August 2, 2011
Practice Group(s):
Environmental, Land
and Natural
Resources
What's a Waste: EPA's Proposed
Redefinition and Its Impact on Recycling
I.
Introduction
On July 22, 2011, the Environmental Protection Agency (“EPA”) proposed modifications to the 2008
Definition of Solid Waste Rule (the “2008 Rule”). See Definition of Solid Waste, 76 Fed. Reg. 44094
(proposed July 22, 2011) (to be codified at 40 C.F.R. §§ 260, 261 and 266). The proposed
modifications eliminate some of the current regulatory exclusions in the 2008 Rule that were designed
to promote recycling of hazardous materials. According to the EPA, the proposed rule will impact up
to 9,100 industrial facilities that generate or recycle hazardous materials and add up to $47 million per
year in compliance costs. If adopted, these modifications are likely to substantially affect both
generators of industrial by-products that are considered “hazardous” under the Resource Conservation
and Recovery Act (“RCRA”) and those in the business of accepting those materials for reclamation.
Generators may find that the costs of arranging for reclamation will increase, and recyclers may find
themselves subject to a more expensive, complicated and onerous regulatory process. Comments on
the proposed modifications described by this alert must be received by September 20, 2011.
II.
The 2008 Rule
The 2008 Rule was promulgated to encourage recycling of hazardous secondary materials. A
hazardous secondary material is a material generated in a manufacturing or other process (e.g., spent
material, by-product or sludge) that would be defined as hazardous because of its constituents or
character and, therefore, if discarded, would technically fall under the definition of a “hazardous
waste.” 40 C.F.R. § 260.10. The treatment, storage and disposal of hazardous wastes are strictly and
comprehensively regulated under RCRA’s Subtitle C. Under the 2008 Rule, when a hazardous
secondary material is reclaimed rather than discarded, it is not considered to be a hazardous waste,
and, therefore, need not be subject to the same regulatory regime. The 2008 Rule was designed to
ensure that the Subtitle C requirements would not create a barrier to beneficial recycling and recovery
processes, consistent with the core purpose of the law under which it was promulgated – the Resource
Conservation and Recovery Act.
To achieve this goal, the 2008 Rule contains exemptions from RCRA’s Subtitle C requirements for
hazardous secondary materials reclaimed under the control of the generator (the generator-controlled
exclusion) and for hazardous secondary materials transferred to another party for reclamation
(transfer-based exclusion). To be considered “under the control of the generator,” the materials must
be (i) reclaimed at the generating facility: (ii) reclaimed at a facility owned or controlled by the
generator; or (iii) generated and reclaimed pursuant to a written agreement between a tolling
contractor and toll manufacturer. 40 C.F.R. §§ 261.4(a)(23) and 261.2(a)(2)(ii).
The 2008 Rule also provides conditions for the application of the generator-based exclusion, including
a requirement that a hazardous secondary material be properly “contained,” to avoid its release into
the environment before it can be reclaimed. However, the 2008 Rule does not specifically define
“contained,” merely stating in its preamble that a hazardous secondary material is contained if it is
placed in a unit that controls its movement out of the unit and that a hazardous secondary material
What's a Waste: EPA's Proposed Redefinition and Its
Impact on Recycling
would be considered waste if a “significant” release occurred as a result of its not being managed as a
valuable raw material, intermediate or product.
Additionally, the 2008 Rule provides that, in order to be considered a legitimate recycling activity, the
hazardous secondary material must (1) provide a useful contribution to the recycling process and (2)
produce a valuable product or intermediate. 40 C.F.R. §§ 260.43(b)(1) and (2). Two additional
factors are also taken into account, although compliance with these factors is not mandatory to qualify
for exemption: (3) whether the secondary material is managed as a valuable commodity and (4)
whether the product of recycling contains toxic constituents at significantly greater levels than an
analogous product. 40 C.F.R. §§ 260.43(b)(3) and (4).
III.
Why Were the Modifications Proposed?
After receiving a January 29, 2009 administrative petition from the Sierra Club and hearing comments
from various interest groups during a June 2009 public meeting, the EPA proposed modifications to
the 2008 Rule in order to address perceived deficiencies.
One alleged deficiency is that EPA did not adequately address environmental justice in the
rulemaking; that is, whether the 2008 Rule was encouraging reclamation in locations that would have
a disproportionately higher impact on minority and/or low-income populations. In response, EPA
performed what it describes as a more rigorous environmental justice analysis, which showed that
facilities eligible for the exemptions provided by the 2008 Rule are disproportionately located in
communities with minority and/or low-income populations. EPA also determined that the 2008 Rule
fails to take into account whether the applicable conditions to qualify for the exemptions would
operate effectively in the real world. Specifically, EPA is concerned that, by exempting recycling
facilities from the requirement to obtain a permit under RCRA, the 2008 Rule reduces the public’s
access to information and removes the opportunity to comment that is provided in the RCRA
permitting process. EPA has determined that revising the 2008 Rule to eliminate the transfer-based
exclusion and impose additional requirements to qualify for the generator-based exclusion would
address these concerns.
Another alleged deficiency concerns the criteria for legitimate recycling. EPA received comments
expressing concern that the design of the legitimacy provision would make it possible for reclaimed
materials to be mismanaged or for recycled products causing a risk to human health and the
environment to be allowed into the marketplace. These comments, combined with continued
confusion from state agencies about how the legitimacy provision should be enforced, led EPA to
determine that a structure with four mandatory factors would be less complicated and would improve
both the clarity and the protectiveness of the legitimacy provision.
A third concern is that, absent specific conditions, transfers of hazardous secondary materials to thirdparty recyclers generally involve a discarding of the materials as well (except in instances where EPA
has promulgated a case-specific exclusion based on a particular type of secondary material and how it
is typically managed). However, EPA also found that, when reclaimed under the control of the
generator, hazardous secondary materials are being handled as valuable commodities rather than as
wastes and thus are not, in fact, being discarded.
IV.
What Do the Proposed Modifications Do?
EPA asserts that the proposed modifications will tighten the requirements of the 2008 Rule in order to
“improve accountability and oversight of hazardous materials recycling.” The modifications include:
(i) eliminating the exclusion from RCRA’s Subtitle C requirements for hazardous secondary materials
2
What's a Waste: EPA's Proposed Redefinition and Its
Impact on Recycling
transferred to a third party for the purpose of reclamation; (ii) introducing additional requirements for
generators who wish to reclaim hazardous secondary materials in processes under their control; and
(iii) mandating stricter requirements to meet the definition of a legitimate recycling activity.
A. Elimination of the Transfer-Based Exclusion
The proposed modifications will eliminate the current transfer-based exclusion for hazardous
secondary materials transferred to another party for reclamation. See 40 C.F.R. §§ 261.4(24) and (25).
In its place, the proposed modifications create 40 CFR § 266 Subpart D to regulate generators of
“hazardous recyclable materials” (defined as hazardous waste being reclaimed) sent for reclamation.
The requirements of Subpart D not only are as strict as the current hazardous waste generator
standards, but also impose additional requirements..
Subpart D would allow generators time to accumulate enough hazardous recyclable material to make
reclamation economical. The proposed rule allows hazardous recyclable materials to be accumulated
up to one year without a permit or interim status if the generator: (i) provides notification of its
intention to operate under the alternative standard: (ii) makes and documents advance arrangements
for reclamation in a reclamation plan; (iii) accumulates the material in tanks or containers labeled
“Hazardous Recyclable Material”; and otherwise complies with the hazardous waste generator
requirements. See 40 C.F.R. § 266.30(b) (proposed). The reclamation plan must: (i) identify the
reclamation facility; (ii) include written confirmation from the facility that it is able to reclaim the
material; (iii) identify the size and frequency of shipments; and (iv) document that the reclamation is
legitimate. See 40 C.F.R. § 266.30(b)(2) (proposed). EPA is also specifically requesting comments
on setting an upper limit as to the amount of recyclable material a generator may accumulate at any
one time.
B. Stricter Requirements for the Generator-Based Exclusion
EPA proposes to retain the 2008 Rule’s generator-based exclusion, but the proposal narrows the
exclusion by strengthening the conditions that must be met to qualify for it. The proposed
modifications define the term “contained” by requiring that a unit that is used to contain hazardous
secondary material meet the following conditions: (i) the unit must be in good condition with no leaks
and be designed to prevent the release of the hazardous secondary materials into the environment;
(ii) the unit must be properly labeled; and; (iii) the unit cannot hold incompatible materials and must
address any potential risks of fires or explosions. See 40 C.F.R. § 260.10 (proposed). A person who
attempts to reclaim hazardous secondary materials but fails to meet these conditions would be exposed
to liability for improperly managing hazardous waste.
The proposed modifications also add 40 C.F.R. § 260.4(a)(23), which states that a hazardous
secondary material released into the environment or managed in a unit with leaks or other continuing
or intermittent unpermitted releases is considered to be discarded, and thus a solid waste, unless it is
immediately recovered for the purpose of reclamation. In addition to revising the “contained”
standard, EPA proposes to make notification, recordkeeping requirements and speculative
accumulation storage limits conditions of the generator-based exclusion.
C. Stricter Definition of a “Legitimate Recycling Activity”
As described previously, to qualify as a legitimate recycling activity under the 2008 Rule, the
hazardous secondary material must meet two mandatory requirements, with two non-mandatory
requirements also taken into consideration. The proposed modifications would make all four
“legitimacy” requirements mandatory. 40 C.F.R. § 260.43(a) (proposed). Additionally, EPA
proposes to alter the two newly mandatory criteria. With respect to management of the recovered
3
What's a Waste: EPA's Proposed Redefinition and Its
Impact on Recycling
product, where there is analogous raw material, the hazardous secondary material must be managed in
a manner consistent with the management of the raw material or in an equally protective manner.
Where there is no analogous raw material, the hazardous secondary material must be contained. 40
C.F.R. § 260.43(a)(3) (proposed). With respect to the level of toxics in the product, while the 2008
Rule requires that the levels of toxic products of recycling must not be significantly elevated compared
to analogous products, the proposed rule would require those levels to be comparable to or lower than
those found in analogous products. 40 C.F.R. § 260.43(a)(4) (proposed).
The proposed modifications would also require that recyclers document the manner in which their
activities would qualify as “legitimate” recycling. 40 C.F.R. § 260.43(b) (proposed). However, the
modifications would allow applicants who did not meet the requirements of the third and fourth
legitimacy factors to petition the Regional Administrator for a formal determination that a recycling
process is legitimate. 40 C.F.R. § 260.43(c) (proposed).
V.
Conclusion
In general, the EPA has proposed to significantly limit the scope of the current exclusions under the
2008 Rule and to impose stricter controls on the reclamation of hazardous secondary materials. In
particular, hazardous secondary materials transferred from the generator to another party for
reclamation, which previously qualified for an exemption, will now be considered hazardous waste.
Additionally, some activities may no longer qualify as legitimate recycling activities. This proposal
raises many questions that could be addressed in the comments. For example:
• When is a released material “immediately” recovered?
• What does “significantly elevated” mean in terms of the amount of toxics in the recycled material?
What happens if that level varies?
• Is the basis sound for the agency’s conclusion that the new proposal serves environmental justice
concerns?
• Are the agency’s cost estimates of the impact of this proposal sound?
The regulated community is well advised to review the basis for this proposal, provide the agency
with information and comments that might render the assumptions and premises for this proposal
incorrect, and suggest alternative means of achieving the same ends. Comments must be received by
September 20, 2011.
Authors:
John Englert
John.Englert@klgates.com
+1.412.355.8331
Barry Hartman
Barry.Hartman@klgates.com
+1.202.778.9338
Jane Pohl
Jane.Pohl@klgates.com
+1.412.355.6396
4
What's a Waste: EPA's Proposed Redefinition and Its
Impact on Recycling
5