With so many new and expanded reporting requirements taking effect for the 2016 reporting cycle, it is time for manufacturers and importers of chemical substances to begin compiling the information necessary for making a timely submission to comply with the Chemical Data Reporting (CDR) rule, under the Toxic Substances Control Act (TSCA). Reports must be submitted between June 1 and September 30, 2016. Although the submission period for the 2016 CDR may seem far off, certain changes in the rule’s requirements will make reporting more complicated than in prior reporting cycles. Failing to meet the 2016 reporting deadlines, and submitting reports with omissions or errors, can lead to enforcement actions and potentially significant penalties.

The Basics

The CDR rule requires manufacturers (including importers) of chemical substances to submit to the US Environmental Protection Agency (EPA) data concerning the production and use of such chemicals if certain minimal quantity thresholds are met. EPA collects, collates, and eventually publishes the information it receives concerning the identity of chemical substances produced and imported in the United States, the quantities produced or imported, and the manner in which the substances are used. EPA considers the information compiled to represent the “most comprehensive source of basic screening-level, exposure-related information on chemicals available” to EPA.

What’s New for 2016?

Expanded Reporting Years: The 2016 CDR reports, like those for previous reporting cycles, will cover a four-year period (for the 2016 reports, those years will be 2012, 2013, 2014, and 2015). However, while 2012 submitters only had to determine whether they manufactured (or imported) a substance in quantities of 25,000 pounds or greater at any single site during a single year (i.e., 2011), for the 2016 submissions, reporting will be triggered when 25,000 pounds or greater were manufactured (or imported) at any single site during any of the four years covered by the reporting cycle. In other words, for the 2016 CDR reports, manufacturers (and importers) will have to quadruple their analyses and determine whether they manufactured (or imported) a substance above the applicable threshold in 2012, 2013, 2014, and 2015. Thus, submitters should begin to collect and review for accuracy and completeness manufacturing (or importing) volumes for each of these four years.  

Lower Thresholds: In addition, for the 2016 CDR reports, EPA has lowered considerably the manufacturing (or importing) quantity threshold that triggers reporting for substances that are subject to certain TSCA requirements from 25,000 pounds or greater to 2,5000 pounds or greater per site per year. The substances to which this lower threshold applies include, but are not limited to those substances subject to TSCA Section 4 test rules and negotiated testing agreements, Section 5(e) Orders, and 5(a) Significant New Use Rules. (Note: Such actions also can have an effect on a manufacturer’s eligibility to claim certain exemptions from reporting. The correct reporting threshold and eligibility for certain exemptions is determined based on a chemical substance’s regulatory status as of June 1, 2016. )

Additional Reporting of Processing and Use Information: Also new for the 2016 cycle, there is no longer a different reporting threshold for reporting processing and use information. The CDR reports require manufacturers (or importers) that exceed the aforementioned manufacturing (or importing) thresholds also to report how the substance is processed or used, including by consumers. For the 2012 reporting cycle, processing and use information previously was triggered only when a substance was manufactured or imported in quantities of 100,000 pounds or greater per site per year. As a result, many 2012 submitters did not need to provide processing and use information because they fell under this 100,000 pounds threshold.

For the 2016 CDR reports, however, EPA lowered the threshold for reporting processing and use information to be the same as the manufacturing (or importing) volumes that trigger CDR reporting more generally: 25,000 pounds per year or 2,500 pounds per year, depending on whether the substance in question also is subject to certain other TSCA actions. Accordingly, for the 2016 reporting cycle, all submitters will need to provide processing and use information. However, processing and use information will be required only for calendar year 2015 and not for all four years subject to the 2016 reporting cycle.

What Remains the Same, But Is Important to Remember

In addition to these new requirements for the 2016 CDR reports, there are several other requirements that remain the same as for the 2012 CDR reports, including those we discuss below that, in our experience, may complicate or even delay submission of CDR reports if not proactively considered. 

Confidentiality Claims Must be Substantiated at the Time of Reporting, and Can Cause Delays 

While EPA permits submitters of CDR reports to claim certain trade secrets and commercially sensitive information to be confidential business information (CBI), such claims will generally need to be substantiated at the time the CDR report is initially filed. Thus, CBI claims asserted for the specific chemical identity of a manufactured or imported substance will be accepted only when accompanied by a separate written substantiation for the chemical substances claimed as CBI. The failure to substantiate the claim for confidentiality of the chemical identity in accordance with applicable rules could result in EPA making the information available to the public without further notice to the submitter. CDR report submitters who intend to assert such claims and submit the necessary substantiation should carefully consult the reporting instructions and consider seeking assistance in preparing the substantiation documentation. 

Importers in particular may encounter issues related to CBI, especially when overseas suppliers who ship chemical mixtures and blends refuse to reveal to the US importer (the entity responsible for CDR filings) the specific chemical identities of all components in the mixture. Clearing up such discrepancies frequently adds time to the process of preparing CDR submissions. 

Only Electronic Submissions Will Be Accepted

EPA will only accept 2016 CDR reports that are submitted electronically through EPA’s Central Data Exchange (CDX) portal. Those 2016 CDR submitters that have not already registered for access to CDX should consider doing so at least several weeks in advance of the submission deadline and become familiar with the CDX interface.

Importance of Timely Filing and Correct and Accurate Submissions

As demonstrated by recent EPA enforcement actions, the financial consequences of misreporting or failing to submit timely CDR reports can sting. For example, in 2012, EPA publicized that it had issued complaints against three companies arising from their alleged failure to comply with the CDR rule’s predecessor (known as the Inventory Update Reporting, or IUR, regulations). First, Haldor Topsoe, Inc. paid greater than US$200,000 in penalties arising from its alleged failure to provide accurate and complete reports and for failing to timely report four substances. Second, Bethlehem Apparatus Company, Inc. paid more than US$100,000 in penalties arising from its alleged failure to report one chemical and failure to comply with various other TSCA requirements. Third, Chemtura Corporation paid more than US$55,000 in the context of its alleged failure to file timely reports for two chemicals. 

More recently, Kemira Water Solutions, Inc. entered into a consent agreement with EPA to resolve multiple counts related to its failure to provide reports for eight different facilities.  The settlement obligated Kemira to pay in excess of US$500,000 in civil penalties.

Conclusion

Compared to the 2012 reporting cycle, manufacturers and importers of chemical substances face increased and more complicated CDR reporting obligations, including needing to analyze four years of manufacture (or importing) data per substance per site and providing additional processing and use information to EPA. Although perhaps tedious to complete, entities can ease their 2016 CDR reporting obligations (and reduce their risk of committing costly errors) by beginning the process now, including collecting, and reviewing for accuracy and completeness, the relevant manufacturing, importing, processing, and use information.