• EPA Proposes Broad Expansion of Waste Recycling Exemptions
  • November 1, 2003 | Authors: Edward Moye Callaway; Robert J. Martineau
  • Law Firm: Waller Lansden Dortch & Davis, LLP - Nashville Office
  • On Tuesday, the United States Environmental Protection Agency (EPA) proposed a rule that would revise the definition of solid waste under the Resource Conservation and Recovery Act (RCRA) to exclude certain recyclable industrial byproducts from onerous hazardous waste management requirements. The agency's action is in response to court decisions holding that EPA counts too much material as "discarded" - and therefore waste subject to RCRA - under its current regulations. EPA contends that this week's proposal could significantly increase the recovery of metals, solvents, and other usable materials.

    The proposed regulation is partly in response to a series of decisions by the U.S. Court of Appeals for the D.C. Circuit that address the limits of EPA's jurisdiction over various kinds of recyclable materials. The latest of these decisions was Association of Battery Recyclers v. EPA, 208 F.3d 1047 (D.C. Cir. 2000). In that case, the court held that hazardous secondary materials, which are generated and reclaimed in a continuous process within the same industry clearly were not "discarded," and hence were not solid wastes. Since the Association of Battery Recyclers decision, EPA has struggled to modify its regulatory definition of solid waste to capture only those materials that would be considered "discarded" by the Court.

    Tracking the language of the Association of Battery Recyclers decision, EPA proposes to exclude from hazardous waste regulation those materials that are recycled in a "continuous process" within the "same industry." A continuous process is one with no momentary stoppage and in which the company reclaiming or recovering the material is the same one that generated it. By removing regulatory controls over these recycling practices, EPA says it expects beneficial recycling of hazardous secondary materials will increase.

    EPA's proposal also solicits public comment on whether it should pursue a more fundamental change: excluding all materials that are recycled, regardless of whether it occurs within the same industry. The expanded approach comes after industry representatives met with the White House Office of Management and Budget (OMB) this spring and summer to urge EPA to consider a broader exemption for industrial recycling than the agency had announced it was pursuing. Industry critics argued EPA's initial approach is too limited a response to the D.C. Circuit decisions. These critics pointed out that recycling opportunities are relatively limited within a given industry because facilities tend to produce the same waste streams.

    The broad inter-industry recycling exclusion approach might be of particular benefit for an industry that is composed primarily of small business entities because the companies often are too small to undertake the recycling themselves and must instead transfer it to a third party. A broader exclusion would encourage these types of inter-industry recycling transactions. The proposed rule asks industry to substantiate the costs and benefits of an expanded recycling exemption.

    Significantly, the rulemaking also will codify longstanding EPA guidance on what constitutes legitimate industrial recycling. Only legitimate recycling would be covered by the RCRA exclusion in the proposal. The proposed amendment specifies four general criteria for distinguishing legitimate hazardous waste recycling from improper recycling:

    1. The material must be managed as a valuable commodity. In the context of the proposal, EPA considers a commodity "valuable" if it can be reclaimed or recycled.
    2. The material must provide a useful contribution to the recycling process or to a product of the recycling process.
    3. The recycling process must yield a valuable product or intermediate that is sold or used under specific conditions.
    4. The product of the recycling process must not contain significant amounts of hazardous constituents.

    EPA has published the proposed modification in the Federal Register and is requesting comment by January 26, 2004.