Protection of Stratospheric Ozone; Labeling; Petitions for Exemption; Notice ENVIRONMENTAL PROTECTION AGENCY

SUMMARY: On February 11, 1993, the U.S. Environmental Protection Agency

(EPA) published the final labeling regulations implementing section 611

of the Clean Air Act (CAA), as amended by the Clean Air Act Amendments

(CAAA) of 1990. The regulations include a section which permits a

manufacturer to petition EPA to temporarily exempt a product

manufactured with a class I substance from the labeling requirements.

The company must prove that there are no substitutes that: do not rely

on the use of a class I substance; reduce the overall risk to human

health and the environment; and, are currently or potentially

available. Through this action, EPA proposes to grant petitions for

such exemptions for the two specific applications of products

manufactured with class I substances described below, because

substitutes that do not rely on the use of class I substances and

reduce the overall risk to human health and the environment are neither

potentially nor currently available. The effect of this action will be

to provide the extensions necessary for these two petitioners to

develop potentially available substitutes.

ADDRESSES: Copies of information relevant to these petitions are

available for inspection in public docket A-91-60 at the Air Docket

(LE-131) of the EPA, room M-1500, 401 M Street, SW., Washington, DC

20460 between the hours of 8:30 a.m. to noon and 1:30 p.m. to 3:30 p.m.

Monday through Friday.

Any comments, in duplicate, from interested parties should be

addressed to the docket with a copy forwarded to Mavis Sanders,

Stratospheric Protection Division (6205-J), Office of Air and

Radiation, U.S. Environmental Protection Agency, 401 M Street, SW.,

Washington, DC 20460. A reasonable fee may be charged for copying

services.

FOR FURTHER INFORMATION CONTACT: Mavis Sanders, Stratospheric

Protection Division (6205-J), Office of Air and Radiation, U.S.

Environmental Protection Agency, 401 M Street, SW., Washington, DC

20460, (202) 233-9737.

SUPPLEMENTARY INFORMATION:

I. Background

Section 611 of the Clean Air Act, as amended, requires EPA to

promulgate regulations requiring labeling of products manufactured

with, and products and containers containing, ozone-depleting

substances. On February 11, 1993 at 58 FR 8136, EPA published the final

regulations at 40 CFR part 82, subpart E (40 CFR 82.100 et seq).

Section 82.120 of the final labeling regulations (40 CFR 82.120),

states that a company may petition EPA to temporarily exempt a product

manufactured with a class I substance. To get the exemption, the

company must prove that there are no substitutes that: (1) Do not rely

on the use of a class I substance; (2) reduce the overall risk to human

health and the environment; and (3) are currently or potentially

available. In the regulations, EPA defines ``potentially available'' to

mean that adequate information exists to support a determination that a

substitute for a class I substance is environmentally acceptable,

economically viable, and technologically feasible.

The petition provision allows the Agency to exempt products

manufactured with class I substances from the labeling requirements

where a company shows that it has been unsuccessful in identifying a

commercially or potentially available alternative substance or

manufacturing process for its current use of the class I substance and

where the Agency finds that no such alternative substance or process is

``potentially available.'' The two petitions claimed that alternatives

were not ``potentially available'' at this time. In one case, the

argument was made that additional time is required in order to

accommodate an extensive evaluation and approval process required by

another Federal entity; and, in the other case, implementation of

possible substitutes/manufacturing processes remain uncertain,

requiring additional development of the possible alternative process

before full-scale construction of three new manufacturing facilities

can begin.

As part of the petition review process, EPA developed criteria by

which to evaluate the submissions. Unlike the Significant New

Alternatives Policy Program (SNAP) petitions naming acceptable

substitutes for eight sectors of industry submitted under section 612

of the CAA, the petitions submitted under section 611 are reviewed on a

case-by-case basis with careful attention given to each application of

a class I substance in a manufacturing process. The Agency considered

all of the factors below in determining whether to accept or reject a

petition with regard to the technological feasibility and the

environmental acceptability of a substitute.

In evaluating technological feasibility, EPA considers when the

company first began investigating alternative substances or processes

to replace their uses of class I substances; EPA's knowledge about the

product/manufacturing process and possible substitutes; whether

parallel manufacturers of similar products have come up with

substitutes; whether a timeline has been developed for implementation

of a substitute, including research and development of a substitute

process where applicable; and, whether the timeline seems reasonable

where no substitute is commercially available. In addition, the Agency

considers a company's constraints (technology, other Federal

requirements, etc.) in order to determine whether a change is within

the control of the company; whether a company is able to state what it

must specifically do to implement the substitute; whether training and

procurement of equipment and manufacturing materials are accessible;

what measures have been taken to understand and solve the ``unknowns;''

whether vendors exist that can meet the product's manufacturing needs;

and whether the company has discussed its manufacturing needs with

these vendors.

In evaluating environmental acceptability, EPA considers whether a

substitute is environmentally implementable in terms of the available

technology.

In general these criteria were considered collectively. However,

EPA believes that for most companies, implementation of an alternative,

whether it be a drop-in replacement or a complete overhaul of the

production process, often entails significant cost and time

constraints. EPA recognizes that companies need lead time in

establishing a labeling program or installing an alternative technology

where companies have chosen to switch from a class I substance to a

substitute in order to comply with the regulations. Companies that have

not implemented a substitute are required to label their products until

they have implemented a substitute. Therefore, where a company's early

efforts to replace its uses of controlled substances are prevented

through unavoidable obstacles beyond its control, such as a required

Federal review or permit program, or where a substitute requires

additional development through testing due to unknown or unavoidable

impediments, EPA has placed greater weight on such circumstances in

developing its determinations, because the ability of a company to

switch to an alternative is seriously hampered by circumstances outside

of its control.

EPA emphasizes that its process of evaluating a company's request

for exemption from the labeling requirements is a different review

process from the essential use exemption authorized by the Parties to

the Montreal Protocol on Substances that Deplete the Ozone Layer (the

Parties) and could well reach different conclusions. Under the Montreal

Protocol process, member countries can put forth nominations for

essential use exemptions that would allow for continued production of

ozone-depleting substances after the production phaseout, to be used in

an application for which there are no suitable substitutes. The Parties

receive and review these applications individually and may decide to

grant particular exemption requests. If the Parties agree that a

particular applications is essential, additional production of an

ozone-depleting substance will be authorized for that particular

application after the phaseout has taken effect.

EPA published a notice in the Federal Register on May 20, 1993 (58

FR 29410), requesting essential use nominations for CFCs, carbon

tetrachloride, methyl chloroform and HBFCs by July 19, 1993. The Agency

requested nominations for essential uses of halons on February 12, 1993

(58 FR 6788). Companies nominated their specific applications of a

controlled substance to receive an exemption from the production and

consumption phaseout schedule. These nominations are reviewed first by

EPA and then by the Montreal Protocol Parties. The Parties recognized

the need for such exemptions because of the accelerated phaseout dates.

Exemptions, if any, will be granted at the Sixth Meeting of the

Parties, which may be held as early as June 1994. Nominations for halon

essential uses will be considered earlier since halons are subject to

an even more rapid phaseout schedule. Nominations for essential uses

will continue to be considered each year at subsequent meetings of the

Parties; thus, companies will have additional opportunities to request

an essential use exemption in the future. The process will entail a

rigorous international review process, which is described in Decision

IV/25 of the Fourth Meeting of the Protocol. Therefore, if a company

requests a temporary exemption from the labeling requirements through

Sec. 82.120 of the labeling regulations, and also wishes to request an

exemption for use of controlled substances beyond the phaseout date,

the company must separately nominate its use for an essential use

exemption to EPA.

II. Petitions for Exemption

Today, EPA proposes to accept two petitions. The first petition,

submitted by the Upjohn Company (Upjohn), contends that Upjohn has a

substitute for its use of CFC-12 as a sterilant; however, a review and

evaluation period is required by the Food and Drug Administration (FDA)

before the alternative can be approved and then implemented. The

company therefore contends that a substitute is not potentially

available until the FDA review is completed. EPA is proposing to grant

this exemption until August 31, 1994.

The other petition, submitted by the E.I. DuPont de Nemours & Co.

(DuPont), is classified as confidential business information and thus,

EPA cannot disclose the name of its product. (Dupont has produced a

petition containing nonconfidential information that has been placed

into the docket). This product, which consists of certain fine

synthetic fibers, uses CFC-11 as a basic process solvent in the fiber

manufacturing process. Although Dupont has identified a possible

substitute, it must develop, implement and test a major process change

to replace the existing manufacturing facilities. Therefore, Dupont

contends that a substitute is not potentially available until this

process has been identified and current facilities have been

successfully modified to ensure that this alternative can in fact be

accommodated.

A. The Upjohn Company

The Upjohn Company (Upjohn) submitted a petition to exempt six of

its pharmaceutical products that are currently sterilized using CFC-12

from the labeling requirements. The products are Hydrocortisone,

Isoflupredone Acetate, Methylprednisolone acetate, Medroxyprogesterone

acetate, Neomycin Sulfate and Prednisolone Hydrous USP. The company has

submitted a request to the Food and Drug Administration (FDA) to accept

Spectinomycin Hydrochloride, a non-ozone-depleting substance, as a

replacement for CFC-12. The alternative is currently used by Upjohn to

sterilize some of its other products; however, FDA review and

evaluation is required before it can make a change. Therefore, Upjohn

is submitting this petition based on the premise that the above

mentioned products are not currently or potentially available until FDA

approval is obtained. There are no environmental concerns identified

with this substitution; the company clearly has an alternative which it

has instituted in other applications and requires additional time

before it can use the substitute in the above applications.

Without an exemption, the company asserts that it would be required

to label the five products until FDA concludes its review, which would

result in a substantial financial loss with little if any environmental

benefit. The company also maintains that by labeling its five products

while FDA reviews their submission, users could become confused by the

warning statement and could decide to discontinue use of the products

against the advice of their physicians. Upjohn indicates that such an

outcome could result in increased absenteeism from work and potentially

severe negative health effects and expenses incurred by society.

B. DuPont

DuPont currently manufactures a fine synthetic fiber using a

chlorofluorocarbon (CFC-11). DuPont began searching for an alternative

in 1987 and initiated a research and development (R&D) program to find

an alternative substance for the CFC-11. The R&D program was comprised

of the following activities: identifying all non-CFC candidates for

replacements; acquiring or fabricating (where none were commercially

available) all potential candidates for testing; conducting tests to

ascertain that each candidate possessed the desired properties; further

evaluating those which passed the initial tests in laboratory reviews;

performing additional examinations once the candidates passed the

laboratory tests; then performing testing to determine the

acceptability of the test product. For six years, DuPont has researched

over 100 potential candidates which hold specific properties required

for production of the fiber. This search has included all reasonable

chemical classes including (but not limited to): HCFCs, HFCs,

perfluorinated hydrocarbons, alcohols, and amines. After consideration

of these and other potential alternatives, Dupont determined that no

drop-in or replacement compound (i.e. a substitute that does not

require retrofitting of equipment) for the current manufacturing

process was possible. Dupont identified only one or two possible

replacement candidates, which will require complete testing and

development and which, even if successful, will require specially

designed and engineered new production facilities. All of the

unsuccessful replacement candidates failed to possess at least one of

the physical and chemical properties needed in the manufacturing

process. The critical properties include corrosion characteristics,

critical temperature, toxicity, boiling point and ozone depletion

potential. Moreover, use of the possible non-CFC replacement at the

current manufacturing facilities is not compatible with the existing

plant process and permits, as well as OSHA and other safety code

restrictions. Thus, testing of any non-CFC replacement must occur at

new specially designed and engineered facilities.

Although a candidate substance has been identified as a possible

substitute, Dupont continues to face various technical difficulties in

implementing a new process change. Once a substitute is identified as a

possible replacement, pilot testing of the candidate in a smaller

version of a large-scale production facility, the preparation of the

design of the larger facilities, and construction of the plants must

ensue in order for the alternative to be tested for large scale

production. DuPont has obtained the necessary local, state and Federal

operating permits and general approval from the appropriate

environmental authorities to design, construct and test the pilot plant

which will further verify the production technology and equipment, the

new process, and establish new procedures and practices for the

facility operators. In May 1993, this specially engineered and

constructed pilot plant was constructed.

DuPont indicates that it will spend millions of dollars over the

next several years for implementation and production trials in the new

facilities. Two years of development activities are planned for the

pilot facility in order to test and refine the manufacturing process.

The plant continues to be modified as the need for technical

adjustments arise from the trial runs. This occurs simultaneously with

the design of the first facility, selection of a contractor and

construction of the facility. There will be additional actions required

to prepare for the first round of commercial production trials once the

facility is built. DuPont will need to certify that each end use for

the new fiber product meets the standards of each customer base,

including industry, local, state, and Federal standards. The standards

vary, requiring distinct examinations in order to determine whether for

each end use, the product is capable of the same performance standards

as the product made with a CFC. In addition, personnel require

retraining, a new workforce is necessary to carry out the tests for

product standards and certifications, and process control systems need

monitoring.

DuPont contends that until all of the plants have been constructed,

fully evaluated for their productability, and full-scale production of

the saleable fiber product has been initiated following completion of

the standards testing, no substitute is potentially available. Because

of these various technical difficulties in design, and process changes

to accommodate further investigation of the potential alternative, the

Agency concurs that Dupont has subsequently shown that an alternative

is neither potentially nor currently available.

Although DuPont estimates it will be unable to meet the global

demand for its product by the end of 1996, the substitute would then be

considered to be potentially available, as some of the plants will have

undergone equipment quality checks and production tests and begun

producing the product.

III. Proposed Decisions

EPA proposes to accept these two petitions for temporary exemptions

from the labeling requirements until the dates specified by the

petitioners. No company may exceed its deadline without first obtaining

approval by the EPA. If the need for an additional extension is

required by either company, an addendum to the petition must be

submitted to the Agency requesting an extension.

A. Upjohn

EPA believes that in this case, the alternative identified in the

petition is neither potentially nor currently available, due to

additional Federal requirements regarding approval or disapproval of

the substitute, which preclude the company from implementing the change

until after a determination under such requirements is made. The

circumstances are outside of the company's control. Absent the FDA

requirements, Upjohn would be able to introduce the alternative

substance to its sterilizing operation. This proposed determination is

consistent with regulations implementing section 610 of the Clean Air

Act Amendments of 1990 which state that companies seeking Federal

approval of substitute chemicals or reformulations may receive a

temporary exemption (ninety days) from the product ban requirements (58

FR 69667). In those regulations, EPA recognized that other Federal

approval processes can be time-consuming and beyond the control of the

manufacturer. Until approval is obtained, a substitute is not

potentially available. EPA maintains that it would be inappropriate for

the federal government to deny a manufacturer a temporary exemption

from the labeling regulations while at the same time preventing them

from implementing a substitute pending receipt of a required Federal

approval for their alternative substance or process.

B. DuPont

EPA believes that DuPont's request for a temporary exemption from

the labeling requirements is appropriate given the task and the

uncertainties it has encountered and continues to face in developing a

substitute and implementing a major process change to replace an

existing system that currently depends on the use of a CFC. DuPont

contends that its alternative process is not potentially available

until the company is certain that the alternative process works in its

facilities. In order for the company to ensure that large scale

production is possible, it must first construct new facilities, test

the functioning of the new systems and perform full scale production

tests. Until production tests are completed in these facilities, due to

significant differences in technical design, no substitutes are

potentially available. DuPont indicates that current problems it is

experiencing with the pilot facility are due to unanticipated and

unknown factors, requiring delays in testing of the new design until

the problems are resolved and the necessary modifications are made to

the system. However, as the new system is undergoing the required

tests, DuPont is constructing its new facilities. The designs of the

facilities are based solely on the results of the trials at the pilot

facility, rather than on existing designs, thereby creating unknown

obstacles which can significantly impede the company's switch to an

alternative process.

EPA believes that a substitute process is not potentially available

for the fiber product, which currently depends on a process that uses a

CFC, until the company can be reasonably assured that its new systems

actually work with the candidate substitute and can produce a product

that meets the company's and its customers' quality standards in a

large scale production process. While EPA believes that this waiver

should be granted until January 1, 1996, EPA would like any information

on whether extending the waiver to this January 1, 1996 is appropriate.

IV. Changes to the Conditions of the Petition

EPA proposes to establish provisions to ensure that petitioners

meet the conditions agreed upon in a petition exemption. Companies that

receive a temporary exemption from the labeling requirements must

notify EPA if the agreed-upon conditions of the exemption change in any

way, such as a modification in a Federal entity's schedule for

evaluation, slippage in a company's implementation of an alternative

substance or process, or a shift in corporate priorities. Failure to

notify the Agency of such changes to the agreement will result in the

Agency's withdrawal of the exemption.

V. Statutory Authority

Authority for the action proposed in this notice is section

611(e) of the Clean Air Act, as amended (42 U.S.C. 7625-1(a)(1)).

VI. Administrative Designation and Regulatory Analysis

Under Executive Order (EO) 12866, the Agency must judge whether a

regulation is ``significant'' and thus subject to OMB review. The

decision proposed today is not a regulation, rule or significant

regulatory action, as defined in EO 12866; therefore, no OMB review is

necessary.

VII. Impact on Small Entities

Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 through

612, whenever the Agency is required to publish a general notice of

rulemaking for any proposed or final rule, it must prepare and make

available for public comment a regulatory flexibility analysis which

describes the impact on small entities. Since today's proposed decision

does not have a significant impact on a substantial number of small

entities, no regulatory flexibility analysis has been prepared.

VIII. Paperwork Reduction Act

The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq. and

implementing regulations, 5 CFR part 1320, do not apply to this action

as it does not involve the collection of information as defined

therein.

Dated: September 6, 1994.

Mary D. Nichols,

Assistant Administrator.

[FR Doc. 94-22586 Filed 9-12-94; 8:45 am]

BILLING CODE 6560-50-P