Toxic Substances: Are You On The List?

The U.S. Environmental Protection Agency (EPA) published on January 27, 2020, a notice identifying the preliminary lists of manufacturers (including importers) of the 20 chemical substances that the EPA designated as high-priority substances for risk evaluation and for which fees will be charged (85 Fed. Reg. 4661). The list and the EPA’s interpretation of the fee rule caught many off guard. This column explains why.

Background

Companies that have manufactured or imported any of the 20 high-priority chemical substances in the five years preceding publication of the lists (i.e., prior to January 27, 2020) are required to a submit notice to the EPA admitting that fact, even if the agency didn’t identify them in the preliminary lists. In so admitting, companies are potentially responsible for paying a share of the $1.35-million administrative fee the EPA will charge to conduct a risk evaluation under Toxic Substances Control Act (TSCA) Section 6. Other charges could apply via industry consortia formed prior to issuance of the notice or any launched afterwards.

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Companies may also certify to the EPA that they haven’t manufactured the chemical substance in the five-year period preceding publication of the preliminary lists. Alternatively, companies can certify they had ceased producing or importing the substance prior to March 20, 2019 (when TSCA prioritization was initiated for these chemicals) and will not do so in the five years following that date. Either certification action would avoid the fee obligations. Companies that have manufactured or imported a high-priority chemical substance after March 20, 2019, cannot avoid the fee obligation, however.

Importantly, in the final TSCA user fees rule, the EPA elected not to exempt listed chemicals manufactured or imported as an impurity or byproduct, even if the presence of a listed chemical is found in very small volumes. Under TSCA definitions, a byproduct means a chemical substance produced without a separate commercial intent during the manufacture, processing, use or disposal of another chemical substance(s) or mixture(s), while an impurity means a chemical substance that is unintentionally present with another chemical substance.

Similarly, listed chemicals included in imported articles are not exempt, and the importer is subject to the fee obligation. Accordingly, even if the substance or mixture isn’t intended to be removed from the article and has no end use or commercial purposes separate from the article of which it is a part, the importer is still required to pay the risk evaluation fee.

Because the EPA developed the preliminary lists using data submitted via the Chemical Data Reporting (CDR) Rule (2012 and 2016 reporting years) and the Toxics Release Inventory (TRI) (2012–2018 reporting years), entities may not expect to be included on the list but in fact are. It’s possible the EPA incorrectly identified companies that either had ceased manufacture prior to the defined cutoff dates or as a result of processing or use activities reported under TRI. Some in industry are concerned about the broad application of the interpretation and the consequences of being drawn into consortia formed to pay the EPA’s fee and address the implications of the risk evaluation, which could involve additional chemical testing, among other charges.

What To Do Now?

Companies have until March 27, 2020, to self-identity and/or certify, as appropriate. The preliminary lists are available in Docket EPA-HQ-OPPT-2019-0677 and on the EPA’s website at www.epa.gov/TSCA-fees. The open comment period on the preliminary lists affords stakeholders the ability to comment and identify to EPA other companies that may be missing that should share in the fee obligation.

Manufacturers and importers should review the lists now and take the appropriate action. Self-notification is a required action under TSCA; failure to do so is a violation of TSCA Section 16. Whether and when the EPA would actually pursue such an action is another matter. Entities wishing to certify and/or represent compliance with TSCA and other federal laws to stakeholders inside and beyond the company should take care to assess the implications of the notice.

Our December 20, 2019 memorandum contains more information on the 20 substances listed. More information on the final TSCA fees rule is available in our September 28, 2018 memorandum.