Recent EPA Actions Show Why Companies Must Understand Products’ Individual Chemical Constituents

Historically, the US Environmental Protection Agency (EPA) has generally declined to regulate manufactured goods or finished products―known as “articles”―under the Toxic Substances Control Act (TSCA). This long-standing practice seems to now be falling by the wayside, however, as EPA has begun affirmatively including articles in many new regulatory measures under TSCA. For companies that import, manufacture, process, or distribute finished goods for commercial sale, it is more critical than ever to know what chemicals are contained in those products.

TSCA regulations define “articles” to include manufactured goods or finished products. In 2021, Michal Freedhoff, whose legislative work includes the 2016 reauthorization of TSCA and who now heads EPA’s chemicals program office, made clear that the individual chemical constituents of articles can be subject to regulation under TSCA.

Additionally, in recent regulatory actions EPA has proposed (in the case of still-pending regulations) or required that companies know whether per- and polyfluoroalkyl substances (PFAS); persistent, bioaccumulative, and toxic (PBT) substances; methylene chloride; perchloroethylene  (PCE); or carbon tetrachloride are in any product that the company manufactures, imports, processes, or distributes, including in the products’ internal components.

Freedhoff’s 2021 comments confirm that these are not isolated regulatory actions, but the result of a significant policy shift in EPA’s use of its authority to regulate “articles.” Similar regulatory actions for additional substances are anticipated to follow. As Freedhoff forewarned, it is becoming increasingly important for companies to communicate with their supply chains about the composition of their parts and products to ensure they can comply with future TSCA regulations.

SUPPLY CHAIN DISRUPTIONS

For example, in January 2021, EPA released regulations for five PBT substances (decaBDE, PIP (3:1), 2,4,6-TTBP, HCBD, and PCTP) limiting the use and sale of products―including individual product components―that include the substances. For two of the five substances, PIP (3:1) and decaBDE, EPA’s rulemaking resulted in chaos for companies throughout the supply chain that manufactured or distributed parts and products containing PIP (3:1) and decaBDE but were unaware of new regulations.

The story of decaBDE provides a good example of just how significant the extension to articles can be, and how important it is for manufacturers to be aware of these new and pending regulatory developments.

As noted, the decaBDE rule prohibited the manufacture and processing of decaBDE or decaBDE-containing products or articles. While EPA included an extended compliance deadline for processing and distributing decaBDE for certain articles—specifically, use in wire and cable insulation in nuclear power generation facilities—EPA developed that extended deadline after engaging with the primary supplier of the decaBDE-containing wires and cables. However, the primary supplier did not notify its customers of the impact of the new regulation until the compliance date, after which it sent a letter informing its customers for the first time that it was discontinuing processing and distribution of decaBDE wire and cable.

The resulting supply disruption led to multiple emails, calls, and letters of concern to EPA that decaBDE-containing wire and cable—essential for operations in the nuclear power sector—was no longer available. Although the issue was of critical importance to the nuclear power industry, it took EPA nearly four months to agree to defer enforcement of the rule until a suitable replacement could be approved.

This delay—while necessary for the Agency to identify the next steps and take appropriate action— caused significant confusion for stakeholders at every point in the supply chain trying to understand which, if any, product components included decaBDE and what actions were necessary to ensure regulatory compliance.

The unintended disruptions in the decaBDE supply chain may have been avoided by an awareness on the part of the parties receiving the articles that those goods contained a newly regulated chemical (in this case, one that was being banned outright by EPA). This, in turn, may have prompted those companies to proactively engage with EPA during the rulemaking process, and/or have taken additional steps on the business side to prepare for the implementation of that regulation.

Another example is EPA’s proposed reporting rule for PFAS under TSCA Section 8(a). While this proposed rule only requires reporting and is not an outright ban like the decaBDE example, the extension of that proposed rule to articles will likely sweep hundreds (if not thousands) of unsuspecting companies into its scope, particularly if the proposal to include small businesses within the scope of Section 8(a)’s requirements survives the final rulemaking processes.

TAKEAWAYS

It is no longer enough to know if a particular chemical is used in the manufacturing process itself: if PFAS are contained in a finished product (including parts that are incorporated into other products), companies will have a duty to investigate and report the presence of that chemical. This should prompt all importers, manufacturers, and processors of finished goods to take notice.

Article manufacturer supply chains may involve thousands of components and multiple supply and distribution chains. Companies should be monitoring EPA’s proposed TSCA rules, submitting comments regarding the burdens and costs of regulating articles, and gathering data necessary for compliance.