Waste or Recycling? EPA’s Legitimacy Criteria Largely Upheld
If a material is a hazardous waste, it is subject to regulation under the Resource Conservation and Recovery Act (RCRA). If it remains a useful product, it is not a waste, and so it is not subject to RCRA regulation. However, distinguishing between the two is not always straightforward.
EPA’s latest effort to articulate the difference between solid waste and reuse or recycling came in a 2015 final rule, which revised the regulatory definition of “solid waste,” among other things. Both environmental groups and industry groups challenged various aspects of the rule. The federal Circuit Court for the District of Columbia recently issued its opinion (American Petroleum Institute v. EPA, 862 F.3d 50, July 7, 2017). In the end, the court largely upheld the approach taken by EPA, with some important qualifications.
Environmental groups took issue with two areas: containment requirements for hazardous secondary materials and a requirement that regulated entities notify EPA periodically. On both items, the groups wanted EPA to impose new regulations, but EPA postponed that decision. The court declined to rule before the agency reached the conclusion of its decision-making process on the basis that only a “final agency action” is subject to judicial review.
Industry groups focused on EPA’s “legitimacy factors” to distinguish between legitimate and “sham” recycling. The factors are (1) the material must provide “a useful contribution to the recycling process”; (2) the recycling process “must produce a valuable product or intermediate”; (3) any hazardous secondary material must be managed “as a valuable commodity”; and (4) the end product must be “comparable to a legitimate product or intermediate.” (40 C.F.R. § 260.43 (a))
As to Factor 3, industry objected to requirements to contain the secondary material and keep it labeled. They argued that secondary materials should be unregulated. However, the court found EPA’s requirements a reasonable way to distinguish sham recycling and rejected the argument.
As to Factor 4, industry objected to a prohibition on using hazardous secondary material for a useful product, if the hazardous component provided no “useful contribution” to the product. Where the recycled product has an analogue in the marketplace, EPA required additional showings that hazardous constituents were present at levels comparable to the analogue, or else met “widely-recognized commodity standards and specifications.” The court found EPA’s specific tests were overbroad and unlawful because they did not reflect consideration of risks to human health or the environment.
Finally, industry also objected to the Verified Recycler Exclusion in EPA’s final rule. A previous provision, known as the Transfer Based Exclusion, had allowed a generator of material to send it for reclamation to certain vendors, as long as the generator made reasonable efforts to confirm the vendor’s activities. The 2015 provision, however, added provisions for emergency preparedness at the generator’s facility and for the vendor to obtain EPA or state approval. The court found the preparedness requirement to be reasonable, but EPA had not fully explained why the “reasonable efforts” provision was inadequate and the regulatory approval requirement was necessary. The court reinstated the Transfer Based Exclusion, but with the additional emergency preparedness provisions of the Verified Recycler Exclusion.
The next step will be for EPA to take action to implement the court’s order. For more information, here are links to the source materials: