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Federal Register / Vol. 86, No. 186 / Wednesday, September 29, 2021 / Proposed Rules
provides authority to phase out the production and consumption of class II
substances, to restrict the use of class II
ODS, and to promulgate regulations associated with the production of class II ODS. EPAs regulations implementing the production and consumption controls for class II substances, including provisions implementing exceptions to those controls, can be found at 40 CFR part 82, subpart A.
To the extent that this rulemaking involves recordkeeping and reporting requirements, EPA also relies on its authority under section 114 of the CAA, which authorizes the EPA
Administrator to require recordkeeping and reporting in carrying out any provision of the CAA with certain exceptions that do not apply here.
Additional authority for electronic reporting comes from the Government Paperwork Elimination Act 44 U.S.C.
3504, which provides 1 for the option of the electronic maintenance, submission, or disclosure of information, when practicable as a substitute for paper; and 2 for the use and acceptance of electronic signatures, when practicable.

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II. Background on This Action A. Class I and Class II ODS Phaseout To comply with the United States obligations under the Montreal Protocol on Substances that Deplete the Ozone Layer Montreal Protocol and requirements under Title VI of the CAA, EPA has been implementing a system of production and consumption controls for decades to facilitate the orderly phaseout of class I and class II ODS.3
Under this system, EPA allocates allowances for the production and consumption of these substances, gradually reducing the number of allowances allocated over time.
Allocation of production and consumption allowances for most class I substances e.g., chlorofluorocarbons, methyl chloroform, carbon tetrachloride, and halons ended by 1996, and in 2005 for methyl bromide.
EPA is implementing the phaseout of class II ODS on a chemical-by-chemical basis and had stopped allocating production and consumption allowances for most HCFCs by 2020.
EPA allocated the few remaining production and consumption allowances for HCFC-123 and HCFC-124
in a 2020 rulemaking 85 FR 15258.
Under that rule, production and 3 The current list of substances that are categorized as class I substances can be found at 40
CFR part 82, subpart A, Appendix A, and as class II substances at 40 CFR part 82, subpart A, Appendix B. The class II substances are all HCFCs.

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consumption allowances for class II
substances are reduced to zero by 2030
82.16. Production and import of HCFCs that are categorized as class II
ODS without the appropriate allowances is generally prohibited unless an exception applies 82.15a and b. The Montreal Protocol, the CAA, and EPAs implementing regulations also limit the permissible uses of HCFCs, with certain exceptions.
Additional information on the class II
phaseout can be found in EPAs prior rulemakings in this area see, e.g., 68 FR
2819, 79 FR 64254, and 85 FR 15258.
As noted previously, there are limited exceptions to these production controls under the CAA and EPAs implementing regulations 82.15a. One exception allowed indefinitely under the CAA is manufacture for use in a process resulting in the HCFC being transformed. Consistent with section 60111 of the CAA, the definition of production in 40 CFR 82.3 excludes the manufacture of a controlled substance that is subsequently transformed. As defined in 40 CFR
82.3, transform means to use and entirely consume except for trace quantities a controlled substance in the manufacture of other chemicals for commercial purposes.
B. The American Innovation and Manufacturing Act HFC-23 is a very potent GHG with a 100-year global warming potential GWP of 14,800 4 that is generated as a byproduct during the manufacture of certain chemicals, including HCFC-22.
In a Technical Support Document for EPAs GHGRP, EPA detailed the process by which HFC-23 is generated as a byproduct during the manufacture of HCFC-22:
HCFC-22 is produced by the reaction of chloroform CHCl3 and hydrogen fluoride HF in the presence of a catalyst, SbCl5. The reaction of the catalyst and HF produces SbClxFy, where x + y = 5, which reacts with chlorinated hydrocarbons to replace chlorine atoms with fluorine. The HF and chloroform are introduced by submerged piping into a continuous-flow reactor that contains the catalyst in a hydrocarbon mixture of chloroform and partially fluorinated intermediates. The vapors leaving the reactor contain HCFC-21 CHCl2F, HCFC-22
CHClF2, HFC-23 CHF3, HCl, chloroform, and HF. The under-fluorinated intermediates HCFC-21 and chloroform are then condensed and returned to the reactor, along with residual catalyst, to undergo further fluorination. The final vapors leaving the condenser are primarily HCFC-22, HFC-23, HCl and residual HF. The HCl is recovered 4 Errata to Table 2.14 of the Intergovernmental Panel on Climate Changes IPCC Fourth Assessment Report.

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as a useful byproduct, and the HF is removed. Once separated from the HCFC-22, the HFC-23 may be vented to the atmosphere as an unwanted by-product, captured for use in a limited number of applications, or destroyed.5

Historically, HFC-23 that has not been controlled or captured has been vented to the atmosphere. EPA is also aware of limited instances where HFC-23 is captured, purified, and used for commercial purposes, such as fire suppression, very low temperature refrigeration, and semiconductor manufacturing.
HFC-23 is a regulated substance under the American Innovation and Manufacturing Act of 2020 AIM Act enacted December 27, 2020, as section 103 in Division S, Innovation for the Environment, of the Consolidated Appropriations Act, 2021 Pub. L. 116
260. EPA has recently published a proposed rule under AIM Act authority, the Proposed HFC Allocation Rule 86
FR 27150, May 19, 2021, that has several interrelated proposed approaches linked to HFC-23 emissions.
Under the primary proposed approach, all creation of HFC-23, whether intentional or unintentional, beyond insignificant quantities under certain conditions, would be production covered by AIM Act regulations. That proposal would require that HFC-23 be captured and controlled to a specific standard and then the HFC-23 could be refined for sale, which would require expenditure of AIM Act allowances, or the HFC-23 would need to be destroyed.6 In the alternative, EPA is proposing to require that, in order to be eligible for a production allowance under the AIM Act rules, companies must control, capture, and destroy HFC23 emissions from plants producing HFCs listed as regulated substances in the AIM Act. Under both proposals, EPA is proposing that, no later than October 1, 2022, as compared to the amount of chemical intentionally produced on a facility line, no more than 0.1 percent of HFC-23 generated as a byproduct on the line may be emitted.
EPA also proposed a process under which companies could seek an 5 Technical Support Document for Emissions of HFC-23 from Production of HCFC-22: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 6, 2009, available at: https www.epa.gov/
sites/production/files/2015-02/documents/
subparto-tsd.pdf.
6 If that proposed approach under the AIM Act were to be finalized, all generation of HFC-23
would be regulated, including HFC-23 generated as a byproduct during production of HCFCs for feedstock use. Under such a scenario, EPA
anticipates that it would not finalize this proposal, but is soliciting comments on whether this CAAspecific rulemaking would still be beneficial.

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