2016 Chemical Data Reporting – New TSCA Requirements Apply for Confidential Business Information Claims

by King & Spalding
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On June 22, 2016, President Obama signed into law the Frank R. Lautenberg Chemical Safety for the 21st Century Act (the Act).  Passed with significant bipartisan support, the Act is the first major update to a federal environmental statute in more than 20 years and the first update ever for the Toxic Substances Control Act (TSCA) of 1976.  Significant revisions to TSCA in the Act focus on evaluating risks of existing chemicals, testing, preemption of state laws and regulations, and protections for (or disclosure of) confidential information.  For many new or revised provisions, the Act establishes a timeline for the U.S. Environmental Protection Agency (EPA) to conduct rulemaking or take other action, but certain provisions took effect immediately.  The revised requirements for confidential business information (CBI) claims are one such provision, with immediate implications for companies in the energy sector now preparing their reports under the 2016 Chemical Data Reporting (CDR) rule.

The CDR Rule

The CDR rule requires manufacturers (including importers) to submit information to EPA every four years on the production and use of “chemicals in commerce” whose annual volumes are generally 25,000 pounds or greater.  Information provided in the CDR includes company and site identification, chemical identity, concentration and physical form, as well as production volumes and processing or use information.  In past CDRs, each of these elements has been claimed as CBI by one or more manufacturers (or importers); consequently, similar claims are expected in the 2016 CDR.  The submission period for the 2016 CDR opened on June 1, 2016, and extends until September 30, 2016.  Oil and gas, mining, utility, construction, refining and chemical manufacturing companies are among the sectors who will be reporting under the CDR.  Because CBI claims must be made at the time of submittal, companies in the energy sector seeking to make such claims must comply with the new requirements.

The New CBI

As revised by the Act, Section 14 of TSCA outlines what information may (and may not) be protected from disclosure and what steps a claimant must make to obtain protection.  The Act requires a statement that the claimant has:

  • Taken reasonable measures to protect the confidentiality of the information;
  • Determined that the information is not required to be disclosed or otherwise made available to the public under any other Federal law;
  • A reasonable basis to conclude that disclosure of the information is likely to cause substantial harm to the competitive position of the person; and
  • A reasonable basis to believe that the information is not readily discoverable through reverse engineering.

TSCA § 14(c)(1)(B).  With certain exceptions, claimants must substantiate all CBI claims and certify both the assertion of the claim and its substantiation.  Id. § 14(c)(3),(5).  

Preparing CBI claims for the 2016 CDR has additional value because companies’ efforts will serve more than one purpose.  As noted above, the Act’s new provisions require EPA to assess risk for existing chemicals, making the Agency’s prioritization of candidates for such assessment a daunting task.  To aid EPA in narrowing the roughly 85,000 chemicals on the TSCA Inventory of existing substances, the Act requires EPA to “reset” the Inventory, designating all Inventory chemicals as either active or inactive, and reviewing all CBI claims for active substances.  Manufacturers (including importers) will be required to identify all Inventory substances that they have manufactured, imported, or processed in the past ten years, and CDR substances represent a sizable subset of the chemicals companies will identify in those reports.  Thus, in many respects, the 2016 CDR will serve as a “test run” for the Inventory reset.  

In its “First Year Implementation Plan” for the amended TSCA, EPA announced that it will “[p]rovide stakeholders with additional information on statement and certification by mid-July.”  However, prudent companies will not wait to start assembling information needed to substantiate their CBI claims. 

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