87 FR 195 pgs. 61314-61318 - Phasedown of Hydrofluorocarbons: Notice of 2023 Allowance Allocations for Production and Consumption of Regulated Substances Under the American Innovation and Manufacturing Act of 2020
Type: NOTICEVolume: 87Number: 195Pages: 61314 - 61318
Pages: 61314, 61315, 61316, 61317, 61318Docket number: [EPA-HQ-OAR-2021-0669; FRL-9116-03-OAR]
FR document: [FR Doc. 2022-22059 Filed 10-7-22; 8:45 am]
Agency: Environmental Protection Agency
Official PDF Version: PDF Version
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2021-0669; FRL-9116-03-OAR]
Phasedown of Hydrofluorocarbons: Notice of 2023 Allowance Allocations for Production and Consumption of Regulated Substances Under the American Innovation and Manufacturing Act of 2020
AGENCY:
Environmental Protection Agency (EPA).
ACTION:
Notice.
SUMMARY:
The Environmental Protection Agency (EPA) has issued calendar year 2023 allowances for the production and consumption of hydrofluorocarbons in accordance with the Agency's regulations as established in the 2021 final rule titled Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program under the American Innovation and Manufacturing Act . The American Innovation and Manufacturing Act directs the Environmental Protection Agency by October 1 of each calendar year to determine the quantity of production and consumption allowances for the following calendar year. The Agency also provided notice to certain companies on September 30, 2022, that the Agency intends to retire an identified set of those companies' allowances in accordance with the administrative consequences provisions established in the final rule.
FOR FURTHER INFORMATION CONTACT:
Andy Chang, U.S. Environmental Protection Agency, Stratospheric Protection Division, telephone number: 202-564-6658; email address: chang.andy@epa.gov . You may also visit EPA's website at https://www.epa.gov/climate-hfcs-reduction for further information.
SUPPLEMENTARY INFORMATION:
Subsection (e)(2)(D)(i) of the American Innovation and Manufacturing Act of 2020 (AIM Act) directs the Environmental Protection Agency (EPA) to determine, by October 1 of each calendar year, the quantity of allowances for the production and consumption of regulated substances that may be used for the following calendar year. EPA has codified the production and consumption baselines and phasedown schedules for regulated substances in 40 CFR 84.7. Under the phasedown schedule, for 2023, total production allowances may not exceed 344,299,157 metric tons of exchange value equivalent (MTEVe) and total consumption allowances may not exceed 273,498,315 MTEVe.
EPA regulations at 40 CFR part 84, subpart A, outline the process by which the Agency determines the number of allowances each entity is allocated. EPA allocated allowances consistent with this process for calendar year 2023, and has posted entity-specific allowance allocations on its website at https://www.epa.gov/climate-hfcs-reduction . An allowance allocated under the AIM Act does not constitute a property right and is a limited authorization for the production or consumption of a regulated substance.
EPA has codified the procedure for calculating application-specific allowance allocations in 40 CFR 84.13. These allowances are drawn from both the production and consumption allowance pools. EPA is issuing "application-specific allowances" to end users in five applications established by the AIM Act: propellants in metered dose inhalers, defense sprays, structural composite preformed polyurethane foam for marine use and trailer use, etching of semiconductor material or wafers and the cleaning of chemical vapor deposition chambers within the semiconductor manufacturing sector, and onboard aerospace fire suppression. Additionally, EPA is issuing "application-specific allowances" to the U.S. Department of Defense for mission-critical military end uses.
EPA has denied requests for application-specific allowances from Applied Materials, Inc; Benuvia Manufacturing; General Electric Global Research Center; Gilero LLC; Guardian Protective Devices, Inc.; nHalience LLC; and Shamrock Filling LLC because they are ineligible under 40 CFR 84.13. The requests were ineligible for at least one of the following reasons:
(1) Did not meet the criteria for HFC use in a covered application;
(2) Did not submit by the deadline;
(3) Did not provide proper supporting documentation or justification for their requests; or
(4) Did not report purchases of regulated substances in the past three years.
[top] EPA has allocated 2023 application-specific allowances as shown in Table 1.
| Entity | Application | Number of application- specific allowances issued (MTEVe)? 1 |
|---|---|---|
| Analog Devices | Semiconductors | 28,852.2 |
| Apple | Semiconductors | 1,033.8 |
| Armstrong Pharmaceuticals | Metered Dose Inhalers | 157,231.4 |
| ASML US | Semiconductors | 1,237.2 |
| AstraZeneca Pharmaceuticals | Metered Dose Inhalers | 4,652.7 |
| Aurobindo Pharma USA | Metered Dose Inhalers | 65,427.9 |
| Broadcom | Semiconductors | 834.7 |
| Compsys | Structural Composite Foam | 14,152.8 |
| Defense Technology | Defense Sprays | 9,366.7 |
| Diodes Incorporated | Semiconductors | 3,667.1 |
| GlobalFoundries | Semiconductors | 177,721.8 |
| Hitachi High-Tech America | Semiconductors | 1,064.4 |
| IBM Corporation | Semiconductors | 533.5 |
| Intel Corporation | Semiconductors | 746,212.5 |
| InvaGen Pharmaceuticals | Metered Dose Inhalers | 74,380.1 |
| Jireh Semiconductor | Semiconductors | 5,787.8 |
| Keysight Technologies | Semiconductors | 538.8 |
| Kindeva Drug Delivery | Metered Dose Inhalers | 408,952.0 |
| Lupin | Metered Dose Inhalers | 24,098.0 |
| Medtronic | Semiconductors | 637.6 |
| Microchip Technology | Semiconductors | 31,266.7 |
| Micron Technology | Semiconductors | 42,600.7 |
| Newport Fab DBA TowerJazz | Semiconductors | 8,042.3 |
| NXP Semiconductors | Semiconductors | 86,878.8 |
| Odin Pharmaceuticals | Metered Dose Inhalers | 1,708.5 |
| Polar Semiconductor | Semiconductors | 13,446.4 |
| Proteng Distribution | Onboard Aerospace Fire Suppression | 4,060.4 |
| Qorvo Texas | Semiconductors | 1,237.2 |
| Raytheon Technologies | Onboard Aerospace Fire Suppression | 952.6 |
| Renesas Electronics America | Semiconductors | 4,445.5 |
| Samsung Austin Semiconductor | Semiconductors | 384,969.7 |
| Security Equipment Corporation | Defense Sprays | 63,889.9 |
| Semiconductor Components Industries DBA ON Semiconductor | Semiconductors | 38,821.5 |
| SkyWater Technology | Semiconductors | 17,549.8 |
| Skyworks Solutions | Semiconductors | 4,652.3 |
| Texas Instruments | Semiconductors | 194,744.9 |
| The Research Foundation for The State University of New York | Semiconductors | 159.9 |
| Tokyo Electron America | Semiconductors | 558.8 |
| Tower Semiconductor San Antonio | Semiconductors | 4,948.7 |
| TSMC Arizona Corporation | Semiconductors | 32,632.0 |
| UDAP Industries | Defense Sprays | 110,727.8 |
| Wabash National Corporation | Structural Composite Foam | 73,543.0 |
| WaferTech | Semiconductors | 22,355.4 |
| Wolfspeed | Semiconductors | 36,114.7 |
| X-FAB Texas | Semiconductors | 5,076.0 |
| Zarc International | Defense Sprays | 1,384.1 |
| Department of Defense | Mission-critical Military End Uses | 2,513,169.3 |
| Total | All | 5,426,319.9 |
| 1 ?Numbers may not sum due to rounding. | ||
EPA has codified the procedure for calculating the production allowance allocation in 40 CFR 84.9. EPA has allocated calendar year 2023 production allowances as shown in Table 2.
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| Entity | Number of production allowances issued (MTEVe)? 1 |
|---|---|
| Application-specific allowances? 2 | 5,426,319.9 |
| Arkema | 40,873,469.3 |
| Chemour | 75,703,417.3 |
| Honeywell International | 171,747,616.1 |
| Iofina Chemical | 1,758.6 |
| Mexichem Fluor DBA Koura | 50,546,575.8 |
| Total | 344,299,157.0 |
| 1 ?Numbers may not sum due to rounding. | |
| 2 ?See Table 1. | |
EPA has codified the procedure for calculating the consumption allowance allocation in 40 CFR 84.11. Calendar year 2023 consumption allowances have also been allocated to new market entrants consistent with 40 CFR 84.15. 1 EPA has allocated calendar year 2023 consumption allowances as shown in Table 3.
Footnotes:
1 ?A comprehensive overview and discussion of allocation decisions to new market entrants can be found in the Agency's April 5, 2022, notice Phasedown of Hydrofluorocarbons: Notice of 2022 Set-Aside Pool Allowance Allocations for Production and Consumption of Regulated Substances Under the American Innovation and Manufacturing Act of 2020 [87 FR 19683].
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| Entity | Number of consumption allowances issued (MTEVe)? 1 |
|---|---|
| Application-specific allowances? 2 | 5,426,319.9 |
| A.C.S. Reclamation & Recovery (Absolute Chiller Services)?* | 200,000.0 |
| Ability Refrigerants?* | 200,000.0 |
| ACT Commodities?* | 77.8 |
| Advance Auto Parts?* | 190,699.1 |
| Advanced Specialty Gases | 285,314.5 |
| AFK & Co.?* | 193,335.9 |
| AFS Cooling?* | 200,000.0 |
| A-Gas | 3,209,232.5 |
| Air Liquide USA | 498,530.3 |
| AllCool Refrigerant Reclaim?* | 200,000.0 |
| Altair Partners | 2,918,730.4 |
| American Air Components?* | 200,000.0 |
| Arkema | 31,075,488.7 |
| Artsen | 1,027,571.2 |
| Automart Distributors DBA Refrigerant Plus?* | 200,000.0 |
| AutoZone Parts | 2,486,664.3 |
| AW Product Sales & Marketing | 194,505.7 |
| Bluon | 33,459.8 |
| CC Packaging?* | 194,000.0 |
| Certified Refrigerant Services?* | 200,000.0 |
| Chemours | 33,382,686.1 |
| Chemp Technology?* | 200,000.0 |
| Combs Gas | 1,287,918.3 |
| ComStar International | 374,063.9 |
| Creative Solution?* | 200,000.0 |
| Cross World Group?* | 200,000.0 |
| Daikin America | 3,120,932.2 |
| EDX Industry?* | 200,000.0 |
| Electronic Fluorocarbons | 104,289.0 |
| Fireside Holdings DBA American Refrigerants?* | 199,978.5 |
| First Continental International | 769,838.0 |
| FluoroFusion Specialty Chemicals | 2,552,532.6 |
| Freskoa USA?* | 200,000.0 |
| GlaxoSmithKline | 536,367.9 |
| Golden Refrigerant?* | 200,000.0 |
| Harp USA | 765,574.0 |
| Honeywell International | 82,497,424.7 |
| Hudson Technologies | 2,988,057.5 |
| Hungry Bear?* | 200,000.0 |
| ICool USA | 3,406,995.9 |
| IGas Holdings | 25,944,614.3 |
| Iofina Chemical | 1,264.9 |
| Kidde-Fenwal?* | 200,000.0 |
| Lenz Sales & Distribution | 1,110,319.3 |
| Lina Trade?* | 200,000.0 |
| Linde | 532,503.3 |
| Meraki Group?* | 200,000.0 |
| Metalcraft?* | 161,000.0 |
| Mexichem Fluor DBA Koura | 25,479,884.3 |
| Mondy Global | 318,706.9 |
| National Refrigerants | 19,806,810.9 |
| Nature Gas Import and Export | 819,624.4 |
| North American Refrigerants?* | 200,000.0 |
| O23 Energy Plus?* | 200,000.0 |
| Perfect Score Too DBA Perfect Cycle* | 37,876.0 |
| Reclamation Technologies?* | 200,000.0 |
| Refrigerants, Inc. | 26,550.9 |
| RMS of Georgia | 1,621,276.8 |
| RTR Suppliers?* | 198,000.0 |
| Saalok?* | 200,000.0 |
| Sciarra Laboratories?* | 8,700.0 |
| SDS Refrigerant Services?* | 200,000.0 |
| Showa Chemicals of America | 73,466.6 |
| Solvay Fluorides | 1,102,459.2 |
| Summit Refrigerants?* | 200,000.0 |
| SynAgile Corporation?* | 1,125.1 |
| Technical Chemical | 974,140.0 |
| TradeQuim?* | 200,000.0 |
| Transocean Offshore Deepwater Drilling | 16.8 |
| Tulstar Products | 734,110.9 |
| Tyco Fire Products?* | 200,000.0 |
| USA United Suppliers of America DBA USA Refrigerants?* | 200,000.0 |
| USSC Acquisition Corp?* | 131,451.0 |
| Walmart | 2,280,583.0 |
| Waysmos USA | 634,504.6 |
| Weitron | 6,338,344.6 |
| Wesco HMB?* | 200,000.0 |
| Wilhelmsen Ships Service | 40,392.5 |
| Total | 273,498,315.0 |
| 1 ?Numbers may not sum due to rounding. | |
| 2 ?See Table 1. | |
| *?These entities were issued consumption allowances consistent with the provisions in 40 CFR 84.15(e)(3). Consistent with 40 CFR 84.15(e)(3) and as clarified in the Agency's 2021 final rule, these entities were issued the same number of allowances for 2023 as they were in 2022. In accordance with 40 CFR 84.15(f)(1), allowances allocated to these entities may not be transferred. | |
On September 30, 2022, EPA also provided notice to four entities of the Agency's intent to take administrative consequences in accordance with 40 CFR 84.35. Using this authority, EPA can retire, revoke, or withhold the allocation of allowances, or ban a company from receiving, transferring, or conferring allowances. 2 EPA provided notice of its intent to retire an identified set of each of the four companies' allowances, affecting both calendar year 2022 and calendar year 2023 allowances.
Footnotes:
2 ?Administrative consequences that the Agency has finalized can be found here: https://www.epa.gov/climate-hfcs-reduction/administrative-consequences-under-hfc-allocation-rule .
Judicial Review
The AIM Act provides that certain sections of the Clean Air Act (CAA) "shall apply to" the AIM Act and actions "promulgated by the Administrator of [EPA] pursuant to [the AIM Act] as though [the AIM Act] were expressly included in title VI of [the CAA]." 42 U.S.C. 7675(k)(1)(C). Among the applicable sections of the CAA is section 307, which includes provisions on judicial review. Section 307(b)(1) provides, in part, that petitions for review must only be filed in the United States Court of Appeals for the District of Columbia Circuit: (i) when the agency action consists of "nationally applicable regulations promulgated, or final actions taken, by the Administrator," or (ii) when such action is locally or regionally applicable, but "such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination." For locally or regionally applicable final actions, the CAA reserves to the EPA complete discretion whether to invoke the exception in (ii).
The final action herein noticed is "nationally applicable" within the meaning of CAA section 307(b)(1). The AIM Act imposes a national cap on the total number of allowances available for each year for all entities nationwide. 42 U.S.C. 7675(e)(2)(B)-(D). For 2023, there was a national pool of 344,299,157 production allowances and 273,498,315 consumption allowances available to distribute. The action noticed herein distributed that finite set of allowances consistent with the methodology EPA established in the nationally applicable framework rule. As such, the allowance allocation is the division and assignment of a single, nationwide pool of HFC allowances to entities across the country according to the uniform, national methodology established in EPA's regulations. Each entity's allowance allocation is a relative share of that pool; thus, any additional allowances awarded to one entity directly affects the allocations to others.
[top] In the alternative, to the extent a court finds the final action to be locally or regionally applicable, the Administrator is exercising the complete discretion afforded to him under the CAA to make and publish a finding that the action is based on a determination of
Footnotes:
3 ?In the report on the 1977 Amendments that revised section 307(b)(1) of the CAA, Congress noted that the Administrator's determination that the "nationwide scope or effect" exception applies would be appropriate for any action that has a scope or effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
For these reasons, the final action of the Agency allocating hydrofluorocarbon allowances to entities located throughout the country is nationally applicable or, alternatively, the Administrator is exercising the complete discretion afforded to him by the CAA and finds that the final action is based on a determination of nationwide scope or effect for purposes of CAA section 307(b)(1) and is hereby publishing that finding in the Federal Register .
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the District of Columbia Circuit by December 12, 2022.
Hans Christopher Grundler,
Director, Office of Atmospheric Programs.
[FR Doc. 2022-22059 Filed 10-7-22; 8:45 am]
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