SUPPLEMENTARY INFORMATION:

The Environmental Protection Agency (EPA) hereby provides notice that it has taken final actions establishing administrative consequences for specific entities under the American Innovation and Manufacturing Act (AIM Act). Each action, which EPA took through a letter issued to the relevant entity, is a separate final action informing the recipient entity of an administrative consequence. The requirements pertaining to administrative consequences are codified in 40 CFR 84.35. Under this provision, EPA can retire, revoke, or withhold the allocation of allowances, or ban an entity from receiving, transferring, or conferring allowances. A retired allowance is one that must go unused and expire at the end of the year; a revoked allowance is one that EPA takes back from an allowance holder and redistributes to all the other allowance holders; and a withheld allowance is one that is retained by the Agency until an allowance holder that has failed to meet a regulatory requirement comes back into compliance, at which point EPA allocates it to the allowance holder. A withheld allowance could become a revoked allowance if the allowance ( printed page 81080) holder fails to meet the applicable regulatory requirement within the timeframe specified by EPA.^[1] More information on EPA's approach to administrative consequences can be found at 86 FR 55168 (Allocation Framework Rule).

EPA finalized administrative consequences for three entities that imported regulated HFCs without expending the requisite number of consumption allowances at the time of import. The Agency has retired and revoked consumption allowances commensurate with the quantities of regulated substances imported without allowances from the following entities' remaining calendar year 2024 consumption allowances: ChemPenn, LLC (ChemPenn); Tulstar Products (Tulstar); and, USSC Acquisition Corp (USSC). EPA also finalized administrative consequences for one entity (Firetrace) who failed to submit complete HFC reports as required in 40 CFR 84.31. This entity failed to submit complete HFC reports as required, and therefore, EPA withheld 20 percent of Firetrace's calendar year 2024 consumption allowances from any granted requests for additional consumption allowances (RACAs) until the outstanding reports were submitted, and EPA verified them as complete. Table 1 provides a summary of each of the administrative consequences applied to the relevant entities.

Adjustments to Consumption Allowances

EPA notes that entities in Table 1 who imported without expending the requisite number of consumption allowances at the time of import are not eligible to receive allowances that are redistributed (to entities that were directly issued calendar year 2024 consumption allowances by EPA) as a result of allowances revoked if the administrative consequence action took effect on the same day, with the exception of entities who had their allowance withheld (regardless of effective date).^[2] There are two separate batches of effective dates for redistribution of revoked consumption allowances: allowances that were revoked effective March 31, 2024 (15,504.5 MTEVe, i.e., the sum of 15,503.3 MTEVe and 1.2 MTEVe); and, allowances that were revoked effective June 6, 2024 (16.3 MTEVe). In the former, neither Tulstar nor USSC are eligible for redistribution of the affected allowances but ChemPenn is eligible, as are all other entities to whom EPA issued consumption allowances for calendar year 2024; in the latter, ChemPenn is not eligible for redistribution of the affected allowances but Tulstar and USSC are eligible, as are all other entities to whom EPA issued consumption allowances for calendar year 2024. As EPA did not issue consumption allowances to Firetrace for calendar year 2024, this entity is not eligible to receive any of the redistributed allowances described herein. A summary of the number of revoked and redistributed allowances available to each eligible entity from each batch of effective dates is included in table 2 and table 3.

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 governing judicial review. 42 U.S.C. 7607(b)(1). Each adjudicatory action establishing an administrative consequence as described in this notice is a final action previously taken by EPA. Under section 307(b)(1) of the CAA, any petition for review of such a final action shall be filed in the United States Court of Appeals for the appropriate circuit by December 6, 2024. Filing a petition for reconsideration by the Administrator does not affect the finality of any such action for purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such action. The final actions described herein may not be challenged later in proceedings to enforce their requirements. 42 U.S.C. 7607(b)(2).