Obama Administration EPA Reversing Bush Administration Relaxation of RCRA Rules by Considering Sierra Club Petition to Reconsider

            May 27, 2009 EPA announced (74 FR 25200-25205) that it is currently reviewing a January 29, 2009 RCRA 7004(a) petition filed by the Sierra Club (see March 18, 2009 JK Blog for details) requesting that the Agency reconsider and repeal the October 30, 2008 revisions to the definition of “solid waste” for hazardous secondary materials being reclaimed which were effective December 29, 2008. (73 FR 64667-64716), commonly referred to as the “DSW Rule” (see October 29, 2008 JK Blog for details). Materials that are not defined as “solid wastes” are not subject to regulation as hazardous wastes under RCRA. Thus, the definition of “solid waste” plays the key role in defining the scope of EPA's RCRA authority. 

             The DSW final rule is the product of ten years of intense negotiated rulemaking spurred by a series of seven decisions by the U.S. Court of Appeals for the DC Circuit (1987 to 2000), which, restricted EPA’s authority to include certain recycling activities in its 1985  RCRA regulatory definition of “solid waste”. When the final rule was promulgated in October 2008 there was a sigh of relief from the regulated community. 

            The Sierra Club petition argues that the revised regulations are unlawful and that they increase threats to public health and the environment, including adverse impact to environmental justice communities and to children’s health, without producing compensatory benefits, and therefore, should be repealed. The petition singles out several areas of deficiency, which are discussed in more detail below:  

• Lack of a regulatory definition of “contained” and “significant release”  
• Lack of mandatory notifications for persons claiming the exemption
• Failure to apply the definition of “legitimacy” to all hazardous secondary material recycling
• Failure to make all the “legitimacy factors” mandatory
• Repeal exclusion when hazardous secondary materials are shipped to a third party for reclamation 

            On March 6, 2009, a coalition of industry associations, the American Iron & Steel Institute, the Copper and Brass Fabricator’s Council, the Copper Development Association Inc., the International Metals Reclamation Company, Inc., the Specialty Steel Industry of North America, the Steel Manufacturers Association, the American Chemistry Council, the Alliance of Automobile Manufacturers, the American Coke & Coal Chemicals Institute, the National Paint and Coatings Association, the Treated Wood Council, the American Forest and Paper Association, and the Synthetic Organic Chemical Manufacturers Association submitted to EPA a response letter to the Sierra Club petition. This industry letter requests that EPA deny Sierra Club’s petition on the grounds that the DSW final rule comports with the many court cases construing the scope of EPA’s jurisdiction to regulate solid waste under RCRA, and that the DSW final rule achieves significant economic and conservation benefits, while imposing significant controls on the hazardous secondary material recycling industry that are fully protective of the environment. 

            In the context of the DSW rule, the key issue relates to the circumstances under which a hazardous secondary material that is recycled by reclamation is or is not “discarded” (73 FR 64675). EPA determined that if the generator maintains control over the recycled hazardous secondary material and if the material is legitimately recycled under the standards established in the final rule and not speculatively accumulated within the meaning of EPA’s regulations, then the hazardous secondary material is not discarded because the hazardous secondary material is being treated as a valuable commodity rather than as a waste. By maintaining control over, and potential liability for, the reclamation process, the generator ensures that the hazardous secondary materials are not discarded. (See 73 FR 64676). Basically, the reclamation rule excludes materials from the federal hazardous waste system that are:  

• generated and legitimately reclaimed under the control of the generator (the “generator-controlled exclusion”;
• generated and transferred to another company for legitimate reclamation under specific conditions, provided certain conditions are met (the “transfer-based exclusion” or
•  the reclaimed materials are determined by EPA or an authorized state to be non-wastes on a case-by-case basis via a petition process    

EPA has stated that it does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non-waste determination petition process. However, despite numerous proposed rulemakings, three major studies of recycling activities and years of intense negotiation with both industry and environmental groups,   EPA now is stating that it could still consider “opportunities to revise or clarify the definition of solid waste rule”. The areas for revision petitioned for by the Sierra Club and specifically being considered by EPA are:  

Definition of Contained:

             For both the generator-controlled and the transfer-based exclusions, EPA requires that the hazardous secondary material be “contained”. EPA stated in the final rule preamble that whether hazardous secondary materials are contained would be decided on a case-by-case basis, and that such materials are generally contained if they are placed in a unit that controls the movement of the hazardous secondary materials out of the unit. Sierra Club pressed that “containment” must be narrowly defined, so EPA is considering.  

Definition of Significant Release:

            The final rule provides that hazardous secondary materials released to the environment and not immediately recovered are solid wastes; in addition, hazardous secondary materials remaining in the unit may also be a solid waste if they are not managed as a valuable raw material, intermediate, or product, and, as a result, a “significant” release of hazardous secondary materials from the unit to the environment were to take place and the materials were not immediately recovered. A release may be “significant” even if it is not a large volume, if such a release has the potential of causing significant damage over time (73 FR 64681). Sierra Club argues that any release should be “significant”. 

Notification for Persons Claiming Exclusions:

            The DSW final rule required persons claiming one of the exclusions to notify the appropriate regulatory agency before operating under the exclusion. EPA explained that the notification requirement would not be a condition of the exclusion, and failure to notify, while constituting a violation of the notification regulations, would not affect the excluded status of the hazardous secondary materials. In other words, generators or reclaimers could fail to notify yet still be considered to be legitimately recycling their hazardous secondary materials according to the conditions of the exclusion (73 FR 64682).           

Sierra Club objected, so EPA is considering requiring notification as the first step in the facility’s demonstrating that the hazardous secondary material is not being discarded.

Failure to Apply Definition of Legitimacy to all Hazardous Secondary Material Recycling:

            In the October 2008 DSW final rule, EPA codified the definition of “legitimacy” as a requirement for both the generator-controlled and transfer-based exclusions in the final rule and for the non-waste determinations, but not for other hazardous secondary material recycling. The purpose of defining legitimacy was to distinguish “legitimate” recycling from “sham” recycling (i.e., waste treatment and/or disposal conducted in the guise of recycling). To avoid confusion among the regulated community and the States, as well as the other implementing regulatory agencies about the status of recycling exclusions that were in existence prior to the October 2008 DSW final rule, EPA codified the legitimacy factors as specifically applicable to the new exclusions and non-waste determination procedures in that final rule. However, the final rule also explained how the four legitimacy factors codified in the final rule are substantively the same as the existing legitimacy policy (73 FR 64707-64708). 

While this approach was intended to make it clear that legitimacy determinations made for the existing exclusions are not affected by the codified language, ultimately EPA has decided that there may be greater clarity if there is a single legitimacy standard for all recycling. 

Making All Legitimacy Factors Mandatory:

            In the DSW definition of “legitimacy”, EPA included four factors, all of which must be considered, but not all of which must be met.  Two factors must always be met,

• Hazardous secondary materials being recycled provide a useful contribution to the recycling process or to the product of the recycling process
• The product of the recycling process is valuable.  

Two other factors may in some cases not need to be met, depending on such considerations as the protectiveness of the storage methods, exposure from toxics in the product, the bioavailability of the toxics in the product, and other relevant considerations (73 FR 64743-64744):   

• Whether the hazardous secondary material is managed as a valuable commodity, 
• Whether the product of the recycling process contains hazardous constituents that are significantly elevated in comparison to analogous products (i.e., “toxics along for the ride”) (73 FR 64701-64705). 

The Agency took this approach because there were some situations in which a legitimate recycling process did not conform to one or both of these two factors, yet the reclamation activity was still legitimate. Based on the Sierra Club petition, EPA is considering making all legitimacy factors mandatory.   

Repeal Exclusion when Hazardous Secondary Materials are Shipped to a Third Party for Reclamation:

As EPA explained in the October 2008 DSW final rule, businesses often ship hazardous secondary materials to be reclaimed by a third party or commercial facility or another manufacturer. In such situations, EPA determined that the generator has relinquished control of the hazardous secondary materials and the entity receiving such materials may not have the same incentives to manage them as a useful product. Therefore EPA developed specific conditions for the transfer-based exclusion in order for the Agency to determine which hazardous secondary materials transferred to another entity are not discarded. EPA is considering: 

·       Repeal of the transfer-based exclusion, and thus return to regulating most hazardous secondary materials transferred to third parties as discarded materials under traditional RCRA program requirements, while keeping the generator-controlled exclusion and the non-waste determination petition process as the basis for excluding materials which are not discarded;

·       Limit the transfer-based exclusion to materials reclaimed in a “continuous industrial process within the generating industry”.

·       Limit the transfer-based exclusion to activities where the generator is paid for the hazardous secondary material. 

This article was authored by Barbara D. Little, Jackson Kelly PLLC. For more information on the author see here.