Controversial EPA Recycling Rule—Almost Ready for Prime Time?

January 16, 2008
by RODD BENDER
Client Alert Newsletter Forecast 2008

By summer 2008, the U.S. Environmental Protection Agency ("EPA") hopes to finalize a rule amending the Resource Conservation and Recovery Act ("RCRA") regulatory definition of solid waste to exclude from regulation certain hazardous secondary materials sent for recycling. The supplemental proposed rule, published in the Federal Register in March 2007, seeks to promote recycling of spent materials, listed sludges, and listed by-products by deregulating those materials when either legitimately reclaimed under the control of the generator or transferred to another person for legitimate reclamation. The proposal also includes a case-specific petition process and criteria to define when recycling is "legitimate." EPA estimates that the rule could spur industry to divert from disposal over half a million tons of hazardous secondary materials annually. Sectors most likely to benefit include chemical manufacturing, coating and engraving, semiconductor and electronics manufacturing, and pharmaceuticals.

Diverse opinions on the proposal emerged during and after the public comment period, which ended last summer. Several states believe that the proposal lacks sufficient notification and recordkeeping obligations for recyclers. A trade group representing the recycling, treatment, and disposal industry expressed concern that the rule would weaken RCRA in states that choose to adopt it. These constituencies have also criticized the non-mandatory aspects of the legitimacy criteria and pushed for more stringent storage requirements. Environmental groups contend that ensuring actual recycling of the deregulated secondary materials would be difficult, possibly leading to improper disposal. Conversely, generators of hazardous secondary materials generally support the proposal, although these groups have criticized some of the proposal's conditions as contrary to EPA's stated "deregulatory" intent.

EPA currently plans to forward a final rule to the White House in April, and publish the rule by July. Regulators, environmental groups, and the regulated community will evaluate the final rule carefully to determine which public comments, if any, swayed EPA to modify its proposal. Depending on the outcome of the rulemaking, Congressional scrutiny of the rule may also be possible.