March 14, 2018

Court Finalizes Partial Vacatur of DSW Rule

EPA’s 2015 definition of solid waste (DSW) rule was issued to resolve legal challenges to its 2008 DSW rule. Then, the 2015 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 three 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], upholding some aspects of the rule and vacating others. However, the court left the door open for a rehearing on one of the vacated components. In response, the parties filed petitions for rehearing that addressed that issue and a number of others. The DC Circuit Court reviewed the petitions and revised its 2017 decision in a March 6, 2018 opinion. Taken together, the 2017 and 2018 appellate court opinions result in the following:

Application of Factor 4 to evaluate the legitimacy of a RCRA recycling exclusion/exemption is vacated. 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 “[t]hat 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 the prescribed test is likely to be discarded, the court vacated the factor. This vacatur applies to the post-2008 recycling exclusions in the DSW rules as well as to the pre-2008 exclusions/exemptions.
The vacatur of the fourth factor noted above results in reinstatement of the 2008 DSW rule version of Factor 4 when evaluating the legitimacy of all (pre- and post-2008) recycling exclusions. This is notable because the reinstated Factor 4 only has to be considered (i.e., it is not mandatory as are the other three). In case you have forgotten, the 2008 rule version of Factor 4 reads as follows:

“The product of the recycling process does not (i) Contain significant concentrations of any hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) Contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are significantly elevated from those found in analogous products; or (iii) Exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit.”

The verified recycler exclusion added in the 2015 DSW rule is vacated, 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. 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. Of importance to the petroleum refining industry, the reinstated TBE will be available for spent catalyst that will be reclaimed (i.e., spent catalyst that otherwise would require management as K171/K172).

In a separate March 6, 2018 order, the DC Circuit Court mandated that the items noted above will take effect on March 13, 2018.

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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.