Outlook 2021 – The Biden Administration Sharpens TSCA’s Sword

Kilpatrick Townsend & Stockton LLP

The Toxic Substances Control Act (TSCA), enacted in 1976, authorizes the United States Environmental Protection Agency (EPA) to regulate the manufacture or importation of new and existing chemicals. TSCA’s regulations include reporting, record-keeping, and testing requirements.  TSCA’s scope is very broad – reaching any “person” who manufactures, imports, processes, distributes in commerce, uses or disposes of a chemical substance, regardless of the industry sector. In June 2016, Congress enacted the Lautenberg Act, which sharpened TSCA’s tools for assessment and regulation of both existing and new chemical substances in the marketplace. Consequently, the Trump Administration was the first administration with the opportunity to most fully implement the 2016 Amendments.  In the view of its critics, Trump’s EPA exercised its discretion often to the benefit of chemical companies, including a narrower scope for risk evaluation and procedures to accelerate the process of review and approval.  The Biden Administration, in turn, has been urged by its supporters to exercise its discretion to broaden the scope of risk review and evaluation.  Time will only tell whether such a change in course will have significant impacts on the industry going forward.

High Priority Chemical Risk Evaluations.  The 2016 TSCA Amendments require risk evaluations for existing chemicals identified as “high priority.”  The evaluation of the first ten high priority chemicals was completed in January 2021.[1]  Each risk evaluation for these ten chemicals identified some uses of the chemicals that present an “unreasonable risk,” triggering a one-year deadline for proposal of rule to mitigate the unreasonable risk and an additional year thereafter to finalize the rules. The Biden Administration has determined that, despite completion of these risk assessments, further evaluation of these chemicals is warranted.  On February 5, 2021, EPA announced that it is reviewing certain TSCA actions, including chemical risk evaluations, issued under the previous Administration to ensure protections of human health and the environment.  EPA stated that it “is actively reviewing the final risk evaluations in light of statutory obligations and policy objectives related to use of the best available science and protection of human health and the environment, in accordance with the Executive Orders and other direction provided by the Biden-Harris Administration.” 

EPA’s reevaluation of these ten chemicals, along with the next twenty chemicals, which the Agency proposed for review on September 20, 2020, is anticipated to use an approach that is drastically different from the previous administration, increasing the possibility of finding that new and different uses present unreasonable risks.  Among other things, TSCA’s “framework rule,” which establishes the process for evaluation of existing chemicals, gives the EPA Administrator “discretion” to exclude certain conditions for evaluation. The Trump administration utilized this discretion arguably to develop a narrow approach to chemical uses and exposure pathways.  Now the Biden administration may use this discretion in the other direction to broaden the scope of evaluation.  This approach could include expanding the range of potential exposures considered in the risk evaluation.  For example, an increased emphasis on the impact upon vulnerable populations and potential routes of exposure, including through the ambient environment, is anticipated. 

EPA is also expected to take  reevaluate  workplace exposures that are regulated by OSHA, The agency may no longer assume the use of OSHA-required personal protective equipment is presumptively sufficient in evaluating and managing risk.  Further, beyond OSHA, EPA has indicated that it will change its standard practice and no longer exclude the evaluation of risks addressed under other EPA regulatory programs.  As a result, this broader evaluation may likely to result in more restrictions on the use of a particular chemical and will certainly increase the cost and time for review.

Fee Assessment.  The 2016 TSCA Amendments allow EPA to set up a fee structure that allows it to cover 25% of its TSCA implementation costs.  These fees, which are collected from chemical manufacturers and imports, are to be reviewed every three years.  The proposed revisions to the fee rule, which would cover fiscal years 2022-2024, were issued on December 21, 2020.  The rule proposes a number of exemptions for importers of articles; chemicals that are manufactured as a byproduct or manufactured/imported as an impurity; chemicals used solely for research and development and manufacture of a chemical in de minimis amounts.  The rule also establishes a product-volume based fee as well as new chemical fee categories. EPA extended the comment period to March 2021.  The new EPA leadership will evaluate the comments and is expected to revise how EPA calculates the fees and the exemptions granted by EPA.

Chemical Data Reporting Rule.  Manufacturers and importers of 25,000 pounds or greater of chemical must report specific data on the use of such chemicals every four years.  Such data provides important information to EPA to assess and manage risks presented by such chemicals.  The most recent reporting period’s (2016 to 2019) September 30, 2020 deadlines has been extended a number of times with the most recent deadline of January 29, 2021. The Biden Administration’s evaluation of this data will play a part in the more stringent risk evaluation by the Biden administration.

New Chemicals Program. On March 29, 2021, EPA issued a public notice that it is evaluating its policies, guidance, templates and regulations under TSCA’s new chemicals program to confirm that such information “adheres to statutory requirements” and specifically identified a number of specific actions that it would undertake. It is not clear how EPA’s new procedures increase or really change, in the end, the health and safety review of new chemicals but it clearly will front-end any party’s burden in seeking TSCA approval for a new chemical.

First, in its March 29, 2021 notice, EPA rejects the previous administration’s process of how a new chemical is reviewed. A Significant New Use Rule (SNUR) prohibits parties from manufacturing or processing a new chemical use absent advance notification to EPA and the submission of a Significant New Use Notice (SNUN); a SNUN enables EPA to evaluate the chemical use in the same manner as if a PMN had been filed for the chemical.  Under the Trump Administration, EPA would issue new chemical determinations of “not likely to present an unreasonable risk” based upon the existence of a proposed SNUR. EPA’s March 29, 2021 indicates that it is rejecting this current practice. EPA now intends to broaden its inquiry regarding all conditions of use of the new chemical at its first opportunity and regulate all such uses through an individual order rather than put off such an evaluation of foreseeable uses. Essentially, EPA is questioning the appropriate scope of a “foreseeable use” review of a new chemical and  at what stage that “foreseeable use” be addressed.  The manner in which this issue plays out in practice remains to be seen.

Second, the March 29, 2021 notice provides that EPA intends to increase its focus on worker protections when it reviews any foreseeable impact on workers from exposures to the new chemical. EPA assumed previously that such potential worker hazards would be addressed by the PPE and hazard communication policies mandated by OSHA. Now EPA states that it “will no longer assume that workers are adequately protected under OSHA’s worker protection standards and updated Safety Data Sheets (SDS).”  Rather, such hazards will be “reasonably foreseen” conditions of use and EPA will move to impose necessary protections through a TSCA Section 5(e) order. How that will play out in practice on a factory floor also remains to be seen and it is possible that there could be tensions between the agencies with regard to how OSHA restrictions are recognized in risk evaluations.

Persistent, Bioaccumulative and Toxic Chemicals.  The 2016 Amendments required EPA to take expedited action on certain PBT chemicals and promulgate final risk management actions no later than the statutory deadline of December 2020.  To meet that requirement, EPA fast-tracked final rules to reduce exposure to five PBT chemicals. These rules went into effect on February 5, 2021.   The Biden Administration has determined that a second look at these chemicals is warranted.  On March 9, 2021, EPA announced a Public Comment Period to provide additional comments on the PBT Chemical Rule, including whether the rules are sufficient address the risk of exposure to these chemicals. The announcement states that “EPA will review and consider revising the final PBT rules with an eye towards reducing exposure to the extent practicable, environmental justice, scientific integrity, and EPA's mission of protecting human health and the environment, taking into consideration information received while the rules were under development as well as any new information submitted since the rules were finalized and information received in response to this document.”  EPA will use the information from the public comments to assess the path forward with regard to these chemicals.  This path forward could include amending the current rules to include additional or alternative exposure reduction measures. 

Going forward, TSCA is seen as a significant tool to promote President Biden’s environmental equity initiatives and protect vulnerable communities.  Among other things, TSCA requires EPA to consider “potentially exposed and susceptible subpopulations” in conducting risk assessments.  Although this requirement has always been a part of TSCA, the impact on vulnerable communities has not been a driving force for regulation of chemicals.  As a part of the Biden Administration’s environmental equity initiative, the regulated community should expect increased data submission requirements, longer review and approval processes, and increased enforcement.

[1] The chemicals include 1,4-Dioxane, 1-Bromopropane (final), Asbestos, Carbon Tetrachloride, Cyclic Aliphatic Bromide Cluster (known as HBCD), Methylene Chloride, N-methylpyrrolidone (NMP), Pigment Violet 29 (PV29), Tetrachloroethylene and Trichloroethylene.

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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