The U.S. Environmental Protection Agency’s struggle to distinguish between a waste and a recyclable material, dating back to its original May 19, 1980 rulemaking under the Resource Conservation and Recovery Act, takes its latest turn in the now-final Definition of Solid Waste rule (DSW rule), signed by Administrator Gina McCarthy on December 10, 2014. 80 Fed.  Reg. 1694 (January 13, 2015).

The new DSW rule will take effect six months after publication in the Federal Register. The 507 page final rule came as the result of a settlement between EPA and the Sierra Club over the EPA’s October 2008 rule on the same topic, in which the EPA liberalized the regulation of a form of recycling known as “reclamation.” Prior to the 2008 rulemaking, the EPA generally considered reclamation (the processing or regeneration of a material to recover a usable product) as akin to treatment, and therefore considered most materials destined for reclamation to be solid wastes.

However, EPA’s October 7, 2008 rule exempted certain forms of reclamation from hazardous waste regulation.  In doing so, EPA increased the complexity of an already intricate regulatory scheme known as the “definition of solid of waste.”  This definition is used to determine the threshold question of whether a given material is regulated as a solid or hazardous waste under RCRA or is instead a recyclable material exempt from regulation.  The October 2008 rule, among other things, established streamlined requirements for (a) materials generated and legitimately reclaimed under the control of the generator; (b) materials that are transferred to another entity for legitimate recycling; and (c) determining, on a case-by-case basis, whether a given material should be exempt from waste classification because of the manner in which it would be recycled. The rule also defined legitimate recycling by comparing the composition and handling of the reclaimed material against the raw material it was intended to replace.

The Sierra Club thought the 2008 rule lacked adequate safeguards to prevent hazardous waste from being released into the environment, and filed an administrative petition with EPA.  The petition resulted in the settlement that forced EPA’s hand to issue a proposed revised rule by June 30, 2011.  In sharp contrast to the 2008 rule, the June 2011 proposal tilted the balance of “recycling” in the other direction, and cut back on much of the flexibility in the October 2008 rule.

The now final rule, according to the EPA’s press release, “addresses significant regulatory gaps in the 2008 rule by requiring off-site recycling at a facility with a RCRA permit or with a “verified recycler” variance.  The rule “affirms pre-2008 DSW exclusions,” such as the scrap metal exclusion, and does not change the regulatory status of material “legitimately recycled” under those exclusions.  The rule includes a revised definition of recycling that “re-affirms the legitimacy of in-process recycling” and of commodity-grade recycled products, such as metal commodities. The rule retains the exclusion for recycling under the control of the generator, including “recycling onsite, within the same company and through certain types of toll manufacturing agreements.” Notably, the final rule includes a targeted “remanufacturing exclusion” for certain hazardous spent solvents being remanufactured into commercial-grade products.

Commenting on the rule, Assistant Administrator Mathy Stanislaus indicated that “it’s a major environmental justice milestone that directly addresses mismanagement of hazardous materials at some of these recycling facilities.” “The new DSW rule reduces risks for communities, at the same time that it helps to encourage certain types of recycling. Some higher-value hazardous spent solvents, for example, can be remanufactured and reused safely under the rule, which means that less new solvents are created. And some hazardous byproducts can be reused in the same process that generated them, through in-process recycling.” See Protecting Our Communities through Safe and Legitimate Recycling (December 12, 2014).

In its analysis, the EPA estimates that if thirty-one states and territories adopt the new DSW rule, it “will have an annual regulatory cost savings of $24 million as compared to baseline cost savings in the [eight] states and territories that have adopted the 2008 DSW final rule.”

For generators and waste industries alike, the new DSW rule means considerable work to ensure compliance.  Interpretation, understanding, and implementation of the new DSW rule will be a complex and time-consuming process.  To assist the regulated community, Seyfarth Shaw LLP will provide a DSW rule webinar in early 2015.