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What would  TSCA reform bill HR 5820, if it passed as released, do to companies beyond what they have to do today?  This blog deals with my best guess at what the implications are for Chemical Processors and follows on from my previous review for chemical manufacturers/importers.  This blog also deals only with single chemicals being processed and not mixtures as such.  HR 5820’s potential hit on regulating mixtures (“preparations” in EU-speak) will be another potential blog.   The following processing scenarios are reviewed here:

Scenario H: Company processes an existing chemical for the same uses as it has for a number of years.  The chemical isn’t on anybody’s concern list (no safety standard yet).

Scenario I: Company begins to process a chemical it has previously declared for a use that was not included in its previous declaration (whether or not anyone else had declared the use). The chemical isn’t on anybody’s concern list (no safety standard yet).

Scenario J:.  Company processes a chemical that is subject to a newly issued safety standard.

Scenario K: Company wants to begin processing a chemical that is subject to a safety standard.

Chemical processors are those who prepare a chemical substance or mixture after its manufacture, for distribution in commerce, regardless of form or physical state or as part of an article containing the chemical substance or mixture.  EPA has long held that reacting a chemical to form another is also “preparing” a chemical for distribution (which has never made any sense.)  This definition is unchanged in HR 5820.

That means any company that opens a packaged product it got from someone else, does anything to it and then distributes any of its atoms further is a processor. Formulators, repackagers, fabricators.

Not a lot of attention has gone into this TSCA definition for years because most of the tough work (PMNs, testing and reporting) has fallen on manufacturers, with EPA exempting processors as too many, too duplicative and too confusing to deal with.  But HR 5820 fully opens the net by requiring inventory reporting (to be called “declarations”) to processors and making significant new use rules apply to everyone and every chemical.  Maybe EPA will exempt processors if they think they will get all the information they need from manufacturers, but the level of detail to be required will demand processor reporting.

The Scenarios:

Scenario H: Company processes an existing chemical for the same uses as it has for a number of years. The chemical isn’t on anybody’s concern list (no safety standard yet).

1.  DECLARATION.  Company has to file a declaration one year after amendment of TSCA that includes:

–  the chemical identity of the chemical substance or mixture;

–  the name and location of each facility under the control of the processor at which the chemical substance or mixture is manufactured (e.g., if it is contract manufactured for the company) or processed or from which the chemical substance or mixture is distributed in commerce

–  the number of individuals exposed, and reasonable estimates of the number who will be exposed, to such substance or mixture in their places of employment and the duration of such exposure

–  a list of health and safety studies reasonably ascertainable by the processor (regardless of whether EPA already knows about it). Also copies of those studies that the company has not previously submitted to EPA.

–  the physical, chemical, and toxicological properties of the chemical substance or mixture, including GHS classification of the toxicity.

–  the categories or proposed categories of intended use

–  the total amount of each substance and mixture processed

–  reasonable estimates of the total amount to be processed

–  the amount processed for each of its categories of use

–  reasonable estimates of the amount to be processed for each of its categories of use or proposed categories of use

–  a description of the byproducts resulting from the processing, use, or disposal of each such substance or mixture

–  exposure information relating to the chemical substance or mixture. EPA will need to define what this means.  Will it be life cycle exposures to any and all media by all users and disposal?  Assume it will be similar to what is asked for in a PMN today – although EPA does a lot of modeling based on process descriptions which are not called out in the bill.  Perhaps EPA will ask for process conditions as a surrogate for exposure information?

–  any conditions currently placed on the chemical substance or mixture due to regulation under any Federal law or due to voluntary action (presumably, this would include conditions set out in safety standards, with which the company must comply and possibly include all uses – even those previously outside current TSCA “chemical substance” jurisdiction)

–  any information indicating that a mixture including the chemical substance has substance characteristics that are different from the substance characteristics in kind or degree.

–  a certification signed by a responsible official of the submitting party that each statement contained in the submission is accurate and reliable; and includes all material facts known to, in the possession or control of, or reasonably ascertainable by the manufacturer or processor.’’

2.  DECLARATION UPDATES

Company has to update the information

every 3 years whether or not it has made any changes

immediately if it would indicate “significant new information” of adverse effects or anything relevant to meeting a safety standard.  If this goes the way the old 8(e) did, this will turn out to be any change from that previously reported except for minor volume differences

– No later than 180 days if the company permanently quits processing the chemical.

3.  MINIMUM DATA SET

Company has to provide a minimum data set [to be defined by EPA by rule, but expect the REACH set] depending on volume [to be EPA defined] on a schedule of:

– 3 years for high volume

– 4 years for moderate volume

– 5 years for everyone else  [REACH gives until 2018 and has a 1000 kg cutoff]

Odds are pretty good that processors will be able to rely on – and pay for the privilege – the minimum data set developed by manufacturers.

4.  WHATEVER ELSE EPA WANTS TO KNOW

– EPA has carte blanche to ask for any other records or reports it wants by rule or order.

– Section 4 test rules and orders will also trigger reporting

5.  SIGNIFICANT ADVERSE REACTION ALLEGATIONS AND SUBSTANTIAL RISK INFORMATION

The old 8(c) and 8(e) provisions are unchanged except that allegations records need to be reported annually.   And the bill changes the numbering so that those sections become 8(e) and 8(h), respectively.

6.  DISCLOSURES TO COMMERCIAL PURCHASERS

Companies have to provide “all known commercial purchasers” (whether they buy from the company or someone else?) with each shipment or on request:

– the chemical identity of the chemical substance or, for mixtures, the chemical identity of all chemical ingredients.  Confidentiality for chemical identity appears to be limited to those chemicals with no (known?) health and safety studies and that are not in children’s products or otherwise possibly exposing children.

-all information regarding toxicological properties of the chemical substance or mixture submitted to EPA in the Declaration

– the list of health and safety studies submitted to EPA and copies of the individual studies if requested

– any records of “significant adverse reactions” allegations (e.g., customer complaints) submitted to EPA (but oddly, not substantial risk notifications)

This provision will impact processors the most, as it will challenge the ability to maintain confidential business information.

IMPLICATIONS FOR EXISTING PROCESSORS

INFORMATION MANAGEMENT: A huge multi-disciplinary effort will be needed to create the first declaration.  Records will need to be searched, collated and reported for health and safety studies and toxicity information, sales and marketing current and future will need to be calculated, experts will need to determine how to represent exposure information (which EPA will need to carefully lay out in rulemaking), collating all applicable regulatory standards, chemistry experts to identify byproducts and more.  Likely there will be very extensive communication needed with suppliers to make sure the processor knows what is in the raw materials he uses and what information he can use from the manufacturer or upstream processor.

A jobs bill?  Probably not (at least for the private sector – EPA and consultants will have a hey day, however!).  Resources will have to be reallocated to cover these new reporting requirements, since they will not be revenue generators.

This work will need to continuous – to quickly identify “significant new information” and at a minimum redoing the reporting every 3 years.

MINIMUM TESTING: It’s doubtful any processor would do its own testing on individual chemicals.  The best that can be hoped for is that the manufacturer has already done the testing and will give or sell downstream customers the data at a reasonable cost.  This can be tricky if there are multiple parties in the supply chain before the reporting processor.  One can only hope that EPA will give processors a bye on this one.

RULEMAKING: A lot of work will need to be done to help EPA exercise the provision that declarations  will not be unnecessary or duplicative.” Much will depend on how fine EPA makes reporting categories of information. Regardless, there will need to be mechanisms for the supply chain to communicate what is and is not being reported by each party.

CBI: There will be loss of proprietary information: No chemical identity confidentiality is allowed if it is subject to a health or safety study or is used in a children’s product.  Processors will be hard-pressed to protect formulation ingredient disclosure (except for percent composition information).  EPA has already begun reversing the historical default of not challenging claims.  Much more care will need to go into upfront substantiation of use, exposure, volumes, etc. information.  Whether or not the link between a company and a chemical is going to be accepted as a valid claim is unclear.

Fees:  Wildcard.  EPA can charge them and, given budget constraints, will.

Scenario I: Company begins to process a chemical it has previously declared for a use not included in its previous declaration (whether or not anyone else had declared the use – the use is new to the company). The chemical isn’t on anybody’s concern list (no safety standard yet).

Submit a declaration as in Scenario H on the new use within 6 months of starting the previously undeclared use.  Update the previously declared information.

IMPLICATIONS FOR PROCESSORS WITH NEW USES OF NONCONTROVERSIAL CHEMICALS:

Same as Scenario H, but with closely monitored new marketing/sales activity to spot changes outside previously reported categories.

Scenario J:.  Company processes a chemical that is subject to a newly issued safety standard.

See blog on Safety Standards here.

As well as dealing with everything from Scenario H, the following will apply:

First, the company will have probably been subject to an extensive reporting rule as EPA tries to collect enough information to be able to do a life cycle assessment of aggregate and cumulative exposures to the chemical.  EPA can do this by rule or order (with less recourse for companies to argue the requirement) on anything it thinks would “assist” (not today’s “necessary”) the agency in doing a safety standard.  Likely this would sweep in uses that are otherwise exempt from today’s TSCA.

Company will need to comply with any conditions set and be able to prove it.  These conditions can be pretty much anything: ban, production limits, use restrictions, hazard communication, monitoring, testing, industrial hygiene measures, disposal, risk reduction plans, etc.

Presumably, EPA will set various recordkeeping, monitoring and other requirements for reporting.

Priority chemicals listed in the bill will be the first to get safety standards (within 18 months of passage) and newly listed (300/yr) within 30 months of listing.

There is a provision for “critical uses” for chemicals that cannot meet the safety standard conditions if the EPA is convinced (the burden of proof is on the company) that the use is “critical or essential” and there is no feasible safer alternative or there is a net benefit to health or the environment compared to alternatives.  Feasible conditions will still be set and purchasers must be informed that the supplied chemical is subject to a safety standard. These exemptions are good for 5 year periods. EPA will publish them.

IMPLICATIONS FOR PROCESSORS WHO BECOME SUBJECT TO SAFETY STANDARDS:

New reporting requirements need to be monitored and responded to.  These will far exceed current PAIR reporting as EPA needs detailed information to create safety standards.

Compliance with conditions set for safety will entail variable and potentially high costs, e.g., relabeling, market restrictions, monitoring, workplace controls, etc.

Constant vigilance to prevent a “significant new use” will be necessary to allow consideration of whether notification is economically warranted and avoid penalties. (90 day pre-notice is required for such new uses.)

New communication to customers about the safety standard and its meaning for the company’s products will be required, along with requests not to initiate new uses without prior consultation.

More export notifications.

Companies will exit manufacture of safety standard chemicals, threatening sources of supply.  Likely only large companies will be able to deal with managing safety standard conditions.

The rate of issuance of safety standards by EPA and the use of categories of chemicals will determine how many companies are affected and the market for the chemicals.

Scenario K: Company wants to begin processing a chemical that is subject to a safety standard.

See Scenario J.

Notification 90 days prior to processing and wait to see what additional conditions EPA may impose.

IMPLICATIONS FOR PROCESSORS ADDING SAFETY STANDARD CHEMICALS TO THEIR PORTFOLIO:

Fewer companies will want to make such chemicals, unless they already have extensive regulated chemical capabilities.  De facto shrinkage of the number of suppliers as existing manufacturers exit and no new ones who will want to deal with the new restrictions.

……………….

Congress is on hold on moving TSCA Reform this year.  But heavy lobbying continues on both sides.  It’s not tough enough, it’s too tough, etc…  And if the Republicans gain more votes in the House….  Meanwhile, EPA is issuing Action Plans under the existing authority of TSCA (which is far broader than is acknowledged and can be quite effective with an aggressive EPA.  See latest here).

Contact EHS Strategies, Inc. for today’s and possibly tomorrow’s TSCA assistance.

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