Audit Finds EPA’s New Chemicals Program Lacks Sufficient Guidance

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On August 2, 2023, EPA’s Office of Inspector General (“OIG”) released a report on its audit of EPA’s New Chemicals Program. The audit identified recordkeeping and quality assurance issues with the program as administered by EPA’s New Chemicals Division (“NCD”). The audit, which began in October 2021, was conducted in response to several internal complaints submitted to OIG.

The New Chemicals Program reviews whether new chemicals or significant new uses of existing chemicals pose an “unreasonable risk” to human health or the environment under the Toxic Substances Control Act (“TSCA”). According to the report, NCD did not have finalized, up-to-date guidance for recordkeeping or for many of the steps in the new chemicals review process, contrary to EPA protocol.  OIG stated that these issues resulted from insufficient staff resources, which prevented NCD from both conducting the chemical reviews within statutory time frames and finalizing guidance for the activities composing the review process. The report also found frequent technical issues with NCD’s TSCA Confidential Business Information systems.

Some of the complaints to OIG alleged that staff were pressured to focus on deadlines rather than chemicals’ potential risks during the new chemical review process. However, OIG found no evidence of this; for example, the report notes that NCD employees were not evaluated on the speed at which they reviewed chemicals.

OIG made the following four recommendations to EPA’s Office of Pollution Prevention and Toxics (“OCSPP”) based on its findings:

  1. Develop a plan to regularly review NCD’s guidance documents,
  2. Develop a plan to periodically assess the effectiveness of NCD’s recordkeeping system,
  3. Develop a plan to identify the root causes of the technical issues, and
  4. Conduct periodic reviews of NCD’s workload.

OCSPP’s response, which was included in the report, agreed with each of OIG’s recommendations and proposed corrective actions in line with the recommendations.

This audit was not the first to find issues with EPA’s implementation of TSCA provisions. A 2019 GAO report identified similar issues, such as insufficient guidance and resources, with the new chemicals review process. In 2020, OIG found that EPA had missed deadlines on existing chemical risk evaluations and that EPA’s ability to meet future deadlines was at risk. EPA has since proposed a fee adjustment designed to increase TSCA fee collections. Most recently, in February 2023, GAO determined that EPA had missed most TSCA deadlines for reviewing new and existing chemicals.  In general, EPA agreed in part or in full when recommendations were made in these reports and corrective actions have been completed or are pending.

EPA Releases Framework for Addressing New PFAS and New Uses Under TSCA

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EPA has released the Framework for Addressing New PFAS and New Uses of PFAS. This document details the Agency’s planned strategy for evaluating Premanufacture Notices  (“PMNs”) for new PFAS compounds and Significant New Use Notices (“SNUNs”) for “new uses” of existing PFAS to ensure they do not pose harm to human health and the environment.

The Agency states that new PFAS substances present challenges for regulators, as there is frequently limited information available to assess their potential risks accurately. Many PFAS compounds are known to persist in the environment, bioaccumulate, and be toxic (known as “PBT”); the framework aims to qualitatively evaluate PFAS based on how likely they truly are to become PBTs in the body and environment.

The framework distinguishes between PFAS uses that may result in environmental releases and potential exposures and those that don’t. For example, PFAS applications that are deemed to have negligible exposure and minimal environmental release, such as in the closed systems used in the manufacture of electronics. EPA generally anticipates allowing the compounds to enter commerce after exposure data is provided.

The framework calls for more comprehensive testing, including toxicokinetic data, for PBT PFAS compounds that are expected to have a low but greater than negligible potential for environmental release and exposure. If initial testing raises concerns about exposure levels and risks, EPA will mandate further testing and risk mitigation before permitting manufacturing. This comprehensive testing would encompass physical-chemical properties, toxicity, and fate analysis. For example, uses of PFAS in spray-applied stain guards inherently involve releases into the environment. If required testing finds potential hazards, EPA has the authority under TSCA section 5 to demand additional testing and risk mitigation strategies or prohibit manufacturing entirely.

If EPA determines a new chemical substance poses an unreasonable risk, lacks sufficient risk information, or involves substantial production with potential exposure, it must issue a section 5(e) order for human health and environmental protection, which may include testing requirements. If PFAS data suggests it’s a PBT chemical and EPA anticipates exposures, the substance or significant new use could be deemed to present an unreasonable risk, therefore requiring either a section 5(f) order or an immediately effective proposed rule under TSCA section 6(a). The section 5(f) order applies to the submitter, while the 6(a) rule covers all users. For a SNUN, the 6(a) rule typically targets the specified new use. The chart below further details the possible EPA determinations and related actions following their review.

Determination Related Action
In the absence of sufficient information to permit a reasoned evaluation of risk from the substance or significant new use, the substance or significant new use may present an unreasonable risk. EPA must issue an order under TSCA section 5(e).
There is insufficient information to permit a reasoned evaluation of risk from the substance or new use. EPA must issue an order under TSCA section 5(e).
The substance or significant new use presents an unreasonable risk. EPA must take action under TSCA section 5(f).
The substance is or will be produced in substantial quantities, and there may be significant or substantial human and/or environmental exposure (exposure-based). EPA must issue an order under TSCA section 5(e).
The substance or significant new use is not likely to present an unreasonable risk. EPA notifies the submitter of its decision and publishes its findings in the Federal Register.

 

TSCA Enforcement Action Taken Over Failure to Comply with PFAS SNUR

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In December 2022, two separate lawsuits were filed against Inhance Technologies USA regarding its alleged production of certain PFAS substances in violation of the Toxic Substances Control Act (“TSCA”). These lawsuits are important as they raise novel questions of TSCA interpretation and enforcement.

The first lawsuit was filed by the U.S. Department of Justice, Environment and Natural Resources Division on behalf of the U.S. Environmental Protection Agency (“EPA”).  The second case is a citizen suit filed by the non-profit organizations Center for Environmental Health (“CEH”) and Public Employees for Environmental Responsibility (“PEER”). U.S. v. Inhance Technologies LLC, U.S. Eastern District of Pennsylvania, Case No. 2:22-cv-05055; Center for Environmental Health v. Inhance Technologies USA, U.S. District Court for the District of Columbia, Case No. 1:22-cv-03819. It is rare that EPA pursues TSCA enforcement actions in federal court. Similarly, the citizen suit provision of TSCA is exercised infrequently.

Defendant Inhance Technologies USA (“Inhance”) is a Texas-based corporation that treats plastic containers, including high-density polyethylene (HDPE), using a fluorination process. Inhance is the principal supplier of post-mold fluorination services in the United States.

According to the Complaints, Inhance has been in violation of the Long-Chain Perfluoroalkyl Carboxylate (“LCPFAC”)  Significant New Use Rule (“SNUR”) that requires manufacturers to file a Significant New Use Notice (“SNUN”) for any manufacturing (including importing) or processing of an LCPFAC for which there were no ongoing uses as of January 21, 2015. See 40 CFR 721.10536. This includes substances that are typically exempt byproducts under TSCA and LCPFACs that are imported as part of articles. Inhance allegedly violated two SNUR requirements.  The complaints assert that Inhance failed to submit a SNUN for LCPFAC substances formed during the fluorination of plastic containers at least 90 days prior to the manufacture of these substances. The second violation charged is the company’s manufacture of these substances before completion of the requisite 90-day SNUN review period.

Inhance received warning of its violation of the LCPFAC Rule by the Plaintiffs of each lawsuit months prior to litigation. The lawsuits follow a March 2022 letter EPA sent to the HDPE industry. EPA issued the letter, first “to remind industry of this issue to help prevent unintended PFAS formation and contamination,” and second, to “emphasize the requirement under TSCA as it related to PFAS and fluorinated polyolefins.” In its letter, EPA reminded the industry of the SNUR, highlighting that while LCPFAC chemical substances are byproducts of the fluorination process from the chemical and commercial standpoint, these substances are not eligible for the byproducts exemption in 40 CFR § 721.45(e). The Agency letter further encouraged the industry to pursue alternative fluorination processes which are less likely to foster unintentional PFAS creation. EPA’s lawsuit is its first enforcement matter against the HDPE industry following the Agency’s warnings.

In March 2022, EPA issued a Notice of Violation (NOV), requesting that Inhance provide the Agency with additional information on changes the company may have made to the HDPE fluorination process that would eliminate PFAS production. The NOV stated that if no changes to the manufacturing process had been made, Inhance would need to immediately cease manufacturing PFAS and submit a SNUN to the Agency for review. Agency review of the information submitted by the company confirmed that the company was producing substances that are subject to the LCPFAC Rule.

In September 2022, Inhance notified EPA that it intended to submit a SNUN for its fluorination processes, but that it was unwilling to cease its fluorination processes before or during the EPA SNUN review period. Inhance has consistently maintained that it believes its operations are in full regulatory compliance.

EPA’s lawsuit was filed on December 19, 2022, with the non-profit lawsuit following about a week behind. The Complaints allege a variety of TSCA violations, namely the following:

  • Section 5(a)(1) of TSCA, which states no person may manufacture or process a chemical substance for a significant new use unless (1) that person submits a Significant New Use Notice (“New Use Notice”) to the EPA; (2) the EPA reviews that notice; and (3) the EPA makes a determination on that use under Section 5(a)(3) of TSCA, 15 U.S.C. § 2604(a)(3). 15 U.S.C. § 2604(a)(1).
  • Title 40 C.F.R. § 721.25 prescribes similar requirements for any person seeking to engage in a significant new use of a chemical substance.
  • Section 15 of TSCA, which states that it is a prohibited act to fail or refuse to comply with any requirement of TSCA or any rule promulgated under TSCA. 15 U.S.C. § 2614.
  • Under 40 C.F.R. § 721.35, it is a violation of Section 15 of TSCA to fail to comply with any provision of Title 40, Part 721 of the regulations implementing TSCA.

Plaintiffs in both cases are seeking declaratory and injunctive relief under Section 15(a) of TSCA (15 U.S.C. § 2616(a)) and the Declaratory Judgment Act (28 U.S.C. § 2201) for Inhance to cease production of all products using the PFAS forming fluorination process. To resume production, Inhance must demonstrate to EPA that it has altered its production process to eliminate PFAS production.

Case Update

In April 2023, the U.S. District Court of the District of Columbia dismissed the lawsuit brought by CEH and PEER. Shortly after CEH and PEER filed their lawsuit, Inhance filed a motion to dismiss the case arguing that the lawsuit was inappropriate under TSCA’s diligent prosecution bar. DOJ filed an amicus brief supporting Inhance’s motion to dismiss. For the CEH and PEER lawsuit to proceed, the organizations would have needed to demonstrate that DOJ was not diligently prosecuting the case. The court granted Inhance’s motion stating that “[n]othing in the eight days between when DOJ filed its lawsuit and when the Plaintiffs filed theirs suggests that [DOJ] was not diligently prosecuting the case.”

On June 13, the court presiding over the DOJ lawsuit scheduled oral arguments for August 23, 2023.

EPA Updates New Chemical Review Program Webpage to Increase Transparency

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In December 2022, EPA announced updates to its New Chemicals Review Program website to include additional information and metrics on the Agency’s review of new chemicals and significant new uses.  In the announcement, the Agency stressed its commitment to increasing efficiency, effectiveness, and transparency through the chemical review process. To progress in this goal, the website will now include:

  • A more detailed breakdown of new chemical submissions, including a month-by-month count of new chemical submissions, completed risk assessments, and completed risk management actions for all notices and exemptions.
  • Greater details and explanations on each step of the review process. This includes “the extent to which the submitter has provided additional information during the review period – subsequent to the original submission – and the level of effort needed to potentially rework some or all of the risk assessment as a result” and applicability of new approaches developed by the Agency to standardize reviews for certain new chemicals.
  • A status tracker for new chemical exemptions (e.g., Low Volume Exemptions (LVEs) and Test Market Exemptions (TMEs)).

According to EPA, the new website will be updated monthly.

EPA Releases White Paper on Modernizing the Process and Bringing Innovative Science to Evaluating New Chemicals Under TSCA

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EPA recently released a white paper, The New Chemicals Collaborative Research Program: Modernizing the Process and Bringing Innovative Science to Evaluate New Chemicals Under TSCA. The document was produced as a summary report to the Board of Scientific Counselors as an integrative research plan under the 2023-2026 Chemical Safety for Sustainability (CSS) Strategic Research Action Plan. This plan seeks to address concerns by both industry and environmental organizations, including the significant lag in EPA’s review of new chemicals, lack of transparency in the process, and insufficient consideration of potential hazards. In addition, the plan would allow EPA’s staff to use new scientific methods to analyze chemical impacts on humans and the environment.

Under TSCA, chemical manufacturers have not been required to provide chemical hazard data in their PMN applications. Under the proposed new processes, data on toxicity, exposure, chemical use, and other databases, in conjunction with computer-based analysis methods, would make chemical reviews easier for the Agency. The plan will focus on five key research areas:

(1) Updates and refinements to chemical analog and category approach.

(2) Development and expansion of databases containing TSCA chemical information.

(3) Development and refinement of predictive models for physiochemical properties, environmental fate/transport, hazard, exposure, and toxicokinetics.

(4) Integration and application of in vitro New Approach Methodologies (NAMs).

(5) Development of a TSCA new chemicals decision support tool that utilizes curated data.

Using these NAMs, the Agency hopes to fill information gaps and address the challenges of its current framework.

EPA Launches Stakeholder Outreach Effort to Help Speed New Chemical Reviews

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On June 27, 2022, EPA announced its TSCA New Chemical Engineering Initiative.  EPA seeks to increase efficiency and transparency in the new chemical review process by inviting stakeholders to learn more about how the agency evaluates submitted information.  EPA plans to focus the initiative specifically on issues surrounding “engineering” information, including, but not limited to, occupational exposures and environmental releases.

The initiative has been launched in response to significant delays in new chemical reviews.  Frequently, submitters will provide additional information after the safety review process of a chemical under Section 5 of the Toxic Substances Control Act (TSCA) has already begun.  When EPA receives this additional information, it must revise its risk assessment (known as a “rework”) which causes delays in completing its review process and finalizing its risk assessment.  In an analysis of previous cases, EPA determined that an individual case may be reworked anywhere from one to five times, delaying the process at least several months.

EPA will be conducting a series of webinars providing an in-depth look at how the Agency analyzes submissions, including EPA’s written methodology of how its conducts analysis.  EPA intends to present case studies to stakeholders to further demonstrate what it considers acceptable in submissions.  Webinars will also communicate EPA’s considerations in evaluating qualitative claims or quantitative data, particularly in circumstances in which they deviate from model defaults such as those used in the Chemical Screening Tool for Exposures and Environmental Releases (ChemSTEER).  Webinars will also discuss EPA’s considerations in evaluating information about sites that are not controlled by the submitter.

The kick-off meeting for the series was held on July 27, 2022.  The meeting detailed background on rework analysis, causes of reworks, examples of rework cases, and general observations.  EPA will be releasing information including the dates for two additional webinars in this fall.

OIG to Audit EPA New Chemicals Review

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EPA’s Office of Inspector General (OIG) has informed the Office of Chemical Safety and Pollution Prevention (OCSPP) that it will audit EPA’s process for conducting reviews of new TSCA chemicals (i.e., substances submitted to the Premanufacture Notification (PMN) and PMN exemption processes).  This is a self-initiated audit to accomplish OIG’s oversight plan for fiscal year 2022, to address ensuring safe use of chemicals, and to address complaints from the OIG Hotline.  OIG seeks to determine the extent EPA is following records-management requirements, quality-assurance requirements, and employee performance standards.  OIG will also be looking at how EPA manages human health and environmental risks for approving new chemicals under TSCA.

OIG has asked OCSPP to assist in expediting the audit by providing all materials, handbooks, and anything related to the review of new chemicals; the resource allocations for chemical review from fiscal years 2018 through 2021; scopes of work for any contracts related to chemical review; any guidance they have received on chemical review; and new chemicals review program organization charts before and after the October 2020 reorganization.

OIG notes authority under the Inspector General Act of 1078, as amended, to have timely access to their requests and personnel.  In addition to the Inspector General Act, in its request, OIG references EPA Manual 6500 and statements from Administrator Michael S. Regan.

EPA Proposes Non-Consent-Order SNURs for 13 Chemical Substances

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On October 16, 2018, the Environmental Protection Agency (EPA) issued a proposed rule that would establish Significant New Use Rules (SNURs) under the Toxic Substances Control Act (TSCA) for 13 chemical substances for which premanufacture notices (PMNs) have been approved during the two years since the statute was amended. A total of 6 SNURs were proposed for these 13 substances. Unlike other recent SNURs enacted after TSCA was amended, the 13 chemical substances are not also subject to consent orders. Indeed, all previously proposed and final SNURs for PMNs under amended TSCA were for substances for which EPA had previously negotiated orders under TSCA Section 5(e).

The proposed SNURs would require that persons who intend to manufacture (including import) or process any of the 13 chemical substances for an activity that is designated as a significant new use submit a “Significant New Use Notice” to EPA at least 90 days before commencing that activity. And, consistent with the SNUR regulations at 40 CFR § 721.25, the proposed rule states that persons may not commence the manufacture or processing for the significant new use until EPA has conducted a review of the notice and decided on the notice, and the person has taken any actions as are required as a result of that determination. Comments on the proposed SNURs are due November 15, 2018.

EPA Publishes Direct Final Rules for 29 Significant New Use Rules

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On August 27, 2018, the U.S. Environmental Protection Agency (EPA) issued two direct final rules promulgating significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA). The first direct final rule promulgates SNURs for ten chemical substances that were the subject of premanufacture notices (PMN). 83 Fed. Reg. 43527. The second direct final rule promulgates SNURs for 19 chemical substances that were the subject of PMNs. 83 Fed. Reg. 43538. All 29 chemical substances are subject to consent orders issued by EPA pursuant to TSCA Section 5(e). The rules require persons who intend to manufacture (including import) or process any of these chemical substances for an activity that is designated as a significant new use to notify EPA at least 90 days before commencing that new use.

The covered chemicals vary, but include several substances intended for use as coatings additives. The requirements for each of the substances differ, but may include limitations on the uses of the substance, hazard communication, personal protective equipment use, and the submission of certain toxicity testing data. Both direct final rules will be effective on October 26, 2018.

NRDC Petitions 2nd Circuit to Review EPA’s New Chemicals Decision-Making Framework

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On January 5, 2018, the Natural Resources Defense Council (NRDC) filed a petition for review with the United States Court of Appeals for the Second Circuit, asking that the court review “a final rule of the U.S. Environmental Protection Agency (EPA) entitled New Chemicals Decision-Making Framework:  Working Approach to Making Determinations under Section 5 of TSCA.”  A stay was not filed with the petition.

On its website, NRDC asserts that it filed the petition to overturn the Agency’s “Framework” “because it is both unlawful under TSCA and was adopted without the minimum legal requirements for ‘rules.’”

The case is Natural Resources Defense Council v. U.S. Environmental Protection Agency, 2d Cir., No. 18-25