The many U.S. companies that combust natural gas as part of their operations received good news today, as EPA announced that it will amend the Toxic Substances Control Act (TSCA) “Fees Rule” to exclude from coverage manufacturers that only produce a chemical as a byproduct or impurity, as well as companies that import articles containing the chemical.   The agency move comes in response to an uproar from the manufacturing community, which came to realize that the Fees Rule, as it stands now, imposes financial responsibility on “manufacturers” for funding EPA’s evaluation of a substance even if they only produce the substance as an incidental or trace byproduct, or if it happens to be contained at low levels in a product they import.  At least one of the first 20 “high priority” substances undergoing risk evaluation — formaldehyde — is generated in trace levels through combustion of natural gas, meaning that hundreds of companies would be on the hook for contributing to the $1.35 million evaluation fee.

In addition, because the Fees Rule will not formally be amended until 2021, EPA issued a No Action Assurance on enforcement for the same classes of “manufacturers.”

More information on EPA’s planned amendment of the Fees Rule and the No Action Assurance is available at the agency’s website.

Before today’s action, a wide range of companies were scrambling to determine if they must “self-identify” to EPA as a “manufacturer” of one of the 20 chemicals in advance of a March 27th deadline (later extended to May 27th).  Critically, for Fees Rule purposes, the term “manufacture” does not include the usual TSCA exemptions for coincidentally manufactured byproducts or impurities, or for trace/de minimis levels, as EPA made clear when it adopted the Fees Rule in 2018 .  More recently, in a February 27th webinar, EPA reiterated that unintentionally produced trace level combustion byproducts were considered “manufactured” and subject to fee payment:

QUESTION:  I’d like to know if manufacturing is going to be inclusive of what I’m going to kind of characterize as secondary atmospheric chemistry where a substance is produced in minute quantities as exhaust from combustion sources like combustion turbines and heaters and boilers, and not through what would typically be considered a manufacturing line, where there’s a specific product being produced.

EPA RESPONSE: … So, manufacture is defined in TSCA – the law itself – to include import as well as manufacture and production of the chemical, and there are no exclusions for manufacture of chemicals that occur as you described in a secondary way, as a byproduct, or unintentionally or coincidentally in association with another process. If the chemical is produced, it’s considered manufactured under TSCA and such an activity would be subject to the TSCA fees rule requirements.

Many companies only recently became aware of the breadth of the Fees Rule, particularly with respect to formaldehyde formed in trace amounts during natural gas combustion.  For those companies, and the many also who import articles containing formaldehyde (e.g., treated wood products among others), today’s EPA announcement comes as welcome relief.