Calif.'s Bold New Green Chemistry Regulations

Published on Law360.com  

Jan. 1, 2011, is the statutory deadline for California's Department of Toxic Substances Control to adopt its potentially game-changing "Green Chemistry" regulations. That deadline seemed a long way off when the California Legislature passed Assembly Bill 1879 in 2008, but now is just around the corner.

DTSC's bold "Green Chemistry" initiative is focused on reducing or eliminating the need to manage, treat and dispose of toxic substances and hazardous wastes by designing products and manufacturing processes to use less-toxic alternative chemicals and materials throughout the entire life cycle of a product. "Benign by design" is DTSC's oft-stated objective.

The aggressive deadline for adopting these regulations was born out of the California Legislature's desire to stop the ever-increasing number of chemical-specific bills that were being introduced to ban particular chemicals or restrict their use in certain products.

When AB 1879 was passed in 2008, along with SB 509 creating the Toxics Information Clearinghouse, there was general agreement by stakeholders that a systematic regulatory process would be better than the ongoing chemical-by-chemical legislative battles that had been taking place. However, general agreement on the forum to address these issues does not translate to consensus among divergent interest groups on what should be in the final regulations.

On Sept. 14, 2010, DTSC submitted its final proposed rulemaking package with proposed final regulations to the California Office of Administrative Law. Written comments will be accepted through Nov. 1, 2010, with a public hearing to be held on November 1 in Sacramento. The proposed regulations and the rulemaking package are available on DTSC's website at: http://www.dtsc.ca.gov/PollutionPrevention/GreenChemistryInitiative/Proposed-Regulation.cfm, in addition to instructions for submitting comments. Whether DTSC can meet the Jan. 1, 2011, deadline remains to be seen, but they are clearly closing in fast on issuance of final regulations.

In anticipation of these regulations, companies that produce chemicals or consumer products for use in California should be assessing the potential impacts on their operations and developing a compliance strategy if they are not doing so already.

Consumer products subject to potential regulation under DTSC's Green Chemistry program are very broadly defined to be any product used, bought or leased for use in California by a person for any purposes, with exceptions provided for certain drugs, devices, food and pesticides. As such, these regulations have a huge potential reach.

Not every consumer product will face the full impact of these new regulations and many companies will see little or no impact. However, some companies will face a daunting task in complying with this new regulatory program. Although it does not have the "citizen's suit" provision contained in California's other unique consumer product chemical safety law, Proposition 65, it has the potential to be much more intrusive into a company's operations in other ways, as described below.

The proposed regulations include a process for DTSC to identify a list of "Chemicals of Concern" from which a list of "Priority Chemicals" will be identified, based on a variety of factors set forth in AB 1879 and the proposed regulations. DTSC will then identify "Products Under Consideration" that contain those chemicals, from which will be drawn a list of "Priority Products."

The responsibilities then shift from DTSC to "Responsible entities." Note that a "Responsible entity" under the proposed regulations is not limited to the manufacturer, but includes the owner of the brand name or trademark, someone who imports a product into California, distributors, and retailers. There will be more than one Responsible entity for most, if not all, consumer products entering the stream of commerce in California but satisfaction of the regulatory requirements by any one of them - or by some other entity such as a trade association - will fulfill the requirements for the product.

For any product listed as a Priority Product through DTSC's prioritization process, a Responsible entity will need to perform what the proposed regulations refer to as a Tier II Alternatives Assessment, including a Chemical Hazard Assessment and Exposure Potential Assessment, as well as a Multimedia Life Cycle Assessment. These Alternatives Assessments will consider not only hazards associated with the product itself but throughout the life cycle of the product, including its manufacturing, usage and final disposal, as well as identifying and assessing available alternatives that eliminate or reduce the exposure to the Priority Chemical across the chemical's life cycle.

These alternatives assessments will require review and approval by DTSC. DTSC has a menu of possible responses to the alternatives assessment, ranging from no action being required at all through requiring that information be provided to the consumer, end-of-life management (manufacturer take-back programs), engineering safety measures, restrictions on use, or even outright prohibitions on product sales.

How large an impact this new program will have on the business community will depend in large measure on up-front decisions by DTSC (made with ample opportunity for public input and comment) about the number of Chemicals of Concern and Priority Chemicals to be listed. An extensive list of Priority Chemicals will almost certainly lead to a larger impact, as more Priority Products containing those chemicals will need to go through the burdensome and resource-intensive alternatives assessment process and run the gauntlet of regulatory responses that can be imposed.

There are clear advantages to a short initial set of Priority Products, allowing a de facto pilot-scale phase while regulators, the regulated community and consultants sort out how the new process will actually work, then expanding as necessary.

This approach will lead to fewer products being initially subject to the full impact of the new regulations, lessening the burden on both the regulated community and DTSC during what is likely to be a challenging startup phase for such a sweeping new regulatory program. However, there are others who advocate starting off with a much broader reach, putting as many products through the alternatives assessment process as possible.

Even if the new regulations are adopted by the Jan. 1, 2011, deadline, the program will take some time to unfold. DTSC will be taking the lead in identifying Chemicals of Concern, Priority Chemicals and Priority Products. These efforts will undoubtedly take substantial time to accomplish under the process set forth in the proposed regulations, which contemplates substantial opportunity for public input.

Nonetheless, some of the elements of the program, such as submission of chemical and product information by manufacturers in response to requests from DTSC, will come into play much earlier in the process.

Companies could find themselves responding to such information requests, and deciding whether to assert a claim that the submitted information is confidential information, long before the program works its way to the alternatives assessments stage.

Given the fast-track of the regulations and their scope, manufacturers, importers and distributors whose products are sold or used in California will want to review the proposed regulations and begin to assess the potential impacts on their businesses and consider submitting comments, as appropriate. No one will want to be in the unfortunate position of being blindsided by discovery in the not-too-distant future that they are subject to this new regulatory program and scrambling to comply!