On May 30th, EPA reinstated a Bush Administration RCRA exemption that allows third-party recycling of hazardous secondary materials, known as the “Transfer-Based Exclusion.” The move will make it easier for facilities to use vendors to recycle materials like spent solvents and expired pharmaceuticals without managing them as hazardous waste. As a result, it may be possible for Large Quantity Generators (“LQG”) to reduce their generator status and avoid the compliance obligations that come with being an LQG.

Because the revival of the Transfer-Based Exclusion will make the federal RCRA regulations less stringent, states are not required to adopt the change. Determining whether the Transfer-Based Exclusion is available to a facility will therefore require a careful analysis of the state’s hazardous waste regulations and the status of EPA’s approval of those regulations. For example, in states that simply incorporate the federal rules – including all amendments – by reference, the Transfer-Based Exclusion is already effective. But, in states that adopted the 2015 Verified Recycler Exemption in lieu of the Transfer-Based Exclusion, the state will need to go through the normal process for amending its rules and seeking EPA’s approval for those revisions.

In addition, the Transfer-Based Exclusion contains a number of compliance obligations for the generators of newly exempted materials as well as the recyclers of those materials. While the conditions for the Transfer-Based Exclusion are much less onerous than the conditions for the Verified Recycler Exemption, generators and recyclers will both want to think carefully about how to comply with their respective obligations, including vendor contract provisions, documenting the legitimacy of the recycling process, compliance auditing and minimizing financial assurance requirements for recycling facilities.