As previously reported in our blog item on October 26, 2017, the U.S. Environmental Protection Agency (EPA) proposed triennial electronic reporting requirements pertinent to the supply, use, and trade of mercury in the United States. 82 Fed. Reg. 49564. This memorandum provides more information and an in-depth look into EPA’s proposed rule. The 2016 amendments to the Toxic Substances Control Act (TSCA) require EPA to establish periodic mercury reporting requirements for any person that manufactures mercury or mercury-added products or otherwise intentionally uses mercury in a manufacturing process to assist in the development of an inventory of mercury and other recommended actions. These other actions reportedly include potentially revising federal law or regulations to achieve further reductions in mercury use.
Under the proposed rule, EPA proposes to require reporting on the manufacture, import, distribution in commerce, storage, and export of mercury. EPA is directed by new TSCA to refrain from requiring reporting related to the generation, handling, or management of mercury-containing waste, unless mercury is recovered in the management of such waste. The proposed rule aims to narrow data gaps and limitations encountered in the EPA’s historic reliance on publicly available data on the mercury market in the United States. Additionally, the information provided under the proposed rule would be used by the U.S. government to assist in its implementation of the Minamata Convention, a multilateral environmental agreement that addresses the supply, use, and trade in mercury. Comments on the proposal are due by December 26, 2017.
Definition of Mercury, Exclusions under TSCA Do Not Apply
According to the proposed rule, the term “mercury” applies to elemental mercury (Chemical Abstracts Service Registry Number (CASRN) 7439-97-6) and mercury compounds, including all instances where elemental mercury or a mercury compound is reacted with another chemical substance. EPA provided examples of mercury compounds in Table 2 of the proposed rule. EPA notes that the definition of “mercury” under TSCA Section 8(b)(10)(A) supersedes the exclusions for chemical substances under TSCA Section 3(2)(B). The proposed rule, therefore, applies to all chemical substances that contain mercury, including chemicals that are not regulated under TSCA.
Explanation of Supply, Use, and Trade
TSCA, as amended in 2016, requires EPA to establish periodic mercury reporting requirements to assist the Agency in developing an inventory of mercury supply, use, and trade in the United States. To obtain the information necessary to create such an inventory, EPA is proposing to require reporting for the following activities:
- Import of mercury or a mercury-added product with the purpose of obtaining an immediate or eventual commercial advantage for the importer, except where such mercury is generated as a byproduct not used for commercial purposes or an impurity;
- Manufacture (other than import) of mercury or a mercury-added product with the purpose of obtaining an immediate or eventual commercial advantage for the manufacturer, except where such mercury is generated as a byproduct not used for commercial purposes or an impurity;
- Otherwise intentional use of mercury in a manufacturing process, other than the manufacture of a mercury compound or a mercury-added product, with the purpose of obtaining an immediate or eventual commercial advantage for the user, except where such mercury is generated as a byproduct not used for commercial purposes;
- Distribution in commerce, including domestic sale or transfer, of mercury or a mercury-added product;
- Storage of mercury after manufacture (including import); and
- Export of mercury or a mercury-added product, including determining and controlling the sending of mercury (unless specifically prohibited) or a mercury-added product to a destination out of the customs territory of the United States.
EPA states that the definition under TSCA of “distributed in commerce” is adequate to describe the storage and distribution in commerce under the proposed rule. EPA is proposing, however, to incorporate the concept of “domestic” to distribution activities to differentiate from the international import and export activities that are covered separately under the proposed rule. Additionally, EPA is proposing to require reporting only for quantities of mercury stored by persons who manufacture (including import) mercury and otherwise intentionally use mercury. Persons who produce mercury-added products would not be required to report on mercury storage, since the quantity of mercury would likely be too small to help explain the information gap.
EPA is proposing to separate reporting for manufacture and import activities to capture distinct actions by entities that handle and trade mercury. According to the proposed rule, reporters would be required to specify distinct amounts, if any, of imported or otherwise manufactured mercury, as well as amounts of mercury in imported or otherwise manufactured mercury-added products. EPA states that the intentional use of mercury in a manufacturing process and the manufacture of mercury or a mercury-added product will be distinguished based on how the mercury came to be present in a final product. Under the proposal, the manufacture of mercury or a mercury-added product involves the intentional addition of mercury where mercury remains present in the final product for a particular purpose. Otherwise intentional uses of mercury in a manufacturing process, under the proposal, involve the intentional use of mercury, but where no mercury remains in the final product, or only exists in the final product as an impurity.
With respect to mercury exports, EPA is proposing to include articles in the reporting requirements to collect data on mercury compounds and mercury-added products. EPA, however, is not proposing to require reporting on the export of elemental mercury from the United States since such exports have been prohibited since January 1, 2013. EPA notes that under new TSCA, the export of mercury (I) chloride or calomel; mercury (II) oxide; mercury (II) sulfate; mercury (II) nitrate; and cinnabar or mercury sulphide (an alternative spelling of “mercury sulfide”) will be prohibited as of January 1, 2020. To ensure a complete inventory, EPA is proposing to include at least one cycle of reporting prior to the effective date of the prohibition for export of the five mercury compounds to measure trends in supply, use, and trade; and provide a baseline for comparison of the changes in the amounts of other mercury compounds exported after the 2020 effective date. EPA states that reporting for exports of mercury compounds that are not prohibited under TSCA, and products that contain intentionally-added elemental mercury and/or any mercury compounds, including the compounds prohibited from export, will be required.
Regarding the manufacture and import of mercury as a byproduct, impurity, or similar occurrence, EPA stated that it considered whether such chemical substances are intentionally generated and whether such substances are used for commercial purposes. According to the proposed rule, mercury generated as a byproduct not used for commercial purposes and mercury that exists as an impurity, except where such impurities are present in a final product produced by persons who otherwise intentionally use mercury in a manufacturing process, would not be subject to the proposed rule. EPA states it considers the addition and presence of mercury in the manufacture of mercury-added products to be intentional, and, therefore, not an impurity.
Coordination with Existing Reporting Programs
New TSCA Section 8(a)(1)(5)(A) directs EPA to not require reporting which is unnecessary or duplicative, to the extent feasible. To avoid duplicative reporting on mercury, EPA is proposing to incorporate comparable reporting concepts and tools, as well as some exemptions, based on its review of four applicable data collection systems, specifically Interstate Mercury Education and Reduction Clearinghouse (IMERC), the Chemical Data Reporting (CDR) rule, the Toxics Release Inventory (TRI) program, and the U.S. International Trade Commission Interactive Trade DataWeb (USITC DataWeb).
Because EPA recognizes that some required information is already reported under the CDR rule and IMERC, the electronic reporting application for the mercury inventory would be designed to automatically skip certain reporting requirement fields when users indicate they report to the IMERC Mercury-Added Products Database and/or under the CDR rule. For instance, persons that reported to IMERC would not need to report amounts of mercury distributed in commerce and CDR reporters would not be required to report amounts manufactured (including imported) or exported that are already reported per the CDR rule. Such reporters would still be required to provide qualitative data that is not covered under the other data collection programs, however.
Persons Who Must Report
EPA believes that the statutory mandate applies to intentional acts that introduce mercury into supply, use, and trade in the United States through the manufacture of mercury or mercury-added products or otherwise intentionally use mercury in a manufacturing process. EPA notes that small businesses are not exempt from reporting and recordkeeping requirements under TSCA Section 8(b). According to the proposed rule, the following activities are subject to the reporting requirements:
- The manufacture (including import) of mercury;
- The manufacture (including import) of mercury-added products, except the import of a product that contains mercury solely as a component that is a mercury-added product; and
- The otherwise intentional use of mercury in a manufacturing process including, but not limited to, production of chlorine, polyurethane elastomer, and other chemicals.
EPA states that obtaining certain contextual data, such as North American Industrial Classification System (NAICS) codes, from original manufacturers (including importers) and users of mercury would sufficiently describe the use of mercury-added components by companies who do not first manufacture, import, or otherwise intentionally use mercury. Requiring reporting for products where mercury is present solely within a previously manufactured component poses risks of double-counting and may create undue burden for certain importers. Additionally, persons who merely trade, but do not manufacture or import mercury or mercury-added products, are not subject to the reporting requirements.
According to the proposed rule, the reporting requirements do not apply to individual consumers purchasing and importing a mercury-added product for personal use, nor persons engaged in the delivery of mercury-added products to an individual consumer, unless the delivery service intentionally specializes in part or whole in the import and distribution in commerce of mercury-added products.
Exemption for Persons Who Generate, Handle, or Manage Mercury-containing Waste
Pursuant to new TSCA, persons engaged in the generation, handling, or management of mercury-containing waste, unless that person manufactures or recovers mercury in the management of that waste with the intent to use it or store it for use, are not required to report for purposes of the mercury inventory. EPA states that it considers the following examples of persons and waste types to be exempt from reporting under the proposed rule:
- Hazardous waste treatment facilities that stabilize and landfill low-concentration mercury-containing waste;
- Manufacturing facilities that:
- Generate a mercury-containing waste and send it to a waste management facility;
- Use mercury to manufacture products or otherwise intentionally use mercury in a manufacturing process, and also generate a mercury-containing waste from that use or another process; and
- Discard mercury-added products, such as fluorescent light bulbs, switches, and thermometers, unless the facility also intentionally uses mercury in a manufacturing process;
- A person who uses a mercury-added product but does not manufacture mercury or mercury-added products and does not intentionally use mercury in a manufacturing process;
- Hazardous waste treatment facilities that recover elemental mercury from mercury-containing waste and manage that elemental mercury as a waste;
- A generator producing mercury incidentally from the beneficiation or processing of ore or related pollution control activities, who accumulates this mercury on-site; and
- A generator who temporarily stores waste elemental mercury for up to 90 or 180 days pending shipment for long-term storage or for treatment and disposal.
According to EPA, new TSCA calls for the development of a comprehensive inventory to eliminate existing data gaps related to mercury in commerce. Additionally, EPA states that the phrase “identify any manufacturing processes or products that intentionally add mercury” indicates that the proposed reporting requirements should apply to any person who manufactures (including imports) mercury, mercury-added products, or otherwise intentionally uses mercury in a manufacturing process regardless of the amount of mercury at issue. As a result, EPA is not proposing to establish a reporting threshold under the proposed rule. This means that any amount of mercury manufactured in, imported from, or otherwise used in the United States that is not otherwise exempt must be reported.
EPA believes that the amount of mercury used in the activities within the mercury market to be the core elements of the mercury inventory, but that additional information would help to better contextualize reported quantities of mercury used in domestic and, where appropriate, global supply, use, and trade. To streamline the reporting process and reduce the reporting burden, EPA states that it aims to develop a user-friendly and dynamic reporting application, consisting of straightforward questions that include fill-in-the-blank (numbers) fields, check boxes, and drop down menus based on pre-selected lists, which are described in the proposed rule.
EPA is proposing to require the following general reporting requirements, as applicable:
- Amount of mercury manufactured (other than imported) (lbs.);
- Amount of mercury in manufactured (other than imported) products (lbs.);
- Amount of mercury imported (lbs.);
- Amount of mercury in imported products (lbs.);
- Amount of mercury exported (lbs.), except mercury prohibited from export at 15 U.S.C. Sections 2611(c)(1) and (c)(7);
- Amount of mercury in exported products (lbs.);
- Amount of mercury in exported final product(s) (lbs.);
- Amount of mercury stored (lbs.);
- Amount of mercury distributed in commerce (lbs.);
- Amount of mercury in final product(s) distributed in commerce (lbs.);
- Amount of mercury in products distributed in commerce (lbs.); and
- Amount of mercury otherwise intentionally used (lbs.) in a manufacturing process.
EPA states that additional specific reporting elements are needed to better understand the categories of mercury-added products and the otherwise intentional use of mercury in a manufacturing process. Under the proposed rule, any person who manufactures (including imports) mercury would be required to report, as applicable, the specific mercury compound(s) from the pre-selected list provided in the proposed rule. Any person who manufactures (including imports) a mercury-added product would be required to specify as applicable, the category(ies) and subcategory(ies) from a pre-selected list. Any person who otherwise intentionally uses mercury in a manufacturing process would be required to specify, as applicable, the manufacturing process and specific use of mercury from pre-selected lists.
Similarly, EPA is proposing to require the following contextual reporting elements for certain sectors of the mercury market to provide context to the quantitative data reported:
- Country(ies) of origin for imported mercury and mercury-added products;
- Country(ies) of destination for exported mercury, mercury-added products, and final products; and
- NAICS code(s) for mercury, mercury-added products, and mercury in final products distributed in commerce.
Frequency of Inventory Publication and Data Collection
The recent TSCA amendments required EPA to publish the initial mercury inventory by April 1, 2017, and to continue publishing triennial iterations of the inventory thereafter. EPA expects to publish the first inventory supported by the proposed rule by April 1, 2020. While new TSCA mandates triennial inventory publications, EPA notes that the statute offers no guidance on the frequency of collection or reporting deadline.
After reviewing the respective collection frequencies and reporting deadlines for IMERC, the CDR rule, and the TRI program, EPA determined that coinciding with the triennial IMERC frequency of collection is appropriate given the mercury inventory publication schedule is also triennial. Additionally, EPA is proposing to set the mercury inventory reporting deadline to coincide with the TRI program deadline to align with a date with which certain, potential reporters might already be familiar. The proposed rule, therefore, would establish a July 1 reporting deadline for 2019 and every three years thereafter. EPA states that data submitted should cover only the calendar year preceding the year in which the reporting deadline occurs.
When describing the activities for which reporting is required, the proposed rule states that imported mercury or mercury-added products generated as a byproduct not used for commercial purposes or an impurity are exempt from reporting. Similarly, reporting is not required for the intentional use of mercury generated as a byproduct not used for commercial purposes. The proposed rule, however, does not include the same byproduct/impurity exemption in the description of the manufacture of mercury. EPA should revise the proposed rule to specify that activities related to the manufacture of mercury generated as a byproduct not used for commercial purposes or an impurity are exempt.
EPA stated that it aims to develop a reporting application and database with fill-in-the-blank number fields, check boxes, and drop down menus to minimize the reporting burden and streamline the reporting process. As a result, EPA created pre-selected lists for reporters to use to specify applicable mercury compounds, mercury-added product categories, manufacturing processes, and attendant uses of mercury. The mercury-added product categories, manufacturing processes, and attendant uses of mercury lists, however, include a number of “other (specify)” options requiring reporters to fill in their responses, which may impede EPA’s goal of streamlining the process. EPA should consider modifying the lists to include only an “other” option, thereby eliminating the requirement for a fill-in-the-blank response; or specifying that the fill-in-the-blank response options will only be required during the first reporting period. Once EPA gathers data from the first reporting period, it can modify the pre-selected lists accordingly so that during future reporting periods, reporters can simply check the appropriate responses.
The proposed rule states that mercury compounds for which information must be reported include, but are not limited to, the mercury compounds listed in Table 1. Unlike the other pre-selected lists, however, this list does not include an “other” option. EPA may wish to clarify whether mercury compounds beyond those listed are reportable, and if so, how they will be reported.
According to the proposed rule, all information reported for an applicable reporting year which runs from January 1 to December 31 must be submitted on or before the first day of July following the reporting year. Based on our reading, the reporting cycle runs from January 1 to July 1 following the reporting year. Stakeholders may wish to request that EPA clarify whether there is a limit to how far in advance information may be reported for a given reporting cycle.
With respect to a reporting threshold, the proposed reporting requirements apply to any person who manufactures (including imports) mercury, mercury-added products, or otherwise intentionally uses mercury in a manufacturing process regardless of the amount of mercury at issue. In regards to storage of mercury-added products, however, EPA stated that the quantity of mercury stored for such purposes is likely to be too small to help explain the information gap between sold and used mercury. Since the expected value of the information is likely to be low considering the burden and cost on reporters, EPA is not proposing to require reporting for quantities of such mercury. One could argue that EPA should apply the same reasoning to the establishment of a reporting threshold. Given the current data gap of approximately 26 metric tons, establishing a reasonable reporting threshold would minimize the reporting burden, particularly for small entities, while still allowing for EPA to bridge the information gap. Under new TSCA, EPA has the authority to evaluate and refine the reporting requirements, including the reporting threshold, as the total volume of mercury in commerce declines.
While EPA states that it incorporated reporting concepts, tools, and exemptions based on IMERC, the CDR rule, the TRI program, and USITC DataWeb, the proposed rule lacks specifics on the aspects of the TRI program and the USITC DataWeb data collection that were incorporated. EPA clearly states that reporters would be permitted to automatically skip certain reporting fields by indicating that they reported under IMERC and CDR, but there is no mention of reduced reporting or comparable data elements based on TRI and USITC DataWeb.