[Code of Federal Regulations]
[Title 40, Volume 15]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR82.18]

[Page 365-367]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 82--PROTECTION OF STRATOSPHERIC OZONE--Table of Contents
 
             Subpart A--Production and Consumption Controls
 
Sec. 82.18  Availability of production in addition to baseline production allowances for class II controlled substances.

    (a) Article 5 allowances. (1) Effective January 1, 2003, a person 
apportioned baseline production allowances under Sec. 82.17 is also 
apportioned Article 5 allowances, equal to 15 percent of their baseline 
production allowances for the specified HCFC for each control period up 
until December 31, 2014, to be used for the production of the specified 
HCFC for export only to foreign states listed in Appendix E to this 
subpart.
    (2) Effective January 1, 2015, for all HCFCs, a person apportioned 
baseline production allowances under Sec. 82.17 is also apportioned 
Article 5 allowances, equal to 10 percent of their baseline production 
allowances for the specified HCFC for each control period up until 
December 31, 2029, to be used for the production of the specified HCFC 
for export only to foreign states listed in Appendix E to this subpart.
    (3) Effective January 1, 2030, for all HCFCs, a person apportioned 
baseline production allowances under Sec. 82.17 is also apportioned 
Article 5 allowances, equal to 15 percent of their baseline production 
allowances for the specified HCFC for each control period up until 
December 31, 2039, to be used for the production of the specified HCFC 
for export only to foreign states listed in Appendix E to this subpart.
    (b) Export production allowances. (1) Effective January 1, 2003, a 
person apportioned baseline production allowances for HCFC-141b under 
Sec. 82.17 is also apportioned export production allowances equal to 100 
percent of their baseline production allowances for HCFC-141b for each 
control period up until December 31, 2029, to be used for the production 
of HCFC-141b for export only, in accordance with this section.
    (2) [Reserved]
    (c) International trades of production allowances, export production 
allowances and Article 5 allowances. (1) A person may increase or 
decrease its production allowances, export production allowances, or 
Article 5 allowances, for a specified control period through trades with 
another Party to the Protocol as set forth in this paragraph (c). 
Effective January 1, 2004, a nation listed either: in Appendix L of this 
subpart that is also listed in Appendix C, Annex 1 of the Protocol as 
having ratified the Beijing Amendments, or in Appendix C, Annex 1 of the 
Protocol as having ratified the Copenhagen Amendments but not listed in 
Appendix L of this subpart, or in Appendix C, Annex 2 of the Protocol, 
as being a foreign state complying with the Beijing Amendments if the 
foreign state is listed in Appendix L of this subpart, or as being a 
foreign state complying with the Copenhagen Amendments if the foreign 
state is not listed in Appendix L of this subpart must agree either to 
trade to the person for the current control period some quantity of 
production that the nation is permitted under the Montreal Protocol or 
to receive from the person for

[[Page 366]]

the current control period some quantity of production that the person 
is permitted under this subpart. The person must expend its consumption 
allowances allocated under Sec. 82.19, or obtained under Sec. 82.20 in 
order to produce with the additional production allowances.
    (2) Trade from a Party--Information requirements. (i) A person 
requesting a trade from a Party must submit to the Administrator a 
signed document from the principal diplomatic representative in that 
nation's embassy in the U.S. stating that the appropriate authority 
within that nation will establish or revise production limits for the 
nation to equal the lowest of the following three production quantities:
    (A) The maximum production that the nation is allowed under the 
Protocol minus the quantity (in kilograms) to be traded;
    (B) The maximum production that is allowed under the nation's 
applicable domestic law minus the quantity (in kilograms) to be traded; 
or
    (C) The average of the nation's actual national production level for 
the three years prior to the trade minus the production to be traded.
    (ii) A person requesting a trade from a Party must also submit to 
the Administrator a true copy of the document that sets forth the 
following:
    (A) The identity and address of the person;
    (B) The identity of the Party;
    (C) The names and telephone numbers of contact persons for the 
person and for the Party;
    (D) The chemical type and quantity (in kilograms) of production 
being traded;
    (E) Documentation that the Party possesses the necessary quantity of 
unexpended production rights;
    (F) The control period(s) to which the trade applies; and
    (G) For increased production intended for export to the Party from 
whom the allowances would be received, a signed statement of intent to 
export to the Party.
    (3) Trade to a Party--Information requirements. A person requesting 
a trade to a Party must submit a request that sets forth the following 
information to the Administrator:
    (i) The identity and address of the person;
    (ii) The identity of the Party;
    (iii) The names and telephone numbers of contact persons for the 
person and for the Party;
    (iv) The chemical type and quantity (in kilograms) of allowable 
production being traded; and
    (v) The control period(s) to which the trade applies.
    (4) Review of international trade request to a Party. After 
receiving a trade request that meets the requirements of paragraph 
(c)(3) of this section, the Administrator may, at his/her discretion, 
consider the following factors by seeking concurrence from the 
Department of Commerce, the United States Trade Representative, and the 
Department of State, where appropriate, in deciding whether to approve 
such a trade:
    (i) Possible creation of domestic economic hardship;
    (ii) Possible effects on trade;
    (iii) Potential environmental implications; and
    (iv) The total quantity of unexpended production allowances held by 
U.S. entities.
    (5) Notice of trade. If the request meets the requirement of 
paragraph (c)(2) of this section for trades from Parties and paragraphs 
(c)(3) and (4) of this section for trades to Parties, the Administrator 
will issue the person a notice. The notice will either grant or deduct 
production allowances or export production allowances or Article 5 
allowances and specify the control period to which the trade applies. 
The Administrator may disapprove the trade request contingent on the 
consideration of factors listed in paragraph (c)(4) of this section for 
trades to Parties.
    (i) For trades from a Party, the Administrator will issue a notice 
revising the allowances held by the recipient of the trade to equal the 
unexpended production allowances, unexpended export production 
allowances, or unexpended Article 5 allowances held by the recipient of 
the trade under this subpart plus the quantity of allowable production 
traded from the Party.
    (ii) For trades to a Party, the Administrator will issue a notice 
revising the production limit for the trader to equal the lesser of:

[[Page 367]]

    (A) The unexpended production allowances, unexpended export 
production allowances or unexpended Article 5 allowances held by the 
trade or minus the quantity traded; or
    (B) The unexpended production allowances held by the trader minus 
the amount by which the U.S. average annual production of the class II 
controlled substance being traded for the three years prior to the trade 
is less than the total allowable production of that class II controlled 
substance under this subpart minus the amount traded; or
    (C) The total U.S. allowable production of the class II controlled 
substance being traded minus the three-year average of the actual annual 
U.S. production of the class II controlled substance prior to the 
control period of the trade.
    (6) Revised notices of production limits for subsequent traders. If 
after one person obtains approval of a trade of allowable production of 
a class II controlled substance to a Party and other persons obtain 
approval for trades of the same class II controlled substance during the 
same control period, the Administrator will issue revised notices. The 
notices will revise the production limits for each of the other persons 
trading to equal the lesser of:
    (i) The unexpended production allowances, unexpended export 
production allowances or unexpended Article 5 allowances held by the 
trader under this subpart minus the quantity traded; or
    (ii) The result of the following set of calculations:
    (A) The total U.S. allowable production of the class II controlled 
substance minus the three-year average of the actual annual U.S. 
production of the class II controlled substance prior to the control 
period of the trade;
    (B) The quantity traded divided by the total quantity traded by all 
the other persons trading the same class II controlled substance in the 
same control period;
    (C) The result of paragraph (c)(6)(ii)(A) of this section multiplied 
by the result of paragraph (c)(6)(ii)(B) of this section;
    (D) The quantity derived in paragraph (c)(6)(i) of this section, 
minus the result of paragraph (c)(6)(ii)(C) of this section;
    (7) Production limit for previous traders. The Administrator will 
also issue a notice revising the production limit for each trader who 
previously obtained approval of a trade of the class II controlled 
substance to a Party in the same control period to equal the result of 
the following set of calculations:
    (i) The total U.S. allowable production of the class II controlled 
substance minus the three-year average of the actual annual U.S. 
production of the class II controlled substance prior to the control 
period of the trade;
    (ii) The quantity traded by the person divided by the quantity 
traded by all the persons who have traded that class II controlled 
substance in that control period;
    (iii) The result of paragraph (c)(7)(i) of this section multiplied 
by the result of paragraph (c)(7)(ii) of this section.
    (iv) The unexpended production allowances, unexpended export 
production allowances or unexpended Article 5 allowances held by the 
person plus the result of paragraph (c)(7)(iii) of this section;
    (8) Effective date of revised production limits. The change in 
production allowances, export production allowances or Article 5 
allowances will be effective on the date that the notice is issued.

[68 FR 2848, Jan. 21, 2003]