Notice of Proposed Rulemaking - Adjusting Allowances for Class I Substances for Export to Article 5 Countries

ACTION

On August 16, 2006, EPA proposed an amendment to the previous action by the Agency regarding the allocation of Article 5 allowances that permit production of ozone-depleting substances (ODS) that are Class I, Group I controlled substances solely for export to developing countries to meet those countries' basic domestic needs.
Specifically, this action will remove the 2007-2009 phasedown step for companies that manufacture CFCs 11, 12, or 114 for export to meet the basic domestic needs of developing countries.
The Agency is taking this action in response to notification that there would otherwise be a shortfall in the availability of pharmaceutical-grade CFCs for use in metered dose inhalers in developing countries.
In a final rule published December 29, 2005 (70 FR 77042), EPA established initial baselines for each company that are far more stringent than required under the Beijing Adjustments to the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol), which set out restrictions for production to meet basic domestic needs.
Even without the 2007-2009 step-down reduction, the U.S. will be at production levels to meet basic domestic needs that are well below those allowed under the Beijing Adjustments. Under the Beijing Adjustments, the U.S. is allowed CFC production for developing country needs in the amount of 1,493 metric tones.
Under EPA's proposed approach, the allowable amount of this type of production is 173 metric tones.

BACKGROUND

Under the Montreal Protocol, industrialized countries and developing countries have differentiated schedules for phasing out the production and import of ozone-depleting substances.
Developing countries operating under Article 5, paragraph 1 of the Protocol, have schedules to phase out ozone depleting substances (ODSs) that are many years after the industrialized countries.
The Protocol also allows developed countries to manufacture ODS for export to developing countries during this interim.
The intent of this provision was to prevent the unnecessary construction of new ODS manufacturing capacity at a time when the global community has agreed to phaseout these chemicals.