Regulatory Developments

Q&As from September 15, 2011, CDR Webinar Available

November 15, 2011 PRINT

Responses to questions raised by stakeholders during the September 15, 2011, Chemical Data Reporting (CDR) rule webinar, hosted by Bergeson & Campbell, P.C. (B&C), are provided below.

During the September 15, 2011, webinar, which was attended by more than 300 participants, numerous issues, questions, and requests for clarification were addressed during the Q&A portion of the webinar. Many of the questions submitted, however, could not be addressed during the time allotted. In addition, parties sent in questions after the webinar was completed. B&C compiled all of these questions and developed responses, which have been reviewed by U.S. Environmental Protection Agency (EPA) staff.

Responses to Questions

The Q&As address a range of topics, including the scope of the reporting requirements for byproducts, timing of production, clarification on worker exposure and commercial workers, clarification on reporting obligations for importers, and applicability of CDR reporting exemptions for certain circumstances.

The Q&As are intended solely as informational guidance and should not be viewed as legal advice. Although EPA staff provided feedback on the responses, the Q&A document is not an official EPA document.

CDR Rule Workshop

B&C will continue to work with EPA to provide further clarification and refinement on CDR reporting issues. B&C's affiliate group, B&C Consortia Management, L.L.C. (BCCM), is coordinating with EPA on a CDR workshop specifically focused on reporting for recycled materials. B&C will provide further information on this workshop when it is scheduled, which we expect will be in December or January.

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Questions & Answers (Q&A) Generated As Part of the September 15, 2011, Bergeson & Campbell, P.C. (B&C) Webinar on the U.S. Environmental Protection Agency's (EPA) Chemical Data Reporting (CDR) Rule

This document should not be viewed as legal advice. It is intended solely as informational guidance. It is possible that the information provided may not apply well or at all to particular fact patterns. Parties are urged to consult with EPA and or legal counsel in assessing compliance obligations.

  1. Does the small business exemption apply only if the criteria are met during the principal reporting year?
     
    Based on EPA's Instructions for the 2012 TSCA Chemical Data Reporting, which states that a company would determine whether it meets the small business exemption based on total sales during 2011, the small business exemption seems to apply only if the sales volume criteria are met during the principal reporting year (2011 during this reporting cycle).
     
    Based on this guidance, it seems that if a company exceeds the sales volumes established for the small business exemption in the principal reporting year, it would be required to report on production volumes for that year and previous years, regardless of the sales volumes in the previous years.
     
    On the other hand, if a company satisfies the small business exemption criteria in the principal reporting year, it would not be obligated to submit a CDR report, which means it would not be required to report on production volumes for that year or previous years, regardless of sales volumes in the previous years.
     
  2. In formulating several of our products, we add an acid and base (each for their own specific function). The final commercial product does contain the resulting salt. The salt, however, was not the intended component in the commercially sold mixture. Is this salt subject to CDR if volume thresholds are exceeded?
     
    EPA's Instructions for the 2012 TSCA Chemical Data Reporting states that "Manufacture for commercial purposes also applies to chemical substances that are produced coincidentally during the manufacture, processing, use, or disposal of another chemical substance or mixture..." Therefore, although salt was not the intended component in the commercially sold mixture, it was produced coincidentally in the manufacture of the commercial product and may be subject to reporting.
     
    You need to consider whether the exclusion provision at 40 C.F.R. § 720.30(h)(7) can be applied to the salt formed when the pH neutralizers (the acid and the base) function as intended during the formulation of the product, however. From the appearance of this question, this salt may possibly be excluded from reporting according to § 720.30(h)(7).
     
  3. What if you meet the reporting trigger in preceding years, but there is no production in Principal Reporting Year -- what is reported for Parts II & III?
     
    According to the "Are you a manufacturer who is required to report" flowchart in EPA's Instructions for the 2012 TSCA Chemical Data Reporting for the 2012 TSCA Chemical Data Reporting, if a company does not manufacture (including import) 25,000 pounds or more of the chemical substance at a single site during the principal reporting year, it does not have to submit a CDR report for the principal year, and would not report production or import volumes for the preceding years, regardless of what those volumes were.
     
  4. We are a biodiesel manufacturer. Do we report? Byproducts include glycerin.
     
    Reporting for the CDR is generally required for chemical substances that are manufactured (including imported), are listed on the Toxic Substances Control Act (TSCA) Inventory, and are not specifically exempted by 40 C.F.R. § 711.6(a). If you manufacture or import substances included on the TSCA Inventory over the specified thresholds, you are subject to reporting. Glycerin (1,2,3-propanetriol, CAS) is not listed as a fully exempt substance, although it is partially exempt under 40 C.F.R. § 711.6(b)(2)(iv).
     
    If, after it is manufactured (including imported), your byproduct chemical substance (glycerin) is not put to use for a separate commercial purpose (see 40 C.F.R. §§ 711.10(c), 720.30(h)), you do not need to report it. If your byproduct's only separate commercial purpose "is for use by public or private organizations that (1) burn it as a fuel, (2) dispose of it as a waste, including in a landfill or for enriching soil, or (3) extract component chemical substances from it for commercial purposes" (see 40 C.F.R. § 720.30(g)), then that byproduct is also excluded from CDR reporting. This exclusion applies only to the byproduct; it does not apply to the component chemical substances extracted from the byproduct.
     
    If a chemical is obtained from the glycerin through a means that involves breaking chemical bonds or forming new chemical bonds involving the glycerin molecules, the process would not meet EPA's criteria for extracting a component chemical substance and therefore, the byproduct (glycerin) would be subject to reporting because it does not meet the exclusion criteria.
     
    Any required reporting under the CDR is in addition to reporting that may be required under Toxics Release Inventory (TRI). They are two separate reporting requirements by EPA.
     
  5. For 2016 reporting, if you trigger reporting in 2012, but have 0 in 2013, 2014, or 2015, what happens with Part III? Do we have to complete Part III for the 2012 year or is Part III left empty?
     
    You would report process and use information for chemical substances manufactured in the principal reporting year, which would be 2015. If there is no production volume in 2015, there would be no associated process and use information to report. Therefore, you would report "0" or the lowest reporting range option for the applicable sections.
     
    The majority of the information for the 2016 CDR is based on the 2015 production volume. The only information that you report for 2012, 2013, and 2014 is the total production volume for each year. If the production volume for 2015 is zero, you would not complete the remainder of the information. For example, you would not complete the physical form of the chemical substance (see 40 C.F.R. § 711.15(b)(4)).
     
  6. To clarify, if a facility is over the trigger in 2010, but not in 2011, it would not be required to submit a report in 2012 since the determining year is 2011?
     
    That is correct. If the reporting threshold is not met in 2011, there is no reporting obligation in 2012, regardless of whether the manufacture or import volumes in 2010 met or exceed the reporting threshold.
     
  7. What if you do not have an accession number or a Chemical Abstracts Service (CAS) Registry Number, but only a Premanufacture Notice (PMN) Number? Would we have to obtain a CAS Registry Number from CAS for the sole purpose of the CDR reporting?
     
    As noted in EPA's Instructions for the 2012 TSCA Chemical Data Reporting, a submitter must use EPA's Substance Registry Services (SRS) to report the chemical substance identification information consisting of the currently correct Chemical Abstracts (CA) Index Name and the correct corresponding CAS Registry Number (CASRN).
     
    The correct CA Index Name and CASRN must be reported separately for each CDR reportable chemical substance at your site. If you wish to report a chemical substance listed on the confidential portion of the TSCA Inventory, you will need to report the chemical substance using a TSCA Accession Number (the generic name corresponding to the Accession Number will automatically be incorporated into your form).
     
    You may be able to locate the correct Accession Number by searching SRS using a PMN case number. If you cannot locate the CASRN or Accession Number, you should contact EPA well before initiating CDR reporting to obtain the required chemical identifying number from EPA.
     
  8. Will the EPA webinar be available for viewing after September 23, 2011? Or will there be another webinar at a later date?
     
    The September 23, 2011, webinar was an introduction to the electronic CDR reporting tool and associated requirements. The recorded version of the webinar, the presentation, and the final XML schema are available on the About Submissions page of the CDR website, at www.epa.gov/cdr.
     
    EPA is planning to host a webinar on November 16, 2011, to provide an overview and guidance for the 2012 CDR. In addition, more detailed web-based training modules will be made available shortly after the webinar, on the Resources page of the CDR website.
     
  9. If you are considered a formulator of raw materials (not a manufacturer), would you then be required to report under CDR?
     
    If the company in question does not import chemical substances and its formulation process does not result in a chemical reaction in which another chemical substance is produced, it would not be subject to reporting under the CDR.
     
  10. Can you provide a definition for potentially exposed?
     
    As noted in EPA's Instructions for the 2012 TSCA Chemical Data Reporting:
    "Reasonably likely to be exposed" means "an exposure to a chemical substance which, under foreseeable conditions of manufacture, processing, distribution in commerce, or use of the chemical substance, is more likely to occur than not to occur. Such exposures would normally include, but would not be limited to, activities such as charging reactor vessels, drumming, bulk loading, cleaning equipment, maintenance operations, materials handling and transfers, and analytical operations. Covered exposures include exposures through any route of entry (inhalation, ingestion, skin contact, absorption, etc.), but excludes accidental or theoretical exposures" (40 CFR 711.3).
     
    Persons reasonably likely to be exposed to a chemical substance include workers whose employment requires them to pass through areas where chemical substances are manufactured, processed, or used (e.g., production workers and foremen, process engineers, and plant managers). Workers employed to drive vehicles which transport the chemical substance should be included in the number of workers reasonably likely to be exposed to the chemical substance if they come into contact with the chemical substance during loading or unloading. For example, workers engaged in the connection or disengagement of hoses used to load or unload the chemical substance should be included. However, workers involved solely with transporting chemical substances in sealed containers that are totally enclosed with no potential for exposure should not be included.
  11. Can you explain what is meant by a commercial worker? Give an example?
     
    As defined in EPA's Instructions for the 2012 TSCA Chemical Data Reporting:
    Commercial use means the use of a chemical substance or a mixture containing a chemical substance (including as part of an article) in a commercial enterprise providing saleable goods or services.
    EPA does not have a specific definition for "commercial worker" associated with the CDR rule. In general, a commercial worker is a person employed in a commercial enterprise providing salable goods or services. Examples of a commercial enterprise include but are not limited to commercial and residential cleaning services, dry cleaning shops, painting companies, carpet installers, commercial and residential repair and refurbishing companies, and automotive painting and repair shops.
     
  12. Will there be a definition of byproduct in the rule?
     
    A byproduct is defined under 40 C.F.R. § 704.3 of the General Reporting and Recordkeeping Provisions for Section 8(a) Information Gathering Rules and 40 C.F.R. § 720.3(d) of the PMN requirements as "... a chemical substance produced without a separate commercial intent during the manufacture, processing, use, or disposal of another chemical substance or mixture." A byproduct is often (but not necessarily) considered a waste by the manufacturer.
     
    As noted in EPA's Instructions for the 2012 TSCA Chemical Data Reporting:
    (2) Manufacture for commercial purposes also applies to chemical substances that are produced coincidentally during the manufacture, processing, use, or disposal of another chemical substance or mixture, including both byproducts that are separated from that other substance or mixture and impurities that remain in that chemical substance or mixture. Such byproducts and impurities may, or may not, in themselves have commercial value. They are nonetheless produced for the purpose of obtaining a commercial advantage since they are part of the manufacture of a chemical product for a commercial purpose (40 CFR 704.3).
    Thus, byproducts are subject to reporting under the CDR. If, after it is manufactured (including imported), your byproduct chemical substance is not put to use for a separate commercial purpose (see 40 C.F.R. §§ 711.10(c), 720.30(h)), you do not need to report it. If your byproduct's only separate commercial purpose "is for use by public or private organizations that (1) burn it as a fuel, (2) dispose of it as a waste, including in a landfill or for enriching soil, or (3) extract component chemical substances from it for commercial purposes" (see 40 C.F.R. § 720.30(g)), then that byproduct is also excluded from CDR reporting. This exclusion applies only to the byproduct; it does not apply to the component chemical substances extracted from the byproduct.
     
    If a chemical is extracted from the byproduct through a means that involves breaking chemical bonds or forming new chemical bonds, the process would not meet EPA's criteria for extracting a component and therefore, the byproduct would be subject to reporting because it does not meet the exclusion criteria.
     
  13. What are a company's obligations once it determines it is not subject to reporting?
     
    If a company determines that it is not subject to reporting under the CDR, it should maintain the appropriate paperwork/records that demonstrate its findings. There is no regulatory obligation to do so, but would be considered good business practice in case there is a future EPA audit.
     
  14. Reclaim/recycle is still very confusing. For example, if a company scraps a large chemical tank by cutting it up into small pieces for removal and eventual reclamation of the steel, is the iron reportable if it is >25,000 lbs? What about large amounts of metal shavings from a maintenance shop sent to recycler?
     
    These examples, pieces of a metal chemical tank or metal shavings, are not chemical substances nor were they produced as a result of a chemical reaction at the reporting facility. Therefore, they would not be reportable under the CDR.
     
  15. "Volume of substance used at a site," can you comment on how that might apply to a distributor where product is shipped into a public warehouse?
     
    The volume of the substance used at a site would be the total volume of the domestically manufactured and imported chemical substance used at the reporting site, in pounds. "Used" would refer to further chemical reaction or processing of the subject chemical within the same facility location. It could also refer to the direct use at the reporting site, such as for cleaning equipment. The number reported would represent the volume of the chemical substance that does not leave the manufacturing site.
     
  16. If a chemical processor processes a chemical at or above the reporting volume and at the same time the manufacturer of this chemical withholds essential chemical information such as chemical identity or CASRN from this processor based on various reasons, including trade secret, how does the processor go about reporting this chemical?
     
    If there is a situation in which a processor is subject to reporting under the CDR, but does not have relevant information from the chemical manufacturer to complete the Form U reporting, the processor and manufacturer can submit a joint submission under the CDR. EPA's Instructions for the 2012 TSCA Chemical Data Reporting includes special instructions for joint submitters, as follows:
    Joint submissions are allowed only in those instances where a supplier will not disclose to the manufacturer (including importer) the specific chemical name of the imported chemical substance or of a reactant used to manufacture a chemical substance, because the supplier claims the specific chemical name is confidential.
     
    This may happen, for instance, when a company is importing a mixture under a trade name, and the foreign manufacturer refuses to reveal the chemical identity of a confidential component of the mixture. In this case, the importer and the supplier can jointly report the information through a joint submission. The importer must ask the supplier of the confidential chemical substance to directly provide EPA with the correct chemical identity in Part IV of Form U (see 40 CFR 711.15(b)(3)(i)(A)).
     
    This may also happen in the event a manufacturer cannot provide the entire chemical identity of a chemical substance it manufactures because the chemical substance is manufactured using a reactant having a specific chemical identity that the reactant supplier claims as confidential and will not reveal to the manufacturer. In this case, the manufacturer and the supplier of the reactant can jointly report the information through a joint submission. The manufacturer must submit a report directly to EPA containing all information he or she knows or can reasonably ascertain about the chemical identity. Furthermore, the manufacturer must also ask the reactant supplier to directly provide to EPA the correct chemical identity of the confidential reactant in a joint submission (see 40 CFR 711.15(b)(3)(i)(B)).
    See Section 6.7 in EPA's Instructions for the 2012 TSCA Chemical Data Reporting for further details.
     
  17. Are polymers reportable for the CDR, and if so, under which circumstances?
     
    Five groups or categories of chemical substances, though included on the TSCA Inventory, are largely exempt from reporting under the CDR rule. These groups are polymers, microorganisms, certain forms of natural gas, naturally occurring chemical substances, and water. If a polymer, however, is subject to any of certain TSCA actions (Section 4, 5, 6, or 7, or an enforceable consent agreement), it would no longer be exempt from reporting. See Appendix B in EPA's Instructions for the 2012 TSCA Chemical Data Reporting for further details.
     
  18. Will EPA be providing further guidance for pesticide formulators?
     
    EPA does not plan to have specific guidance for pesticide formulators. The 2006 Q&A document contained some guidance for pesticide formulators (see #56, 57, and 58). Because the recent changes to the reporting requirements do not change the definition of chemical substance (which excludes pesticides), these three Q&As are expected to be in the 2011 Q&A document, which EPA plans to publish on its CDR website in 2011. The 2006 guidance has been archived and remains available through the Resources page at www.epa.gov/cdr.
     
  19. What if you source a material domestically and import it? Do you only report on the imported volume? Do you use the total volume or only the imported volume for the threshold?
     
    According to EPA's Instructions for the 2012 TSCA Chemical Data Reporting, for chemical substances manufactured under contract, i.e., by a toll manufacturer, the site is the location where the chemical substance is physically manufactured. If the domestically sourced material is manufactured at a site that is different than the import site, each site would evaluate its own volume for determining reportability. If thresholds are reached, there would be two reports -- one for the manufacturing site and one for the import site. If the manufacturing site is the same as the import site, you would total the manufactured and imported volumes to determine if reporting thresholds have been reached and if so, would report both volumes on one report.
     
  20. Will the information accumulated and made available to the public reveal the company name?
     
    It depends if the submitter claims the company name as confidential business information (CBI). If so, and if the company provides the appropriate upfront substantiation for that claim, the company name would be protected. If not, the company name would be made available to the public.
     
  21. Are imported mixtures reported under CDR?
     
    The individual chemical components in imported mixtures would be subject to reporting under the CDR.
     
  22. If a formulated product is exported to a customer in Canada that later returns a portion of it because it was more than the customer needed, is the returned amount reportable as an imported chemical substance?
     
    The returned amount would be considered an imported chemical substance.
     
  23. What entity is required to report as a site for imported substances?
     
    The site for an importer who imports a chemical substance described in 40 C.F.R. § 711.5 is the U.S. site of the operating unit within the person's organization that is directly responsible for importing the substance. The import site, in some instances, may be the organization's headquarters in the U.S. If there is no such operating unit or headquarters in the U.S., the site address for the importer is the U.S. address of an agent acting on behalf of the importer who is authorized to accept service of process for the importer.
     
  24. Is there further clarification as to what is meant by "directly responsible for importing the substance"? Is that the entity that initially determines the particular substance is needed?
     
    The definition of importer, found at 40 C.F.R. § 704.3, provides specific directions for who should be considered the importer, but also allows for any one of several persons to be considered the importer. In the event that several persons and sites meet the importer definition, you should decide among yourselves who is best situated to report. Only one site should report.
     
  25. A company processes Chemicals A, B, C, D, and E. During the process, Chemicals D and E react to form Chemical F. The company exports a portion of the mixture of Chemical A, Chemical B, Chemical C, and Chemical F to customers outside the U.S. Is Chemical F reportable on the CDR? How does the company report quantity directly exported and process and use at site of manufacture information?
     
    Yes, it is reportable. The EPA Instructions for the 2012 TSCA Chemical Data Reporting state that you are subject to CDR reporting if you manufactured (including imported) a chemical substance in production volumes of 25,000 pounds or greater at any single site you owned or controlled during the principal reporting year. The Instructions specifically note that volumes of chemicals directly exported should not be subtracted from the total production volumes.
     
    If, after synthesis of Chemical F, there are no further processes to the mixture of Chemicals A, B, C, and F at the reporting site, the company would report the quantity of Chemical F in this mixture that is shipped to a customer outside the U.S. as exported. The company would not report on process and use information in Part III for that quantity of Chemical F that was exported without further processing.

 
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