On June 30, 2011, U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson signed a proposed rule seeking to narrow certain recycling exemptions under the Resource Conservation and Recovery Act's (RCRA) 'Definition of Solid Waste' (DSW) provisions. The rule should be published in the Federal Registerwithin the next two weeks. A pre-publication copy of the rule and related information can be accessed online. EPA will accept comments on the rule for 60 days after it is published in the Federal Register.
The RCRA DSW is the most litigated and contentious provision in the federal hazardous waste regulatory regime. The DSW is actually a series of regulatory provisions that seek to define when a material that is recycled is 'discarded' and thus a solid and potentially hazardous waste. Materials that are recycled in a manner that does not meet the DSW generally are not regulated as hazardous waste under RCRA, while those recycled in a way that EPA considers to be 'discard' must be managed as hazardous waste. Over the two and a half decades since EPA first issued its DSW regulations, industry generally has argued that the definition is too narrow, while environmental groups and others contend that it is too broad. EPA has revised the provisions numerous times over the years and virtually every revision has sparked litigation.
The June 30 proposal is the latest offspring in a long progeny of EPA's attempts to 'fix' the DSW provisions. The proposal specifically would revise and clarify certain conditional exclusions for hazardous secondary materials that are recycled. EPA promulgated these exclusions in October 2008 with the intent of encouraging the recovery and reuse of valuable resources.
Two developments that occurred in the wake of the October 2008 rule prompted EPA's proposed revisions. First, pursuant to Executive Order 12898, EPA conducted an analysis of the environmental justice impacts the rule would impose. This analysis concluded that the rule may pose a disproportionately adverse impact on low income and minority populations. Second, EPA responded to the Sierra Club's January 29, 2009, administrative petition seeking to have the October 2008 rule revoked. EPA on September 7, 2010, signed a settlement agreement with the Sierra Club under which the Sierra Club agreed to withdraw its petition and EPA agreed to issue a proposed rule no later than June 30, 2011, revising the DSW by addressing the issues raised in the Sierra Club's administrative petition. The June 30, 2011, proposal thus seeks to address both of these developments. It should be noted that at the same time the Sierra Club filed its administrative petition, the American Petroleum Institute and the Sierra Club also filed judicial Petitions for Review under RCRA Section 7006(a) challenging the rule in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit). These cases are currently before the D.C. Circuit, and it remains to be seen how EPA's proposed revisions will affect the litigation.
EPA is proposing to revise three aspects of the current DSW:
- The so-called 'Transfer-Based' exclusion;
- The exclusion for hazardous secondary materials reclaimed under the control of the generator; and
- The criteria for determining whether a recycling activity is legitimate as opposed to 'sham recycling.'
Further detail on each of these proposed changes is provided below. EPA is also proposing revisions to the solid waste variances and non-waste determinations, requesting comment on an exclusion from the DSW for specific types of higher-value hazardous secondary materials sent for re-manufacturing into similar products, and requesting comments on revisions that would affect other DSW exclusions and hazardous waste exemptions for recyclable materials.
Revisions to the Transfer-Based Exclusion
The co-called 'transfer-based' exclusion currently is codified at 40 C.F.R. Sections 261.4(a)(24) and (25). It exempts certain hazardous secondary materials (i.e., spent materials, listed sludges, and listed by-products) that are generated and transferred to a different person or company for the purpose of legitimate reclamation. There are several conditions that must be met for the exclusion to take effect:
- Hazardous secondary material generators, reclaimers, and intermediate facilities must notify EPA annually on the volumes and types of hazardous secondary materials being reclaimed.
- Hazardous secondary materials managed at such facilities must not be speculatively accumulated and must be legitimately reclaimed.
- Generators using this exclusion must ensure that the hazardous secondary materials are contained and must make reasonable efforts to ensure that the intermediate facility or reclaimer intends to manage or recycle the hazardous secondary material properly and legitimately.
- Intermediate facilities and reclaimers of hazardous secondary materials must contain the materials, retain certain records, have financial assurance equivalent to that required of hazardous waste facilities, and properly manage any residuals generated from the reclamation activities.
In the June 30 proposed rule, EPA is proposing to replace in its entirety, the transfer-based exclusion with an alternative set of regulations. Two reasons have prompted EPA's reconsideration of this exclusion. First, EPA believes that transfers of hazardous secondary materials to third-party reclaimers almost always involve an element of 'discard.' Second, EPA now claims that the conditions in the 2008 final rule 'have serious gaps that could create a potentially unacceptable likelihood of adverse effects to human health and the environment.'
In place of the transfer-based exclusion, EPA is proposing alternative hazardous waste standards under 40 C.F.R. Part 266, Subpart D for generators of hazardous waste being reclaimed. Little regulatory relief would be granted under these proposed standards. Instead, the hazardous recyclable material would, for the most part, be subject to full hazardous waste regulation. EPA would, however, allow generators to accumulate their recyclable waste on-site for up to one year without a permit or interim status (although the hazardous waste generator standards would continue to apply). Other conditions would also apply, including a requirement that generators notify EPA or the state prior to taking advantage of the exemption. Aside from the ability to accumulate hazardous waste for one year, however, no other regulatory relief is evident in the proposed rule