Chemical companies should take note of two immediately effective policy changes in the U.S. Environmental Protection Agency’s (“EPA’s”) new chemicals program under the Toxic Substances Control Act (“TSCA”). These new changes, announced March 29, mean that EPA's new chemical application reviews will take longer and that companies will be subject to stringent enforceable orders addressing hypothetical uses and mandating additional worker protections to bring almost all new chemicals to market.
The announced changes reverse policies established during the prior Administration that were put in place to ensure safety, meet TSCA’s goals, and advance efficiency in new chemical reviews by EPA. The policy changes, which make it highly unlikely EPA will meet the statutory timeline of reviewing new chemicals in 90 days, were welcomed by non-governmental organizations.
Foreseeable Chemical Uses Policy Change
When a company submits a TSCA Section 5 new chemical application to EPA for review, the Agency is required to look at all “reasonably foreseeable” uses of the chemical under the Lautenberg Act Amendments to TSCA, which turn five years old in June 2021. EPA is required to make a finding that a new chemical or a significant new use is not likely to present an unreasonable risk of injury to health or the environment, including an unreasonable risk to potentially exposed or susceptible subpopulations, before authorizing a new chemical. See 15 U.S.C. § 2604(a)(3)(A). This determination is based on known, intended, and reasonably foreseen conditions of use (“COU”). See 15 U.S.C. § 2602(4).
A company may apply only for two COUs, but EPA may find other COUs to be “reasonably foreseeable.” Prior to the instant policy change, to advance efficiency, EPA would address any risks by those other foreseeable COUs through a “follow on” Significant New Use Rule (“SNUR”), allowing the new chemical to enter the market safely but ensuring that no possible risky COUs could commence. This approach kept the new chemical approval pipeline moving, brought innovation to the marketplace, and highly increased the likelihood of EPA meeting TSCA’s 90-day deadline for completing new chemical reviews.
Under the new policy, when EPA’s review concludes that one or more uses may present an unreasonable risk or when EPA lacks the information needed to make a safety finding, the Agency will issue a TSCA Section 5(e) order to the new chemical applicant. The TSCA Section 5(e) order will order the company not to manufacture, process, or use a chemical in a way that could pose risk, even if the company has shown no intention of pursuing such scenarios. This new policy will add administrative burden and an increased level of EPA control into the chemical manufacturing process, and will require companies to agree to not undertake hypothetical and never planned activities.
OSHA-EPA Policy Change
Also under EPA’s newly announced policies, the Agency will no longer assume that workers are adequately protected under the Occupational Safety and Health Administration’s (“OSHA’s”) worker protection standards and updated Safety Data Sheets (“SDS”). EPA’s new policy will presume that the absence of worker safeguards is a “reasonably foreseen” COU, and then issue an order to the new chemical applicant to mandate worker protections through a TSCA section 5(e) order. Notably, EPA had taken this approach early in the Lautenberg Amendment implementation, but abandoned ordering basic personal protective equipment (“PPE”), such as gloves, masks, or respirators, as unnecessarily duplicating OSHA requirements. Instead, EPA pursued an agreement with OSHA to improve interagency coordination on new chemical reviews and worker protection. The worker protection policy changes also respond to environmental groups’ and labor unions’ criticism of the prior Administration’s assumptions that OSHA, PPE, and SDS offer adequate worker protection. By adopting these changes EPA is signaling it plans to assert authority over worker safety in the chemical sector irrespective of OSHA’s involvement.
Orders and Delays to Increase
As a result of these two new policies, companies should expect to see an uptick in new chemical TSCA Section 5(e) orders. A section 5(e) order usually contains conditions such as use of PPE, hazard communication language, and restrictions on releases. New chemical cases are supposed to be processed by EPA within 90 days of receiving a notice of the manufacture of a new chemical or significant new use. See 15 U.S.C. § 2604(a); id. at (i)(3). Cases taking over 90 days for review are considered part of the new chemical backlog. In January 2021, there were approximately 185 backlogged cases. While EPA “remains committed to meeting statutory deadlines for review and determinations on new chemicals submissions,” the reality is that even more cases will now fall into the new chemical backlog – slowing the innovation pipeline.
ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.