Phasedown of Hydrofluorocarbons: Notice of Final Administrative Consequences Under the American Innovation and Manufacturing Act Affecting 2024 Allowances

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 holder fails to meet the applicable regulatory requirement within the timeframe specified by EPA. 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.