The idea that the Agriculture Department will allow the use of methyl bromide, a fumigant that harms the ozone layer, to treat wooden shipping pallets has driven one of the nation's leading environmental groups absolutely buggy.

The Natural Resources Defense Council said it plans to fight a final rule that the USDA issued last month that allows heat or chemical treatment of wooden pallets and other shipping containers, in an effort to stop foreign insects from invading the country. In recent years, the Asian long-horned beetle from China and the emerald ash borer have hitchhiked into the United States on shipping materials; it is estimated that the Asian long-horned beetle has destroyed about $6 million worth of trees in Chicago and New York and cost millions more in eradication efforts.

The environmental group considers the rule the result of the wood packaging industry looking for a quick solution to a big problem and the methyl bromide industry looking for a market. So it has begun work on a legal challenge.

David Doniger, policy director of the NRDC's Climate Center, said the grounds for the suit are that methyl bromide is not an effective treatment, it harms the environment, and the USDA overlooked a more favorable option -- getting rid of wood packaging material.

"We're looking for the approach that does the least damage," Doniger said. "Treating wooden pallets won't eliminate the pests, and it will blow a hole in the ozone layer. We want to stop the invasive pests without hurting the ozone layer, and there is a way to do it."

The use of methyl bromide has declined sharply since the early 1990s, after limits were imposed by the 1987 Montreal Protocol, an international treaty on substances than deplete the ozone layer. Use of the chemical is scheduled to be phased out in the United States next year, though the treaty allows "critical use" exemptions as well as "quarantine" uses, such as keeping out bad bugs.

The Bush administration has sought waivers to the treaty to allow farmers to continue to use the pesticide on crops such as tomatoes and strawberries. There also have been several legislative attempts to allow the United States to use as much methyl bromide as it requests under the exemption provisions of the treaty.

The NRDC and other environmental groups have pushed since the late 1990s for the elimination -- or at least a definite phaseout -- of wood packaging materials. They wanted to require the use of plastic, plywood and corrugated wood, eliminating the need for bombing the bugs with methyl bromide.

In the earliest phases of rulemaking, the USDA did consider an option to prohibit the import of any kind of wood packaging material, including an orderly phaseout of wood packing materials so developing countries would have time to make the switch. But that option was dropped in the final rule, even though the department had noted that fumigating with methyl bromide to quarantine insects could cause an increase in its use.

Julie Quick, a spokeswoman for the USDA, said the discussions about using alternative materials occurred before the department decided to adopt the United Nations standard set by the International Plant Protection Convention in 2002. Eliminating the use of wood would have violated trade obligations to developing countries, background material on the rule said.

Doniger and others worry that "quarantine" uses of methyl bromide will grow enormously under the terms of the final rule -- a prospect, they say, that signatories to the treaty never envisioned.

There is also concern that countries that allow the use of methyl bromide will not adequately police whether chemical treatments actually occur, though the pallets may show the official certification mark the rule requires.

Regulators and environmental groups have deep disagreements about how much methyl bromide would be released under the final rule.

John Payne, a plant and quarantine official with the USDA, said estimates originally appeared much higher because they were based on early experiences with how China was treating the wood. Doniger thinks that the final rule has inconsistencies and that it assumes -- with no data -- that countries will heat treat or, when they do use methyl bromide, they will spray sparingly.

Great Lakes Chemical Corp. in Indiana, the only domestic maker of methyl bromide, takes issue with predictions that methyl bromide use might balloon. The company did not comment on the USDA rule, but it is part of an industry group that is seeking continued use of the chemical.

"The numbers being thrown out just lack credibility," said James Nicol, Great Lakes business manager for agricultural products. "We don't expect to see any increase in business as a result of this rule."

In a newsletter published by the company in March 2003, Great Lakes said it will "continue to defend methyl bromide and its uses on all fronts and values your support in the political arena."

The domestic manufacturers of wooden pallets would lose business if the material is phased out. About 6 million containers are used in transport around the world annually, and 95 percent of those are wood.

"The name of the game is to provide as many alternatives as are efficacious to protect solid wood packaging," said Bruce N. Scholnick, chief executive of the National Wooden Pallet and Container Association in Alexandria. He said his group will oversee the recordkeeping of the fumigation program, but, long-term, he expects other treatment alternatives will emerge.

Makers of wooden pallets argued to the USDA that their products are more environmentally friendly than plastic, come from a renewable resource, and often are the only materials available in developing countries. The association warned that it would be an "environmental nightmare" to favor non-biodegradable pallets.

Then there is cost: Wooden pallets made of low-grade wood scrap run about $4 each, Scholnick said, while plastic containers are $32 apiece, a virtual Cadillac his customers would refuse to pay for.