At nearly 40 years old, EPA is getting a makeover by the Obama Administration, with significant budget increases, new regulatory focuses and expanded enforcement capabilities. Change in control of the White House together with greater public concern over chemical safety have created a more challenging political and policy environment than the chemical industry has seen for decades.

EPA’s 2010 budget seeks the highest level of funding since the agency was created in 1970. The budget includes US$600 million for EPA’s Enforcement and Compliance Assurance program – the highest enforcement budget ever – coupled with a request for 30 additional employees to bolster EPA’s civil and criminal enforcement staff. EPA plans to use these new resources to pursue more "vigorous enforcement of our nation’s environmental laws."

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EPA’s Renewed Focus on Chemicals

EPA Administrator Lisa Jackson has confirmed that strengthening EPA’s chemical management program is a top priority. In particular, EPA is focused on the more stringent regulation of toxics. EPA has requested a 17-percent increase in funding for its toxics program to "enhance efforts to screen, assess, and reduce risks of new and existing chemicals."

For example, Administrator Jackson has vowed to issue a final dioxin risk assessment by 2010 – four years ahead of its projected release under the Bush Administration. Approximately US$6 million is budgeted to bolster the Integrated Risk Information System (IRIS), which provides information on the health effects of chemicals on the public. EPA is also quickly advancing new methodologies for assessing chemical risks, including the use of toxicogenomics data, which consider the effects of chemicals on gene expression. Accelerated and forceful risk screening will be key components of EPA’s chemical management strategy.

Other Emerging EPA Trends

Aggressive removal of chemicals from the market

EPA’s recent actions regarding one pesticide, carbofuran, reveal a new urgency to remove chemicals it views as dangerous from the market. Instead of limiting or cancelling the chemical’s registered uses, EPA elected to revoke all safety tolerances for residues of carbofuran. The result was striking: an almost immediate elimination of the chemical from the market. These actions may indicate a key route EPA will use as it responds to public chemical safety concerns.

Renewed focus on nanomaterials

EPA has redoubled its efforts to designate and regulate nanoscale materials, including initiation of a new pilot program for screening nanomaterials and creation of significant new use rules (SNURs) to regulate nanomaterial safety. These rules will affect fundamental aspects of chemical management.

Increased regulation

EPA’s recent decision to reevaluate and abandon aspects of the Chemical Assessment and Management Program (ChAMP), which permitted voluntary chemical regulation, illustrates EPA’s desire for more direct regulation of chemicals. EPA is preparing to support legislative efforts to significantly strengthen the Toxic Substance Control Act (TSCA) in an anticipated shift towards implementing a program similar to the European Union’s Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). Active efforts to shape legislation are ongoing with opportunities for industry influence.

Industry Response

EPA’s heightened efforts and increased funding pose a significant challenge for the chemical industry. In particular, chemical companies can expect: (1) rapid evolution of laws and regulations that impact the manufacture, distribution and use of chemicals; (2) reinterpretation of existing EPA policies to increase legal exposure and reduce flexibility; (3) more aggressive enforcement under those revised laws and policies; and (4) increased pressure and litigation from environmentalist groups and plaintiffs emboldened by EPA’s efforts. While these changes create unavoidable business risk, they also offer the potential for competitive advantage, particularly for those who are best advised and work proactively to track, shape and respond to EPA’s new rules, laws and policies.

Be proactive

  1. Identify the most important and profitable chemicals. Create an action plan to identify key changes likely to impact those chemicals and focus resources to mitigate potential concerns.
  2. Monitor and guide lobbying efforts. Carefully examine lobbying efforts by industry associations and steer lobbying towards areas of concern. Supplement with focused, individualized lobbying on core issues.
  3. Enhance product stewardship. Conduct detailed reviews of internal best practices and advocate adoption of those practices by customers to increase transparency and improve safety, thus also limiting liability. Use enhanced stewardship efforts to generate increased credibility for achieving policy goals.

Expedited action will be the hallmark of Obama’s EPA. Are you ready?