Topics discussed this week include:

  • EPA proposes to decline to set CERCLA financial assurance rule for electric power industry.
  • D.C. Circuit upholds RCRA transfer-based exclusion.
  • EPA proposes renewable volume obligations for 2020.
  • EPA issues final enforcement policy on coordination with and delegation to states.

EPA proposes to decline to set CERCLA financial assurance rule for electric power industry. On July 2, 2019, the U.S. Environmental Protection Agency (EPA) proposed not to issue regulations for financial responsibility requirements for facilities in electric power generation, transmission and distribution (i.e., the electric power industry) under Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund). According to EPA, financial responsibility requirements are not warranted because, in part, modern industry practices and existing federal and state regulations are effective at addressing risks posed by the electric power industry. The superfund statute directs EPA to compel certain classes of facilities to demonstrate financial ability consistent with their risk levels associated with their production, transportation, treatment, storage or disposal of hazardous substances. In 2017, based on similar reasoning, the agency withdrew a proposal it had made earlier that year for financial assurance requirements for hardrock mining and mineral processing facilities. The suit challenging this decision, discussed here previously, is pending before the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit). EPA is under a court-ordered deadline to take final action by December 2, 2020. A prepublication version of the proposal is available here. Public comments will be due 60 days after the proposal is published in the Federal Register.

D.C. Circuit upholds RCRA transfer-based exclusion. On July 2, the D.C. Circuit upheld the “transfer-based exclusion” under the Resource Conservation and Recovery Act (RCRA) by denying an environmental coalition’s claim that the EPA rule for hazardous waste disposal was unjustified and beyond the agency’s authority. The transfer-based exclusion treats materials transferred from a waste generator to a third-party reclaimer that meet certain conditions as legitimately recycled rather than “discarded” and subject to RCRA Subtitle C regulation. The D.C. Circuit disagreed with the petitioners’ view that hazardous secondary materials are discarded whenever a generator pays a reclaimer to accept such materials. According to the court, EPA provided a reasonable explanation that payment does not necessarily make the materials “discarded” when the generator was willing to pay to recycle materials and reclaimers may charge such a fee because they can based on market conditions. The court further found reasonable EPA’s explanation for applying different standards to materials that are not “discarded” where they meet conditions EPA set to ensure secure transfer and legitimate recycling.

EPA proposes renewable volume obligations for 2020. On July 5, EPA proposed renewable volume obligations (RVOs) under the Renewable Fuel Standards (RFS) for 2020. The proposal increases the volume of biofuels blended into refiners’ annual fuel output to 20.04 billion gallons from 19.92 billion gallons in 2019 while maintaining the mandated amount of conventional biofuels at 15 billion gallons. The RFS provides waivers to small refining facilities (i.e., those with throughput of less than 75,000 barrels per day) in exchange for purchase of renewable identification number credits if they prove compliance would cause financial harm, which is known as the small refinery exemption (SRE). With this proposal, the agency is not seeking to reallocate the SRE amounts and noted that waivers are still available. The proposal also included the biodiesel mandate, which is held at 2.43 billion gallons for 2021, unchanged from 2020, against corn and ethanol producers’ demand for increase. EPA must finalize the 2020 RVOs by the statutory deadline of November 30, 2019. A prepublication version of the proposal is available here. Public comments will be due 30 days after the proposal is published in the Federal Register.

EPA issues final enforcement policy on coordination with and delegation to states. On July 11, EPA released a new policy aiming to increase coordination with and delegation to states around environmental enforcement. The policy memo, titled “Enhancing Effective Partnerships Between the EPA and the States in Civil Enforcement and Compliance Assurance Work,” details when the agency will defer to states on enforcement actions and creates a more structured process for consultation and communication between federal and state agencies. According to EPA, the final policy replaces a set of interim and draft guidelines issued under the current administration but maintains the principle that EPA defers to state decision-making in most cases and works with states on enforcement actions. The policy also expanded on the interim guidance, adding details to nine examples where EPA may choose to exercise primary enforcement authority.