HCFC Proposed Allocation Rule

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U.S. EPA's
Proposed HCFC Allocation Rule
Proposed by EPA July 20, 2001

Overview
- HCFC Allocation will control U.S. production and consumption of HCFCs in accordance with U.S. obligations under the Montreal Protocol's HCFC consumption cap.
- Both Production & Consumption Allocations
- Comparable to CFCs
- Chemical-by-chemcial, absolute kilogram system
- Re-evaluate prior to 1/1/2010
- Eliminating HCFC-141b will achieve mandated 35% reduction in 2004
- Rejected re-allocation of allowances which are not used
- Space vehicle/defense needs up to 1% of 141b total baseline above allocation
- Used HCFC imports require significant paper trail
- Quarterly reports, due within 15 days

Consumption^*
^* Consumption = Production + Imports - Exports - Feed stocks
- Allocated to Producers/Importers --- 85% of CAP
- Allocated to New Entrants on record January 1, 1998 through April 15, 1999
- Allocation baseline 1989, 1994, 1995, 1996, 1997
  - Single year highest ODP for company
- Chemical phase-out date --> remove allowances from company

Production
- Baseline same years as Consumption
  - Only 86% of total due to Montreal Protocol limit
- Post chemical phase-out date, 15% of baseline for developing countries
- Imports/Exports with Copenhagen Signatories only

Transfers/Trades
- Inter-company allowed
- Inter-chemical allowed
- International --- Production allowances only permitted
- 0.1% offset, excluding international
- Current year (temporary) or permanent