89 FR 176 pgs. 73588-73592 - Phasedown of Hydrofluorocarbons: Vacated Provisions
Type: RULEVolume: 89Number: 176Pages: 73588 - 73592
Pages: 73588, 73589, 73590, 73591, 73592Docket number: [EPA-HQ-OAR-2024-0065; FRL-11597-01-OAR]
FR document: [FR Doc. 2024-20191 Filed 9-10-24; 8:45 am]
Agency: Environmental Protection Agency
Official PDF Version: PDF Version
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 84
[EPA-HQ-OAR-2024-0065; FRL-11597-01-OAR]
RIN 2060-AW15
Phasedown of Hydrofluorocarbons: Vacated Provisions
AGENCY:
Environmental Protection Agency (EPA).
ACTION:
Final rule.
SUMMARY:
The U.S. Environmental Protection Agency is taking final action to remove regulations from the Code of Federal Regulations that have been vacated by the United States Court of Appeals for the District of Columbia Circuit related to the prohibition of disposable cylinders and tracking of cylinders of hydrofluorocarbons.
DATES:
This final rule is effective on September 11, 2024.
ADDRESSES:
The U.S. Environmental Protection Agency (EPA) has established a docket for this action under Docket ID No. EPA-HQ-OAR-2024-0065. All documents in the docket are listed on the https://www.regulations.gov website. Although listed in the index, some information may not be publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard-copy form. Publicly available docket materials are available electronically through http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Connor Henderson, Stratospheric Protection Division and Office of Air and Radiation (6205A), Environmental Protection Agency, 1200 Pennsylvania Ave NW, Washington, DC 20460; telephone number: 202-564-2177; email address: Henderson.Connor@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Does this action apply to me?
This action may be relevant for you if you produce, import, export, destroy, use as a feedstock or process agent, reclaim, or recycle HFCs. Potentially relevant categories, North American Industry Classification System (NAICS) codes, and examples of potentially relevant entities are included in table 1. This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities that may be interested in this action. If you have questions regarding the relevance of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.
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| NAICS Code | NAICS industry description |
|---|---|
| 325120 | Industrial Gas Manufacturing. |
| 325199 | All Other Basic Organic Chemical Manufacturing. |
| 325211 | Plastics Material and Resin Manufacturing. |
| 325412 | Pharmaceutical Preparation Manufacturing. |
| 325414 | Biological Product (except Diagnostic) Manufacturing. |
| 325998 | All Other Miscellaneous Chemical Product and Preparation Manufacturing. |
| 326220 | Rubber and Plastics Hoses and Belting Manufacturing. |
| 326150 | Urethane and Other Foam Product. |
| 326299 | All Other Rubber Product Manufacturing. |
| 333415 | Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing. |
| 333511 | Industrial Mold Manufacturing. |
| 334413 | Semiconductor and Related Device Manufacturing. |
| 334419 | Other Electronic Component Manufacturing. |
| 334510 | Electromedical and Electrotherapeutic Apparatus Manufacturing. |
| 336212 | Truck Trailer Manufacturing. |
| 336214 | Travel Trailer and Camper Manufacturing. |
| 336411 | Aircraft Manufacturing. |
| 336611 | Ship Building and Repairing. |
| 336612 | Boat Building. |
| 339112 | Surgical and Medical Instrument Manufacturing. |
| 423720 | Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers. |
| 423730 | Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers. |
| 423740 | Refrigeration Equipment and Supplies Merchant Wholesalers. |
| 423830 | Industrial Machinery and Equipment Merchant Wholesalers. |
| 423840 | Industrial Supplies Merchant Wholesalers. |
| 423860 | Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers. |
| 424690 | Other Chemical and Allied Products Merchant Wholesalers. |
| 488510 | Freight Transportation Arrangement. |
| 541380 | Testing Laboratories. |
| 541714 | Research and Technology in Biotechnology (except Nanobiotechnology). |
| 562111 | Solid Waste Collection. |
| 562211 | Hazardous Waste Treatment and Disposal. |
| 562920 | Materials Recovery Facilities. |
| 922160 | Fire Protection. |
II. Basis for Immediate Effective Date
EPA has determined that it is consistent with the Administrative Procedure Act (APA), 5 U.S.C. 553(d), to make this action effective September 11, 2024, Section 553(d)(3) provides that final rules shall not become effective until 30 days after publication in the Federal Register "except . . . as otherwise provided by the agency for good cause found and published with the rule." "In determining whether good cause exists, an agency should balance the necessity for immediate implementation against principles of fundamental fairness which require that all affected persons be afforded a reasonable amount of time to prepare for the effective date of its ruling." Omnipoint Corp. v. Fed. Commc'n Comm'n, 79 F.3d 620, 630 (D.C. Cir. 1996) (quoting United States v. Gavrilovic, 551 F.2d 1099, 1105 (8th Cir. 1977)). The purpose of this provision is to "give affected parties a reasonable time to adjust their behavior before the final rule takes effect." Id.; see also Gavrilovic, 551 F.2d at 1104 (quoting legislative history).
The EPA has determined that in light of the nature of this action, good cause exists to make this final action effective immediately because the Agency seeks to provide regulatory certainty and clarity as soon as possible. The removal of vacated regulations from the Code of Federal Regulations does not change the status quo or impose new obligations on any person or entity. As a result, there is no need to provide parties additional time to adjust their behavior, and no person will be harmed by making the action immediately effective as opposed to delaying the effective date by 30 days. Accordingly, EPA is making this action effective immediately upon publication.
III. Removal of Vacated Provisions on Disposable Cylinder Ban and Cylinder Tracking
On September 23, 2021, EPA signed a final rule that was the first regulation under the American Innovation and Manufacturing (AIM) Act. This rule established the initial production and consumption baseline levels against which the phasedown of production and consumption of hydrofluorocarbons (HFCs) would be measured, established an initial methodology for allocating and trading HFC allowances for 2022 and 2023, and created a robust, agile, and innovative compliance and enforcement system. Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing Act, 86 FR 55116 (October 5, 2021) (hereinafter referred to as the Allocation Framework Rule). EPA explained in that rule that it was establishing a comprehensive system of mechanisms that together and by themselves would discourage and prevent illegal production, import, and subsequent sales of illegally produced or imported HFCs. EPA intended for, and designed, these provisions to each stand independently from the others and to provide significant stand-alone benefits to deter and identify potential violations, while also recognizing that these separate provisions work together as a comprehensive system to deter noncompliance, incentivize future compliance, and ensure that companies that are complying with statutory and regulatory obligations are not put at a competitive disadvantage. Id. at 55166. As part of the suite of compliance and enforcement tools, EPA finalized a prohibition that as of July 1, 2025, no person may import or domestically fill HFCs in a disposable cylinder, and as of January 1, 2027, no person may sell or distribute, or offer for sale or distribution HFCs contained in a disposable cylinder at 40 CFR 84.5(h). See id. at 55172-78. As an additional, separate compliance enforcement tool, EPA finalized a requirement that as of January 1, 2025, all containers of regulated substances imported, sold, or distributed by producers and importers have a quick response (QR) code. As of January 1, 2026, the rule would require QR codes on all containers filled, sold or distributed, or offered for sale or distribution, by all other repackagers and cylinder fillers in the United States, including reclaimers and fire suppressant recyclers. Finally, as of January 1, 2027, the rule would require a QR code on every container of regulated substances sold or distributed, offered for sale or distribution, purchased or received. 40 CFR 84.23. See id. at 55183-86.
However, on June 20, 2023, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion concluding, in relevant part, that EPA in relying on subsection (e)(2)(B) of the AIM Act had not identified a provision of the AIM Act giving it authority to ban disposable cylinders or to require a QR-code tracking system. As a result of this conclusion, the D.C. Circuit vacated the parts of the Allocation Framework Rule related to the QR code requirements and disposable cylinder ban and remanded to the Agency. Heating, Air Conditioning & Refrigeration Distributors Int'l v. EPA, 71 F.4th 59, 68 (D.C. Cir. 2023). 1 On August 23, 2023, the D.C. Circuit issued its formal mandate.
Footnotes:
1 ?As the D.C. Circuit denied the other challenges to the Allocation Framework Rule raised in this consolidated litigation, its vacatur was only partial.
Consistent with the D.C. Circuit's decision, this action removes from 40 CFR part 84, subpart A certain regulatory provisions that prohibit use of disposable cylinders and that implement the cylinder tracking system (including provisions that create auditing obligations related to the cylinder tracking system). EPA views this removal of regulatory language that has been vacated by the D.C. Circuit as purely ministerial in nature.
IV. Good Cause Findings
[top] EPA is removing the identified vacated regulations from the Code of Federal Regulations without providing an opportunity for public comment or a public hearing because EPA finds that the Administrative Procedure Act (APA) good cause exemption applies here. If 5 U.S.C. 553(b)(B) did not apply, this rule would be subject to the rulemaking procedures in Clean Air Act (CAA) section 307(d). 2 However, CAA section
Footnotes:
2 ?The AIM Act provides that the Clean Air Act's section 307 "shall apply to" actions under the AIM Act "as though [Section 7675] were expressly included in title VI" of the Clean Air Act. 42 U.S.C. 7675(k)(1)(C). Clean Air Act Section 307(d) applies to "promulgation or revision of regulations under subchapter VI of [the CAA]." 307(d)(1)(I); 7607(d)(1)(I). See also CAA section 307(d)(3); 42 U.S.C. 7607(d)(3) (requiring publication of a proposed rule with an opportunity for public comment).
3 ?See CAA section 307(d)(1); 42 U.S.C. 7607(d)(1).
4 ?Section 553(b) generally requires notice-and-comment rulemaking procedures unless, as here, an exception applies under section 553(b)(A) or (B). 5 U.S.C. 553(b).
The EPA has determined that it is unnecessary to provide a public hearing or an opportunity for public comment on this action because amending the regulations to remove the vacated disposable cylinder ban and cylinder tracking provisions is a needed ministerial act. To address the D.C. Circuit's vacatur of these provisions, as described in section I of this document, the EPA is removing the affected provisions from the Code of Federal Regulations. Therefore, this action to remove the affected regulatory text simply implements the decision of the D.C. Circuit, and thus, providing an opportunity for public comment or a public hearing on this issue would serve no useful purpose.
For these reasons, the EPA finds good cause to issue a final rulemaking to remove the disposable cylinder ban and cylinder tracking provisions pursuant to 5 U.S.C. 553(b)(B). Therefore, the requirements of CAA section 307(d), including the requirement for public comment and hearing on proposed rulemakings, do not apply to this action.
V. Judicial Review
The AIM Act provides that certain sections of the 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), as it removes vacated provisions from the Code of Federal Regulations that apply and were designed to be implemented uniformly on a national basis. 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 "nationwide scope or effect" within the meaning of CAA section 307(b)(1). 5 In deciding to invoke this exception, the Administrator has taken into account a number of policy considerations, including his judgment regarding the benefit of obtaining the D.C. Circuit's authoritative centralized review, rather than allowing development of the issue in other contexts, in order to ensure consistency in the Agency's approach to allocation of production and consumption allowances in accordance with EPA's national regulations in 40 CFR part 84. This final action treats all affected entities consistently in how the 40 CFR part 84 regulations are applied. The Administrator finds that this is a matter on which national uniformity is desirable to take advantage of the D.C. Circuit's administrative law expertise and facilitate the orderly development of the basic law under the AIM Act and EPA's implementing regulations. The Administrator also finds that consolidated review of the action in the D.C. Circuit will avoid piecemeal litigation in the regional circuits, further judicial economy, and eliminate the risk of inconsistent results for different regulated entities. The Administrator also finds that a nationally consistent approach in this rulemaking constitutes the best use of agency resources. The Administrator is publishing his finding that the action is based on a determination of nationwide scope or effect in the Federal Register as part of this document. For these reasons, this final action 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 November 12, 2024.
Footnotes:
5 ?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.
VI. Statutory and Executive Order Review
Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive Order 14094: Modernizing Regulatory Review
This action is a "significant regulatory action" as defined in Executive Order 12866, as amended by Executive Order 14094. Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for Executive Order 12866 review. Documentation of any changes made in response to the Executive Order 12866 review is available in the docket. The removal of vacated requirements from the Code of Federal Regulations through this action does not impose new or change existing legal obligations on any person or entity. EPA describes the vacated provisions, including their expected costs and benefits, in the HFC Allocation Framework Rule (86 FR 55116, FRL-8458-02-OAR, published in the Federal Register on October 5, 2021) and the related regulatory impact analysis (RIA).
[top] The court's decision to vacate these provisions in 2023 changed the estimated costs and benefits associated with the HFC Allocation Framework Rule. As shown in table 3-28 of the RIA, EPA estimated the average annual costs for the refillable cylinder provisions between 2022 and 2050 to be $21.8 million per year at a 3% discount rate and $35.3 million per year at a 7% discount rate ($2020). While the upfront costs of establishing a fleet of refillable cylinders was higher than the average annual cost, after 2026 when the full fleet of disposable cylinders was in place, the Agency estimated that the requirement would result in annual cost savings. It was estimated that the replacement of disposable cylinders
Footnotes:
6 ?The regulatory impact analysis for the HFC Allocation Framework Rule can be found on EPA's website at https://www.epa.gov/climate-hfcs-reduction/regulatory-actions-allowance-allocation-and-reporting. The ICR supporting statement associated with the rule can be found at https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=2060-0734.
B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden under the PRA. The Office of Management and Budget (OMB) has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0734. There are no additional reporting or recordkeeping requirements associated with this rule, which takes the ministerial act of removing certain vacated provisions from the Code of Federal Regulations. Given the requirements were vacated in the summer of 2023, EPA removed the burden associated with the refillable cylinder and container tracking provisions in the comprehensive ICR supporting statement and burden estimates for the HFC Allocation Program that were transmitted to OMB for review as part of the final rule ICR package associated with "Phasedown of Hydrofluorocarbons: Allowance Allocation Methodology for 2024 and Later Years," (88 FR 44220). This information was transmitted to OMB in January 2024 (see OMB control number 2060-0734). Further, we do not need to take additional comment on these changes, as commenters had the opportunity to comment on the burden of these provisions and the change in burden from the court's vacatur in prior rulemaking.
C. Regulatory Flexibility Act (RFA)
This action is not subject to the RFA. The RFA applies only to rules subject to notice and comment rulemaking requirements under the Administrative Procedure Act (APA), 5 U.S.C. 553, or any other statute. This rule is not subject to notice and comment requirements because the Agency has invoked the APA "good cause" exemption under 5 U.S.C. 553(b).
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538 and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any State, local, or Tribal governments.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments
This action does not have Tribal implications as specified in Executive Order 13175. To the extent this action has any substantive effect, EPA is not aware of Tribal businesses engaged in activities that would be directly affected by this action. Based on the Agency's assessments, the Agency also does not believe that potential effects, even if direct, would be substantial. Accordingly, this action will not have substantial direct effects on tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks
Executive Order 13045 (62 FR 19885, April 23, 1997) directs Federal agencies to include an evaluation of the health and safety effects of the planned regulation on children in Federal health and safety standards and explain why the regulation is preferable to potentially effective and reasonably feasible alternatives. This action is not subject to Executive Order 13045 because it is not a significant regulatory action under section 3(f)(1) of Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. As noted, this action only removes already vacated provisions from the Code of Federal Regulations so is not anticipated to have any impact on children.
H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use
This action is not a "significant energy action" because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action only removes from the Code of Federal Regulations already vacated provisions that applied to certain regulated substances and certain applications containing regulated substances, none of which are used to supply or distribute energy.
I. National Technology Transfer and Advancement Act and Incorporation by Reference
This rulemaking does not involve technical standards.
J. Executive Orders 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations and Executive Order 14096: Revitalizing Our Nation's Commitment to Environmental Justice for All
[top] EPA considers that the human health or environmental conditions that exist prior to this action have the potential to result in disproportionate and adverse human health or environmental effects on communities with environmental justice concerns. EPA did extensive environmental justice analysis as part of the Allocation Framework Rule and the most recent Allocation Rule covering 2024-2028 (88 FR 46836, July 20, 2023), which is documented in the preamble to those rulemakings and in the associated regulatory impact analysis (RIA) and RIA addendum.
The EPA believes that this action is not likely to change existing disproportionate and adverse effects on communities with environmental justice concerns. This action only removes from the Code of Federal Regulations already vacated provisions and is not likely to result in new disproportionate and adverse effects on communities with environmental justice concerns.
K. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a "major rule" as defined by 5 U.S.C. 804(2).
List of Subjects in 40 CFR Part 84
Environmental protection, Administrative practice and procedure, Air pollution control, Chemicals, Climate Change, Emissions, Imports, Reporting and recordkeeping requirements.
Michael S. Regan,
Administrator.
For the reasons set out in the preamble, EPA is amending 40 CFR part 84 as follows:
PART 84-PHASEDOWN OF HYDROFLUOROCARBONS
1. The authority citation for part 84 continues to read as follows:
Authority:
Pub. L. 116-260, Division S, Sec. 103.
§?84.5 [Amended]
2. Amend §?84.5 by removing and reserving paragraph (h).
§?84.23 [Removed and Reserved]
3. Remove and reserve §?84.23.
§?84.33 [Amended]
4. Amend §?84.33 by:
a. Removing paragraph (b)(11);
b. Redesignating paragraph (b)(12) as paragraph (b)(11);
c. Removing paragraph (d)(4); and
d. Redesignating paragraph (d)(5) as paragraph (d)(4).
[FR Doc. 2024-20191 Filed 9-10-24; 8:45 am]
BILLING CODE 6560-50-P