Energy and Petrochemical Companies Identified by EPA as Responsible for More than Half of TSCA Risk Evaluation Fees

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The 2016 amendments to the Toxic Substances Control Act (TSCA) directed the United States Environmental Protection Agency (EPA) to evaluate the risk associated with existing chemical substances in U.S. commerce and established a process for prioritizing chemicals and conducting these evaluations. 15 U.S.C. § 2605. The amendments also authorize EPA to impose its costs for evaluating chemicals on manufacturers and importers. 15 U.S.C. § 2625. On September 4, 2020, EPA issued the final list of companies responsible for paying the $1.35 million fee for each of the 20 high-priority chemical substances currently undergoing risk evaluation by EPA under TSCA. 85 Fed. Reg. 55,283 (Sept. 4, 2020). The lists are available in docket EPA-HQ-OPPT-2019-0677 at http://www.regulations.gov. The 20 chemicals include chlorinated solvents, phthalates, flame retardants, 1,3-butadiene, and formaldehyde, as well as other substances less relevant to the energy sector. EPA also issued final risk evaluation scopes for the 20 chemicals, 85 Fed. Reg. 55,281 (Sept. 4, 2020), and this triggered the requirement to issue the final fee-payer lists.

In January 2020, EPA issued preliminary lists of potential fee-payers and required companies to self-identify as manufacturers or importers, regardless of whether they appeared on the preliminary lists. 85 Fed. Reg. at 55,283. As previously announced, EPA allowed certain companies to certify “no manufacture” of the substances if they were imported as part of an article or manufactured as a byproduct or impurity. EPA, Memorandum – No Action Assurance Regarding Self-Identification Requirement for Certain “Manufacturers” Subject to the TSCA Fees Rule (Mar. 24, 2020). EPA’s exercise of regulatory discretion resulted in a substantial reduction of the companies identified in final fee lists. Other companies certified as non-manufacturers because the preliminary fee-payer lists included Toxics Release Inventory reporters who were not actually manufacturers or importers. However, energy and petrochemical companies represented less than a third of the companies who were able to certify “no manufacture.” Also, relatively few energy and petrochemical companies were deemed eligible for the reduced fee afforded to small businesses. The net result increased the relative share of companies in the industry. Ultimately, the final fee-payer lists indicate that energy and petrochemical companies will pay roughly 60 percent of the risk evaluation fees.

Manufacturers have 60 days to notify EPA if they intend to form consortia to allocate fees for any of the high-priority chemical substances. 85 Fed. Reg. at 55,825. EPA intends to begin issuing invoices after the 60 days have expired. Based on the current fees rule, invoices must be paid within 120 days of the issuance of the final risk evaluation scopes. However, EPA also noted that, due to “the unprecedented and unforeseen challenges to the economy as a result of public health emergency, the Agency is exploring options for payment flexibilities, including payment plans and extended due dates for fees.” 85 Fed. Reg. at 55,825. Not surprisingly, other stakeholders are expressing disapproval of EPA’s statement, and it remains unclear whether or when EPA will issue guidance on such options.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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