2017 "Reset" of TSCA Inventory Will Affect All Chemical Users

As required by the 2016 amendments to the federal Toxic Substances Control Act (TSCA), the U.S. Environmental Protection Agency (EPA) next year will zero out and rebuild its inventory of chemicals in commerce (the TSCA Inventory). It is generally illegal to import, manufacture or knowingly process chemicals not on this list. This Inventory "reset" process will be the most visible and widely applicable impact of the TSCA amendments because it will require all companies to research and then notify EPA of each chemical substance that they either have manufactured or imported at any time in the past ten years. These will be designated "Active Substances" and added back to the Inventory. Chemicals currently listed on the TSCA Inventory but not reported during the reset process will be designated "Inactive Substances," and thereafter it will be illegal to manufacture, import, or process an Inactive Substance until a new "notice" is submitted to EPA. It is uncertain whether this "reactivation" process will require submission of extensive use, exposure and hazard information, or serve as a trigger for enforcement if the chemical has been in use and was overlooked during the notification period. Companies have strong incentives to assure materials they use are included in the new Inventory.

Inventory Reset Rulemaking Will Address Important Questions

EPA is required to promulgate a final rule implementing the Inventory reset by no later than June 2017. The rule will require all Active Substance notices to be submitted within six months thereafter (i.e., by approximately December 2017). EPA will then publish an updated TSCA Inventory identifying each substance as either "active" or "inactive." Submitters will be allowed to claim that the particular chemical identity of an Active Substance is confidential business information (CBI) to prevent public disclosure; however, the claim will be honored only if the identity is already confidential on the current TSCA Inventory and if the CBI claim can be adequately substantiated.

EPA currently plans to issue a proposed Inventory reset rule for public comment in December 2016. EPA has the option to include chemical processors in the mandatory reporting program, but may also make their participation optional. It is currently uncertain what measures the proposal may include to avoid unnecessary or duplicative reporting (e.g., coordinated reporting through trade associations or phased reporting to minimize duplicative protective submissions) or whether the initial Inventory reset rule will include provisions addressing procedures for keeping active/inactive status designations current into the future as required by TSCA Section 8(b)(5)(A) (e.g., requiring periodic updates).

It is uncertain whether the initial Inventory reset rule will include specific procedures for providing notice to EPA to "reactivate" substances initially designated inactive. Beyond the general intent to start manufacturing or processing and any chemical identity CBI claims, the statute does not require any particular content for the notices and EPA does not approve them. Rather, the Agency is required to update a substance's status to "active" after a notice is received. TSCA Section 8(b)(5)(B)(iii). EPA has broad information collection rulemaking authority under Section 8, however, and it is possible that, as part of the "reactivation" process, EPA might, by rule, seek to require submission of reasonably ascertainable health and safety information concerning the Inactive Substance and its intended use to help the Agency screen the particular risks of these existing chemicals reentering the marketplace. If notice information provides cause for concern, it may be far simpler and faster for EPA to implement reasonable control measures for the Inactive Substance at this early stage, before the new use begins (e.g., proposing a significant new use rule under TSCA Section 5(a)(2)(ii)), and perhaps avoid or further defer formal prioritization or risk evaluation, which are much more burdensome processes for the Agency.

TSCA Inventory Reset Focuses EPA Resources on Active Chemicals

One purpose of the Inventory reset is to help EPA focus its chemical oversight resources on chemicals actually in commerce. The cornerstone of the TSCA Amendments is EPA's mandate to review the risk of each existing chemical in commerce and to regulate its use where unreasonable risks are found. With approximately 86,000 different substances currently on the TSCA Inventory, completing risk evaluations for all these chemicals would require significant, sustained effort over many years. However, given that as of 2012 only approximately 7,700 chemicals from the TSCA Inventory were reported to be in active use in quantities greater than 25,000 lbs/year at any location, there is good reason to believe that the Inventory reset will quickly weed out obsolete substances without EPA fact gathering or decisionmaking and dramatically reduce the number of chemicals that need to be reviewed for risk. The new screening and risk evaluation prioritization process required by Section 6(b)(1) will further focus EPA resources on chemicals presenting the most significant current risks (e.g., identifying and deferring action indefinitely on particular "low-priority" chemicals unlikely to present an unreasonable risk).

Companies Should Prepare for the Reset of the TSCA Inventory in 2017

The Inventory reset may be a useful tool for EPA, but the process presents costs and risks to companies. Given the potential due diligence and reporting burden, all companies should pay attention to the Inventory reset rulemaking as it evolves. Companies should start now to investigate and inventory their current and past nonexempt chemical manufacturing and processing. A complete listing of these substances will ensure compliance with the anticipated reporting obligation, and will also ensure that companies can continue to manufacture and use all chemical substances important to their operations without entering the currently uncertain "reactivation" notice process for any overlooked chemical or inadvertently violating the premanufacture notice obligation for substances designated "inactive." Downstream processors and users should do the same. Even if they technically are not required to report, they should take steps to ensure that all substances important to their operations are designated as "active," either reporting themselves (if the final rule allows) or ensuring that their suppliers have reported the substances. Starting internal chemical reviews now also will surface any practical difficulties that can arise in the process and evaluation of potential solutions and can provide the basis for targeted, effective, and timely participation in the Inventory reset rulemaking proceeding to shape the rule to avoid or minimize those problems.

This may be a particularly auspicious time to start an internal "active" chemical identification review, as it coincides with the 2016 CDR reporting period and involves a similar investigation process and will raise many of the same technical, legal, and practical issues (e.g., identifying which byproduct and inadvertently manufactured substances must be reported, nomenclature uncertainties, and chemical identity uncertainties in imported mixtures). Given that EPA will include automatically all 2012 CDR chemicals on the Active Substance list, the focus for future Active Substance notifications can be on those substances manufactured, imported, or processed in quantities below the applicable CDR reporting thresholds (25,000 or 2,500 lbs/site) or subject to other CDR reporting exemptions.

A version of this article was originally published in September 2016 in a special edition of the ABA Section of Environment, Energy and Resources, Pesticides, Chemical Regulation and Right to Know Committee's newsletter dedicated to reporting on the 2016 TSCA amendments.