ILMA Regulatory Digest: December 2022
EPA Proposes Substantial TSCA Fee Increase
EPA issued a supplemental notice of proposed rulemaking (SNPRM) on November 16, proposing to significantly increase the fees collected for a variety of agency actions under TSCA (87 Fed. Reg. 68,647 (Nov. 16, 2022). The 2016 TSCA Amendments directed EPA to collect fees to offset as much as 25% of TSCA’s implementation costs. EPA estimates in the SNPRM that these annual costs have risen from $87.5 million in 2021 to approximately $182 million. Comments must be received by January 17, 2023.
Under the SNPRM, EPA proposes significant fee increases for new chemical applications under TSCA section 5, more than doubling fees for submitting a Premanufacture Notice (PMN) or Significant New Use Notice (SNUN), from $19,020 to $45,000 (the current fees were adjusted for inflation on January 1, 2022). These proposed increases, if adopted, likely will have the effect of dissuading companies, including ILMA members, from submitting PMNs for chemicals other than those for which commercialization is highly probable. Further, it will likely necessitate PMN submitters to spend additional resources to develop more robust submissions. EPA also proposes substantial fee increases for companies seeking exemptions from the section 5 new chemical review process, increasing the application fee from $5,590 to $13,200 for test marketing exemptions (TME), low volume exemptions (LVE), and low release and exposure exemptions (LoREX).
Turning to existing chemicals under TSCA section 6, the fee split among manufacturers of chemicals selected for an EPA-initiated risk evaluation would increase from $2.56 million to $5.081 million per chemical with the fee paid in two installments. For a manufacturer-requested risk evaluation of a chemical listed in the TSCA Work Plan, the fee will increase to two payments of $1.497 million, with a final invoice from EPA capturing the remainder of payment needed to recover 50% of its actual costs. For a manufacturer-requested risk evaluation for a chemical that is not included in the TSCA Work Plan, the fee will increase to two payments of $2.993 million, with a final invoice from EPA capturing the remainder of payment needed to recover 100% of its actual costs. These proposed increases for existing chemicals, if adopted, likely will deter manufacturers from requesting risk evaluations.
EPA Proposes to Add PFAS to TRI List of Chemicals of Special Concern
The Environmental Protection Agency (EPA) is proposing to add per- and polyfluoroalkyl substances (PFAS), which already are subject to reporting under the Emergency Planning and Community Right-to-Know Act (EPCRA) and the Pollution Prevention Act (PPA), to the Toxic Release Inventory (TRI) list of Lower Thresholds for Chemicals of Special Concern (chemicals of special concern). While these PFAS already have a lower reporting threshold of 100 pounds, the addition of these PFAS to the list of chemicals of special concern would eliminate them from the use of the de minimis exemption and the option to use Form A.
EPA claims that removing the availability of these burden-reduction reporting options will result in a more complete picture of the releases and waste management quantities for these PFAS. In addition, EPA is proposing to remove the availability of the de minimis exemption for purposes of the Supplier Notification Requirements for all chemicals on the list of chemicals of special concern. The Agency said that this change will help ensure that purchasers of mixtures and trade name products containing PFAS chemicals are informed of their presence in mixtures and products they purchase.
Comments on the proposal are due by February 2, 2023.
EPA Proposes 2023-25 Renewable Fuels Mandates
EPA proposed at the end of November to increase between 2023-25 the volume of biofuels in the nation’s transportation fuel supply and to expand the renewable fuels program to include electric vehicles. The Agency’s proposal is viewed as a victory for the ethanol industry, and it sparked immediate criticism from petroleum companies. EPA’s renewable fuels mandate affects automotive lubricants, in part, because the increased biofuel volumes can strain refiners who may close refineries or convert them to produce biodiesel.
Under EPA’s proposal, total renewable fuels in 2023 would be 20.82 billion gallons, up from 20.63 billion gallons this year. The volume of renewable fuels would climb to 21.87 billion gallons in 2024, and then to 22.68 billion gallons in 2025.
The proposal also includes a provision that would become effective on January 1, 2024, allowing for electricity generated through biomass to qualify for renewable fuel credits — called “eRINs” — if the electricity is used to power electric vehicles.
Last week’s proposal is the first time EPA has set biofuel volumes without a specific congressional mandate under the renewable fuel standard. The biofuel volumes set by Congress expire next year, leaving the Agency free to set the levels based on its own conclusions about the nation’s fuels markets.
EPA will be soliciting public comment on the proposed rule and holding a public hearing in January.
EPA Proposes SNURs for 35 PFAS
On December 2, 2022, EPA proposed significant new use rules (SNURs) under the TSCA section 5 for 35 PFAS substances that were the subject of premanufacture notices (PMN) and are also subject to Section 5(3) orders issued by EPA. 87 Fed. Reg. 74072. The SNURs require persons who intend to manufacture, import or process any of these chemical substances for an activity that is proposed as a significant new use to notify EPA at least 90 days before commencing that activity. Persons may not commence manufacture or processing for the significant new use until EPA has completed its review of the notice.
EPA says that its proposed rule advances one of the “key actions” in the PFAS Strategic Roadmap where the Agency stated it plans to revisit past PFAS regulatory decisions and address those that are insufficiently protective by imposing additional notification requirements. To view the PFAS Strategic Roadmap, please click here.
Please click on the Federal Register link above to see the 35 PFAS substances. Comments on the proposed rule are due by January 3, 2023.
EPA Publishes Materials from its CompTox Chemicals Dashboard Training
EPA announced last week that the final video recording, slide deck, and case study worksheets from the CompTox Chemicals Dashboard virtual training are now available. EPA also unveiled an updated version to the Dashboard (v2.1.1).
The Agency also has made available the recordings and slides from its October 12-13, 2022, New Approach Methods (NAM) Conference. The materials are available on the conference web page. The NAM Conference topics included: Variability and Relevance of Traditional Toxicity Tests; Evolution of Validation and Scientific Confidence Frameworks to Incorporate 21st Century Science; and Breakout groups discussing Variability of Traditional Toxicity Tests, Relevance of Traditional Toxicity Tests, and Feedback on EPA Scientific Confidence Framework.
DOL Rule Permits ESG Investing in ERISA Plans
The Department of Labor (DOL) has promulgated a final rule under ERISA to “safeguard the savings of America’s workers by clarifying that fiduciaries may consider climate change and other environmental, social, and governance (ESG) factors” in both investment decisions and in exercising shareholder voting rights when such factors are relevant to a risk and return analysis. The final rule could have a significant impact on financial decision-making for 401(k) plans, and it signals the Biden Administration’s continued, aggressive push of its climate agenda through the regulatory process. However, the DOL final rule is in direct contrast with several state-level regulatory initiatives, which have sought to preclude the consideration of ESG factors by state pension funds (which are not governed by ERISA). For example, Florida Governor Ron DeSantis (R) has “direct[ed] the state of Florida’s fund managers to invest state funds in a manner that prioritizes the
highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement…”
Biden Proposal Seeks to Address Climate Change in Federal Supply Chain
The Biden Administration last month proposed a rule aimed at addressing the Federal government’s exposure to climate-related financial risks in its supply chains. The proposed Federal Supplier Climate Risks and Resilience Rule, issued by the Federal Acquisition Regulatory Council, would amend the Federal Acquisition Regulation, and it would require “major” and “significant” Federal contractors to disclose publicly their greenhouse gas (GHG) emissions and climate-related financial risks and set science-based emissions reduction targets.
According to the proposed rulemaking, most companies in these two categories would need to take steps to come into compliance if the proposal is finalized. Only 31 percent of “major” contractors and 10 percent of “significant” contractors already report disclosing their GHG emissions through the System for Award Management (SAM).
“Major” Federal contractors receiving more than $50 million in annual contracts would be required to publicly disclose Scope 1, Scope 2, and relevant categories of Scope 3 emissions, disclose climate-related financial risks, and set “science-based emissions reduction targets” (in line with the goals of the Paris Agreement). Major contractors that are small businesses with over $50 million in annual contracts would only be required to report Scope 1 and Scope 2 emissions in SAM. “Significant” Federal contractors with more than $7.5 million in annual contracts, but less than $50 million, would be required to report Scope 1 and Scope 2 emissions. Federal contractors with less than $7.5 million in annual contracts would be exempt.
EPA Adds Submissions to ChemView
On November 21, 2022, EPA announced that it has added public access to certain reports submitted by chemical companies in ChemView, EPA’s web application for public access to non-confidential business information (non-CBI) on chemicals regulated under TSCA. The report additions by the Agency include new chemical notices and notices of substantial risk. EPA previously posted unpublished new chemical notices received under TSCA Section 5 and notices of substantial risk provided by companies under TSCA Section 8(e). EPA also has added to ChemView chemical health and safety studies received under TSCA Section 8(d).