EPA Announces Chemical Data Reporting Rule, Which Replaces the IUR Modifications Rule

The U.S. Environmental Protection Agency (EPA) announced on August 2, 2011, the final Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR) Rule, previously referred to as the Inventory Update Reporting (IUR) Modifications Rule. The CDR is intended to enable EPA to collect and publish information on the manufacturing, processing, and use of commercial chemical substances and mixtures on the TSCA Chemical Substance Inventory (TSCA Inventory). This includes current information on chemical substance production volumes, manufacturing sites, and how the chemical substances are used. According to EPA, this information helps it determine whether humans or the environment potentially are exposed to reported chemical substances in ways that could prove harmful. EPA will publish submitted CDR data that are not confidential business information (CBI). The final CDR Rule amends the previous IUR Rule to require submission of information that EPA believes will better address its and the public’s information needs, improve the usability and reliability of the reported data, and ensure that data are available in a timely manner. EPA is requiring electronic reporting of CDR information and modifying reporting requirements, including certain circumstances that trigger reporting, the specific data to be reported, the reporting standard for processing and use information, and CBI reporting procedures. The CDR Rule establishes the upcoming submission period, which will be from February 1, 2012, to June 30, 2012, and which will include submission of production information from 2010 and production, processing, and use information from 2011. The CDR Rule will be effective 30 days after publication in the Federal Register. More information is available online.

Set forth below are some of the key components of the CDR Rule, how reporting will change from prior IUR reporting, and potential issues with these changes. We are preparing an in-depth analysis of these issues and will distribute it separately to our clients and friends list-serve.

According to a fact sheet available online, the name change from IUR to CDR “is intended to better reflect the distinction between the next data collection (which includes exposure-related data) and the TSCA Inventory itself (which only involves chemical identification information).” EPA states that identifying the next data collection as “CDR” will make it easier for the public to understand what information is available to them through the data collection effort. EPA reportedly modified the IUR Rule to meet four primary goals: to tailor the information collected to meet better EPA’s general information needs; to increase its ability to provide effective public access to the information; to obtain new and updated information relating to potential exposures to a subset of chemical substances listed on the TSCA Inventory; and to improve the usefulness of the information reported.

Who Is Required to Report?

EPA states that entities may be affected by the CDR Rule if they manufacture (including manufacture as a byproduct or import) for commercial purposes, chemical substances listed on the TSCA Inventory and produced in volumes of 25,000 pounds (lbs) or more at a site during the principal reporting year (i.e., calendar year 2011). Potentially affected entities may include, but are not limited to:

• Chemical substance manufacturers and importers (North American Industry Classification System (NAICS) codes 325 and 324110; e.g., chemical substance manufacturing and processing and petroleum refineries); and
   
• Chemical substance users and processors who may manufacture a byproduct chemical substance (NAICS codes 22, 322, 331, and 3344; e.g., utilities, paper manufacturing, primary metal manufacturing, and semiconductor and other electronic component manufacturing).

One issue that could have a significant impact on certain industries concerns EPA’s definitions of and interpretative guidance statements on “manufacture” and “byproduct.” EPA states that it is providing “additional information on byproduct reporting” because “the scope of the CDR obligation to report byproducts is not well understood by industry.” EPA is careful not to note that the reason this issue is not clear to industry is because EPA’s explanations over the years have lacked clarity and certainly formality in that the reporting policy has been fragmentary and unstructured. In particular, EPA states in the CDR that “[c]hemical substances that are byproducts of the manufacture, processing, use, or disposal of another chemical substance or mixture, like any other manufactured chemical substances, are subject to CDR reporting if they are listed on the TSCA Inventory, are not otherwise excluded from reporting, and their manufacturer is not specifically exempted from CDR reporting requirements.” EPA’s guidance and interpretation of “byproducts” raises many issues, including possible notice issues, and it is by no means clear whether certain byproducts should be listed on the TSCA Inventory and/or subject to CDR reporting, and whether EPA has interpreted such terms consistently and in a way countenanced by TSCA.

When Is Reporting Required?

The 2012 submission period, during which 2011 manufacturing, processing, and use and 2010 production volume information would be reported, is scheduled to occur February 1, 2012, to June 30, 2012. Subsequent recurring submission periods will be from June 1 to September 30 at four-year intervals, beginning in 2016.

What Will Change for 2012?

Under the final CDR Rule, manufacturers (including importers) are:

• Required to report if the production volume of a chemical substance meets or exceeds the 25,000 lb threshold per site during the principal reporting year (i.e., calendar year 2011);
   
• Required to provide upfront substantiation for each processing and use data element claimed as CBI. EPA states that submitters cannot claim those data elements as confidential when they are identified as “not known to or reasonably ascertainable by”; and
   
• Required to use e-CDRweb, EPA’s electronic reporting tool, to submit all CDR information through the Internet.

Manufacturing-related information required to be reported, subject to the relevant reporting threshold, includes:

• The production volume only for calendar year 2010;
   
• For the principal reporting year (i.e., 2011):
  
  • The production volume of a chemical substance manufactured (including imported) at a reporting site;
     
  • Whether an imported chemical substance is physically at the reporting site;
     
  • The volume of the chemical substance directly exported and not domestically processed or used; and
     
  • Whether a manufactured chemical substance, such as a byproduct, is being recycled, remanufactured, reprocessed, or reused.

Processing and use-related information required to be reported includes:

• For the principal reporting year only (i.e., 2011):
  
  • Report processing and use information of all reportable chemical substances manufactured at 100,000 lbs or more at a site, unless otherwise exempted;
     
  • Report processing and use information using the reporting standard “known to or reasonably ascertainable by,” instead of the “readily obtainable” standard used in 2006;
     
  • Report industrial processing and use information using a revised list of industrial function categories and a list of 48 Industrial Sectors (IS), which replace the five-digit NAICS codes;
     
  • Report consumer and commercial product categories separately to distinguish between the use types; and
     
  • Report consumer and commercial use information using a revised list of consumer and commercial product category codes.

The new “known to or reasonably ascertainable by” standard should be reviewed carefully, including the hypothetical examples provided by EPA to illustrate the anticipated application of this standard. A quick review suggests that there may be more subtle changes to the standard that warrant close scrutiny.

Are Any Chemicals Exempt from Reporting?

According to EPA’s fact sheet, the following chemicals are exempt from reporting:

Certain chemicals — naturally occurring substances, microorganisms, polymers, certain forms of natural gas, and water — are exempt unless they are subject to another TSCA rule. In addition, certain chemicals are partially exempt, and manufacturers of such chemicals are required only to report identification and manufacturing information for those chemicals. The partially exempt chemicals are listed in the CDR regulations at 40 C.F.R. Section 711.6(b).

Chemical substances that are the subject of an enforceable consent agreement are no longer exempt from reporting.

Are There Changes That Will Be Phased in for the 2016 CDR?

According to EPA, it is delaying implementing certain requirements until the 2016 submission period. For the 2016 CDR:

• The determination of the need to report will be based on whether, for any calendar year since the last principal reporting year, a chemical substance was manufactured (including imported) at a site in production volumes of 25,000 lbs or greater;
   
• For any such subject chemicals, manufacturers (including importers) will be required to report the production volume for each of the years since the last principal reporting year;
   
• The reporting threshold for processing and use information will be 25,000 lbs at a site; and
   
• The reporting threshold for chemical substances that are the subject of a rule proposed or promulgated under TSCA Sections 5(a)(2), 5(b)(4), or 6, the subject of an order issued under TSCA Sections 5(e) or 5(f), or the subject of relief that has been granted under a civil action under TSCA Sections 5 or 7 will be 2,500 lbs at a site.

Will EPA Provide Reporting Instructions?

EPA will conduct a webinar on September 23, 2011, to demonstrate e-CDRweb. According to EPA, those interested will be able to test the tool during the following week. The test version will not be usable for 2012 submissions. More information is available online.

EPA will also provide guidance materials with reporting instructions, questions and answers, and case studies prior to the start of the submission period. EPA states that it has placed two documents that provide detailed instructions for reporting chemical information, including the requirements for reporting byproduct chemicals, in the docket (EPA-HQ-OPPT-2009-0187) for the final CDR Rule, which is available online.

Commentary

The final CDR Rule represents an important step that will greatly increase EPA’s understanding of the volumes, uses, and exposures of chemicals, beginning with the 2012 reporting and increasing with the changes that will take place in the 2016 reporting. The final CDR Rule is only modestly changed from the proposal, although some of the changes are important and contribute to the workability and somewhat reduced burden of the final set of requirements. In particular, EPA has decided to:

• Delay until 2016, reporting of production volumes for each of the intervening years (this had been proposed to apply since 2005, but in the final CDR Rule it is applied for years 2012 and beyond);
   
• Lower the reporting threshold for processing and use information to 100,0000 lbs in 2011 and to 25,000 lbs in 2016; and
   
• Reduce the reporting threshold for chemicals subject to certain TSCA rules and orders starting with the 2016 reporting cycle (e.g., under Sections 4, 5, or 6) to 2,500 lbs at a site (rather than as proposed that such reporting applies regardless of the production volume).

Also, in the proposed rule EPA had raised a number of potentially far-reaching issues for comment and has decided not to proceed down these paths. These include, among others:

• Revising or eliminating exemptions;
   
• Revising or eliminating the 25,000 lb threshold for general reporting;
   
• Changes in reporting to more closely parallel the reporting required on new chemicals under TSCA Section 5 (i.e., the PMN form); and
   
• Expanding the reporting universe to include processors.

Some of the language in the final CDR Rule will need close scrutiny to understand fully its effect and to consider its legal provenance. In particular we draw attention to the discussion on the byproducts reporting requirement and CBI substantiation, including what seems to be a conflated misreading of the statute to apply criminal sanctions against submitters if there are “knowing and willful” false statements made regarding confidentiality claims.

Finally it is interesting that EPA recurrently cites its experience applying the 2006 IUR data under the Chemical Assessment and Management Program (ChAMP), but redolent of political correctness, cannot bring itself to state “ChAMP” in the preamble (yet comfortably cites the European Union’s (EU) Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation repeatedly).

Regardless, it is clear from the discussion in the rule that the experiences gained under ChAMP in applying the IUR data were key to the shape and form of this final CDR Rule. It is regrettable that EPA cannot bring itself to recognize the contributions made by ChAMP under the Bush Administration to the current rulemaking. Nevertheless, based on the discussion in the preamble concerning the use of the CDR data, it is evident that EPA will apply these data in much the same way that ChAMP did, to prepare screening level or prioritization assessments. Thanks to the experience gained in ChAMP, EPA will find itself with more of the information it needs to do the assessments.