Overview of TSCA Inventory Reset

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The Environmental Protection Agency (EPA) published the final rule establishing the process for TSCA “Inventory Reset” under the Toxic Substances Control Act (TSCA) on August 11, 2017. The final rule was effective as of the same day. The TSCA Inventory Reset process concerns chemical substances that are listed on the TSCA Inventory; it does not apply to every chemical substance in commerce, as many such substances are exempt from Inventory listing requirements. The Reset process is designed to identify which of the listed chemical substances are and are not actively in commerce. Inventory Reset is required by the Lautenberg amendments to TSCA.

Substances identified as “in commerce” will be placed on the “Active Inventory.” Substances not currently in commerce will be placed on the “Inactive Inventory.” Companies will not be able to lawfully manufacture, import, or process any chemical substance on the “Inactive Inventory” without first notifying the substance to EPA. The Active and Inactive Inventories will be created through “retrospective” reporting. Retrospective reporting requires companies to notify EPA regarding the non-exempt chemicals they manufactured or imported during the ten years prior to Lautenberg’s enactment (June 21, 2006 and June 21, 2016). Manufacturer/importer reporting began the day the final rule was published. Companies have 180 days to submit notifications. In addition, a subsequent 180-day reporting period, beginning April 9, 2018, is designated for reporting by processors. Companies may report substances that they processed during the ten-year look back period.

After retrospective reporting closes, EPA will formally establish the Active and Inactive Inventories. Once these Inventories are published, forward-looking reporting will be required before a company can lawfully manufacture, import, or process any chemical substance on the “Inactive Inventory.” In addition, EPA has designated the period between retrospective and forward-looking reporting as the “Transition Period.” The forward-looking reporting requirements are optional, but recommended, during this period.

Considerable effort to coordinate with the companies that manufacture and supply one’s raw materials will be required to ensure that these products remain available for use in the company’s commercial activities.

TSCA Negotiated Rulemaking Committee Meetings — Inorganic Byproducts and CDR

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On August 18, 2017, EPA announced two upcoming meetings of the TSCA Chemical Data Reporting Negotiated Rulemaking Committee.  These meetings will be held on September 13 – 14 and October 25 – 26, 2017 in Washington, DC.  The public is invited to attend.

EPA issued a Federal Register Notice of its intent to form the committee December 16, 2016.  That notice explained that the objective of the Negotiated Rulemaking Committee will be to negotiate a proposed rule that would limit chemical data reporting requirements under section 8(a) of the amended TSCA for manufacturers of any inorganic byproduct chemical substances, when such byproduct chemical substances are subsequently recycled, reused, or reprocessed.  It also explained that the Negotiated Rulemaking Committee will attempt to reach consensus on proposed regulatory language. The negotiation process is required by section 8(a)(6) of TSCA.

EPA believes the Chemical Data Reporting (CDR) rule is the only current reporting obligation under TSCA section 8(a) that is likely to affect the manufacturers of inorganic byproduct chemical substances.

The December 16, 2016 Federal Register Notice also explained that the Agency intends to conduct the negotiated rulemaking proceedings with particular attention to ensuring full and adequate representation of those interests that may be significantly affected by a rule providing for limiting CDR requirements for inorganic byproduct chemical substances.  EPA initially identified the following groups as representing interests likely to be significantly affected by a rule:

  • Aluminum Association
  • American Chemistry Council
  • American Coal Ash Association
  • Environmental Defense Fund
  • Institute of Scrap Recycling Industries
  • IPC—Association Connecting Electronics Industries
  • North American Metals Council
  • National Mining Association
  • S. Environmental Protection Agency
  • Utility Solid Waste Activities Group

Additional information about the Committee, including information about attending Committee meetings and meeting agendas, can be found on the Committee webpage.

 

EPA Releases Working Guidance for the Nanoscale Material Reporting Rule

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On August 14, 2017, EPA released the Working Guidance for the Nanoscale Material Reporting Rule.  The Working Guidance considerably narrowed the scope of “reportable chemical substance” from the draft Guidance.  EPA considers the Guidance a “working” document because it intends to update the Guidance based on questions the Agency receives.

The Working Guidance also discusses other aspects of what makes a chemical a “reportable chemical substance” and a number of other issues.  It is divided into the following sections:

  • What Chemicals are Reportable?
  • Who is Required to Report?
  • What Information is to be Reported?
  • When is Reporting Required?
  • General Questions.

The most helpful information is found under “What Chemicals are Reportable?” and “Who is Required to Report?”

What Chemicals are Reportable.  A reportable chemical substance is one that it solid at 25º C, 1 – 100 nanometers in size in at least one dimension, and intentionally manufactured or processed to exhibit unique or novel properties because of its size.  The draft Guidance had raised a number of unanswered questions regarding what comprised unique and novel properties.

In the Working Guidance, EPA explicitly states that “size is not considered to be a unique and novel property.”  The Working Guidance differentiates between unique and novel properties and enhanced or continuously scaling properties.  The later are those which do not intrinsically change on the nanoscale and instead scale proportionately with size.  Chemicals that have different functionality at the nanoscale than the form greater than 100 nanometers would be considered substances demonstrating unique and novel properties.

Additional points about “reportable chemical substances” include discussion of discrete chemical substances and coatings.  The Working Guidance notes that some nanoscale materials are engineered to give all the particles a certain morphology or shape.  The change in shape needs to be a specifically engineered change in the shape of particles to be a discrete form of a reportable chemical substances.  EPA explains that coating a nanoscale material results in a nanoscale material with different properties; in other words, by coating a nanoscale material, one has created a reportable chemical substance.

Who is Required to Report.  According to the Working Guidance, each manufacturer and processor in the supply chain must report on the reportable chemical substance.  EPA notes that processors should document the steps they took to determine whether reporting is required.  If processors do not know about specific properties that would allow them to know if they are processing a chemical substance subject to the rule, EPA believes that it would be within the reasonably ascertainable standard to ask their suppliers.

NGOs Challenge Risk Evaluation and Prioritization Rules

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Environmental Defense Fund (EDF), Safer Chemicals Healthy Families, and the Alliance of Nurses for Healthy Environments (ANHE) have filed suit for review of EPA’s Risk Evaluation and Prioritization Rules promulgated under the amended Toxic Substances Control Act (TSCA).  Both rules were required by Section 6 of the amended statute.  The final rules were released by EPA on June 22, 2017.  The Safer Chemicals Healthy Families petitions challenge the Risk Evaluation and Prioritization Rules as arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; in excess of statutory jurisdiction, authority, or limitations; and without observance of procedure required by law.

EDF filed suit on August 11, 2017 in the U.S. Court of Appeals for the Second Circuit; ANHE et al filed suit on August 11, 2017 in the U.S. Court of Appeals for the Fourth Circuit; and Safer Chemicals Healthy Families et al filed suit on August 10, 2017 in the U.S. Court of Appeals for the Ninth Circuit.  Safer Chemicals Health Families was joined on its petition by a number of groups including Environmental Working Group, Union of Concerned Scientists and AFL-CIO.  ANHE was joined on its petition by the Natural Resources Defense Council (NRDC).  The NGOs did not file a Motion for Stay to prevent EPA from moving forward in implementing the Risk Evaluation and Prioritization Rules while the petitions are under review.

Additional insight into the petitioners’ concerns can be found in their statements regarding the final rules and the litigation.  EDF has said that it believes the final risk evaluation rule improperly narrows conditions of use by not including all conditions of use in the risk evaluation.  NRDC expressed concern that the risk evaluation rule introduces loopholes that could lead to incomplete analysis, which could lead EPA to conclude that a chemical doesn’t pose a health or environmental risk when it actually does.  Regarding the prioritization rule, EDF asserts that the final rule describes an information-gathering process that seeks to minimize and undermine EPA’s use of the new testing authorities available to the agency under section 4.

EPA has not commented on the litigation.

CBI Claims under the Amended TSCA

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EPA recently notified many companies that CBI substantiation statements are due September 19, 2017.  This was a surprise to those unfamiliar with the CBI substantiation requirements imposed by the Lautenberg amendments to TSCA and EPA’s Statement of Interpretation regarding these provisions.  The Statement of Interpretation was issued in the Federal Register January, 19, 2017.

The Lautenberg amendments require upfront substantiation of CBI claims.  EPA data systems were not equipped to accept substantiation statements when the statute was first enacted.  CBI claims made in the months between Lautenberg’s enactment and EPA updating its systems must now be substantiated.  At issue are CBI claims made from June 22, 2016 to March 20, 2017.

The Agency has given companies until September 19, 2017 to substantiate claims made from June 22, 2016 to March 20, 2017.  For CBI submissions made on or after March 21, 2017, all claims must be substantiated at the time the assertion is made to EPA – that is at the time the information claimed as CBI is submitted to EPA.  Where there is no substantiation for a CBI claim, EPA is authorized to make the information public.

Under the amended statute, CBI substantiation must address the following:

  • Identify measures the company has taken to protect the confidentiality of the information,
  • Explain how disclosure of the information would harm to the company’s competitive position, and
  • Determine whether or not the information must be disclosed under any other Federal law;

Some categories of information are generally not subject to substantiation requirements (§14(c)(2)) (e.g., specific information describing the processes used in manufacture or processing, marketing and sales information).  Most information from health and safety studies is classified as “information not protected from disclosure” (§14(b)).

EPA provided some helpful guidance on developing CBI substantiation statements in a July 13, 2017 webinar.  In addition, the has developed substantiation templates that may be used as a starting point in preparing CBI substantiations.  In the templates, the EPA asks questions “to elicit facts that will help the Agency understand the basis for the submitter’s belief that a particular data element claimed as CBI is in fact entitled to this status.”  Detailed responses are necessary to demonstrate the following points:

  • The company’s efforts to protect the confidentiality of the information,
  • How disclosure of the information would harm to the company’s competitive position, and
  • That the information claimed as confidential does not appear in any public documents.

EPA has also developed a webpage to address these issues.  Included are lists of CDR and PMN data elements exempt from CBI substantiation under TSCA section 14(c)(2).

It is critical to be very detailed when developing substantiation statements.  Companies get only one chance to articulate the facts that support their CBI claims.  EPA procedures for reviewing CBI substantiation provide no opportunity for companies to revise or amend the statements.  The only avenue for appeal, when claims are denied, is to file a petition for review in federal district court pursuant to TSCA Section 14(g)(2)(D).  In such cases, the court’s review is likely to be limited to the record that was created for the Agency’s review, and additional legal or factual arguments beyond those presented to EPA are unlikely to be allowed.  To ensure that substantiation statements will withstand EPA’s determination process, we encourage companies to seek legal counsel.

EPA Issues Three Final Rules under New TSCA

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On June 22, 2017, the U.S. Environmental Protection Agency (EPA) released pre-publication Federal Register notices of the final framework actions under the new Toxic Substances Control Act (TSCA), the Frank R. Lautenberg Chemical Safety for the 21st Century Act. The final rules include:

  • The Inventory Reset Rule (AKA the Active-Inactive Rule), which requires industry to report chemicals manufactured, imported, or processed in the U.S. over the past ten years;
  • The Prioritization Process Rule, which establishes EPA’s process and criteria for identifying High-Priority chemicals for risk evaluation and Low-Priority chemicals for which risk evaluation is not warranted at this time; and
  • The Risk Evaluation Process Rule, which establishes EPA’s process for evaluating High-Priority chemicals to determine whether or not they present an unreasonable risk to health or the environment.

EPA also published pre-publication notices concerning the scopes of the risk evaluations to be conducted for the first ten chemical substances under new TSCA, and a guidance document to assist interested persons in developing and submitting draft risk evaluations.

EPA Grants First ‘Conditional’ Approval Under TSCA Reform

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EPA recently approved a new chemical additive subject to the conditions of the polymer exemption criteria.  The Agency found that the chemical substance is “not likely to present an unreasonable risk” under TSCA (5(a)(3)(C)), so long as it meets the requirements of the polymer exemption as described under 40 CFR §723.250(e)(1).  Specifically the Agency found that the substance presents both a low human hazards and a low environmental hazard.  The requirement that “the chemical must be manufactured such that it meets the polymer exemption criteria” gives little insight into restrictions that EPA might impose on future conditional approvals.

EPA’s Determination for Premanufacture Notice explains that although the agency estimates that the new chemical substance will be very persistent, it is unlikely that the chemical substance would present an unreasonable risk, given that it has low potential for bioaccumulation, low human health hazard, and low environmental hazard.  The Determination’s discussion of potential exposures is particularly interesting.  The Agency explained that, although the exposure to a new chemical substance is potentially relevant to whether a new chemical substance is likely to present unreasonable risks, EPA did not estimate the exposure.  The Agency elected not to estimate exposure because the substance present low health and environmental hazard.  The Determination concludes that, “Due to low hazard, EPA believes that this chemical substance would be unlikely to present an unreasonable risk even if exposures were high.”

The name of the substance was claimed confidential business information, as was the manufacturers name. The generic substance name is 2–alkenoic acid, 2–alkyl–, alkyl ester, polymer with 2–alkyl 2–propenoate and a-(2–alkyl-1-oxo-2-alken-1-yl-[iquest]-alkoxypoly(oxy-1,2-alkanediyl), ester with a–2–alken–1–yl–[iquest]–hydroxypoly(oxy–1,2–alkanediyl).

The approval, announced online on May 12, 2017, was the first time EPA has approved a new chemical with a condition since the Toxic Substances Control Act was amended in June 2016.

Petition for Toxicity and Exposure Testing on Flame Retardants Denied

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On April 12, 2017, EPA published a notice in the Federal Register denying a TSCA section 21 petition regarding a group of flame retardants.  EPA explained that the petition did not demonstrate that there was insufficient data on these chemicals, and therefore the EPA found that the testing requested was not necessary.   The petition was submitted by Earthjustice, Natural Resources Defense Council, Toxic-Free Future, Safer Chemicals, Health Families, BlueGreen Alliance, and Environmental Health Strategy Center (“Earthjustice Petition”).

Under TSCA section 21, any person can petition EPA to initiate a rulemaking for the issuance, amendment, or repeal of a rule under TSCA section 4, 6, or 8 or an order under TSCA section 4 or 5(e) or (f).  The Earthjustice petition asked EPA to issue an order under section 4, requiring toxicity and exposure tests testing on particular flame retardants.  The flame retardants at issue are chlorinated phosphate esters (“CPE”).  The CPE Cluster is comprised of

  • tris(2-chloroethyl) phosphate ((“TCEP”) (CAS No. 115-96-8),
  • 2-propanol, 1-chloro-, phosphate (“TCCP”) (CAS No. 13674-84-5), and
  • 2-propanol, 1,3- dichloro, phosphate (“TDCPP”) (CAS No 13674-87-8).

These substances had previously been evaluated during EPA’s TSCA Work Plan Chemical Problem Formulation and Initial Assessment.  Millions of pounds of the substances are manufactured and imported annually.

The Federal Register notice explained that EPA must make several findings in order to issue a rule or order to require testing under section 4.  EPA must find that information and experience are insufficient to reasonably determine or predict the effects of a chemical substance on health or the environment and that testing is necessary to develop the missing information.  EPA must also find that the chemical substance may present an unreasonable risk of injury under section 4.  EPA did find that the manufacture, distribution in commerce, processing, use, or disposal of the CPE Cluster chemicals may present an unreasonable risk of injury to health or the environment.  However, EPA stated that the petitioners failed to demonstrate that the information and experience available to EPA are insufficient to reasonably determine or predict the effects on health or the environment from “manufacture, distribution in commerce, processing, use, or disposal” (or any combination of such activities) of the CPE Cluster chemicals, and therefore the Agency found that the testing requested by the petitioners is unnecessary.

In March, EPA denied a section 21 petition by Earthjustice and others to require additional testing on the flame retardant tetrabromobisphenol A (CAS No. 79-94-7).

Processors and Downstream Users Comment on the Inventory Reset Proposed Rule, Asking for Clarity

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On January 13, 2017, the EPA published a proposed rule to reset the TSCA Inventory into separate lists of “active” and “inactive” substances (i.e., inventory reset). The proposal details notification requirements and establishes exemptions and procedures for handling confidentiality claims. Properly notified substances would be designated by EPA as “active,” whereas substances without a valid notification would be designated as “inactive.”

Once designated, “inactive” substances could not properly be manufactured, imported, or processed for a non-exempt commercial purpose under TSCA. For inactive substances, EPA proposed “forward-looking” procedures for notifying inactive substances if and when non-exempt manufacture, import, or processing would resume in the future. Properly notified substances would be converted by EPA to “active” substances.

Many comments to the proposed rule were received from interested parties, including coalitions and trade associations – examples are provided below.

A downstream user coalition has questioned the proposed requirement under the TSCA inventory reset proposed rule that a processor of an inactive substance submit notification to the EPA prior to its use. The Chemical User Coalition (CUC), a cross-industry group of nine major companies, including Intel, Boeing, Honda and Procter & Gamble, said in its comments that the inventory reset provisions should only be relevant to reporting, and a failure to adhere to the notification deadline should constitute a reporting violation, not affect a company’s ability to process substances on the inventory.

IPC, the Association Connecting Electronics Industries, in its comments requested clarification of the term “processors” stating that the definition currently in place is “overly simple and prone to misinterpretation.” Specifically, IPC requested that EPA clarify that processing does not include assembling parts into articles, when it does not involve the preparation of a chemical substance or mixture.

Others pointed out that because processors are not required to report pre-manufacture notices or under the Chemical Data Reporting rule, that many would be wholly unfamiliar with the EPA’s CDX reporting system.

The comment period on the inventory rest proposed rule ended March 14, 2017.

Implementing the 2016 TSCA Amendments – Progress & Prognosis

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Verdant Attorney Irene Hantman will speak on Wednesday, February 22 at a panel discussion among experts on implementing the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which amends the Toxic Substances Control Act (TSCA). The program includes a panel of legal experts, current and former EPA officials, and representatives from environmental NGOs and trade groups. The panel will discuss topics including:

  • The potential effects of the change in Administration
  • Congress’ oversight role
  • Regulatory actions already taken by EPA
  • Regulatory actions required during 2017

The program includes an informal brown bag lunch for in-person participants in Washington, D.C., as well as dial-in participation. If attending in person, please RSVP to Gina Dean at gina.dean@apks.com; teleconference information is forthcoming. This event is sponsored by the Pesticide, Chemical Regulation, and Right-to-Know Committee of the ABA Section of Environment, Energy, and Resources (SEER), with co-sponsorship by the Environmental Law Institute and SEER’s Special Committee on Congressional Relations, and hosted by Arnold & Porter Kaye Scholer LLP.

Please see the announcement [PDF] for more details.

GENERAL INFORMATION:

Location: Arnold & Porter LLP, 601 Massachusetts Avenue, NW, Washington, DC 20001

Arrival Time: 11:45 am; plan to arrive in advance to check in and pass through security; the dialogue will begin promptly at noon and will conclude at 2:00 pm.

Moderator: Larry Culleen, Partner, Arnold & Porter Kaye Scholer LLP

Panelists:

  • Jim Jones, Former Assistant Administrator, US EPA [invited]
  • Wendy Cleland-Hamnet, Office Director, Office of Pollution Prevention & Toxics, US EPA
  • Mike Walls, VP Regulatory & Technical Affairs, American Chemistry Council [invited]
  • Richard Denison, Lead Scientist, Environmental Defense Fund
  • Ernie Rosenberg, President & CEO, American Cleaning Institute
  • Lynn Bergenson, Managing Partner, Bergeson & Campbell
  • Martha Marrapese, Partner, Keller & Heckman
  • Irene Hantman; Verdant Law