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The Environmental Protection Administration (EPA) recently announced its Regulations on Managing HCFC Consumption Levels, which regulate the quantities of hydrochlorofluorocar-bons (HCFCs) that may be produced and con-sumed. HCFCs means substances that are listed in Group I of Annex C (Controlled Substances) of the Montreal Protocol on Substances that Deplete the Ozone Layer and announced by the EPA, whether such substances exist alone or in a mixture. The regulations also cover HCFCs and HCFC mixtures contained in transport or storage containers, but not those contained within prod-ucts. The main points are as follows:
Exportation and importation of HCFCs is limited to transactions with countries and ter-ritories designated by the EPA as compliant with the provisions of the Montreal Protocol.
Domestic manufacturers using HCFCs in the production of soft or semi-hard polyurethane (PU) foams, PU foams for applications other than thermal insulation, PU foams for ambi-ent-temperature thermal insulation applica-tions, electronic communications products, and non-electronic products, must stop using HCFC-141b in their manufacturing processes from 1 January 2004.
HCFC users, importers and manufacturers must apply to the EPA by the end of July each year for qualification to be allocated a quota.
By the end of October each year, the EPA must set an initial estimated quota for each qualified entity for the entire subsequent year, and projected purchase quantities for the first and second quarters of the subsequent year. By the end of April each year it must set the total actual quota for each entity for the cur-rent year, and projected purchase quantities for the third and fourth quarters of the current year. The basis for calculation of each entity's actual HCFC quota for the current year is its record of actual production or use in the entire previous year.
An entity awarded a quota must hold an HCFC quota approval document issued by the EPA before it begins production or applies to the Bureau of Foreign Trade, Ministry of Economic Affairs for an import license, and the HCFCs must be taken delivery of or im-ported in the current quarter.
If the HCFCs are not imported and released, or purchased domestically and taken delivery of, within the current quarter, and the entity con-cerned has not applied to the EPA for an ex-tension permit during that quarter, its quota for the quarter will be taken back by the EPA. But if the quota for the fourth quarter of a year is not imported or taken delivery of in full, the EPA will deduct twice the difference from the actual quota for the subsequent year. A quota held by a user entity may not be transferred to another entity.
An entity holding a quota should report its projected purchase quantities for the third and fourth quarters of each year to the EPA by 5 March of the same year; and by 5 September each year it should report its projected pur-chase quantities for the first and second quar-ters of the following year.
The projected purchase quantities for the first half (first and second quarters) and second half (third and fourth quarters) of a year may not vary by more than 20% above or below half of the initial estimated quota for the whole year.
An entity holding a quota must report the ac-tual use of its quota in the preceding quarter to the EPA by the end of January, April, July and October each year, submitting the following documents. An entity that fails to report or reports late will be deemed not to have com-pleted its importation or domestic sourcing:
1.Users: An entity purchasing from a do-mestic source should fill out a domestic purchase quantity report form, and an en-tity that contracts another company to im-port HCFCs, or imports them itself, should fill out a delivered import quantity report form. They should also report the quanti-ties used, by filling out report forms ac-cording to the type of use, i.e. refrigerant, refrigerant for new construction or main-tenance, foaming, PU additive supply, or cleansing.
2.Importers: Fill out a delivered import quantity report form and a domestic sales report form.
3.Producers: Fill out a production quantity report form and an own-production sales report form.
