findings were not used for decisional purposes in this proposed rule and are

provided for informational and illustrative purposes only.

Table 2—Summary of Annual Incremental Climate Benefits, Costs, and Net Benefits of the Technology Transitions Rule Base Case and High Additionality Case Scenarios for the 2025-2050 Timeframe

[Millions of 2020$, discounted to 2022]

a b c d e

Base case

Year

Incremental

climate

benefits (3%)

Annual costs

(negative

values are savings)

Net benefits

(3% benefits, 3% or 7% costs)

e

High additionality case

Incremental climate

benefits

(3%)

Annual costs

(negative

values are savings)

Net benefits

(3% benefits, 3% or 7% Costs)

e

2025

−$3,603

−$395

−$3,209

$546

$31

$515

2029

−1,043

50

−1,092

2,563

335

2,227

2034

141

−200

340

3,739

−77

3,816

2036

−404

−677

273

3,213

−635

3,848

2040

2,669

−848

3,516

3,928

−784

4,712

2045

2,946

−786

3,732

4,031

−717

4,748

2050

3,606

−817

4,422

4,677

−743

5,419

Discount rate

3%

3%

7%

3%

7%

3%

3%

7%

3%

7%

PV

$5,084

−$8,045

−$4,225

$13,130

$9,309

$51,145

−$5,140

−$2,190

$56,285

$53,335

EAV

$311

−$492

−$438

$803

$748

$3,126

−$314

−$227

$3,440

$3,353

a

Benefits include only those related to climate. Climate benefits are based on changes in HFC emissions and are calculated using four different estimates of the SC-HFCs (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent discount rate). For purposes of this table, we show the effects associated with the model average at a 3 percent discount rate, but the Agency does not have a single central SC-HFC point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-HFC estimates. As discussed in Chapter 5 of the RIA addendum a consideration of climate effects calculated using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts.

b

Rows may not appear to add correctly due to rounding.

c

The annualized present value of costs and benefits are calculated as if they occur over a 26-year period from 2025 to 2050.

d

The costs presented in this table are annual estimates.

e

The PV for the 7% net benefits column is found by taking the difference between the PV of climate benefits at 3% and the PV of costs discounted at 7%. Due to the intergenerational nature of climate impacts the social rate of return to capital, estimated to be 7 percent in OMB's Circular A-4, is not appropriate for use in calculating PV of climate benefits.

Some of the information regarding projected impacts of the rule, including cost estimates and anticipated environmental impacts, was considered by EPA in its assessment of certain factors listed in subsection (i)(4) of the AIM Act.

5

The cost and benefit information relied upon by EPA in its consideration of the subsection (i)(4) factors is compiled in the

Costs and Environmental Impacts

TSD. As discussed in section VII.E, EPA chose to use certain cost and environmental benefit information that it had generated in conducting its RIA addendum in considering certain factors under subsection (i)(4), but we expect that in future rulemakings we may consider different types of information to address the (i)(4) factors. In assessing the (i)(4) factors for this proposed rule, as summarized in the

Costs and Environmental Impacts

TSD, EPA considered estimates of costs of the proposed action and estimates of cumulative consumption and emission reductions for 2025-2050 of 735 to 1,121 MMTCO

2

e and 134 to 903 MMTCO

2

e, respectively, neither of which incorporate the social costs of HFCs (SC-HFCs).

5

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

Although EPA is using SC-HFCs for purposes of some of the analysis in the RIA addendum, this proposed action does not rely on those estimates of these costs as a record basis for the Agency action, and EPA would reach the proposed conclusions even in the absence of the social costs of HFCs.

Additional information on this analysis can be found in section X of this preamble and in the

Costs and Environmental Impacts

TSD and RIA addendum contained in the docket.

II. General Information

A. Does this action apply to me?

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

Table 3—NAICS Classification of Potentially Affected Entities

NAICS code

NAICS industry description

238220

Plumbing, Heating, and Air-Conditioning Contractors.

311812

Commercial Bakeries.

321999

All Other Miscellaneous Wood Product Manufacturing.

322299

All Other Converted Paper Product Manufacturing.

324191

Petroleum Lubricating Oil and Grease Manufacturing.

324199

All Other Petroleum and Coal Products Manufacturing.

325199

All Other Basic Organic Chemical Manufacturing.

325211

Plastics Material and Resin Manufacturing.

325412

Pharmaceutical Preparation Manufacturing.

325414

Biological Product (except Diagnostic) Manufacturing.

325998

All Other Miscellaneous Chemical Product and Preparation Manufacturing.

326150

Urethane and Other Foam Product.

326299

All Other Rubber Product Manufacturing.

327999

All Other Miscellaneous Nonmetallic Mineral Product Manufacturing.

332812

Metal Coating, Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers.

332999

All Other Miscellaneous Fabricated Metal Product Manufacturing.

333415

Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.

333511

Industrial Mold Manufacturing.

333912

Air and Gas Compressor Manufacturing.

333999

All Other Miscellaneous General Purpose Machinery Manufacturing.

334419

Other Electronic Component Manufacturing.

335220

Major Household Appliance Manufacturing.

336120

Heavy Duty Truck Manufacturing.

336212

Truck Trailer Manufacturing.

336214

Travel Trailer and Camper Manufacturing.

3363

Motor Vehicle Parts Manufacturing.

3364

Aerospace Product and Parts Manufacturing.

336411

Aircraft Manufacturing.

336611

Ship Building and Repairing.

336612

Boat Building.

336992

Military Armored Vehicle, Tank, and Tank Component Manufacturing.

337214

Office Furniture (Except Wood) Manufacturing.

339112

Surgical and Medical Instrument Manufacturing.

339113

Surgical Appliance and Supplies Manufacturing.

339999

All Other Miscellaneous Manufacturing.

423120

Motor Vehicle Supplies and New Parts Merchant Wholesalers.

423450

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers.

423610

Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers.

423620

Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers.

423690

Other Electronic Parts and Equipment Merchant Wholesalers.

423720

Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers.

423730

Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers.

423740

Refrigeration Equipment and Supplies Merchant Wholesalers.

423830

Industrial Machinery and Equipment Merchant Wholesalers.

423840

Industrial Supplies Merchant Wholesalers.

423850

Service Establishment Equipment and Supplies Merchant Wholesalers.

423860

Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers.

423990

Other Miscellaneous Durable Goods Merchant Wholesalers.

424690

Other Chemical and Allied Products Merchant Wholesalers.

424820

Wine and Distilled Alcoholic Beverage Merchant Wholesalers.

443142

Electronics Stores.

444190

Other Building Material Dealers.

445110

Supermarkets and Other Grocery (except Convenience) Stores.

445131

Convenience Retailers.

445298

All Other Specialty Food Retailers.

449210

Appliance Stores, Household-Type.

453998

All Other Miscellaneous Store Retailers (except Tobacco Stores).

45711

Gasoline Stations With Convenience Stores.

481111

Scheduled Passenger Air Transportation.

531120

Lessors of Nonresidential Buildings (except Miniwarehouses).

541330

Engineering Services.

541380

Testing Laboratories.

541512

Computer Systems Design Services.

541519

Other Computer Related Services.

541620

Environmental Consulting Services.

562111

Solid Waste Collection.

562211

Hazardous Waste Treatment and Disposal.

562920

Materials Recovery Facilities.

621498

All Other Outpatient Care Centers.

621999

All Other Miscellaneous Ambulatory Health Care Services.

72111

Hotels (Except Casino Hotels) and Motels.

72112

Casino Hotels.

72241

Drinking Places (Alcoholic Beverages).

722513

Limited-Service Restaurants.

722514

Cafeterias, Grill Buffets, and Buffets.

722515

Snack and Nonalcoholic Beverage Bars.

81119

Other Automotive Repair and Maintenance.

811219

Other Electronic and Precision Equipment Repair and Maintenance.

811412

Appliance Repair and Maintenance.

922160

Fire Protection.

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

FOR FURTHER INFORMATION CONTACT

section.

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

On December 27, 2020, the AIM Act was enacted as section 103 in Division S, Innovation for the Environment, of the Consolidated Appropriations Act, 2021 (codified at 42 U.S.C. 7675). In subsection (k)(1)(A), the AIM Act provides EPA with the authority to promulgate necessary regulations to carry out EPA's functions under the Act, including its obligations to ensure that the Act's requirements are satisfied. Subsection (k)(1)(C) of the Act also provides that Clean Air Act (CAA) sections 113, 114, 304, and 307 apply to the AIM Act and any regulations EPA promulgates under the AIM Act as though the AIM Act were part of title VI of the CAA. Accordingly, this rulemaking is subject to CAA section 307(d) (see 42 U.S.C. 7607(d)(1)(I)) (CAA section 307(d) applies to “promulgation or revision of regulations under subchapter VI of this chapter (relating to stratosphere and ozone protection)”).

The AIM Act authorizes EPA to address HFCs by providing new authorities in three main areas: phasing down the production and consumption of listed HFCs; managing these HFCs and their substitutes; and facilitating the transition to next-generation technologies by restricting use of these HFCs in the sector or subsectors in which they are used. This rulemaking focuses on the third area: the transition to next-generation technologies by restricting use of these HFCs in the sector or subsectors in which they are used.

Subsection (i) of the AIM Act, “Technology Transitions,” provides that “the Administrator may by rule restrict, fully, partially, or on a graduated schedule, the use of a regulated substance in the sector or subsector in which the regulated substance is used.” 42 U.S.C. 7675(i)(1). The Act lists 18 saturated HFCs, and by reference any of their isomers not so listed, that are covered by the statute's provisions, referred to as “regulated substances” under the Act.

6

(42 U.S.C. 7675(c)(1)). EPA is also authorized to designate additional substances that meet certain criteria as regulated substances (42 U.S.C. 7675(c)(3)). EPA has not so designated any additional substances, and the list of 18 regulated substances can also be found in appendix A of 40 CFR part 84. Through this rule, EPA is proposing to restrict the use of certain HFCs, whether neat or used in a blend, in specific sectors or subsectors, based on EPA's consideration of the factors listed in (i)(4) of the AIM Act.

6

As noted previously in this document, “regulated substance” and “HFC” are used interchangeably in this document.

A rulemaking restricting the use of regulated substances in sectors or subsectors can be initiated by EPA on its own accord, or a person may petition EPA to promulgate such a rule. Specifically, subsection (i)(3)(A) states, “A person may petition the Administrator to promulgate a rule under subsection (i)(1) for the restriction on use of a regulated substance in a sector or subsector.” Where the Agency grants such a petition submitted under subsection (i), the statute requires that “the Administrator shall promulgate a final rule not later than 2 years after the date on which the Administrator grants the petition.” (42 U.S.C. 7675(i)(3)(C)(ii)). Thus, EPA is addressing the granted petitions under subsection (i) in this proposed action.

Furthermore, prior to proposing a rule, subsection (i)(2)(A) directs EPA to consider negotiating with stakeholders in the sector or subsector subject to the potential rule in accordance with negotiated rulemaking procedures established under subchapter III of chapter 5 of title 5, United States Code (commonly known as the “Negotiated Rulemaking Act of 1990”). A brief discussion on EPA's consideration of using negotiated rulemaking procedures and its decision not to negotiate with stakeholders prior to this proposal can be found in section VI.B of this preamble.

In addition to proposing HFC use restrictions, this proposal includes measures designed to assist with enforcement and to help ensure compliance with those use restrictions, including recordkeeping, reporting, and labeling requirements. The proposed reporting requirements are also intended to inform EPA of market dynamics and the transitions that are occurring in those sectors and subsectors addressed by this rulemaking. EPA notes that subsection (k)(1)(C) of the AIM Act states that section 114 of the CAA applies to the AIM Act and rules promulgated under it as if the AIM Act were included in title VI of the CAA. Thus, section 114 of the CAA, which provides authority to the EPA Administrator to require recordkeeping and reporting in carrying out provisions of the CAA, also applies to and supports this rulemaking.

III. Background

A. What are HFCs?

HFCs are anthropogenic

7

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

2

).

7

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

HFC use and emissions

8

have been growing worldwide due to the global phaseout of ODS under the

Montreal Protocol on Substances that Deplete the Ozone Layer

(Montreal Protocol) and the increasing use of refrigeration and air-conditioning equipment globally. HFC emissions had previously been projected to increase substantially over the next several decades. In 2016, in Kigali, Rwanda, countries agreed to adopt an amendment to the Montreal Protocol, known as the Kigali Amendment, which provides for a global phasedown of the production and consumption of HFCs. Global adherence to the Kigali Amendment would substantially reduce future emissions, leading to a peaking of HFC emissions before 2040.

9 10

8

World Meteorological Organization (WMO), Scientific Assessment of Ozone Depletion: 2018, World Meteorological Organization, Global Ozone Research and Monitoring Project—Report No. 58, 588 pp., Geneva, Switzerland, 2018. Available at:

https://ozone.unep.org/sites/default/files/2019-05/SAP-2018-Assessment-report.pdf.

9

Ibid.

10

A recent study estimated that global compliance with the Kigali Amendment is expected to lower 2050 annual emissions by 3.0-4.4 Million Metric Tons of Carbon Dioxide Equivalent (MMTCO

2

e). Guus J.M. Velders et al. Projections of hydrofluorocarbon (HFC) emissions and the resulting global warming based on recent trends in observed abundances and current policies. Atmos. Chem. Phys., 22, 6087-6101, 2022. Available at:

https://doi.org/10.5194/acp-22-6087-2022.

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

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

11

11

WMO, 2018.

In 2016, HFCs excluding HFC-23 accounted for a radiative forcing of 0.025 W/m

2

. This is a 36 percent increase in total radiative forcing due to HFCs relative to 2012. This radiative forcing was projected to increase by an order of magnitude to 0.25 W/m

2

by 2050. If the Kigali Amendment were to be fully implemented, it would be expected to reduce the future radiative forcing due to HFCs (excluding HFC-23) to 0.13 W/m

2

in 2050 which is a reduction of about 50 percent compared to the radiative forcing projected in the business-as-usual scenario of uncontrolled HFCs.

12

12

Ibid.

The 18 HFCs listed as regulated substances by the AIM Act are the most commonly used HFCs and have high impacts as measured by the quantity of each substance emitted multiplied by their respective GWPs.

13

These 18 HFCs are all saturated, meaning they have only single bonds between their atoms and therefore have longer atmospheric lifetimes.

13

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

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

14

14

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

https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2014.

EPA estimated in the Allocation Framework Rule that phasing down HFC production and consumption according to the schedule provided in the AIM Act will avoid cumulative consumption of 3,152 million metric tons of exchange value equivalent (MMTEVe) of HFCs in the United States for the years 2022 through 2036 (86 FR 55116, October 5, 2021). That estimate included both consumption as defined in § 84.3—

i.e.,

with respect to a regulated substance, bulk production plus bulk imports minus bulk exports—and, although not requiring AIM Act allowances, the amount in imported products containing a regulated substance, for the abatement options necessary to meet the HFC cap. Annual avoided consumption was estimated at 42 MMTCO

2

e in 2022 and 282 MMTCO

2

e in 2036. In order to calculate the climate benefits associated with consumption abatement, the consumption changes were expressed in terms of emissions reductions. EPA estimated that for the years 2022-2050 that action will avoid emissions of 4,560 MMTCO

2

e of HFCs in the United States. The annual avoided emissions are estimated at 22 MMTCO

2

e in the year 2022 and 171 MMTCO

2

e in 2036. More information regarding these estimates is provided in the Allocation Framework RIA in the docket.

B. How do HFCs affect public health and welfare?

Elevated concentrations of GHGs including HFCs have been warming the planet, leading to changes in the Earth's climate including changes in the frequency and intensity of heat waves, precipitation, and extreme weather events; rising seas; and retreating snow and ice. The changes taking place in the atmosphere are a result of the well-documented buildup of GHGs due to human activities and are changing the climate at a pace and in a way that threatens human health, society, and the natural environment. In this section, EPA is providing some scientific background on climate change to offer additional context for this rulemaking and to help the public understand the environmental impacts of GHGs such as HFCs.

Extensive additional information on climate change is available in the scientific assessments and EPA documents that are briefly described in this section, as well as in the technical and scientific information supporting them. One of those documents is EPA's 2009 Endangerment and Cause or Contribute Findings for Greenhouse Gases Under section 202(a) of the Clean Air Act (CAA) (74 FR 66496, December 15, 2009).

15

In the 2009 Endangerment Finding, the Administrator found under section 202(a) of the CAA that elevated atmospheric concentrations of six key well-mixed GHGs—CO

2

, methane (CH

4

), nitrous oxide (N

2

O), HFCs, perfluorocarbons (PFCs), and sulfur hexafluoride (SF

6

)—“may reasonably be anticipated to endanger the public health and welfare of current and future generations” (74 FR 66523, December 15, 2009). The 2009 Endangerment Finding, together with the extensive scientific and technical evidence in the supporting record, documented that climate change caused by human emissions of GHGs (including HFCs) threatens the public health of the population of the United States. It explained that by raising average temperatures, climate change increases the likelihood of heat waves, which are associated with increased deaths and illnesses (74 FR 66497, December 15, 2009). It noted that while climate change also increases the likelihood of reductions in cold-related mortality, evidence indicates that the increases in heat mortality will be larger than the decreases in cold mortality in the United States (74 FR 66525, December 15, 2009). The 2009 Endangerment Finding further explained that compared with a future without climate change, climate change is expected to increase tropospheric ozone pollution over broad areas of the United States, including in the largest metropolitan areas with the worst tropospheric ozone problems, and thereby increase the risk of adverse effects on public health (74 FR 66525, December 15, 2009). Climate change is also expected to cause more intense hurricanes and more frequent and intense storms of other types and heavy precipitation, with impacts on other areas of public health, such as the potential for increased deaths, injuries, infectious and waterborne diseases, and stress-related disorders (74 FR 66525, December 15, 2009). Children, the elderly, and the poor are among the most vulnerable to these climate-related health effects (74 FR 66498, December 15, 2009).

15

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

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

16

in the United

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

16

The CAA states in section 302(h) that “[a]ll language referring to effects on welfare includes, but is not limited to, effects on soils, water, crops, vegetation, manmade materials, animals, wildlife,

weather, visibility, and climate, damage to and deterioration of property, and hazards to transportation, as well as effects on economic values and on personal comfort and well-being, whether caused by transformation, conversion, or combination with other air pollutants.” 42 U.S.C. 7602(h).

In 2016, the Administrator similarly issued Endangerment and Cause or Contribute Findings for greenhouse gas emissions from aircraft under section 231(a)(2)(A) of the CAA (81 FR 54422, August 15, 2016).

17

In the 2016 Endangerment Finding, the Administrator found that the body of scientific evidence amassed in the record for the 2009 Endangerment Finding compellingly supported a similar endangerment finding under CAA section 231(a)(2)(A) and also found that the science assessments released between the 2009 and the 2016 Findings “strengthen and further support the judgment that GHGs in the atmosphere may reasonably be anticipated to endanger the public health and welfare of current and future generations” (81 FR 54424, August 15, 2016).

17

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

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

18

These updated observations and projections document the rapid rate of current and future climate change both globally and in the United States.

19

20

21

22

18

IPCC, 2021: Summary for Policymakers. In:

Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

[Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Pe´an, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, O. Yelekçi, R. Yu and B. Zhou (eds.)]. Cambridge University Press. In Press: 4.

19

USGCRP, 2018: Impacts, Risks, and Adaptation in the United States: Fourth National Climate Assessment, Volume II [Reidmiller, D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018. Available at:

https://nca2018.globalchange.gov.

20

IPCC, 2021.

21

National Academies of Sciences, Engineering, and Medicine, 2019. Climate Change and Ecosystems. Washington, DC: The National Academies Press. Available at:

https://doi.org/10.17226/25504.

22

NOAA National Centers for Environmental Information, State of the Climate: Global Climate Report for Annual 2020, published online January 2021. Available at:

https://www.ncdc.noaa.gov/sotc/global/202013.

C. How is EPA evaluating environmental justice?

EPA provides the following discussion of the Agency's assessment of environmental justice impacts in relationship to this proposal. This analysis is intended to provide the public with information on the potential environmental justice impacts of this action, if finalized as proposed, and to comply with executive orders. This analysis was not used for purposes of EPA's consideration of the statutory factors under AIM Act subsection (i)(4). Executive Order 12898 (59 FR 7629, February 16, 1994) and Executive Order 14008 (86 FR 7619, January 27, 2021) establish federal executive policy on environmental justice. Executive Order 12898's main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on people of color and low-income populations in the United States. EPA defines environmental justice as the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.

23

Meaningful involvement means that: (1) potentially affected populations have an appropriate opportunity to participate in decisions about a proposed activity that will affect their environment and/or health; (2) the public's contribution can influence the regulatory Agency's decision; (3) the concerns of all participants involved will be considered in the decision-making process; and (4) the rule-writers and decision-makers seek out and facilitate the involvement of those potentially affected.

24

The term “disproportionate impacts” refers to differences in impacts or risks that are extensive enough that they may merit Agency action. In general, the determination of whether there is a disproportionate impact that may merit Agency action is ultimately a policy judgment which, while informed by analysis, is the responsibility of the decision-maker. The terms “difference” or “differential” indicate an analytically discernible distinction in impacts or risks across population groups. It is the role of the analyst to assess and present differences in anticipated impacts across population groups of concern for both the baseline and proposed regulatory options, using the best available information (both quantitative and qualitative) to inform the decision-maker and the public.

25

23

See,

e.g.,

Environmental Protection Agency. “

Environmental Justice.”

Available at:

https://www.epa.gov/environmentaljustice.

24

The criteria for meaningful involvement are contained in EPA's May 2015 document “

Guidance on Considering Environmental Justice During the Development of an Action.”

Environmental Protection Agency, 17 Feb. 2017. Available at:

https://www.epa.gov/environmentaljustice/guidance-considering-environmental-justice-during-development-action.

25

The definitions and criteria for “disproportionate impacts,” “difference,” and “differential” are contained in EPA's June 2016 document “Technical Guidance for Assessing Environmental Justice in Regulatory Analysis.” Available at:

https://www.epa.gov/environmentaljustice/technical-guidance-assessing-environmental-justice-regulatory-analysis.

A regulatory action may involve potential environmental justice concerns if it could: (1) create new disproportionate impacts on people of color, low-income populations, and/or indigenous peoples; (2) exacerbate existing disproportionate impacts on people of color, low-income populations, and/or indigenous peoples; or (3) present opportunities to address existing disproportionate impacts on people of color, low-income populations, and/or indigenous peoples through the action under development.

Executive Order 14008 calls on agencies to make achieving environmental justice part of their missions “by developing programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-

related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts.” Executive Order 14008 further declares a policy “to secure environmental justice and spur economic opportunity for disadvantaged communities that have been historically marginalized and overburdened by pollution and under-investment in housing, transportation, water and wastewater infrastructure, and health care.”

In addition, the Presidential Memorandum on Modernizing Regulatory Review calls for procedures to “take into account the distributional consequences of regulations, including as part of a quantitative or qualitative analysis of the costs and benefits of regulations, to ensure that regulatory initiatives appropriately benefit, and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities.”

26

EPA also released its June 2016 “Technical Guidance for Assessing Environmental Justice in Regulatory Analysis” (2016 Technical Guidance) to provide recommendations that encourage analysts to conduct the highest quality analysis feasible, recognizing that data limitations, time and resource constraints, and analytic challenges will vary by media and circumstance.

27

26

Presidential Memorandum on Modernizing Regulatory Review, January 20, 2021. Available at:

https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/.

27

Technical Guidance for Assessing Environmental Justice in Regulatory Analysis, June 2016. Available at:

https://www.epa.gov/sites/default/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf.

The Allocation Framework Rule, among other things, established the framework for the United States' phasedown of HFCs, which will achieve significant benefits by reducing production and consumption of certain chemicals with high GWPs. In that rulemaking, EPA described the environmental justice analysis conducted in support of the rule and summarized the public health and welfare effects of GHG emissions (including HFCs), including information that certain parts of the population may be especially vulnerable to climate change risks based on their characteristics or circumstances, including the poor, the elderly, the very young, those already in poor health, the disabled, those living alone, and/or indigenous populations dependent on one or limited resources due to factors including but not limited to geography, access, and mobility. Potential impacts of climate change raise environmental justice issues. Low-income communities, for example, can be especially vulnerable to climate change impacts because they tend to have more limited capacity to bear the costs of adaptation and are more dependent on climate-sensitive resources such as local water and food supplies. In corollary, some communities of color, specifically populations defined jointly by both ethnic/racial characteristics and geographic location, may be uniquely vulnerable to climate change health impacts in the United States.

Many of the environmental justice implications of this proposed rule are similar to those addressed at length in the RIA

28

developed for the Allocation Framework Rule. The analysis of potential environmental justice concerns for the Allocation Framework Rule focused mainly on characterizing baseline emissions of air toxics that are also associated with chemical feedstock use for HFC production. As detailed in the RIA for the Allocation Framework Rule, the phasedown of high-GWP HFCs in the United States will reduce GHG emissions, thereby reducing damages associated with climate change that would have been associated with those emissions. Similar to the Allocation Framework Rule, EPA expects that this proposed rule would reduce GHG emissions, which would benefit populations that may be especially vulnerable to damages associated with climate change. We also expect that the restriction on use of certain HFCs will increase the production of HFC substitutes. However, there continues to be significant uncertainty about how the transition to lower-GWP substitutes and market trends independent of this proposed rulemaking could affect production of predominant HFC substitutes, such as hydrocarbons, ammonia (R-717), and hydrofluoroolefins (HFOs), at individual facilities and how those changes in production could affect associated air pollutant emissions, particularly in communities that are disproportionately burdened by air pollution. Some predominant HFC substitutes, such as HFOs, use the same chemicals used in the manufacture of HFCs as feedstocks in their production or release the same chemicals as byproducts, potentially raising concerns about local exposure. Due to the limitations of the current data, we cannot make conclusions about the impact this proposed rule may have on individuals or specific communities near facilities producing HFC substitutes. For the purpose of environmental justice, however, it is important to understand the characteristics of the communities surrounding these facilities to better ensure that future actions, as more information becomes available, can improve outcomes.

28

The RIA for the Allocation Framework Rule is available in the docket for that rulemaking at:

https://www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0227.

EPA's 2016 Technical Guidance does not prescribe or recommend a specific approach or methodology for conducting an environmental justice analysis, though a key consideration is consistency with the assumptions underlying other parts of the regulatory analysis when evaluating the baseline and regulatory options. Therefore, for this proposed rule, EPA followed the format used for the Allocation Framework RIA to analyze the demographic characteristics and baseline exposure of the communities near facilities producing HFC substitutes. The complete analysis is described in the RIA addendum developed for this proposed rule, which is available in the docket. EPA relied on public data from the Toxics Release Inventory (TRI),

29

GHGRP, Chemical Data Reporting (CDR) Program,

30

EJScreen (an environmental justice mapping and screening tool developed by EPA), Enforcement and Compliance History Online (ECHO), Census data, and information provided by industry stakeholders to identify the facilities. In addition, Air Toxics Screening Assessment (AirToxScreen, formerly National Air Toxics Assessment (NATA)) data from 2017 (the most recent year available) for census tracts within and outside of a 1-, 3-, 5-, and 10-mile distance were used to approximate the cumulative baseline cancer and respiratory risk due to air toxics exposure for communities near the production facilities.

29

TRI tracks the management of certain toxic chemicals that may pose a threat to human health and the environment. U.S. facilities in different industry sectors must report annually how much of each chemical is released to the environment and/or managed through recycling, energy recovery, and treatment. Facilities submit a TRI Form R for each TRI-listed chemical it manufactures, processes, or otherwise uses in quantities above the reporting threshold.

30

The CDR program, under the Toxic Substances Control Act, requires manufacturers (including importers) to provide EPA with information on the production and use of chemicals in commerce. Under the CDR rule, EPA collects information on the types, quantities, and uses of chemical substances produced domestically and imported into the United States. The information is collected every four years from manufacturers of certain chemicals in commerce generally when production volumes are 25,000 pounds or greater for a specific reporting year.

30

With the restriction on use of certain HFCs, EPA anticipates that the production of HFC substitutes will increase. Accordingly, for the environmental justice analysis for this proposed rule, EPA identified 14 facilities producing predominant HFC substitutes that may be impacted by this proposed rule and where production changes may impact nearby communities. The relatively small number of facilities that may be affected by this rule enabled EPA to assemble a uniquely granular assessment of the characteristics of the facilities and the communities where they are located. Overall, this proposed rule would reduce GHG emissions, which would benefit populations that may be especially vulnerable to damages associated with climate change. However, the manner in which producers transition from high-GWP HFCs could drive changes in future risk for communities living near facilities that produce HFC substitutes, to the extent the use of toxic feedstocks, byproducts, or catalysts changes, and those chemicals are released into the environment with adverse local effects.

The environmental justice analysis, which examines racial and economic demographic and health risk information, found heterogeneity in community characteristics around individual facilities. The analysis showed that individuals identified as African American or Black and as Hispanic with respect to race live in proximity to the identified facilities compared with the national average or the rural areas national average. Importantly, the comparison to the rural area national average is more striking, because so many of the facilities are rural. While median income is not significantly different for the communities near the facilities (slightly lower than the national average but slightly above or equal to the rural median income), there are more very low-income households in these communities. Additionally, total cancer risk and total respiratory risk is higher than either the rural national average or the overall national average in communities near the facilities. The analysis shows that the risks are higher for those within the 1-mile average radius and decrease at the 3-mile, 5-mile, and 10-mile radii.

EPA notes that the averages may obfuscate potentially large differences in the community characteristics surrounding individual production facilities. Analysis of the demographic characteristics and AirToxScreen data for the 14 facilities identified shows that there are significant differences in the communities near these facilities. The racial, ethnic, and income results are varied but, in almost all cases, total cancer risk and total respiratory risk are higher for the communities in proximity to the sites than to the appropriate (rural or overall) average when compared with the national or state results.

Additionally, some facilities are in communities that are quite different from the aggregate results discussed in this section above. The aggregate results show that the communities near the facilities identified tend to have slightly fewer neighboring individuals identified as White, and more identified as African American or Black and as Hispanic with respect to race, in several cases. In several cases, however, the communities near specific facilities have higher percentages of White individuals than either the state or national averages. This is true for the facilities in San Dimas, CA; Sibley, LA; El Dorado, AR; Gregory, and Manvel, TX, along with those in Iowa, Illinois, and West Virginia.

EPA is including a demonstration of a microsimulation approach in the RIA addendum to analyze the proximity of communities to potentially affected facilities. Microsimulation is a technique relying upon advanced statistics and data science to combine disparate survey and geospatial data. It has long been used in a variety of economic and social science research and has been used before by EPA (in the context of understanding the implications of underground storage tank impacts on groundwater). Recent advances in data science and computational power have increased the availability of microsimulation for applications such as environmental justice analysis. The demonstration analysis included in the RIA addendum contributes to understanding communities that may warrant further environmental justice analysis.

EPA seeks comment and further discussion of the use of microsimulation approaches and techniques for regulatory impact analysis and other program activities. Among other things, EPA seeks information on what microsimulation tools are appropriate for better understanding the burdens faced by communities, and in what circumstances. The demonstration analysis presented in the RIA addendum uses a dataset of “synthetic households” based on geospatial data combined through microsimulation techniques with information from the U.S. Decennial Census and the American Communities Survey (ACS). EPA requests comment on other surveys or other geospatial datasets should be the focus of EPA efforts to combine with the ACS and/or Decennial Census data; how microsimulation tools supplement other EPA tools for understanding demographics, multiple burdens facing communities, and assessing the impact of EPA programs; and how microsimulation and other techniques to use current survey information can be used to identify data gaps which might be filled with refinements or improvements to existing survey tools.

In considering potential additional analysis for a final rule based on this proposal, EPA is also considering assessing the estimated exposure of the communities near the identified facilities to toxics using the Risk Screening Environmental Index Geographic Microdata (RSEI-GM). The Agency seeks comment on whether this additional analysis would be useful and what additional insight it might provide for the environmental justice analysis.

EPA noted in the Allocation Framework Rule, and reiterates here, that it is not clear the extent to which these baseline risks are directly related to potential future HFC substitute production, but some feedstocks, catalysts, and byproducts are toxic, particularly with respect to potential carcinogenicity (

e.g.,

carbon tetrachloride). All HFC substitute production facilities are near other industrial facilities that could contribute to the cumulative AirToxScreen cancer and respiratory risk, and, at this time, it is not clear how emissions related to HFC substitute production compare to other chemical production at the same or nearby facilities. Because of the limited information regarding where substitutes will be produced and what other factors might affect production and emissions at those locations, it's unclear to what extent this rule may affect baseline risks from hazardous air toxics for communities living near HFC substitute production facilities.

Additionally, as mentioned in this section above, emissions from facilities producing fluorinated and non-fluorinated substitutes may also be affected by the phasedown of HFCs. For the forthcoming proposed 2024 Allocation Rule, EPA is updating the environmental justice analysis that was previously conducted for the Allocation Framework RIA to help determine how the implementation of the HFC phasedown may affect production and emissions at facilities that produce HFCs. EPA is following the analytical approach used in the Allocation Framework RIA to provide an update to the characterization of community demographics near HFC production facilities using updated data on the total

number of TRI facilities near HFC production facilities and the cancer and respiratory risks to surrounding communities. More information will be provided in conjunction with that proposed rule, which the Agency anticipates publishing later this year.

EPA seeks input on the environmental justice analysis contained in the RIA addendum for this proposed rule, as well as broader input on other health and environmental risks the Agency should assess. To support the development of comments, EPA is seeking data or analysis to identify whether it is reasonable to expect net increases in emissions and, if so, how we might isolate the impacts of this program (

i.e.,

effects resulting from the transition to lower-GWP substitutes or some other factor) in a manner that would enable the Agency to conduct a more nuanced analysis of changes in releases associated with chemical feedstocks and byproducts for HFC substitutes, given the inherent uncertainty regarding where, and in what quantities, substitutes will be produced.

EPA is also taking comment on whether there are other authorities that would allow for the reporting of emissions tied to HFC substitute production. This could complement the emissions reporting and/or monitoring requirements in the proposed 2024 HFC Allocation Rule for HFC production facilities. Emissions monitoring and/or reporting provides communities with greater transparency and allows EPA to better evaluate potential environmental justice impacts over time. For more discussion of that proposal, see 87 FR 66372 (November 3, 2022). Finally, EPA is seeking comment in order to aid our efforts to understand further cumulative impacts and how they might be addressed. Since the updated environmental justice analysis and proposed reporting requirement are focused on chemical stressors, the Agency is requesting additional information on how both the chemical and non-chemical stressors associated with the HFC phasedown can alter the cumulative impacts experienced by communities surrounding HFC production facilities, how the Agency can share this information with the public, and whether and how the Agency can assess and measure cumulative impacts in the context of the HFC phasedown.

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

In making a determination to grant or deny a petition, subsection (i)(4) of the AIM Act requires EPA to consider, to the extent practicable:

• The best available data;

• The availability of substitutes for use of the regulated substance that is the subject of the rulemaking or petition, as applicable, in a sector or subsector, taking into account technological achievability, commercial demands, affordability for residential and small business consumers, safety, consumer costs, building codes, appliance efficiency standards, contractor training costs, and other relevant factors, including the quantities of regulated substances available from reclaiming, prior production, or prior import;

• Overall economic costs and environmental impacts, as compared to historical trends; and

• The remaining phase-down period for regulated substances under the final rule issued under subsection (e)(3) of the AIM Act, if applicable.

These factors under subsection (i)(4) of the AIM Act were considered in the process of making a determination on the granted petitions, and will be the factors that EPA considers in evaluating future petitions. A discussion on how EPA interprets these factors and how they were considered in this proposed rulemaking is in section VII.E of the preamble.

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

Subsection (i)(3) of the AIM Act states that a person may petition EPA to promulgate a rule to restrict the use of a regulated substance in a sector or subsector in accordance with the Agency's authority to issue such a rule under subsection (i)(1) of the AIM Act. If EPA receives a petition under subsection (i)(3), the AIM Act states that “[t]he Administrator shall grant or deny a petition . . . not later than 180 days after the date of receipt of the petition” (42 U.S.C. 7675(i)(3)(B)) and make the petition available to the public no later than 30 days after receiving the petition (42 U.S.C. 7675(i)(3)(C)(iii)). For petitions that are denied, EPA must publish in the

Federal Register

an explanation of the denial (42 U.S.C. 7675(i)(3)(C)(i)). If EPA grants a petition, the statute requires EPA to promulgate a final rule not later than two years from the date the Agency grants the petition (42 U.S.C. 7675(i)(3)(C)(ii)).

This section describes the proposed process for submitting a petition under subsection (i) to the Agency, which includes direction on how technology transition provisions should be submitted to EPA; the necessary content of petitions; and how EPA will respond once petitions are received.

Subsection (i)(3)(A) of the AIM Act explicitly states that “a person may petition the Administrator to promulgate a rule under [subsection (i)(1) of the AIM Act] for the restriction on use of a regulated substance in a sector or subsector, which shall include a request that the Administrator negotiate with stakeholders. . .”. EPA views “person” for the purpose of a technology transitions petition submittal as having the same meaning as how the term is defined in 40 CFR 84.3 (the definition established in the Allocation Framework Rule); that is, to mean “any individual or legal entity, including an individual, corporation, partnership, association, state, municipality, political subdivision of a state, Indian tribe; any agency, department, or instrumentality of the United States; and any officer, agent, or employee thereof.” Using this definition in 40 CFR 84.3 for purposes of petition submittal under subsection (i) would ensure consistency of how this term is used across these two regulatory programs developed under the AIM Act. This definition of “person” also captures the Agency's intended meaning of this term for purposes of the technology transitions program. Therefore, any person who fits the Allocation Framework Rule definition may submit a technology transitions petition to EPA. We further note that the plain text of subsection (i)(3)(A) also limits this provision to requests for restrictions on the use of a regulated substance in a sector or subsector. Other types of requests—such as exemptions from existing or anticipated restrictions—are therefore not properly presented under the (i)(3)(A) petition process, although parties are always welcome to communicate to the Agency informally, to provide comments on a proposed rule that considers such restrictions on use, or to generally petition for rulemaking under the Administrative Procedures Act.

All the petitions considered in this rulemaking were submitted to EPA electronically. EPA is proposing to require future petitions to also be submitted electronically. The Agency's preferred method is for petitions to be submitted to the email address:

HFCpetitions@epa.gov.

A link to this address is available on EPA's web page at:

https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act.

Petitions can also be submitted electronically through an EPA electronic reporting system. For instructions on how to submit a petition through an EPA electronic reporting system, please contact the individual

listed in the

FOR FURTHER INFORMATION CONTACT

section of the preamble.

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

EPA is proposing to require standard content to be included in a technology transitions petition, which would assist petitioners in preparing their petitions and also enhance EPA's ability to review and respond to them promptly. Under this proposal, in order to qualify for a grant, a technology transitions petition would need to include the elements described in the following paragraphs. We are seeking comment on these proposed elements of a petition submission under AIM Act subsection (i).

EPA is proposing that petitions must indicate either a GWP limit or the specific name(s) of the regulated substance(s) (including whether there are specific blend(s) that use the regulated substance(s), if the petition seeks a restriction on use of the regulated substance(s) in specific blends) to be restricted and their GWPs. Under this proposal, petitioners specifying specific regulated substances should use as the GWP the exchange values for the regulated HFCs listed in subsection (c) of the AIM Act and codified as appendix A to 40 CFR part 84.

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For blends containing regulated substances, petitioners should identify all components of the blend using the composition-identifying designation as listed in American National Standards Institute/American Society of Heating, Refrigerating and Air-Conditioning Engineers (ANSI/ASHRAE) Standard 34-2019

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(

e.g.,

HFC-134a, HFO-1234ze(E)). If blends are not listed in ASHRAE Standard 34, petitioners should provide the nominal composition of the blend, specifying all components with the ASHRAE Standard 34 designation for the components. If the components or substances are not listed in ASHRAE Standard 34, petitioners should provide the chemical name, the applicable CAS Registry Number, and the chemical formula and structure (

e.g.,

CHF=C=CF

2

rather than C

3

F

3

H) for the components not listed in ASHRAE Standard 34. EPA intends to maintain a list of commonly used blends containing HFCs and the GWPs of those blends at EPA's Technology Transitions web page. Nevertheless, EPA is also proposing a process to determine the GWP of blends containing regulated substances for purposes of this rulemaking, using the following hierarchy. For the regulated substances used in the blend, and as previously noted, the petitioner would use as the GWP the exchange value provided in subsection (c) of the AIM Act and codified as appendix A to 40 CFR part 84. EPA is proposing to use the 100-year GWP values from the IPCC's Fourth Assessment Report (AR4) for all substances or components of blends, which for HFC regulated substances is numerically equal to the exchange values provided in subsection (c), which are listed in AR4. EPA is proposing to use AR4 100-year GWPs wherever possible given the exchange values are numerically the same and because EPA considers such an approach to be less complicated. For hydrocarbons (HCs) listed in Table 2-15 of AR4, EPA is proposing to use the net GWP value. For substances for which no GWP is provided in AR4, EPA is proposing to use the 100-year GWP listed in World Meteorological Organization (WMO) 2018.

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For any substance listed in neither of these sources, EPA is proposing to use the GWP of the substance in Table A-1 to 40 CFR part 98, as it exists on a specified date, such as the date this rule is published in the

Federal Register

as a final rule, if such substance is specifically listed in that table. EPA is aware of two potential substances that might be included as components of blends containing regulated substances that are not listed in these three sources, trans-dichloroethylene (HCO-1130(E)) and HCFO-1224yd(Z) and is proposing to set these GWPs to be five

34

and one,

35

respectively, for purposes of this rulemaking. For any other substance not listed in the above three source documents, EPA is proposing that the default GWPs as shown in Table A-1 to 40 CFR part 98, as it exists on a specified date, such as the date this rule is published in the

Federal Register

as a final rule, shall be used. In the event that the hierarchy outlined in this section does not provide a GWP (

i.e.,

the substance in question is not listed in the three documents, is not one of the two for which EPA is proposing GWPs, is not listed in Table A-1 to 40 CFR part 98 and does not fit within any of the default GWPs provided in Table A-1 to 40 CFR part 98), EPA is proposing to use a GWP of zero. In any case where a GWP value is preceded with a less than (<), very less than (<<), greater than (>), approximately (~), or similar symbol in the source document which is used to determine the GWP, EPA is proposing that the value shown shall be used. As such, petitioners should provide GWP values of the components of a blend based on the hierarchy proposed in this section. The GWP of a blend would then be calculated as the sum of the nominal composition (in mass proportions) of each component multiplied by the GWP of each component.

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EPA noted in section III.A of this preamble that the exchange values for the regulated HFCs listed in subsection (c) of the AIM Act are numerically identical to the 100-year GWPs of each substance, as given in the Errata to Table 2.14 of the IPCC's Fourth Assessment Report (AR4) and Annexes A, C, and F of the Montreal Protocol. Available at:

https://www.ipcc.ch/site/assets/uploads/2018/05/ar4-wg1-errata.pdf.

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Hereafter referred to as ASHRAE Standard 34.

33

WMO, 2018.

34

81 FR 32244 (May 23, 2016).

35

84 FR 64766 (November 25, 2019).

EPA is proposing that petitioners must indicate the sector or subsector for which restrictions on use of the regulated substance would apply. EPA is proposing definitions for “sectors” and “subsectors” in section VII.A of this preamble that generally reflect how these terms are historically used and EPA's understanding of sectors and subsectors where HFCs are currently or can be used. However, EPA is not limiting sectors or subsectors to a specific list, recognizing there may be additional uses of HFCs today or that may be developed in the future, and thus additional sectors or subsectors for which it could be appropriate to restrict use.

EPA is proposing that petitions must include a date that the requested restrictions would go into effect and information concerning why the date or dates is appropriate. Petitioners should recognize that subsection (i)(6) of the AIM Act restricts the effective date of rules promulgated under subsection (i) to no earlier than one year after the date of the final rule.

Before proposing a rule for the use of a regulated substance for a sector or subsector under subsection (i)(1), subsection (i)(2)(A) directs EPA to consider negotiating with stakeholders in accordance with the Negotiated Rulemaking Act of 1990 (

i.e.,

negotiated rulemaking procedure). Subsection (i)(3)(A) requires petitioners to “include a request that the Administrator negotiate with stakeholders in accordance with paragraph (2)(A)” (42 U.S.C. 7675(i)(3)(A)). Therefore, EPA is proposing that petitioners include such a request in their petition. However, we are seeking comment on whether, in the alternative, it is reasonable for EPA to interpret the petition process under subsection (i)(3) as requiring petitioners to

address

whether EPA use the negotiated rulemaking procedure, rather than requiring them to affirmatively request that the Agency pursue negotiated rulemaking. Most petitions received to date by the Agency complied with the statute's requirement to request that EPA use negotiated

rulemaking; however, those petitioners unanimously expressed a preference that EPA

not

use this procedure in promulgating its restrictions. Allowing petitioners to express their views as to whether EPA should engage in negotiated rulemaking for a subsection (i) rulemaking, as opposed to requiring them to request something they may disagree with, provides more value to EPA as we consider, per subsection (i)(2)(A), whether to use the negotiated rulemaking procedure before proposing a restriction under subsection (i). Otherwise, EPA could be misled as to the petitioners' views and could elect to use the negotiated rulemaking procedure when no stakeholder sought that outcome. The unwarranted use of time and resources to undergo that procedure could be counterproductive to meeting the statutory deadlines to complete a final rule. Regardless of whether we finalize a requirement that petitioners affirmatively request negotiated rulemaking or whether we finalize a requirement that petitioners address negotiated rulemaking, EPA proposes that petitioners must provide an explanation of their position on the use of the negotiated rulemaking procedure and any considerations that would either support use of a negotiated rulemaking process or disfavor it. If a petition is granted, EPA intends to consider the petitioner's statement on negotiated rulemaking as it determines whether to use the procedure.

Lastly, EPA is proposing to require petitioners to submit, to the extent practicable, information related to the “Factors for Determination” listed in subsection (i)(4) of the AIM Act to facilitate EPA's review of the petition.

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Given the relatively short 180-day statutory timeframe for EPA to grant or deny a petition, this proposed requirement would ensure that information is available to EPA at the start of its review, to the extent the petitioner has relevant available information. This proposed requirement would clarify that EPA may deny a petition where no information had been provided that would allow the Agency to act on the petition.

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

Petitioners must, to the extent practicable, provide best available data on substitutes that could be used in lieu of the petitioned substance(s), addressing the subfactors (

e.g.,

technological achievability, safety, commercial demands, etc.) that may affect the availability of those substitutes. Other information submitted by petitioner could include estimates of the economic costs and environmental impacts. In particular, providing EPA with a sense of the scale of impacts (

e.g.,

whether the suggested restriction would have a significant environmental impact, or whether the suggested restriction would be likely to impose costs or savings on regulated entities or consumers) using quantitative, accurate data to support that assessment will be more likely to result in a timely, well-reasoned response to the petitioner's request.

B. What happens after a petition is submitted?

Subsection (i)(3)(C)(iii) instructs EPA to make petitions publicly available within 30 days after EPA receives the petition. As stated in another Agency action (see “

Notice of Data Availability Relevant to Petition Submissions Under the American Innovation and Manufacturing Act of 2020,”

86 FR 28099 (May 25, 2021)), EPA intends to continue to post technology transitions petitions at

www.regulations.gov,

in Docket ID No. EPA-HQ-OAR-2021-0289, as well as on the Agency's website at

https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act.

Making the petitions available allows the public to provide additional data and relevant material to aid in EPA's evaluation of petitions, based on the factors specified in subsection (i) of the AIM Act.

In accordance with the statutory directive, EPA intends to act on petitions no later than 180 days after the date of receipt of the petition. EPA notes that a petition granted under subsection (i) of the AIM Act does not necessarily mean the Agency will propose or finalize requirements identical to a petition's request. Rather, granting a petition means that the requested restriction contained in a granted petition warrants further consideration through rulemaking. During the rulemaking process, EPA will determine what restrictions on the use of HFCs to propose and finalize based on multiple considerations, including its consideration of the “Factors for Determination” listed in subsection (i)(4) to the extent practicable. This approach provides interested stakeholders with the opportunity to review and comment on a regulatory proposal restricting the use of HFCs prior to restrictions going into effect.

C. Can I revise or resubmit my petition?

As stated in section V.B of this preamble, receipt of a completed petition received by EPA triggers two statutory deadlines: the posting of the petition within 30 days of receipt and the granting or denying the of petition within 180 days of receipt. Because there is little purpose in EPA continuing to take action on the original petition when the petitioner has revised (

i.e.,

makes edits to an original request) or resubmitted (

i.e.,

makes edits to an original request and presents it as a new petition) it, EPA's view is that a petition revision or resubmittal made by petitioners is typically intended to supersede or replace the original petition and would thus restart these timelines. However, depending on the timing of the resubmission and the nature of the revision and the request, EPA may be able to act more quickly on a revised or resubmitted petition, for example, if the Agency had already developed familiarity with the request through its consideration of the original petition. Therefore, EPA intends to address petition revisions and resubmittals on a case-by-case basis. If petitioners do not intend for their submission to supersede or replace their original petition, rather revising or resubmitting their petition, they should instead submit supplemental or clarifying information regarding their petitions to the docket created for additional information and material related to petitions under consideration. In making a determination to grant or deny petitions, EPA plans to consider relevant and timely information provided in this docket, as the Agency did with the petitions in this rulemaking, including information provided by petitioners and from other stakeholders, for those petitions under review. Once a petition is granted or denied, any revised or resubmitted petitions will likely be treated as a new petition.

VI. How is EPA considering negotiated rulemaking?

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

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

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

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

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

Prior to this proposed rulemaking, EPA issued a document informing the public of the Agency's consideration of using the negotiated rulemaking procedure and the Agency's decision to not use these procedures for this proposed rulemaking (86 FR 74080, December 29, 2021). The Agency found that using negotiated rulemakings was not in the best interest of the public in the document and thus decided not to use negotiated rulemaking. In making this decision, EPA considered information provided by the petitions, including statements made by petitioners on the use of negotiated rulemaking procedures, and information provided by other stakeholders on the petitions. Further, the Negotiated Rulemaking Act of 1990, 5 U.S.C. 563, provides seven criteria that the head of an agency should consider when determining whether a negotiated rulemaking is in the public interest. EPA believes these criteria are informative for purposes of making a determination under AIM Act subsection (i) of whether to use the procedures set out in the Negotiated Rulemaking Act for proposed rulemakings and, therefore, also considered these criteria in its decision.

Going forward, EPA intends to use a similar process in making its determination on whether to use negotiated rulemaking procedures for any rulemaking being considered under subsection (i) in response to granted petitions. This includes reviewing the petitions themselves and statements from petitioners on the use of negotiated rulemaking procedures, considering information provided by stakeholders commenting on petitions, and considering the seven criteria listed in the Negotiated Rulemaking Act of 1990, 5 U.S.C. 563, that the head of an agency should consider when determining whether a negotiated rulemaking is in the public's interest. For rulemakings initiated by EPA (

i.e.,

not in response to granted petitions), EPA anticipates that our review would focus on just these seven criteria.

Furthermore, where appropriate, EPA will also take into account recent Agency actions and decisions related to restrictions on the use of HFCs in sectors and subsectors for its consideration on using negotiated rulemaking procedures. For example, EPA received four petitions that were not included in the Agency's consideration of using negotiated rulemaking procedures for petitions granted on October 7, 2021.

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However, these petitions requested restrictions on the use of HFCs in the same sectors and subsectors covered by petitions granted on October 7, 2021, for which EPA made a determination not to use negotiated rulemaking. Subsection (i)(2)(A) states that, “[b]efore proposing a rule for a sector or subsector under paragraph (1), the Administrator shall consider negotiating with stakeholders in the sector or subsector subject to the potential rule. . .” EPA will not issue a separate notice to consider using negotiated rulemaking for these four petitions because these petitions were received well ahead of this proposed action, and the requested restrictions are in the same sectors and subsectors contained in petitions granted on October 7, 2021, for which the Agency considered using negotiated rulemaking procedures and decided not to use them. Nothing in these four petitions caused EPA to reconsider that decision. Therefore, it is unnecessary for the Agency to reconsider whether to use negotiated rulemaking procedures for this rulemaking. EPA encourages future petitioners to consider petitions under review or recently granted before submitting a new petition and to consider submitting information to the docket for an existing petition in lieu of submitting a new petition on the same uses of HFCs that are already under consideration by the Agency.

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These petitions were received from AHRI and IIAR and are discussed in section VII.D.2 of this preamble. Copies of these petitions are located at

www.regulations.gov,

under Docket ID No. EPA-HQ-OAR-2021-0289, or at

https://www.epa.gov/climate-hfcs-reduction/technology-transition-petitions-under-aim-act.

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

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

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

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

See

86 FR 55133 (October 5, 2021) (discussing definitions of export and import under 40 CFR 84.3).

EPA is also proposing to establish definitions for new terms that are applicable only under 40 CFR part 84, subpart B and do not have a counterpart in the definitions under 40 CFR part 84, subpart A. These terms are: blend containing a regulated substance, manufacture, product, regulated product, retrofit, sector, subsector,

substitute, and use. The definitions that EPA is proposing to include in 84.52 for application to 40 CFR part 84, subpart B are as follows:

Blend containing a regulated substance.

EPA is proposing to establish restrictions on the use of HFCs, whether neat or used in a blend. Blends containing a regulated substance are used in multiple sectors and subsectors including refrigeration, air conditioning and heat pump, foam blowing, and fire suppression. EPA is proposing to define this term as “any mixture that contains one or more regulated substances used in a sector or subsector.” EPA would consider any quantity of a regulated substance within a mixture to qualify the mixture as a “blend containing a regulated substance.”

EPA is not proposing that a blend that uses one or more regulated substances is itself a regulated substance. Rather, the Agency is proposing use restrictions on the regulated substance(s) used in certain blends, such that the use restriction on the regulated substance(s) would also affect use of that blend. Most HFCs used in the sectors and subsectors addressed by this proposed rule are components of blends that contain other HFCs, HFOs, and hydrocarbons. As discussed in section V.A of this preamble, where the proportion of a regulated substance multiplied by its GWP, along with the proportion of the other components multiplied by their respective GWPs, causes the blend to exceed the GWP limit, the use of that HFC in that blend would be prohibited.

Export.

For purposes of subpart B, EPA is proposing to define this term to mean the transport of a regulated product from inside the United States or its territories to persons outside the United States or its territories, excluding United States military bases and ships for onboard use.

Exporter.

For purposes of subpart B, EPA is proposing to define this term to mean the person who contracts to sell any regulated product for export or transfers a regulated product to an affiliate in another country.

Importer.

For purposes of subpart B, EPA is proposing to define this term to mean any person who imports any regulated product into the United States. Importer includes the person primarily liable for the payment of any duties on the merchandise or an authorized agent acting on his or her behalf. The term also includes:

(1) The consignee;

(2) The importer of record;

(3) The actual owner; or

(4) The transferee, if the right to withdraw merchandise from a bonded warehouse has been transferred.

This proposed definition of importer, specifically paragraphs (3) and (4), would more closely align with the definition of “importer” at 19 CFR 101.1. Though the definition would vary in non-substantive ways from that in subpart A of 40 CFR part 84, no difference in interpretation between subparts is intended.

Manufacture.

EPA is proposing to define this term as to complete a product's manufacturing and assembly processes such that it is ready for initial sale, distribution, or operation. For equipment that is assembled and charged in the field, manufacture means to complete the circuit holding the regulated substance, charge with a full charge, and otherwise make functional for use for its intended purpose.

This proposed definition is intended to apply similarly to how this term is applied in certain other use restrictions under title VI of the CAA and 40 CFR part 82. Because those restrictions bear certain similarities to restrictions proposed in this document, EPA is drawing on its past experience in implementing those provisions in this proposal, including for the definition of “manufacture.” EPA established restrictions on products, including appliances, foams, and aerosols under section 610 of the CAA (Nonessential Products Bans). EPA also established use prohibitions under section 605(a) of the CAA that addressed the use of certain ODS as a refrigerant in the manufacture of new appliances, including field charged appliances.

See e.g.,

40 CFR 82.15(g)(4)(i), 40 CFR 82.15(g)(5)(i);

see also

85 FR 15267 (March 17, 2020) (describing the use restriction and when a field charged appliance is manufactured). The proposed definition of manufacture in this rulemaking is intended to address both products that are manufactured at a factory, including factory-charged appliances, and the assembly of field charged appliances. It is also intended to address field-charged equipment beyond appliances in the RACHP sector to include fire suppression equipment or other equipment that is assembled and charged on-site.

Appliances used in commercial refrigeration, such as large chillers and industrial process refrigeration (IPR), typically involve more complex installation processes, which may require custom built parts, and typically are manufactured on-site (or field charged). Consistent with EPA's view of the term “manufacture” in its prior experience under title VI of the CAA and its implementing regulations, appliances such as these that are field charged or have the refrigerant circuit completed on-site are manufactured at the point when installation of all the components and other parts are completed, and the appliance is fully charged with refrigerant and able to operate (

see, e.g.,

85 FR 15267, (March 17, 2020)).

EPA is seeking comment on whether it should expand the definition for “manufacture” to include the manufacturing process, prior to the completion of the product containing or manufactured with a regulated substance or blend using a regulated substance.

Product.

EPA is proposing to define this term as “an item or category of items manufactured from raw or recycled materials which is used to perform a function or task. The term product includes, but is not limited to: equipment, appliances, components, subcomponents, foams, foam blowing systems (

e.g.,

pre-blended polyols), fire suppression systems or devices, aerosols, pressurized dispensers, and wipes.” This definition is based on the definition of the term “product” in regulations established under title VI of the CAA in 40 CFR part 82 subparts C and E. EPA's view of what constitutes a product for purposes of use restrictions under subsection (i) mirrors its view under those provisions. Maintaining the same definition will provide clarity for the regulated community, as many are already familiar with the existing definitions in part 82. One difference from the part 82 definition is the proposed addition of two examples: fire suppression systems and foam blowing systems. There had been confusion during the ODS phaseout whether these systems were a product or a bulk substance. For example, some aircraft lavatory fire suppression systems consist of trash containers equipped with a fire extinguisher, a discrete product that automatically discharges the extinguishant in the event of a fire, whereas more integrated fire suppression systems use a reservoir of gas in a detachable cylinder and piping to discharge into the protected space. EPA is proposing to clarify that the self-contained systems would be considered products, while system cylinders independent of the system would continue to be considered bulk. Polyol foam blowing systems consist of two cylinders, one of which contains the foam material and the other containing a blowing agent such as an HFC. The cylinder containing an HFC is not considered a bulk gas as the two are sold together and used as a single system.

Regulated product.

EPA is proposing to define this term as “any product in the sectors or subsectors identified in § 84.56 that contains or was manufactured with a regulated substance or a blend that contains a regulated substance, including products intended to be used with a regulated substance, or that is otherwise subject to the prohibitions of this subpart.” EPA intends for this definition to broadly cover all products that use HFCs, whether they are high-GWP HFCs that are prohibited or lower-GWP HFCs that are subject to labeling and reporting provisions.

Retrofit.

The AIM Act defines “retrofit” as “to upgrade existing equipment where the regulated substance is changed, which—(i) includes the conversion of equipment to achieve system compatibility; and (ii) may include changes in lubricants, gaskets, filters, driers, valves, o-rings, or equipment components for that purpose.” EPA is proposing to adopt the definition contained in subsection (i)(7)(A) of the AIM Act with the addition of examples of equipment. The definition in the AIM Act is similar to, but broader than EPA's definition of retrofit that was codified in 40 CFR part 82, subpart F. The AIM Act definition refers to “regulated substance” and “equipment” whereas the regulatory definition in Part 82 refers to “refrigerant” and “appliances.” As such, in this context, EPA finds it reasonable to interpret this term as applying not just to refrigeration and air-conditioning appliances, but all equipment that uses a regulated substance. EPA is proposing to add a non-inclusive list of examples—such as air conditioning and refrigeration, fire suppression, and foam blowing equipment—recognizing that petitioners may seek, or EPA may establish, restrictions on other types of equipment using HFCs in the future.

Sector.

EPA is proposing to define this term as “a broad category of applications including but not limited to: refrigeration, air conditioning and heat pumps; foam blowing; aerosols; chemical manufacturing; cleaning solvents; fire suppression and explosion protection; and semiconductor manufacturing.” These categorizations and groupings would be similar to how the term “sector” is used in other contexts, such as EPA's Significant New Alternatives Policy (SNAP) Program, the Montreal Protocol Parties' Technology and Economic Assessment Panel (TEAP), the statutory language, and EPA's Vintaging Model. Entities potentially subject to rulemakings proposed under subsection (i) of the AIM Act are often the same entities affected by CAA title VI, including the CAA section 612 SNAP program, and may be familiar with the way EPA traditionally categorizes and groups sectors in that context. Moreover, TEAP is a globally recognized advisory body to the Montreal Protocol Parties, which provides technical information related to alternative technologies that use HFCs in sectors and subsectors. Entities with a global market presence and other stakeholders may be familiar with how TEAP defines sectors, and EPA's proposed definition of sector would be relatable to their understanding of the term.

Subsector.

EPA is proposing to define this term as “processes, classes of applications, or specific uses that are related to one another within a single sector or subsector.” Where appropriate, each sector can be subdivided into different subsectors which more narrowly highlights how the HFC is used. Entities potentially subject to rulemakings proposed under subsection (i) of the AIM Act are often the same entities affected by CAA title VI, including the CAA section 612 SNAP program and may be familiar with the way EPA categorizes and groups sectors and subsectors, in that context. Therefore, EPA is proposing that the term “subsectors” include the concepts of “end-uses” and “applications” under the SNAP Program (40 CFR 82.172). An example subsector is cold storage warehouses under the refrigeration, air conditioning and heat pump sector. Another example is the integral skin polyurethane subsector under foams.

Substitute.

EPA is proposing to define this term as “any substance, product, or alternative manufacturing process, whether existing or new, that is used, or intended for use, in a sector or subsector with a lower global warming potential than the regulated substance, whether neat or used in a blend, to which a use restriction would apply.” Under this proposed definition, substitutes would include regulated substances (

e.g.,

HFC-32 used in lieu of R-410A in commercial unitary AC), blends containing regulated substances (

e.g.,

R-454B used in lieu of R-410A in residential unitary AC), blends that do not use a regulated substance (

e.g.,

R-441A used in lieu of R-410A in window ACs), alternative substances (

e.g.,

HFOs, hydrocarbons, R-717, and R-744 (CO

2

)), and not-in-kind technologies (

e.g.,

finger-pump bottles in lieu of aerosol cans, or vacuum panels in lieu of foam insulation).

Use.

EPA is proposing to define this term as “for any person to take any action with or to a regulated substance, regardless of whether the regulated substance is in bulk, contained within a product, or otherwise, except for the destruction of a regulated substance. Actions include, but are not limited to, the utilization, deployment, sale, distribution, discharge, incorporation, transformation, or other manipulation.”

EPA welcomes comment on these proposed definitions. EPA acknowledges that historical contexts may not fully capture all the ways that regulated substances are being used and is seeking comment on additional sectors and subsectors where regulated substances are used that would fit under this regulatory program.

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

Subsection (i) authorizes EPA to by rule restrict, fully, partially, or on a graduated schedule, the use of a regulated substance in the sector or subsector in which the regulated substance is used. The provision grants EPA authority to fashion restrictions on the use of regulated substances in the sectors that use those substances and does not specify a particular approach as to how restrictions must be structured but lists a number of considerations EPA is to factor in, to the extent practicable, when promulgating restrictions. EPA is considering two possible approaches to structuring those restrictions in this proposal but recognizes that other approaches could be considered in the future that would also fit within the authority granted by this statutory provision.

In considering the two approaches, we have taken into account the statutory text, feasibility, consistency with similar programs being implemented in the states and internationally, impacts on the regulated community and on innovation, efficiency of implementation, and other factors. Subsection (i)(4)'s “Factors for Determination” provides factors that EPA is to consider “[i]n carrying out a rulemaking” under subsection (i)(1). As a general matter, we interpret subsection (i)(1) to apply where EPA is deciding

whether

to impose a restriction on the use of a regulated substance in a sector or subsector and

what

that restriction should be (

e.g.,

a full restriction or a partial restriction and on what timeframe). However, we also think the factors listed in subsection (i)(4) are informative in our consideration of how to structure restrictions, as some approaches may provide advantages with respect to some of the factors listed in subsection (i)(4) over others.

We also note that while subsection (i)(1) identifies that EPA may restrict the use of a regulated substance “in the sector or subsector in which the regulated substance is used,” we think that, given EPA's authority to issue partial restrictions, the provision allows EPA to establish restrictions for particular uses of HFCs, such as products or applications, and that such restrictions do not need to apply uniformly across entire sectors or subsectors. Interpreting EPA's authority in this manner allows the Agency to tailor restrictions in accordance with the best available data and to consider relevant differences in, for example, the availability of substitutes with respect to technological achievability or affordability. For example, EPA is proposing restrictions for HFCs used in chillers for comfort cooling. However, chillers for comfort cooling with evaporating temperatures less than −58 °F are not included in this proposal due to limits in lower-GWP technology to meet the proposed restriction at this time.

The two approaches to structuring subsection (i) restrictions that we are considering at this time were identified in the subsection (i) petitions granted by the Agency to date. They are: (1) to set GWP limits for HFCs used within a sector or one or more subsectors; and (2) to restrict specific HFCs, whether neat or used in a blend, by sector or one or more subsectors.

38

For purposes of the restrictions proposed in this document, which largely respond to the subsection (i) petitions granted to date by the Administrator, we propose to primarily employ the GWP limit approach, with some exceptions where we think the specific-listing approach is more appropriate. We seek comment on both approaches and have provided sufficient information in this proposal and the docket to allow the Agency to finalize restrictions using either approach.

39

38

The restrictions on the use of an HFC under subsection (i) of the AIM Act proposed in this rulemaking are intended to complement and not conflict with existing restrictions established through other authorities. Other authorities would still apply.

39

EPA provides a summary of sectors and subsectors affected by the proposed action, along with the proposed restriction in the form of GWP limits for most subsectors in section VII.F.2 of this preamble. The docket contains a list of specific substances that EPA is proposing to restrict should EPA finalize a specific listing approach to establish use restrictions rather than a GWP limit approach.

GWP Limit Approach

This proposed approach would restrict the use of HFCs by establishing GWP limits for HFCs used in each sector or subsector, whether neat or used in a blend. By establishing GWP limits, only HFCs with GWPs below the proposed limit or HFCs used in blends with GWPs below the proposed limit for a particular sector or subsector could be used in that sector or subsector. If used neat, HFCs with GWPs at or above the GWP limit would be prohibited from use in that sector or subsector. If the HFC is used in a blend in the sector or subsector, compliance with the GWP limit would be determined based on the GWP of the blend. Blends containing an HFC with GWPs at or above the GWP limit would be prohibited from use in that sector or subsector.

For HFCs used in a blend, EPA is proposing that the GWP of the blend would be calculated to incorporate all components of the blend, whether an HFC, HFO, HC or other constituent, using the 100-year integrated AR4 values. We note that the 100-year integrated GWP values in Table 2.15 of AR4 for the HFCs are equivalent to the exchange values listed in the AIM Act and thus what we plan to use here without change. For further details about determining the GWP of compounds that are not listed in AR4, see section V.A of this preamble.

In most cases it is the specific HFC and the proportion of that HFC within the blend that determines the GWP of the blend as a whole. Under this proposal, EPA is not restricting the use of all HFC blends. For instance, if a GWP limit of 150 is established for regulated substances used in a particular sector or subsector, HFC-134a, which has a GWP of 1,430, could not be used. However, R-451A, which is a blend of HFC-134a and HFO-1234yf, has a GWP of 146 and could be used in a sector or subsector with a GWP limit of 150. This approach would allow for the continued use of an HFC with a GWP above the limit EPA establishes when it is used in a blend with a GWP below the limit. There may be certain characteristics associated with a higher-GWP HFC that makes use of that substance in a blend particularly advantageous, such as reducing flammability. Making available substitutes that would not otherwise be available under an approach that did not permit the use of higher-GWP HFCs, even when in a lower-GWP blend, would achieve beneficial environmental impacts sooner, smooth the transition, and support innovation. This approach is consistent with the approach used by other governments including the European Union (EU). EPA notes that this approach would not change in any way the calculation established under 40 CFR part 84, subpart A for determining the quantity of production and consumption allowances required for regulated substances used in blends.

Even where petitions have asked EPA to restrict specific regulated substances or blends containing an HFC in various sectors and subsectors, EPA can translate those requests into restrictions using the GWP limit approach. EPA would select GWP limits that would, in effect, prohibit the use of named HFCs (neat) and named blends in the specified sector. For example, in its granted petition, Natural Resources Defense Council et. al. (NRDC) requested that the Agency restrict the use of R-507A (GWP 3,990), R-404A (GWP 3,920), R-428A (GWP 3,610), R-422C (GWP 3,390), R-434A (GWP 3,250), HFC-227ea (GWP 3,220), R-421B (GWP 3,190), R-422A (GWP 3,140), R-407B (GWP 2,800), and R-422D (GWP 2,730) for new remote condensing units. In this example, EPA's starting point for considering a GWP limit for new remote condensing units would be 2,730, to include within the prohibition the blend with the lowest GWP among those in the petition. EPA then would use the considerations laid out in subsection (i)(4) to determine the appropriate GWP limit restriction that would also account for available substitutes in the remote condensing unit subsector; by definition, that proposed GWP limit would prohibit (or fully restrict) the specific named HFCs and blends containing HFCs requested by the petitioner.

One benefit of the GWP limit approach is that the regulatory certainty it would provide would encourage the continued development and implementation of HFC substitutes with lower GWPs. Under this approach, companies would be free to innovate so long as the substitute did not exceed the GWP limit. Where EPA has established a GWP limit for a particular sector or subsector, based on available and technologically achievable substitutes, new HFCs or blends containing an HFC used in that sector or subsector would need to meet that threshold. This approach would also provide a more efficient and streamlined process for companies to employ these lower-GWP substitutes for new uses, because the existing restrictions would make clear permissible uses. A substance-specific listing approach could create hesitancy to innovate because it would be less clear whether EPA might restrict a particular blend containing an HFC

after

a company had already invested resources in developing it for a particular use. By establishing GWP limits, this program would foster

innovation to next-generation substitutes.

Perhaps recognizing these same advantages, other governments undertaking programs to restrict HFCs have embraced this approach, including the state of California, Canada, and EU member countries. Many of the granted petitions including those submitted by environmental advocates, industry trade associations, and state governments, demonstrated broad support for using GWP limits. Furthermore, many of the businesses in the potentially affected sectors or subsectors are familiar with this approach already and may already comply with GWP limits in certain markets. Therefore, EPA's use of the GWP limit approach, which is familiar to companies operating in other jurisdictions, could potentially support innovation, transition, and compliance.

Specific Listing Approach

The second approach EPA is considering would be to list specifically restricted HFCs and blends containing HFCs by sector or subsector. Using the NRDC petition example described previously, under this approach EPA would prohibit the use of the ten blends contained in the petition (R-507A, R-404A, R-428A, R-422C, R-434A, HFC-227ea, R-421B, R-422A, R-407B, and R-422D) in new remote condensing units. The NRDC petition appears to be based on the SNAP Program's use of acceptable, acceptable subject to use conditions, and unacceptable lists and requests restrictions that would be equivalent to the changes of status in SNAP Rules 20 and 21 which were partially vacated and remanded to the Agency (80 FR 42870, July 20, 2015 and 81 FR 86778, December 1, 2016, respectively).

40

40

After a court challenge, the D.C. Circuit partially vacated the SNAP 2015 Rule “to the extent it requires manufacturers to replace HFCs with a substitute substance,” and remanded to EPA for further proceedings.

Mexichem Fluor, Inc.

v.

EPA,

866 F.3d 451, 464 (D.C. Cir. 2017) (“

Mexichem I”

). However, the court upheld EPA's decisions in that rule to change the listings for certain HFCs in certain SNAP end-uses from acceptable to unacceptable as being reasonable and not arbitrary and capricious.

Id.

at 462-64. The same court later issued a similar partial vacatur for portions of the SNAP 2016 Rule.

See Mexichem Fluor, Inc.

v.

EPA,

760 Fed. Appx. 6 (Mem) (per curiam) (D.C. Cir. 2019) (“

Mexichem II”

).

While EPA's experience implementing the SNAP program under section 612 of the CAA provides some insight into the advisability of using a substance specific listing approach to structure restrictions under subsection (i), EPA recognizes that Congress provided separate authority under subsection (i) of the AIM Act. Section 612(c) of the CAA requires EPA to promulgate rules making it unlawful to replace ODS with any substitute that it determines may present adverse effects to human health or the environment where it has identified an alternative that (1) reduces the overall risk to human health and the environment and (2) is currently or potentially available. Section 612(c) further requires EPA to “publish a list of (A) the substitutes prohibited under this subsection for specific uses and (B) the safe alternatives identified under this subsection for particular specific uses.” Under SNAP, EPA evaluates substances that can be used as alternatives based on a number of criteria and accordingly lists them as acceptable, unacceptable, acceptable subject to use conditions, acceptable subject to narrowed use limits, or pending. See 40 CFR 82.180(a)(7) (listing criteria for review) and 40 CFR 82.180(b) (describing types of listing decisions). EPA has considered more than 450 alternatives for eight industry sectors and more than 40 end-uses since 1994.

41

41

As noted in section VII.A of this preamble, there is significant overlap between the sectors and subsectors identified in this proposal and how sectors and “end-uses” are categorized under the SNAP program.

Based on EPA's experience with using the substance-specific lists to establish use conditions or narrowed use limits under SNAP, we anticipate that using substance-specific lists to communicate the restrictions established under subsection (i) could be unwieldy and less advantageous. We note that in contrast to section 612(c) of the CAA, subsection (i)(1) does not expressly mention publication of a list for substances that are restricted. Moreover, the substance-specific approach could present the challenge of needing to continually update the list of HFCs and blends containing an HFC as they are introduced. For example, if EPA has already restricted one particular use of an HFC in a blend for a given use, a company could reformulate the blend slightly, even

increasing

the high-GWP HFC component, and start using it for that same use. EPA would then need to initiate a rulemaking to restrict that new HFC formulation for that use, even though it was clear from the outset that lower-GWP alternatives already existed.

However, we acknowledge that the substance-specific listing approach may be simpler to implement in some instances, particularly when there are only one or a few regulated substances used or restricted in a specific sector or subsector. Listing these restricted substances explicitly would provide specificity to the regulated community as to exactly what is prohibited. It also allows anyone to compare the regulated substance used to the list of restricted substances and know whether the product is in compliance, avoiding the intermediate step of determining the GWP of the HFC or blend containing an HFC before knowing whether that particular substance meets the established limit.

This approach may also be preferable when substitutes continue to be in development. It may be beneficial to allow additional time before establishing a GWP limit while still restricting those substances that have the highest environmental impact. This approach would allow for the adoption of multiple transitional substitutes and allow for the development of additional substitutes.

We think both approaches could also be used in combination, with some subsectors having a GWP limit and others where specific substances are restricted. We note that petitions granted under subsection (i) requested restrictions using both of these approaches, and one possible approach for the final rule would be to establish, if appropriate, the type of restriction (GWP limit or substance-specific) requested in the petitions for that particular subsector. For example, most petitions regarding the RACHP subsectors requested GWP limit restrictions. EPA suspects that this may be due to the number of HFCs and blends containing an HFC used in those subsectors. However, in some cases not all petitioners were in agreement on the structure of the restriction. For example, some petitions regarding the cold storage warehouse subsector requested that EPA establish a GWP limit of 150 while others requested EPA to prohibit the use of listed HFCs and blends containing an HFC.

The Agency is proposing to establish restrictions on the use of HFCs by establishing GWP limits by sector or subsector in most instances. As discussed further in section VII.F.3.e of this preamble, EPA is proposing to restrict specific HFCs, whether neat or used in a blend, in some instances where the situation making the substance specific listing approach is advantageous. EPA is seeking comment on the GWP limit approach, the specific listing approach, other possible regulatory models that the Agency should consider, and a combination of approaches either for this proposed rule or for future rulemakings under subsection (i) of the AIM Act.

C. Applicability

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

fully, partially, or on a graduated schedule, the use of a regulated substance in the sector or subsector in which the regulated substance is used. HFCs are used in a wide variety of applications, including refrigeration and air conditioning, foam blowing agents, solvents, aerosols, and fire suppression. In these applications, HFCs are often used as a refrigerant, foam blowing agent, and fire suppression agent or may be contained and used within a product. HFCs can also be used in processes such as solvent cleaning, blowing open cell foam, semiconductor manufacturing, or chemical usage.

The AIM Act does not define “use.” The dictionary definitions for that term include “to put into action or service”

42

and “to take, hold, or deploy (something) as a means of accomplishing a purpose or achieving a result; employ.”

43

For several reasons, we think “use,” in the context of subsection (i)(1), was intended to include actions taken with respect to regulated substances that occur at the market or industry level, such as manufacture, distribution, sale, offer for sale—

i.e.,

to cover the presence of HFCs in products and processes in the U.S. market as a way of addressing their use in sectors and subsectors.

42

Merriam-Webster. Available at:

https://www.merriam-webster.com/dictionary/use.

43

Lexico.com

. Available at:

https://www.lexico.com/en/definition/use.

First, subsection (i) grants EPA authority to restrict the use of a regulated substance “in the sector or subsector in which the regulated substance is used.” While sectors and subsectors are not defined in the AIM Act, those terms suggest groupings or categories of related activity at an industry level, and as discussed in section VII.A of this preamble, EPA is proposing definitions for “sectors” and “subsectors” that are consistent with historical usage of those terms in other programs—grouping together similar or related industrial or market uses in distinct sectors, for example, refrigeration and air conditioning, or foam blowing, or aerosols. “Use of a regulated substance in the sector or subsector in which the regulated substance is used” indicates that the grant of authority under subsection (i) was intended to cover a

sector or subsector's use

of a regulated substance, and that use certainly covers the inclusion of a regulated substance in a product

44

to achieve a particular purpose or the employment of a regulated substance in a process, as those are prototypical uses for sectors that are most likely to be using regulated substances, such as the inclusion of an HFC as a refrigerant in a refrigerator or air conditioner for cooling purposes.

44

Similarly, subsection (i)'s authority extends to regulated substances contained in a blend and the use of that regulated substance within a blend by the sector or subsector in a product or process to achieve a particular purpose. In order to address the regulated substance within a blend, it may be appropriate to establish requirements that apply to use of the blend, although the blend itself is not a regulated substance.

Second, because subsection (i) and the subsection (i)(4) factors are focused on broad, sector-level information, it is reasonable to interpret “use” broadly, in a way that would reach uses on a sector-level basis. The subsection is titled “Technology Transitions,” and in subsection (i)(4), the Act directs EPA to consider certain factors, to the extent practicable, in issuing a rulemaking or making a determination to grant or deny a petition regarding use restrictions. The factors listed under subsection (i)(4) task the Agency with examining information relevant to industry-level sectors or subsectors that would inform consideration of the feasibility and advisability of a transition away from the use of a regulated substance in that sector or subsector, as well as consideration of whether that transition should be full, partial, or on a graduated schedule. For example, in subsection (i)(4)(B), the Act directs EPA to factor in “the availability of substitutes for use of the regulated substance that is the subject of the rulemaking or petition, as applicable, in a sector or subsector, taking into account technological achievability, commercial demands, safety, consumer costs, building codes, appliance efficiency standards, contractor training costs, and other relevant factors, including quantities of regulated substances available from reclaiming, prior production, or prior import.” The various subfactors in (i)(4)(B) help EPA to determine whether there are adequate available substitutes for a regulated substance that a sector or subsector could use, indicating feasibility, readiness, advisability, and degree of a sector or subsector transition away from the regulated substances in use. Similarly, the other factors in (i)(4)—to use best available data, to consider overall economic costs and environmental impacts, as compared to historical trends, and to consider the remaining phasedown period for regulated substances under the phasedown rule issued under subsection (e), if applicable—also fit with this understanding of EPA's task: to determine whether, when, and to what degree it is appropriate to establish a use restriction to facilitate the transition away from the use of regulated substances in a sector or subsector.

Third, Congress provided EPA authority to issue restrictions that are full, partial, or on a graduated schedule. Fully restricting the use of a regulated substance in the sector or subsector in which it is used, by its terms, implies a full transition away from the use of that regulated substance in the given sector or subsector. We therefore understand the term “use” to be broad enough to achieve a full transition. In order to effectuate a full transition, we would have to be able to address all the aspects where the regulated substance is present in that sector or subsector of the market. There may be situations where a restriction is best targeted at points in the life cycle or market chain of the regulated substance that are subsequent to the incorporation of the regulated substance in a product or process, as well as points in the chain that are proximate to ultimate use. Thus, we interpret the term “use” as being broad enough to reach points such as transport or offer for sale.

EPA therefore proposes to interpret use of a regulated substance in the sector or subsector for purposes of subsection (i) as “for any person to take any action with or to a regulated substance, regardless of whether the regulated substance is in bulk, contained within a product, or otherwise, except for the destruction of a regulated substance. Actions include, but are not limited to, the utilization, deployment, sale, distribution, discharge, incorporation, transformation, or other manipulation.” EPA's proposed definition of “use” covers all of the links on the chain representing how regulated substances would be introduced, incorporated into products or processes, circulated, and made available in the U.S. market. To the extent EPA has determined, considering the (i)(4) factors, such as the availability of substitutes, that it is appropriate and possible to fully restrict the use of an HFC in a particular sector or subsector, we think that restriction must be able to extend across all the points in the chain. For example, if stakeholders submit a petition to EPA asserting that the Agency should fully restrict use of a certain HFC or HFCs over a certain GWP in motor vehicle air conditioning (MVAC), and EPA agrees such restriction is appropriate, based on consideration of the (i)(4) factors to the extent practicable, we interpret subsection (i) to authorize the restriction of such use of HFCs in every part of the market chain. A narrower interpretation could hamper EPA's ability to

effectively implement a full restriction on HFC use in a sector or subsector. For example, if EPA were to define “use” as only the manufacture of a product containing an HFC but not sale of that product, then the manufacture of a MVAC system with the restricted HFC would be prohibited, because the air conditioning sector would be restricted from that “use” of the HFC. Sale of MVAC systems manufactured with the restricted HFC would not be considered part of the sector's “use” of an HFC and would therefore be permissible, either because the unit had been imported or because it had made it to store shelves, despite a restriction on its manufacture. This would circumvent the intended full transition of the MVAC subsector away from use of HFC. Covering all points in the chain of “use in the sector or subsector” ensures that the use restrictions we establish achieve their intended purpose. However, even though EPA's proposed definition of “use” is broad in order to facilitate a full transition to HFC substitutes where appropriate, that does not mean that in every instance the restrictions promulgated under subsection (i) will exercise that full authority. In many cases, including in this proposed action, EPA may issue partial restrictions that target only certain uses.

The AIM Act also provides EPA other authorities to issue certain regulations for the purpose of maximizing reclamation and minimizing release of regulated substances from equipment and to ensure the safety of technicians and consumers.

45

We have not yet established regulations under those provisions and therefore do not intend to apply our authority under (i) to actions associated with steps in the disposal or reclamation chain such as recovery, recycling, and reclamation of a regulated substance at this point.

45

As explained in the Allocation Framework Rule that in the context of allocating and expending allowances, EPA interprets the word “consume” as the verb form of the defined term “consumption.”

See

86 FR 55122, n. 7 Oct. 5, 2021); see also definition of “consumption” in subsection (b)(3) of the AIM Act and 40 CFR 84.3. The distinct term “consumer” is not defined in the AIM Act. In the context of subsection (i) of the AIM Act, we understand and are using the term “consumer” in a more general way, consistent with its everyday dictionary meaning, for example to refer to a person who purchases goods or services for personal use or the ultimate consumer of a product.

We also do not intend that this rule apply to the ordinary utilization or operation of a regulated product by an ultimate consumer. Given that this is the outset of the phasedown of HFCs, there is an opportunity to efficiently achieve significant emission reductions by limiting the introduction of new products to the U.S. market and restricting the circulation of those products (

e.g.,

sale and distribution) before they reach the ultimate consumer. We therefore are proposing restrictions on the manufacture, import, export, sale, and distribution of products, rather than on restricting ongoing, ordinary operation and utilization by ultimate consumers.

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We note, however, that in some cases the ultimate consumer may have purchased a product where the first incorporation of the regulated substance occurs when the product is in the ultimate consumer's ownership, and in those cases that incorporation would be covered by the proposed requirements.

Further, in this rule, EPA is not proposing to apply the requirements established through this rulemaking to certain applications of HFCs eligible for application-specific allowances under 40 CFR 84.13. Under subsection (i)(7)(B)(i) of the AIM Act, a rule promulgated under subsection (i) “shall not apply to . . . an essential use under clause (i) or (iv) of subsection (e)(4)(B)” of the AIM Act, “including any use for which the production or consumption of the regulated substance is extended under clause (v)(II) of that subsection” of the Act. Subsection (e)(4)(B)(iv) lists six applications which are to “receive the full quantity of allowances necessary, based on projected, current, and historical trends” for the five-year period after enactment of the AIM Act. EPA has codified these six applications at 40 CFR 84.13 and established a framework for allocation of allowances for these application-specific needs. Under the implementing regulations at 40 CFR 84.13, the following applications are currently eligible to receive application-specific allowances for calendar years through 2025: (1) as a propellant in metered dose inhalers; (2) in the manufacture of defense sprays; (3) in the manufacture of structural composite preformed polyurethane foam for marine use and trailer use; (4) in the etching of semiconductor material or wafers and the cleaning of chemical vapor deposition chambers within the semiconductor manufacturing sector; (5) for mission-critical military end uses; and (6) for onboard aerospace fire suppression. Therefore, EPA is not proposing to apply the requirements under this rulemaking to these uses of HFCs in these six specific applications at this time, since they are currently receiving application-specific allowances under 40 CFR 84.13. This aspect of the proposal is reflected in the proposed exemption in section 84.58. Further, EPA has not at this point designated any essential uses under subsection (e)(4)(B)(i). If EPA makes such a designation in the future, EPA would consider at that point how to ensure consistency with subsection (i)(7)(B)(i).

1. Which uses is EPA proposing to restrict in this proposal?

Under the proposed definition of “use” EPA would be exercising its authority under subsection (i) to cover a broad chain of activities associated with regulated products. In this rule, EPA's proposed restrictions on that broad chain of activities are designed to apply only at certain points in this chain, consistent with the direction that EPA “may by rule restrict, fully, partially, or on a graduated schedule.” With respect to the specific sector and subsector restrictions proposed in this document, EPA proposes to adopt a uniform understanding of when the restrictions would begin to apply and explains in this section how the commencement of EPA's restrictions would apply to both regulated products manufactured in the United States and imported regulated products.

For purposes of this rule, EPA is proposing restrictions on newly manufactured products (and the subsequent sale, distribution, export, and offer for sale or distribution of those products) and is not proposing to apply the specific use restrictions that are the subject of this action to existing products or equipment and used products or equipment, except as to the import of existing or used products or equipment. For additional discussion regarding products for export, see section VII.C.2 of this preamble. For additional discussion regarding existing products or equipment, see section VII.C.3 of this preamble.

We think the most efficient and effective way to encourage transition from the use of these HFCs is to restrict the incorporation of HFCs into products entering the U.S. market for the first time. This restriction would primarily be borne by original equipment manufacturers (OEMs) and importers of products, as these are the entities that introduce products into the U.S. market. Given that this is the first rulemaking under subsection (i), and there are many products that are currently being manufactured or imported using HFCs and blends containing HFCs (or are intended to use HFCs and blends containing HFCs) in the sectors and subsectors for which EPA is proposing restrictions, the use restrictions in this proposed rule are intended to only apply to the manufacture and import of regulated products and the subsequent sale, distribution, export, and offer for sale or distribution of those products.

EPA is proposing that the compliance date for the restrictions on the sale, distribution, or export of a regulated product be one year after the compliance date for the prohibition on production and import. Most of the proposed restrictions on the manufacture and import of products using HFCs have a proposed compliance date of January 1, 2025. As such, restrictions on the sale and distribution of those products would be January 1, 2026. Providing one year to sell existing inventory should be sufficient given that compliance date would be more than two years from the date of the final rule and many manufacturers are anticipating this action. EPA prefers a time-limited period during which products can continue to be sold over an approach that indefinitely exempts the sale of existing inventory. Having a date certain for the sale and distribution of regulated products facilitates enforcement of the manufacturing and import restriction. Manufacturers, importers, and distributors can avoid stranding inventory by promptly beginning their transitions. EPA welcomes comment on the effect of a one-year sell through, including the potential for stranding inventory or disadvantaging entities that have completed their transitions.

As noted, for the most part, EPA is designing its restrictions to apply to newly manufactured products and equipment rather than existing or used products and equipment (both addressed below). However, EPA is proposing to restrict the import of existing and used products that do not meet the proposed GWP limits or other restrictions. EPA does not interpret the AIM Act's restriction on EPA's authority to regulate equipment in existence in the sector or subsector prior to December 27, 2020, as applying to imports of equipment that was manufactured prior to that date but was not imported until after that date (see section VII.C.3 of this preamble for additional discussion). EPA is electing to apply its GWP limit restrictions or other restrictions to imports of existing and used products and equipment because failing to prohibit the import of these products could have the effect of undermining the transition from higher-GWP HFCs in the sectors and subsectors that are the subject of this proposal. Permitting the import of existing and used products that did not meet the proposed restrictions could shift market share away from domestically manufactured products that use conforming lower-GWP HFCs or substitutes, towards imported products that continue to use higher-GWP HFCs. The goal of restricting the use of regulated substances (

i.e.,

higher-GWP HFCs) in the named sectors and subsectors would be undermined if those sectors and subsectors simply shifted use to imported existing or used products containing higher-GWP HFCs. EPA is seeking comment on its proposal to apply restrictions on the use of HFCs to the import of existing and used products.

The AIM Act defines “import” as “to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into, any place subject to the jurisdiction of the United States, regardless of whether that landing, bringing, or introduction constitutes an importation within the meaning of the customs laws of the United States,” and we have proposed to codify that definition into our subpart B regulations. We note that this statutory definition contains no threshold volume of business an entity would need to undertake in order to qualify as an importer. As such, EPA intends its proposed restrictions to cover any importation of regulated products. The Agency's intention is to cover the activities of importers bringing large shipments of products or equipment into the country, as well as activities of entities bringing smaller groups of regulated products into the country (

e.g.,

driving a truckload of air conditioning units across the Canadian or Mexican border for sale in the United States).

As discussed above, because EPA proposes to interpret “use” to include activities in the market chain involving regulated products that occur subsequent to manufacture or import, the proposed use restrictions would also apply to any person who sells, distributes, offers for sale or distribution, makes available for sale or distribution, or exports any regulated product in the sectors or subsectors controlled under subsection (i). Applying the restriction in this way ensures that the goal of restricting the use of regulated substances in the sectors or subsectors in which the regulated substances are used can be achieved, because the sector and subsector's use of the regulated substance is present in all these aspects of the market chain, and EPA's intention in this proposal is to restrict use across that chain. Therefore, even if a manufacturer or importer improperly introduces a regulated product that does not meet the proposed restriction into the U.S. market, distributors and retailers offering that product for sale, including online retailers, are also restricted from covered activities related to that product. The intent of the proposed restriction is to remove products that do not meet the proposed limits from circulation in the U.S. market.

However, EPA is proposing not to apply its GWP limit restrictions or other restrictions to the sale or distribution, or offer for sale or distribution, of used products. By used products, we mean products that have been in the ownership of an ultimate consumer and have experienced ordinary operation or utilization by an ultimate consumer. Some regulated products, such as air-conditioning and refrigerated appliances, are often conveyed with the sale of a building and could not reasonably be excluded from that conveyance. Other regulated products may be incorporated into a larger good, such as an MVAC in a motor vehicle, which may be sold multiple times during the useful life of the good. Restricting the sale of used products or equipment that use HFCs likely would significantly decrease the value of those goods and impact the market for used products (

e.g.,

trading in a used motor vehicle during the purchase of a new one). Extending the proposed restriction to the sale of used products could have overall detrimental environmental effects, by requiring consumers to discard products or equipment before the end of the product's useful life, and could negatively impact affordability for consumers b

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