Bergeson & Campbell, P.C. (B&C®) is a Washington, D.C. law firm providing chemical and chemical product stakeholders unparalleled experience, judgment, and excellence in matters relating to TSCA, and other global chemical management programs.

By Lynn L. Bergeson, Carla N. Hutton, and Richard E. Engler, Ph.D.
 
The U.S. Environmental Protection Agency (EPA) has posted a Compliance Advisory entitled “Applicability of the Toxic Substances Control Act to Chemicals made from Petroleum and Renewable Sources Used as Fuels and Fuel Additives and Distillates.”  The Compliance Advisory states that EPA is reaffirming that chemical substances used as fuels, fuel additives, and distillates made from either petroleum or renewable sources are subject to the Toxic Substances Control Act (TSCA).  Anyone who plans to manufacture (including import) a chemical made from petroleum or renewable sources must comply with the statutory and regulatory new chemical requirements under TSCA Section 5.  According to the Compliance Advisory, EPA has received stakeholder inquiries “as to whether fuel and fuel additives made from renewable sources (such as renewable naphtha) are subject to the TSCA new chemicals requirements under section 5.”  EPA states that it is issuing the Compliance Advisory “to affirm that fuel and fuel additives either made from petroleum or renewable sources are subject to TSCA and have been subject to its requirements since 1976.”
 
According to the Compliance Advisory, there are about 142 “naphthas” and 178 “distillates” (that compositionally can qualify as naphthas) currently on the TSCA Inventory, and they are considered Unknown, Variable composition, Complex, or Biological (UVCB) substances.  Any substance that is not on the TSCA Inventory is a new chemical under TSCA Section 5(a)(1)(A).  Prior to manufacture (including import) of a new chemical for commercial use, a premanufacture notice (PMN) must be filed with EPA under TSCA Section 5.  The Compliance Advisory includes several questions and answers (Q&A), including:
 
Can you manufacture or import a chemical substance made from a renewable source if it is not listed on the TSCA Inventory?
 
No.  Anyone who intends to manufacture (including import) a new chemical substance that is subject to TSCA for a non-exempt commercial purpose is required to submit a PMN at least 90 days prior to the manufacture of the chemical.  Manufacturers (importers) are in violation of TSCA if they fail to comply or are late in complying with TSCA notice requirements.  If you are required to submit a PMN, failure to do so is a violation of TSCA Section 15 and you may be subject to penalties.  PMN submissions must include all available data, pursuant to 40 CFR 720.45 and 720.50.  TSCA requires EPA to review the notice and make a determination; and, if appropriate, regulate the proposed activity.
 
EPA’s “compliance advisory” is disappointing.  It signals this EPA is disinclined to promote renewable petroleum cuts and essentially (and emphatically) reaffirms what we believe to be EPA’s inflexible and unimaginative stance on “source” being determinative in petroleum cut UVCBs.  This position, as we have noted in a variety of regulatory contexts, is a substantial disincentive to commercializing renewable petroleum cuts.  EPA’s view is especially problematic when a refinery might wish to use a combination of petroleum and renewable feedstocks to make a single naphtha (or other distillate) cut.
 
For example, to avail itself of the equivalence determination, a company would have to submit a PMN for the renewable equivalent of a petroleum cut, sign the almost certain resultant consent order (EPA will undoubtedly identify aquatic toxicity concerns and may also identify health concerns), commence manufacture, file a Notice of Commencement of Manufacture or Import (NOC), and then request an equivalency determination.  If EPA denies the equivalency determination, any downstream processor or user will have to either segregate the renewable products from the petroleum products so that the downstream entity can maintain records of compliance with the consent order or treat both the renewable and petroleum products as being subject to the order.  Neither option is commercially feasible or sustainable.
 
This sequence of events illustrates why commercial entities are disinclined to avail themselves of renewable sources in the distillate space.  EPA’s “compliance advisory” is an unexpected and, to many, unwanted parting gift from the Trump Administration.  The Biden Administration may wish to revisit the wisdom and prudence of this inflexible, antiquated, and inequitable view.


 

By Lynn L. Bergeson and Carla N. Hutton
 
On June 30, 2020, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) released a report on its audit to determine whether the Safer Choice program effectively meets its goals and whether the program achieves quality standards through its product qualification, renewal, and required audit processes.  OIG states that EPA’s Safer Choice program does not have formal goals included in the fiscal year (FY) 2018-2022 EPA Strategic Plan, and the program has not reported results for FYs 2018-2019.  The program does have internal, non-outcome-oriented goals, however, which it is generally achieving.  The Safer Choice program’s goal is to add 200 Safer Choice products to the program and 25 chemicals to the Safer Chemical Ingredients List each year.  According to OIG, in FY 2019, EPA added 265 products and 24 chemicals.  OIG states that by not including formal goals for the Safer Choice program in EPA reports while continuing to receive Congressional funding and support, EPA limits not only accountability to Congress and the public, but also the extent that the program can use performance management information to make policy, budget, and management decisions.  OIG notes that the Safer Choice program has general controls in place for the required Safer Choice audit process, and EPA reviews audit summaries and corrective actions provided by third-party profilers (TPP).  EPA does not routinely review all supporting documentation, however, relying on TPPs to review and retain these documents.  Additionally, the Safer Choice program does not have procedures in place to conduct any formal performance reviews of TPPs or oversight reviews of TPP partner audits.  According to OIG, without periodic audit oversight, including full reviews of supporting documents and formal performance reviews of TPPs, EPA risks approving products that do not comply with the Safer Choice Standard.  OIG recommends that the Assistant Administrator for Chemical Safety and Pollution Prevention develop and publish adequate Safer Choice program goals and performance measures, establish and implement procedures for formal audit oversight of TPPs, amend its memorandums of understanding with TPPs to require performance reviews conducted by EPA, and collect and document TPP audit supporting information.