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Request for Applications for Essential Use Exemptions to the Production and Import Phaseout of Ozone Depleting Substances Under the Montreal Protocol for the Years 2004 and 2005

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Environmental Protection Agency (EPA).




Through this action, the Environmental Protection Agency (EPA) is requesting applications for essential use allowances for calendar years 2004 and 2005. Essential-use allowances provide exemptions to the production and import phaseout of ozone-depleting substances and must be authorized by the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer. The U.S. government will use the applications received in response to this notice as the basis for its nomination of essential use allowances at the Fifteenth Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer (the Protocol), to be held in 2003.


Applications for essential use exemptions must be submitted to EPA no later than November 29, 2002, in order for the United States (U.S.) Government to complete its review and to submit nominations to the United Nations Environment Programme and the Protocol Parties in a timely manner.


Send two copies of application materials to: Scott Monroe, Global Programs Division (6205J), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. (For applications sent via courier service, use the following direct mailing address: 501 3rd Street, NW., Washington, DC 20001.) Send one copy of non-confidential application materials to: Air Docket A-93-39, EPA Docket Center (EPA/DC), EPA West, Mail Code 6102T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.


Application materials that are sent to the Air Docket should not contain confidential or proprietary information. Such confidential information should be submitted under separate cover and be clearly identified as “trade secret,” “proprietary,” or “company confidential.” Information covered by a claim of business confidentiality will be disclosed only to authorized government personnel. If no claim of confidentiality accompanies the information when it is received by EPA, the information may be made available to the public by EPA without further notice to the company (40 CFR 2.203).

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Scott Monroe at the above address, or by telephone at (202) 564-9712, by fax at (202) 565-2155, or by email at General information may be obtained from EPA's stratospheric protection Web site at​ozone.

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Table of Contents

I. Background—The Essential Use Nomination Process.

II. Information Required for Essential Use Applications for Production or Importation of Class I Substances in 2004 and 2005.

III. Information to Assess the Need for Potential Campaign Production for the Years Beyond 2005.

I. Background—The Essential Use Nomination Process

As described in previous Federal Register (FR) documents,[1] the Parties to the Protocol agreed during the Fourth Meeting in Copenhagen on November 23-25, 1992, to accelerate the phase-out schedules for Class I ozone-depleting substances. Specifically, the Parties agreed that non-Article 5 Parties (developed countries) would phase out the production and consumption of halons by January 1, 1994, and the production and consumption of other class I substances (under 40 CFR part 82, subpart A), except methyl bromide, by January 1, 1996. The Parties also reached decisions and adopted resolutions on a variety of other matters, including the criteria to be used for allowing “essential use” exemptions from the phaseout of production and importation of controlled substances. Decision IV/25 of the Fourth Meeting of the Parties details the specific criteria and review process for granting essential use exemptions.

Decision IV/25 states that “* * * a use of a controlled substance should qualify as “essential” only if: (i) it is necessary for the health, safety or is critical for the functioning of society (encompassing cultural and intellectual aspects); and (ii) there are no available technically and economically feasible alternatives or substitutes that are acceptable from the standpoint of environment and health.” In addition, the Parties agreed “that production and consumption, if any, of a controlled substance, for essential uses should be permitted only if: (i) all economically feasible steps have been taken to minimize the essential use and any associated emission of the controlled substance; and (ii) the controlled substance is not available in sufficient quantity and quality from the existing stocks of banked or recycled controlled substances * * *.” Decision XII/2 taken at the thirteenth meeting of the Parties states that any CFC metered dose inhaler (MDI) product approved after December 31, 2000, is non-essential unless the product meets the criteria in Decision IV/25 paragraph 1(a).

The first step in obtaining essential use allowances is for the user to consider whether the use of the controlled substance meets the criteria of Decision IV/25. If the essential use request is for an MDI product, that Start Printed Page 66148product must also meet the criteria of Decision XII/2. The user should then send a completed application in order to notify EPA of the candidate use and provide information for U.S. government agencies and the Protocol Parties to evaluate that use according to the criteria under the Protocol.

Upon receipt of the essential use exemption application, EPA reviews the information provided and works with other interested Federal agencies to determine whether it meets the essential use criteria and warrants being nominated by the United States for an exemption. In the case of multiple exemption requests for a single use such as for MDIs, EPA aggregates exemption requests received from individual entities into a single U.S. request. An important part of the EPA review of requests for CFCs for MDIs is to determine that the aggregate request for a particular future year adequately reflects the total market need for CFC MDIs and expected availability of CFC substitutes by that point in time. If the sum of individual requests does not account for such factors, the U.S. government may adjust the aggregate request to better reflect true market needs.

Nominations submitted by the United States and other Parties are forwarded from the United Nations Ozone Secretariat to the Montreal Protocol's Technical and Economic Assessment Panel (TEAP) and its Technical Options Committees (TOCs), which review the submissions and make recommendations to the Protocol Parties for essential use exemptions. Those recommendations are then considered by the Parties at their annual meeting for final decision. If the Parties declare a specified use of a controlled substance as essential, and issue the necessary exemption from the production and consumption phaseout, EPA may propose regulatory changes to reflect the decisions by the Parties, but only to the extent such action is consistent with the Clean Air Act (CAA or Act). Applicants should be aware that essential use exemptions granted to the United States for the year 2003 under the Protocol were limited to chlorofluorocarbons (CFCs) for metered dose inhalers (MDIs) to treat asthma and chronic obstructive pulmonary disease, and methyl chloroform for use in manufacturing solid rocket motors.

The timing of this process is such that in any given year the Parties review nominations for essential use exemptions from the production and consumption phaseout intended for the following year and subsequent years. This means that, if nominated, applications submitted in response to today's notice for an exemption in 2004 and 2005 will be considered by the Parties in 2003 for final action.

The quantities of controlled ODSs that are requested in response to this notice, if approved by the Parties to the Montreal Protocol in 2003, will then be allocated as essential-use allowances (EUAs) to the specific U.S. companies through notice and comment rulemaking. EUAs for the year 2004 will be allocated to U.S. companies at the end of 2003, and EUAs for the year 2005 will be made at the end of 2004.

II. Information Required for Essential Use Applications for Production or Importation of Class I Substances in 2004 and 2005

Through this action, EPA requests applications for essential use exemptions for all class I substances, except methyl bromide, for calendar years 2004 and 2005. The Parties to the Montreal Protocol have approved 2,975 metric tons of CFCs for the year 2004; therefore, this notice is the last opportunity to submit new or revised applications for 2004. This notice is also the first opportunity to submit requests for 2005. Companies will have an opportunity to submit new, supplemental, or amended applications for 2005 next year. All requests for exemptions submitted to EPA must present information as prescribed in the current version of the TEAP “Handbook on Essential Use Nominations” (or “handbook”), which was published in June 2001. The handbook is available electronically on the web at, or at​ozone.

In brief, the TEAP Handbook states that applicants must present information on:

  • Role of use in society;
  • Alternatives to use;
  • Steps to minimize use;
  • Steps to minimize emissions;
  • Recycling and stockpiling;
  • Quantity of controlled substances requested; and
  • Approval date and indications (for MDIs).

First, in order to obtain complete information from essential use applicants for CFC MDIs, EPA requires that parties (such as the International Pharmaceutical Aerosol Consortium) who request CFCs for multiple pharmaceutical companies make clear the amount of CFCs requested for each member company. Second, all essential use applications for CFCs must provide a breakdown of the quantity of CFCs necessary for each MDI product to be produced. This detailed breakdown of EUAs will allow EPA and the Food and Drug Administration to make informed decisions on the amount of CFC to be nominated by the U.S. Government for the years 2004 and 2005. Third, all new drug application (NDA) holders for CFC MDI products produced in the United States must submit a complete application for essential use allowances either on their own or in conjunction with their contract filler. In the case where a contract filler produces a portion of an NDA holder's CFC MDIs, the contract filler and the NDA holder must determine the total amount of CFCs necessary to produce the NDA holder's entire product line of CFC MDIs. The NDA holder must provide an estimate of how the CFCs would be split between the contract filler and the NDA holder in the allocation year. This estimate will be used only as a basis for determining the nomination amount, and may be adjusted prior to allocation of EUAs. Since the U.S. Government cannot forward incomplete or inadequate nominations to the Ozone Secretariat, it is important for applicants to provide all information requested in the Handbook, including the information specified in the supplemental research and development form (page 45).

The accounting framework matrix in the handbook entitled “Table IV: Reporting Accounting Framework for Essential Uses Other Than Laboratory and Analytical” requests data for the year 2002 on the amount of ODS exempted for an essential use, the amount acquired by production, the amount acquired by import, the amount on hand at the start of the year, the amount available for use in 2002, the amount used for the essential use, the quantity contained in exported products, the amount destroyed, and the amount on hand at the end of 2002. Because the data necessary to complete Table IV will not be available until after January 1, 2003, companies should not include this chart with their EUA applications in response to this action. EPA plans to send letters to each essential use applicant requesting the information in Table IV in the first two weeks of January 2003. Companies will have only fourteen days in which to respond since EPA must compile companies' responses to complete the U.S. CFC Accounting Framework for submission to the Parties to the Montreal Protocol by the end of January.

EPA anticipates that the Parties' review of MDI essential use requests will focus extensively on the United States' progress in developing alternatives to CFC MDIs, including education programs to inform patients Start Printed Page 66149and health care providers of the CFC phaseout and the transition to alternatives. Accordingly, applicants are strongly advised to present detailed information on these points, including the scope and cost of such efforts and the medical and patient organizations involved in the work. Applicants should submit their exemption requests to EPA as noted in the Addresses section at the beginning of today's document.

III. Availability of Pharmaceutical Grade CFCs for the Year 2005 and Beyond

The plant that currently produces pharmaceutical grade CFCs for U.S. MDIs is scheduled to close at the end of 2005. As such, it is necessary for MDI manufacturers who wish to continue production after that time to identify a source of pharmaceutical grade CFC past this date. The Parties to the Protocol have identified two possible options. One is to qualify another plant to continue to produce pharmaceutical grade CFCs on a just-in-time basis. A second option is to request that CFCs be produced from the existing plant in a “final campaign” production of CFC to be produced in 2005. The CFCs produced in a final campaign could, in theory, then supply the remainder of the transition to CFC-free MDIs. It is important to note that this second option is under consideration but has not yet been approved by the Parties.

In order for EPA to plan effectively for the future of the essential use process, and in order for the U.S. Government to be fully informed, EPA must gather information about how MDI manufacturers intend to procure CFCs after 2005. Therefore, we request that all essential use applicants for MDIs answer the following two questions as completely as possible.

1. What steps has your company taken to ensure a continued supply of CFCs beyond 2005? Please be specific and explain whether there are plans to qualify a plant to produce pharmaceutical grade CFCs. Please identify the chemical company, the location of the plant, and the date the new plant is expected to begin production.

2. Does your company wish to make an essential use request for final campaign production of pharmaceutical grade CFCs for the year 2005 and beyond? If yes, how much CFCs does your company anticipate requesting?

The answers you provide will be considered confidential business information, and will only be shared with authorized government officials. While we are requesting information related to the possibility of campaign production of CFCs for MDIs in 2005, we are not requesting that companies make an official nomination for campaign production in 2005. If it is determined that campaign production is necessary and allowed under the Montreal Protocol, EPA will issue a separate notice requesting nominations for campaign production.

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Dated: October 22, 2002.

Robert Brenner,

Acting Assistant Administrator, Office of Air and Radiation.

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1.  58 FR 29410, May 20, 1993; 59 FR 52544, October 18, 1994; 60 FR 54349, October 23, 1995; 61 FR 51110, 0 30, 1996, 62 FR 51655, October 2, 1997; 63 FR 42629, August 10, 1998; 64 FR 50083, September 15, 1999; 65 FR 65377, November 1, 2000; and 200166 FR 56102, November 6, 2001.

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[FR Doc. 02-27623 Filed 10-29-02; 8:45 am]