August 15, 2017

Court Partially Vacates 2015 DSW Rule

EPA’s 2015 definition of solid waste (DSW) rulemaking was challenged in court. Industry petitioners 1) argued that both the legitimacy factors and the verified recycler exclusion exceed EPA’s RCRA authority, and 2) challenged EPA’s treatment of spent catalysts and off-specification commercial chemical products. Environmental petitioners argued that 1) the verified recycler exclusion is too permissive, and 2) EPA should have added containment and notification conditions to the 32 pre-2008 recycling exclusions/exemptions.

On July 7, 2017, the U.S. Court of Appeals for the District of Columbia Circuit ruled on the petitions [API v. EPA; Docket No. 09-1038]:

The court vacated application [via §261.2(g)] of the fourth legitimacy factor to the pre-2008 recycling exclusions/exemptions. The primary objection was that the product of the recycling process had to contain hazardous constituents at concentrations “comparable to or lower than those found in analogous products….” [§260.43(a)(4)(i)(B)] The court found that the “standard sets the bar at the contaminant level of the [product made from all virgin materials] without regard to whether any incremental contaminants are significant in terms of health and environmental risks.” Because EPA never offered a sufficient “rational basis” as to why a product that fails those criteria is likely to be discarded, the court vacated the factor.
However, the court retained the fourth factor when evaluating the legitimacy of the new DSW recycling exclusions. This apparent inconsistency results from the fact that none of the petitioners challenged Factor 4 as applied to the new exclusions.
The court also vacated the verified recycler exclusion (VRE), except for its emergency preparedness provisions and expanded containment requirement. The court found that the option of requiring a §260.31(d) variance for the reclaimer (particularly the §260.31(d)(6) criterion) “cannot stand as a means of identifying discard” and is unlawful.
In its place, the court reinstated the transfer-based exclusion (TBE) from the 2008 DSW rule, including the ban on recycling K171/K172 under the TBE. The TBE allows a generator to send materials to a reclaimer that does not have a RCRA permit or interim status if the generator has made reasonable efforts to ensure that the chosen reclaimer will properly and legitimately reclaim the hazardous secondary material and not discard it.

It is unclear at this time exactly how and when the court’s ruling will be implemented, but it is likely to be messy.

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