This is the first part of a three-part Insight analyzing the impact of new TSCA Section 5 and EPA’s implementation of it on chemical innovation.
Bergeson & Campbell has written extensively about the U.S. Environmental Protection Agency’s implementation of the 2016 Amendments to the Toxic Substances Control Act occasioned by enactment of the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg). On the whole, EPA implementation efforts have been timely, balanced, and defensible. Implementation of Section 5 (new chemicals) revisions has been less successful. To date, the EPA’s approach has impeded the commercialization of more sustainable new chemical technologies and thus has, ironically, extended the market presence of often less- sustainable legacy chemicals.
The EPA’s release in late July 2018 of a TSCA Section 5 “not likely” determination for a new polymer, P-16-0510, represents a significant positive shift in the agency’s approach to reviewing new chemicals. The EPA concluded that the new chemical at issue is “not likely” to pose unreasonable risk despite the fact that health endpoints and ecological hazards were identified. In nearly all prior post-Lautenberg cases, EPA only made a “not likely” determination if it identified a low hazard for both health and ecological effects. We support and applaud the EPA’s determination and believe, as discussed in our blog post, “EPA Adds Clarity to Interpretation of ‘Reasonably Foreseeable Conditions of Use,’” that this revised approach better implements the law as written and more accurately expresses the national policy, articulated in TSCA Section 2 and unchanged since 1976, to review new chemicals “in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation ….” TSCA Section 2(b)(3) reads, in pertinent part: “[i]t is the policy of the United States that … authority over chemical substances and mixtures should be exercised in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation while fulfilling the primary purpose of this Act.” This article makes the case for the urgent need for other changes in new chemical policy to ensure the realization of a more balanced and measured regulatory process that supports and promotes new chemical innovation and commercialization in a way that aligns with TSCA’s stated goals and requirements.
Out With the Old and In With the New
Under both old and new TSCA, chemicals listed on the TSCA Inventory are considered existing chemicals. Chemicals that are not listed on the Inventory are considered new chemicals, and chemical manufacturers must notify the EPA under Section 5 prior to manufacturing, processing, or importing new chemicals, or qualify for an exemption from doing so. Section 5 notices include premanufacture notifications (PMN) and various exemption notifications.
Under TSCA pre-Lautenberg, the EPA conducted its scientific and regulatory analysis and, if the EPA did not identify an issue to a PMN submitter and take action within the 90-day statutory review period, EPA would “drop” the case from further review and the submitter was permitted to submit a notice of commencement (NOC) and begin manufacture, processing, or import of the chemical substance for which the notification was submitted. Although not required by old TSCA, the EPA paid close attention to completing any needed actions within the 90-day timeframe for review. Based on our experience, there were only a few instances where EPA missed the deadline due to error. In most of these cases, the EPA and the submitter were able to agree on an approach that kept the case within the PMN regulatory framework. The submission of the NOC was the act that placed the chemicals substance on the chemical Inventory, converting the legal status of the substance to that of an existing chemical.
The efficiency of the pre-Lautenberg Section 5 process was under-appreciated. The EPA’s new chemical review process was effective and well-run, did an excellent job of assessing the potential risk of and regulatory issues with new chemicals through various internal working groups which consisted of scientists, risk assessors, regulators, and managers from across program offices, and relied upon sophisticated computational tools to evaluate the new chemical substance. This process included the Chemical Review and Search Strategy (CRSS) team meeting that reviews the chemistry profile of the new chemical substance (i.e., chemical identity and structure, physicochemical properties, and analogs); the Structure Activity Team (SAT) team meeting that reviews and establishes a rating for the likely hazards each new chemical substance may present to health or the environment as well as the substance’s expected environmental fate; evaluation of the degree of the new chemical substance’s potential human exposures (worker and general public) and environmental releases; a “Focus” meeting, where the EPA characterizes the risk and decides whether the new chemical substance would, might, or was not likely to present risk to health or the environment; and if at the Focus meeting, the EPA decides that a PMN chemical substance may present risks, but those risks are not adequately characterized, an in-depth “standard review” would compile a more complete risk characterization to inform the EPA’s risk determination and the most appropriate risk management option. Questions may arise in any of these review stages; if so, the EPA would contact the submitter (or the submitter’s agent) to seek additional information. The EPA routinely reviewed risks to workers and other potentially exposed populations and ecological risks. When regulatory issues were identified, the EPA and the submitter negotiated and agreed on the terms of a consent order under Section 5(e) and/or the EPA implemented a Significant New Use Rule (SNUR) to require advance notification to the EPA of any “significant new uses” that the agency foresaw might lead to an unreasonable risk.
EPA review of new chemicals often resulted in the imposition of workplace or environmental release limitations and other restrictions on the notifier, downstream processors, and users of the new chemical under Section 5(e) orders. Alternatively, or in addition, the EPA would promulgate SNURs to ensure notification of significant new uses from these same types of entities. A “significant new use” frequently does not involve a use per se but concerns some chemical-specific restriction or regulation which, if exceeded, triggers the notification (for example, use above a certain volume or in a different physical form). A SNUR establishes a requirement to notify the EPA 90 days before commencing any activity that the SNUR defines as a “significant new use.” In response to a Significant New Use Notification (SNUN), the EPA will review the proposed use using the same paradigm the agency uses for new chemicals and would issue a Section 5(e) order to require testing, control potential unreasonable risks presented by the significant new use, modify the existing SNUR, or some combination of all three. As part of this process under old TSCA, as the EPA acknowledges, it also routinely identified “potential new uses of the chemical (other than those reviewed as part of the PMN)” (EPA, Statistics for the New Chemicals Review Program under TSCA, 01/19/17 Snapshot ), as such reviews provided the basis for the 1,557 non-5(e) SNURs the EPA issued under TSCA prior to Lautenberg (EPA, Statistics for the New Chemicals Review Program under TSCA). Pre-Lautenberg, some 40,000 new chemicals were reviewed by the EPA and regulatory action was taken on approximately 10 percent to 15 percent of new chemicals, meaning that between 85 percent to 90 percent could proceed without restriction to commencement of manufacture and commercialization. A Notice of Commencement (NOC) of manufacture or import must be submitted to the EPA within 30 days of first manufacture or import. Based on our prior experience with the EPA, NOCs were typically received on 50 percent or somewhat less of the submitted PMNs.
The EPA’s approach under old Section 5 was considered by many to be successful. The National Pollution Prevention and Toxics Advisory Committee (NPPTAC) analyzed TSCA Section 8(e) (notices of substantial risk) notices and PMNs received in 1999 and 2000. Based on that analysis, the Chair of the NPPTAC Broader Issues Work Group concluded in 2004 that the PMN review was “robust.” See Minutes of NPPTAC meeting, dated July 13-14, 2004. This is one metric by which to assess the success of the PMN review program. Another is a 2003 analysis jointly conducted by the EPA and the European Union that favorably compared Section 5 new chemicals review and the deployment of Structure Activity Relationship (SAR) models against actual measured values for 144 chemicals that were notified in the EU. The House of Representatives passed a version of the Lautenberg bill that did not amend Section 5 at all. H.R. 2576, 114th Cong. (as passed by House, June 23, 2015). Of note, page 13 of the Committee Report on H.R. 2576, when reported on June 23, 2015, stated:
Oversight by the Committee yielded two conclusions about TSCA modernization. First, not every part of TSCA needs to be rewritten -- and those that do are places where there is widespread agreement. Second, not every problem with TSCA is a statutory problem. EPA may, if it chooses, use existing authority to remedy these concerns.
In light of these conclusions, the Committee on Energy and Commerce focused on providing EPA more direct tools to obtain testing information on chemical substances, restructuring the way existing chemicals are evaluated and regulated, clarifying the treatment and availability of trade secrets submitted to EPA, updating the collection of fees needed to support EPA implementation of TSCA, assuring high quality science is used by the Agency, and organizing the Federal-State regulatory relationship in a way that makes sense for promoting interstate and global commerce, but also recognizes non-conflicting efforts taken by several States.” H.R. Rep. No. 114-176, at 13 (2015) (emphasis added).
The following statements, taken from a colloquy between Sens. Inhofe and Vitter in the Congressional Record on June 7, 2016, following passage of Lautenberg, captures and reflects the views of many stakeholders:
Mr. INHOFE. … the bill also makes changes to TSCA in the new chemicals program under section 5 which has been largely viewed as one of the major strengths of existing law. It has been credited with spurring innovation in chemistry used for new products and technologies throughout the value chain. … Mr. VITTER. Protecting innovation and not materially altering the new chemicals process was a critical part of the final compromise. Every effort was made to ensure EPA has the right tools to review new chemical substances but the amendments to this section were intended to conform closely with EPA’s current practice and maintain the Agency’s timely reviews that allow substances to market within the statutory deadlines. … The compromise is very clear: EPA should not stop or slow its review of new chemicals while it develops any needed new policies procedures or guidance for Section 5. 162 Cong. Rec. S3511, S3520 (daily ed. June 7, 2016) (statements of Senators James Inhofe and David Vitter).
Indeed, in the run-up to Lautenberg, unlike risk management under Section 6, testing under Section 4, state preemption under Section 18, and other TSCA sections, the Section 5 program was seldom noted as a key driver of the TSCA reform effort. Reflecting the measured level of concern evidenced in the legislative process, Congress retained much of old TSCA Section 5 with targeted changes that strengthened the general approach. Most notably, new Section 5 requires the EPA to make one of three determinations in reviewing PMNs, and to take the appropriate action depending upon the determination, rather than defaulting to commercialization if EPA took no action. In our view, Lautenberg did not change the criteria that EPA would use. Instead, it codified the existing process.
Now, EPA review may not consider costs or other non-risk factors in determining whether the new chemical presents an unreasonable risk. New TSCA also now explicitly requires the EPA to consider unreasonable risks to “potentially exposed or susceptible subpopulations” (including workers, infants, children, and others) identified as relevant by the EPA under the “conditions of use” in making certain of the determinations under Sections 5, although EPA arguably routinely did so under old TSCA.
The first of the determinations (TSCA Section 5(a)(3)(A), 15 U.S.C. § 2604(a)(3)(A)) that EPA can make is that the new chemical “presents” an unreasonable risk of injury to health or the environment, in which case EPA must then regulate the new chemical under Section 5(f) “to the extent necessary to protect against such risk” and promulgate a significant new use rule (SNUR), or publish a statement explaining why it is not initiating such a rulemaking. TSCA Section 5(f)(4), 15 U.S.C. § 2604(f)(4).
The second determination (TSCA Section 5(a)(3)(B), 15 U.S.C. § 2604(a)(3)(B)) that the EPA can make is that the information available is insufficient for a reasoned evaluation of the health and environmental effects; or that in the absence of sufficient information for an evaluation, the manufacture, processing, distribution in commerce, use, or disposal may present an unreasonable risk of injury to health or the environment; or that the new chemical is or will be produced in substantial quantities, and enters or may reasonably be anticipated to enter the environment in substantial quantities or there is or may be significant or substantial human exposure to the new chemical. Because this alternative consists of a series of “or” statements, if any of these determinations is satisfied, the EPA must then issue an order to regulate the new chemical under Section 5(e) to the extent necessary to protect against an unreasonable risk of injury, without consideration of costs or other non-risk factors, including unreasonable risks to potentially exposed or susceptible subpopulations identified as relevant by EPA under the conditions of use. The EPA must also then either promulgate a SNUR or explain why it is not initiating such a rulemaking. TSCA Section 5(f)(4), 15 U.S.C. § 2604(f)(4).
The third determination (TSCA Section 5(a)(3)(C), 15 U.S.C. § 2604(a)(3)(C)) that the EPA can make is that the new chemical is not likely to present an unreasonable risk of injury to health or the environment. In such cases, the PMN submitter may immediately commence manufacture, import, or processing. New TSCA requires the EPA to publish a statement of its finding (TSCA Section 5(g), 15 U.S.C. § 2604(g)), which EPA publishes on its website and in the Federal Register. TSCA Section 5(h), which concerns exemptions from PMN notification, has been retained with generally conforming changes in new TSCA. They include test market exemptions (TME) and low volume exemptions (LVE). 15 U.S.C. § 2604(h).
Despite EPA’s best efforts, its implementation of the Section 5 revisions has been rocky and uneven. The reasons for this are many. The EPA in its early implementation initially embraced an overly broad interpretation of “reasonably foreseen” (a term embedded in the definition of “conditions of use” (TSCA Section 3(4), 15 U.S.C. § 2602(4)) to include virtually any imaginable set of conditions, including those based on mere speculation, as opposed to what we believe Congress intended, namely a plausible (i.e., “reasonably foreseen”) extension of or addition to the conditions of use as described in the PMN. Based on our experience, particularly at the outset of implementation of Lautenberg, EPA decisions also often simply conflated assessment of hazard (toxicity) and risk (a function of both hazard and exposure) with the result that virtually any new chemical with an identified “potential hazard” was regulated as if it presented an unreasonable risk. That is, if the EPA identified a potential hazard, the agency then assumed that some condition of use could exist that would lead to an exceedance of a concern level, without considering whether such condition of use was plausible or likely as defined by Lautenberg.
In other instances, based on our experience, the EPA overlooked the factual hazard and exposure data and information contained in the PMN and instead used modeled results from SAR analysis and/or chemical analogs to assess hazards and EPA-preferred exposure “assumptions” that yielded unreasonably conservative or simply incorrect hazard, exposure, and risk assessments that compelled the application of limitations that, not infrequently, represented commercially devastating overreach. The EPA would only use a submitter’s estimate for releases or exposures if those values were more conservative (i.e., higher exposures and greater releases) than EPA’s conservative assumptions. In this paradigm, there was essentially no reason for a submitter to include measured exposure or other information relating to conditions of use. This outcome is not aligned with the EPA’s frequently made recommendation to include as much information about the conditions of use as possible in a PMN, a recommendation now included in the EPA’s Points to Consider document.
The result has been implementation of a new chemicals program characterized by lengthy delays (delays of more than a year are common) and over-regulation. Table 1 presents information on the outcomes from PMN review that were seen under old TSCA, and Table 2 provides outcome information for post-Lautenberg PMN cases. As can be seen in Table 2, the EPA under the new law has made “not likely” determinations for less than 10% of the PMNs submitted since TSCA was amended and the other 90% of cases have been regulated, are poised for regulation, or have been withdrawn. The table also shows that while the EPA has completed Section 5(a)(3) determinations on 1,545 (77 percent) of the 2,018 new TSCA PMNs, this is only the first part of the process and 1,374 or a disturbing 68 percent of these PMNs remain uncompleted. Under old TSCA, approximately 13% of PMNs were regulated or withdrawn and the remainder, following EPA’s review, could enter commerce without restriction. Our point is not that regulatory outcomes under new TSCA should track the pattern seen in old TSCA. Our point is that a better balance needs to be struck between these poles. The result of EPA implementation of the new law is a “perfect storm” of delay and over-regulation that has greatly reduced the new chemical innovation spigot that existed under old TSCA. As discussed below, this is tangibly seen in the small number of post-Lautenberg PMN chemicals that have commenced manufacture since the new law entered into effect in June 2016. Our purpose in this article is to make clearer the impact of the EPA’s early implementation of new TSCA and focus on the potential consequences of the delays and regulatory overreach.
Table 1. PMN Outcomes Under Old TSCA from 1979 - September 30, 20151
Table 2. PMN Case Statistics Under New TSCA from June 22, 2016 - August 14, 20181
1 Based on EPA’s Statistics for the New Chemicals Review Program under TSCA, available at https://www.epa.gov/reviewing-new-chemicals-under-toxic-substances-control-act-tsca/statistics-new-chemicals-review#stats. It includes PMN, MCAN, SNUN, LVE, and other exemption notices that were within the 90-day review period as of June 22, 2016 -- cases in which EPA restarted the 90-day clock and re-reviewed regardless of the outcome of its initial review.
2 Total PMNs received minus invalid or incomplete PMNs.
3 TSCA Section 5(a)(3) determination and final Section 5(e) or Section 5(g) action, as appropriate, completed; the right-hand column provides the breakdown as a percentage of the completed cases.
4 Valid PMN cases that remain incomplete (Total valid cases, less withdrawn and completed PMNs and LVEs).
Part 2, the next installment in this series, will run tomorrow and address Chemical Innovation in the 21st Century.
Lynn L. Bergeson is the Managing Partner of Bergeson & Campbell, P.C. (B&C®), a Washington, D.C., law firm focusing on conventional, nano, and biobased chemical, pesticide, and other specialty chemical product approval and regulation, environmental, health, and safety law, chemical product litigation, and associated business issues. Charles M. Auer is a Senior Regulatory and Policy Advisor with B&C, and former Director of EPA’s Office of Pollution Prevention and Toxics. Richard E. Engler, Ph.D., is the Directory of Chemistry with B&C and a 17-year veteran of EPA. Kathleen M. Roberts is Vice President of B&C Consortia Management, L.L.C. (BCCM), and Manager of the TSCA New Chemicals Coalition.
The opinions expressed here do not represent those of Bloomberg Environment, which welcomes other points of view.