The U.S. Environmental Protection Agency (EPA) published a Federal Register notice on May 16, 2017, announcing the availability of and requesting public comment on a draft guidance document entitled “Guidance on EPA’s Section 8(a) Information Gathering Rule on Nanomaterials in Commerce.” The promised guidance provides answers to questions EPA has received from manufacturers (includes importers) and processors of certain chemical substances when they are manufactured or processed at the nanoscale as described in the January 12, 2017, final Toxic Substances Control Act (TSCA) Section 8(a) rule. The final rule requires one-time reporting for existing discrete forms of certain nanoscale materials, and a standing one-time reporting requirement for new discrete forms of certain nanoscale materials. More information regarding the final rule is available in our January 12, 2017, memorandum, “EPA Promulgates Final TSCA Reporting and Recordkeeping Rule for Nanoscale Materials.” EPA states that it will accept comments regarding the draft guidance, but not regarding the rule itself, “which has already been finalized.” Comments are due June 15, 2017.
The 14-page draft guidance, in the form of questions and answers (Q&A), addresses questions within the following categories: what chemicals are reportable; who is required to report; information that is to be reported; when is reporting required; general questions; and confidentiality. Below is more information regarding some of the Q&As.
What Chemicals Are Reportable?
According to the draft guidance, for purposes of the final rule, EPA defined unique and novel properties “to include an element of intent, meaning that those properties are the reason why the chemical substance is manufactured in that form or size.” To be reportable, it is not sufficient that a chemical substance contains particles in the size range of 1-100 nanometers (nm); EPA states that it must also have a size-dependent property different from properties at sizes greater than 100 nm and those properties are the reason that the chemical substance is manufactured or processed in that form or size.
The draft guidance states that if a manufacturer sells a mixture containing a reportable chemical substance and sells it to multiple processors, then each processor is also required to report. While mixtures are not reportable, the components of any mixture that contains reportable chemical substances subject to the rule would be reported.
Who Must Report
The May 16, 2017, Federal Register notice lists the following North American Industrial Classification System (NAICS) codes to help readers determine whether the draft guidance may apply to them:
- Chemical Manufacturing or Processing (NAICS Code 325);
- Synthetic Dye and Pigment Manufacturing (NAICS Code 325130);
- Other Basic Inorganic Chemical Manufacturing (NAICS Code 325180);
- Rolled Steel Shape Manufacturing (NAICS Code 331221);
- Semiconductor and Related Device Manufacturing (NAICS Code 334413);
- Carbon and Graphite Product Manufacturing (NAICS Code 335991);
- Home Furnishing Merchant Wholesalers (NAICS Code 423220);
- Roofing, Sliding, and Insulation Material Merchant Wholesalers (NAICS Code 423330); and
- Metal Service Centers and Other Metal Merchant Wholesalers (NAICS Code 423510).
The draft guidance reiterates that, under TSCA, the definition of manufacture is not limited to domestic manufacture but also includes import. In the case of a company importing a chemical substance as part of a formulation, such as ink/toner products, the chemicals in the formulation are subject to TSCA reporting requirements, including the final rule for nanoscale materials. If the chemical substance is imported in a form that meets the definition of a reportable chemical substance, the importer of the toner must report.
Processors that do not know about the particle size and other characteristics of formulations they process or use must take reasonable measures to ascertain the information that would determine whether they are subject to the rule. According to EPA, “it would be within the reasonably ascertainable standard to ask their suppliers for information that would enable [the] processor to determine whether the supplier is selling them a nanoscale material subject to reporting and if so provide them with what reportable information they have.” The supplier is not required to provide any additional information to the processor but might provide other supporting information, such as whether the supplier has reported or intends to report the chemical substance under this rule. The draft guidance states that companies that purchase formulations but do not change or modify those formulations and only use them are not considered processors and are not required to report under the rule. The draft guidance notes that importers that purchase formulations are considered to be the same as manufacturers, however, and are required to report, even if they do not change or modify those formulations and only use the formulation.
Each manufacturer and processor in the supply chain must report reasonably ascertainable information on the reportable chemical substance. Once a chemical substance has been incorporated into an article, the draft guidance states that no further reporting is required as persons that manufacture or process chemical substances as part of articles are exempt from reporting.
Companies that manufacture or process reportable chemical substances solely for export are still subject to the reporting requirements. The draft guidance notes that the processing and use information is restricted to domestic activities, i.e., within the customs territory of the U.S.
Information that Is to Be Reported
The draft guidance clarifies the scope of what would be required under the “known to or reasonably ascertainable by” reporting standard. As defined by 40 C.F.R. Section 704.3, the standard means “all information in a person’s possession or control, plus all information that a reasonable person similarly situated might be expected to possess, control, or know.” A submitter must ascertain what they know about the manufacturing, processing, and use of a chemical substance it manufactures (including imports) or processes, without confining its inquiry to what is known to managerial and supervisory employees. According to the draft guidance, a submitter would also be expected to review other information that the manufacturer (including importer) or processor may have in its possession. This standard requires that submitters conduct a reasonable inquiry within the full scope of their organization (not just the information known to managerial or supervisory employees). The standard does not necessarily require that the manufacturer conduct an exhaustive survey of all employees. While inquiry under the “reasonably ascertainable” portion of the standard may also entail inquiries outside the organization, if particular information cannot be derived or reasonably estimated without conducting further customer surveys, “it would not be ‘reasonably ascertainable’ to the submitter.”
When Is Reporting Required?
The draft guidance includes the following Q&A regarding the 135-day reporting requirement for new discrete forms:
Question 25: Please clarify how the 135-day reporting requirement for new discrete forms would work. For example, can commercialization begin after notification to EPA or after 135 days after notification to EPA?
The 135-day period is not a formal review-period that prohibits manufacture before the end of the 135-day period. Rather, based on EPA’s experience with the [premanufacture notice (PMN)] reviews in the new chemicals program, EPA believes that in most cases companies have the requisite intent to manufacture or process a reportable chemical substance at least 135 days before manufacturing or processing will begin, and the rule requires reporting based upon this presumed intent. However, if a company does not form the requisite intent 135 days ahead of time, the company must report within 30 days of the formation of such an intent. Moreover, if a company desires to begin manufacture or processing less than 135 days after the submission for this rule is made, the company is free to do so. There is no obligation upon the company to wait 135 days after reporting to manufacture or process.
Because the final rule requires only one-time reporting, a change in manufacture, processing, or use will not require updating EPA with new information, unless the change creates a new discrete form of a reportable chemical substance. EPA notes that the type of process change is not the criterion for distinguishing new processing methods from existing methods. EPA states that any manufacturing or processing change that is intended to change particle size and properties would be a process change that could require new reporting.
EPA states that the purpose of the final rule is not to create an inventory of nanoscale material chemical substances in commerce, but rather to collect information on the manufacture (including importation), processing, and industrial, commercial, and consumer uses of certain chemical substances that are nanoscale materials. According to the draft guidance, EPA will use information gathered through the rule to inform its understanding about the manufacture, processing, and use of nanoscale substances and to determine if any further action under TSCA, including additional information collection, is needed in specific instances.
The draft guidance states that substances exempted in TSCA Section 3(2)(B) need not be reported. Such substances include: any pesticide as defined by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), when manufactured, processed, or distributed in commerce for use as a pesticide; any food, food additive, drug, cosmetic, or device, as defined by the Federal Food, Drug, and Cosmetic Act (FFDCA), when manufactured, processed, or distributed in commerce for use as a food, food additive, drug, cosmetic, or device; tobacco or any tobacco product; any source material, special nuclear material, or byproduct material as such terms are defined in the Atomic Energy Act of 1954; and, any article the sale of which is subject to the tax imposed by Section 4181 of the Internal Revenue Code.
Information under the rule may be claimed as confidential at the time it is submitted. The draft guidance notes that submitters must provide upfront substantiation of confidentiality claims for processing and use information, as well as for confidentiality claims for site or chemical identity.
While the publication of draft guidance within four months of promulgation of the final rule is an achievement, the draft guidance does not significantly expand upon that which is already known, or make the rule clearer or easier with which to comply. Companies subject to the reporting requirements of the final rule can expect to continue to struggle in sorting out what discrete forms are required to be reported.
The draft guidance is helpful in some respects, such as its questions regarding what the final rule means by coating and why coated nanomaterials are defined separately from mixtures, given that there is virtually no discussion of what is meant by coating in the proposed or final rule. EPA uses the term “surface treating” in the draft guidance, although this term/any variant does not appear in either the proposed or final rule. EPA specified a coated nanomaterial as a reportable discrete form in its definition of that term, but since there is not a chemical reaction involved in the coating, it is unclear why it is not a mixture. The individual components of a mixture must be reported if they are reportable chemical substances. In the case of a coated nanomaterial, according to the draft guidance, that makes it a discrete form of a reportable chemical substance “even if all of the other intrinsic characteristics of the reportable chemical substance remain the same. Coating or surface treating a nanoscale material results in a nanoscale material with different properties.” EPA does not provide a basis for this last statement and does not clarify whether this goes to “any properties” or is it limited to the specific properties discussed in the definition of “discrete form” such as zeta or surface area. The answer in the draft guidance seems to state that any and all coated nanomaterials need to be reported separately regardless of whether the coating affects relevant properties. This also seems to mean that there is a new reporting requirement each time a different coating is used on a discrete form of a reportable nanoscale material regardless of the effect of the coating on the properties. If the coating takes particle size beyond 100 nm, it is also unclear whether it is still required to be reported. The draft guidance seems greatly to expand the reporting universe and burden, and arguably is a requirement that, if EPA intends to apply it to the rule, is needed to appear in the rule itself.
The draft guidance also clarifies that for each reportable chemical substance, each processor of that substance is required to report. EPA is casting a wide net to ensure that all methods and instances of processing are covered, even though EPA may receive a substantial amount of duplicative information from processors that use standard industry practices. EPA does not reconcile this fact with the requirement in Section 8(a)(5)(A) to avoid requiring “reporting which is unnecessary or duplicative.”