December 14, 2016

New Guidance on Fuel/Water Mixtures

Unused commercial chemical products listed in §261.33 that are themselves fuels, including those that are normal components of fuels (e.g., benzene, toluene, and xylene), are not solid wastes if they are burned for energy recovery. [§261.2(c)(2)(ii), RO 12505] EPA has indicated in previous guidance that this exclusion also applies to off-specification commercial chemical products, including products that are not listed in §261.33 but that exhibit a characteristic (e.g., gasoline, jet fuel, kerosene, diesel, and other petroleum products), when they are reclaimed to produce a fuel. [RO 11138, 11449, 11713, 11848, 12825, 14503]

But what has not been clear in previous guidance is whether there must be a minimum percentage or concentration of fuel in the off-spec material to claim the §261.2(c)(2)(ii) exclusion. For example, petroleum contact water and tank draws are often mostly water containing a small amount of petroleum product. Do these qualify for the §261.2(c)(2)(ii) exclusion? The only direction that we are aware of is contained in RO 11615, wherein EPA noted that “the determining factor is not necessarily a generic percentage level of product, but rather a case-specific determination that indicates whether the material is more product-like or waste-like. This determination must include consideration of whether the recovery of the product is a legitimate recycling operation, as well as how the material is managed.” From a practical standpoint, we have seen state policies that do provide a minimum fuel percentage to distinguish between off-spec products that are not subject to RCRA when reclaimed into fuels and those that are solid and potentially hazardous waste when reclaimed.

In new guidance [RO 14883], EPA is giving the regulated community a little more specificity on what the agency means by a “legitimate recycling operation” for fuel/water mixtures. The materials evaluated by this guidance are gasoline/water mixtures containing no free product and with no measurable flash point but having benzene concentrations over 0.5 ppm. These gasoline/water mixtures are usually bulked with contaminated fuel, and the combined material is then sent to a fuel recovery facility as off-spec product (i.e., not solid waste). EPA used two steps in its evaluation as to the legitimacy of this practice:

The point at which the solid/hazardous waste determination must be made is before the gasoline/water mixtures are mixed (bulked) with another material.
Is recovery of fuel product from the gasoline/water mixtures legitimate recycling under RCRA? “EPA does not have a ‘bright line’ cut-off for determining at what point a mixture of fuel and water would be considered simply a contaminated wastewater rather than commercial chemical product fuel contaminated with water....” Instead the agency based this evaluation step on the four legitimacy factors codified in §260.43. The first factor requires that the recycled material provide a useful contribution to the recycling process or to a product of the recycling process. One way of meeting the “useful contribution” factor is showing that fuel product is recovered by the recycling process. [§260.43(a)(1)(iv)] “[I]f the fuel/water mixture that exhibits the hazardous characteristic for benzene does not have recoverable fuel product prior to being bulked with other mixtures, it would not be making a ‘useful contribution’ as defined in 40 CFR 260.43(a)(1) and would not be considered a commercial product being legitimately recycled. In that case, it would need to be managed as a hazardous waste.” [RO 14883; Emphasis in original.]

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This document addresses issues of a general nature related to the federal RCRA regulations. Persons evaluating specific circumstances dealing with the RCRA regulations should review state and local laws and regulations, which may be more stringent than federal requirements. In addition, the assistance of a qualified professional should be enlisted to address any site-specific circumstances.