EPA Issues Final Rule Requiring Reporting on Nanoscale Substances
Following years of development, an outpouring of public comment, and scrutiny at the Office of Management and Budget (OMB), on January 12, 2017, the US Environmental Protection Agency (EPA) published the first federal environmental regulation to impose reporting requirements specifically for nanoscale materials.1 The regulation—issued using EPA's authority under Section 8(a) of the recently-amended Toxic Substances Control Act (TSCA)—imposes both reporting and recordkeeping obligations for current and future manufacturers and processors of existing chemical substances produced at the nanoscale. The proposed rule was issued in April 2015; EPA extended the public comment period in July 2015. Interest in the proposed rule was considerable. By the August 2015 close of the comment period, EPA had received nearly 70 public comments addressing the often complex terms of the proposal. Numerous intragovernmental comments also were received by the Agency. One year after the close of the comment period, significant amendments to TSCA were enacted. Now, on the eve of a change in administrations, six months after the TSCA amendments took effect, and following an almost three-month review by OMB, EPA has published the final nanoscale substances reporting rule. The rule takes effect May 12, 2017; initial reports required under the final rule must be submitted within one year thereafter. Given that the 2016 amendments to TSCA enable EPA to issue civil penalties of up to US$37,500 per day, per violation, it will be critical that manufacturers, importers, and even persons who merely process a chemical substance that exist on a nanoscale have an understanding of the regulation and its implications for their business.
Scope and Terms of the Final Rule
Who must report. The final TSCA 8(a) rule requires manufacturers and processers of certain existing chemical substances (including persons who intend to manufacture or process such substances) to provide reports to EPA when such substances are manufactured and processed on a nanoscale in new discrete forms not previously reported to EPA. The information must be provided to the Agency using a reporting form generated by EPA which is to be submitted electronically and must include, insofar as the information is "known to or reasonably ascertainable," the chemical identity, production volume, methods of manufacture and processing, exposure and release information, and information (such as test data) concerning the environmental and health effects of the reported substance(s).
When to report. Persons who manufactured or processed a discrete form of a reportable nanoscale chemical substance at any time during the three years prior to the effective date of the final rule must report to EPA not later than one year after the effective date of the final rule, by May 12, 2018. The final rule also establishes a standing requirement to submit a one-time only report for persons who intend to manufacture or process any new discrete form of a reportable existing chemical substance on or after the effective date of the rule. Such reports on new discrete forms are required to be submitted at least 135 days before manufacturing or processing of the discrete form commences.
Substances subject to reporting. Although refinements and clarifications of the reporting requirements were made which assist in interpreting the final rule, the general scope of the rule did not change significantly between the proposal and the final rule. The final rule covers both manufacturers and processors of chemical substances that are (1) solids at 25 degrees Celsius and standard atmospheric pressure; (2) are manufactured or processed in a form where any particles, including aggregates and agglomerates, are between 1-100 nanometers in at least one dimension; and (3) are "manufactured or processed to exhibit one or more unique and novel properties." In order for a substance to exhibit "unique and novel properties," the final rule explains, the chemical substance must have different properties in nanoscale form than it does in other forms—i.e. the substance must demonstrate a "size-dependent property."
Additionally, the final rule states that if there is (1) a change in process to effect a change in size, or a change in the properties of a nanoscale chemical substance, or both; (2) a significant change in mean particle size (greater than 7 times the standard deviation); and (3) a significant change in zeta potential, specific surface area, dispersion stability, or surface reactivity, then manufacturers and processors of multiple nanoscale forms of the same chemical substance may need to report separately for each "discrete form."
Exclusions from reporting. The final rule clarifies, but retains certain exemptions. For example, the Agency will exclude from the reporting requirement chemical substances that are formed at the nanoscale as part of a film on a surface. EPA also is excluding from the reporting requirements certain biological materials including DNA, RNA, and proteins, while expanding the list to include enzymes, lipids, carbohydrates, peptides, liposomes, antibodies, viruses, and microorganisms. (Note that the Agency has separate reporting requirements under TSCA for microorganisms that are considered to be "new chemicals" pursuant to TSCA Section 5 regulations.) The final nanoscale substance reporting rule will not require reporting of substances that dissociate completely in water to form ions with a size that otherwise would be reportable.
Reporting form and recordkeeping are required. The final rule requires persons submitting reports to EPA using a reporting form which requests essentially the same level of detail required in the Agency's TSCA Section 5 premanufacture notification form, including the specific chemical identity of the substance, the methods of manufacture, the quantity produced (including estimates of future production), the uses of the substances, and any existing health and safety data. Responding to a comment on the proposed rule, EPA rejected the suggestion that it does not have the authority under TSCA Section 8 to require the submission of this information, stating that TSCA Section 8(a) gives EPA broad authority to collect information that the EPA Administrator may "reasonably require."
The Final Rule also imposes recordkeeping requirements, obligating processors and manufacturers to maintain records which include copies of the required submission and documents supporting the information contained in the Section 8(a) reports. Such records must be maintained for three years.
Changes from the Proposal
The proposed rule would have required current manufacturers and processors of nanoscale materials to comply with reporting requirements within six months after the final rule became effective. The final rule extends the period of time for compliance to one year after the final rule becomes effective. However, the final rule did not modify the terms of the proposed rule requiring persons who intend to manufacture or process a new discrete form of a chemical substance to submit a report to EPA at least 135 days before beginning manufacture or processing. EPA has clarified that, unlike the Section 5 new chemical notification regulations, the final Section 8(a) regulation does not strictly prohibit the report submitter from commencing production of the new discrete form of a nanoscale substance prior to expiration of the 135-day period. Thus, if unexpected changes affecting a processing or manufacturing schedule prevent the Company from reporting to EPA the full 135 days before beginning manufacture or processing, it may begin manufacturing and processing less than 135 days after submission of its Section 8(a) report. EPA suggests that Section 8(a) report submitters should document "supporting facts" if such a change in schedule occurs.
As noted, in the final rule EPA has enhanced the proposed exemption for RNA, DNA, and proteins to include enzymes, lipids, carbohydrates, peptides, liposomes, antibodies, viruses, and microorganisms. The Agency reasons that the properties of the exempted biological materials, even though existing on a nanoscale, are not specifically a function of the size of the material as opposed to a property imparted by the precise nucleotide sequence, or the complex biological structures (in the case of living cells).
The general exemptions to TSCA Section 8(a) reporting requirements, such as the production of small quantity materials for research and development purposes and the production or manufacture of nanoscale substances by small manufacturers or processors, apply to the final rule. For this rule only, EPA has defined a "small manufacturer or processor" as those with sales of less than US$11 million per year.
Clarifications and EPA's Responses to Comments
In the final rule, EPA included in the preamble a series of responses to public comments the Agency received. Doing so allowed EPA to clarify some ambiguities and address a number of questions that remained outstanding at the close of the public comment period on the proposed rule. Some examples follow:
(1) What will EPA do with the information it collects?
In the final rule, EPA reiterated its intention to use the information it collects through this rulemaking to evaluate whether further regulatory action under the amended TSCA should be pursued for nanoscale materials. The final rule expresses that EPA did not promulgate this rule based on an assumption that nanoscale materials are likely to cause harm to people or the environment. Thus, the final rule leaves open the possibility that a report received by EPA under the 8(a) rule could trigger an administrative order pursuant to the amended Section 4 compelling the generation of additional test data, or the possibility that information gathered under the final rule could be shared with the states pursuant to TSCA Section 14, possibly encouraging environmentally active state governments to pursue their own regulatory actions.
(2) Are manufacturers and processors required to develop information in order to comply with the TSCA Section 8(a) reporting requirements?
In the final rule, EPA clarified that manufacturers and processors are not required to conduct testing or develop new information under this rule. However, the final rule requires processors and manufacturers to report information that is "known or reasonably ascertainable." The Agency also confirmed that, if a processor does not know the size of the particles in a product it acquires for processing, the processor is expected to take "reasonable measures" to determine whether reporting is required (including requesting information from the manufacturer)—but the processor is not obligated to generate test data to determine the particle size. EPA intends to issue guidance for the final rule within six months, including guidance on the reasonably ascertainable standard.
(3) Will a manufacturer of a nanoscale substance that is not on the TSCA Inventory be required to submit information under the Section 8(a) rule and a PMN pursuant to the Section 5 new chemicals notification rules?
EPA has clarified that, to avoid duplicative reporting, the Agency does not require persons to submit a Section 8(a) report if the person already submitted (since January 1, 2005) a notice under the Section 5 PMN rules for the same discrete form of the nanoscale substance. Similarly, any person who has already reported for EPA's Nanoscale Materials Stewardship Program (NMSP) part of or all of the information that is required under the 8(a) rule would not need to report that information again. The Agency also has clarified that the manufacturer of a nanoscale substance that is not on the TSCA Inventory only needs to submit a new chemical notification under Section 5 of TSCA, presumably at least 90-days before manufacture.
Additionally, EPA explains in the final rule that the purpose of the "discrete form" requirements (discussed in the "Scope" section above) is to target substances already listed on the TSCA inventory that are intentionally manufactured at the nanoscale and which have different properties when manufactured at that scale. Caution is still advisable when determining how and what to report under the Final Section 8(a) rule. It would be unfortunate (and potentially very costly) if a business submitting a report required under the final Section 8(a) rule (for what the entity has believed to be a substance already listed on the TSCA Inventory) learned that EPA considers the substance reported to be a "new" chemical substance, rather than simply a nanoscale "form" of an existing substance.
As the date for the final rule to become effective draws nearer, and before enforcement can begin, stakeholders should pay close attention to the additional guidance the Agency has promised to issue, as it will provide additional insight (before reporting must occur) on how the Agency EPA is interpreting the potentially more ambiguous provisions of the final rule. This is especially critical for entities that purchase and process chemical products (such as substances and mixtures supplied by others)—often times, the specific chemistries of which are not known to the processor. The opportunities are numerous for such an entity to discover when it is already too late that a material it has processed also triggered a time-sensitive reporting obligation under the new TSCA nano-chemical reporting rule. Further, given that EPA has stated its intention to use the information collected under this Section 8(a) rule to evaluate whether it should take additional action on nanoscale materials, stakeholders should keep an eye out for hints of any new proposed rulemakings (or testing orders) related to nanoscale materials and be prepared to engage with EPA in the context of the rulemaking process. Of course, if the incoming administration is truly determined to undo regulatory processes begun during the Obama Administration, it is possible the nanoscale substances reporting rule could by modified or repealed even before it takes effect later this year.
*Camille Heyboer also contributed to this advisory.