The Long Wait Is Over: EPA Releases Final Regulations Redefining “Solid Waste” to Increase Recycling

12/14/2008 Articles

After a long and arduous journey through EPA's Office of Solid Waste and the courts which spanned over 20 years, EPA published its final rule revising the regulatory definition of "solid waste" under the Resource Conservation and Recovery Act (RCRA) on October 30, 2008.[1]  EPA's objective with this new rule is to encourage safe and legitimate recycling by excluding certain hazardous secondary materials from regulation as "solid waste" and thus "hazardous waste" under RCRA.  The rule takes effect on December 29, 2008, but does not become automatically effective in those states (including California) that are authorized to implement the federal RCRA program.

I.          Who and What is Affected by the Rule?

This rule may provide significant benefits to businesses and facilities that generate, recycle and/or manage hazardous secondary materials (e.g., spent materials, sludges or byproducts) ("Materials").  EPA estimates that approximately 5,600 facilities in 280 industries, primarily in the manufacturing sector, could benefit from the rule.  This would result in the deregulation or reduction in regulation of approximately 1.5 million tons of hazardous waste annually, providing a cost savings of $95 million per year.  According to EPA, the rule will encourage and expand safe and beneficial recycling of Materials otherwise currently being disposed of as hazardous waste. 

II.        Conditional Exclusions from the Definition of Solid Waste

Under the rule, no formal agency determination is required to manage Materials outside of the traditional hazardous waste regulatory process.  Rather, the rule provides two self-implementing exclusions from the definition of solid waste: one for Materials recycled under the control of the generator ("Generator-Controlled Exclusion") and one for Materials transferred to and recycled by a separate reclaiming facility ("Transfer-Based Exclusion").

In addition, as described in Section III below, the generator must also make an affirmative determination as to the legitimacy of their recycling activities.  Because the rule is extremely long and complex, generators are cautioned to review it carefully when assessing its potential application to their Materials.  As noted below, non-compliance with the rule's myriad of requirements could result in a violation of hazardous waste laws and possible imposition of significant penalties and corrective action obligations.

A.        Taking Advantage of the Generator-Controlled Exclusion

Under the generator-controlled exclusion, a generator may recycle Materials (i) onsite at the facility where the Materials were generated; or (ii) at an off-site facility under the generator's control.[2]

Conditions of this exclusion are spelled out in the rule.  All Materials must be "legitimately" reclaimed (see Section III below) in the United States and not accumulated speculatively.  The generator must submit a notification to EPA (or the authorized state) prior to operating under the exclusion, and by March 1 of each even numbered year thereafter.  Conditions also vary for Materials that are managed in land-based units (e.g., surface impoundments and piles) versus non-land based units (e.g., tanks and containers).

B.        Taking Advantage of the Transfer-Based Exclusion

The transfer-based exclusion permits a generator to transfer Materials to an unrelated entity for legitimate recycling and reclamation.  Conditions for this exclusion are similar to the generator-based exclusion described above.  In addition, records of shipments and confirmation of receipt of Materials must be maintained for at least three years, and residuals generated from the recycling process must be properly managed. 

The rule also obligates generators to undertake "reasonable efforts" to ensure the Materials will be properly managed and legitimately recycled at the selected transfer facility(ies).  The rule identifies a series of five questions that the generator must ask and receive affirmative responses from the transfer facility prior to any transfer of the Materials.  Generators must document and certify this due diligence.

Transfer and intermediate facilities that recycle Materials must also maintain adequate financial assurances for responding to releases and addressing any facility closure requirements (akin to the financial assurances requirements for RCRA-regulated treatment, storage or disposal facilities). 

C.        Materials not Covered by the Rule

Certain Materials are not eligible for these two new exclusions.  These include Materials that are burned for energy recovery, used in a manner constituting disposal, or are inherently waste-like under current RCRA regulations. 

III.       Criteria for "Legitimate Recycling"

For years, EPA has expressed the need to distinguish between those recycling activities that are truly "legitimate" and those activities that are merely "sham" recycling.  The rule provides helpful details about what recycling activities are considered "legitimate" or "authentic," and what constitutes "sham" or "fake" recycling.  According to EPA, the concept of legitimacy as set forth in the rule does not differ significantly from its longstanding policies on legitimate recycling. 

In making an affirmative legitimacy determination, generators must demonstrate that their Materials satisfy several mandatory recycling requirements and that they have considered two additional factors. 

Mandatory Requirement #1 - The Materials Provide a Useful Contribution:  The first requirement is that the Materials being recycled provide a "useful contribution to the recycling process."  This can be accomplished if the Materials meet one or more of the following criteria:

  • Contribute valuable ingredients to a product or intermediate
  • Replace a catalyst or carrier in the recycling process
  • Are the source of a valuable constituent recovered in the recycling process
  • Are recovered or regenerated by the recycling process
  • Are used as an effective substitute for a commercial product

Mandatory Requirement #2 - The Materials Produce Value:  EPA is also requiring that the recycling process must produce a valuable product or intermediate.  "Value" means either an economic value or a more intrinsic value to the end user, and can be demonstrated if the product or intermediate is either:

  • Sold to a third party, or
  • Used by the recycler/generator as an effective substitute for a commercial product or ingredient, or as an intermediate in an industrial process

Factor #1 For Consideration - The Materials are Managed as a Valuable Commodity:  EPA wants to see that the Materials being recycled are managed in the same manner as other valuable materials. Thus, this factor focuses on how the Materials are being managed before they enter the recycling process. 

Factor #2 For Consideration - Comparison of Toxics in the Recycled End Product:  This factor requires those making a legitimacy determination to compare the concentrations of hazardous constituents found in the recycled end product made from the Materials with the concentrations of hazardous constituents in analogous products.  This comparative analysis will provide insight into whether excessive hazardous constituents are "along for the ride" in the recycled product. 

While EPA did not articulate specific recordkeeping requirements for the legitimacy determination, EPA warns that, in the event of a government inspection or enforcement action, the recycler will be expected to demonstrate overall legitimacy based on compliance with the two mandatory requirements and consideration of the two factors described above, suggesting detailed documentation will be the order of the day.  

IV.       Non-Waste Determinations by Agency   

The rule establishes a voluntary process in which generators not wanting to rely solely on their own affirmative legitimacy determination and wanting greater regulatory certainty can seek a formal determination from the EPA or authorized state agency that their Materials are not a solid waste.  If a non-waste determination is granted, the generator is freed from the limitations and conditions specified in the rule (unless otherwise explicitly required in the formal determination).  EPA views this determination process as equivalent to the current process for obtaining a solid waste variance under RCRA.  

Two types of Materials are eligible for this determination: (i) Materials reclaimed in a continuous industrial process, and (ii) Materials that are "indistinguishable in all relevant aspects from a product or intermediate." 

Once an application for formal determination is submitted to EPA (or an authorized state), the agency will evaluate the application and draft a tentative decision.  There is an opportunity for public comment of the tentative decision, and in some cases, a public hearing may be held.  If a formal non-waste determination is issued, the generator will be required to meet all conditions specified in such determination. 

V.        Uncertainties and Challenges Remain   

While the rule goes a great distance to clarify what Materials may and may not be regulated as solid waste, potentially significant uncertainties and challenges remain regarding its implementation. 

A.        Rule is not Effective in States Until Adopted

Despite the rule's effective date of December 29, 2008, the rule will not be immediately effective in RCRA-authorized states (virtually all states, including California).  Normally, the promulgation of federal requirements that are more stringent than those currently in place in a RCRA-authorized state would become immediately enforceable in such states.  However, in this instance, because the rule makes existing requirements less stringent, RCRA-authorized states have the discretion to adopt or reject the rule. 

EPA has strongly encouraged all authorized states to adopt the rule formally, and in the interim, EPA will support each state's implementation of the rule through use of waivers or other authority.  Some states are already on board.  An association of state solid waste management officials reported in October 2008 that the rule had addressed most of the concerns and comments raised by states in early EPA proposals.[3] 

B.        Consequences for Failure to Meet Conditions of the Rule

Generators are well advised to thoroughly and carefully assess whether they can satisfy the requirements of the rule, particularly given that the consequences of non-compliance may be quite severe.  EPA warns that failure to follow any of the rule's conditions could render the Materials hazardous waste starting from the time the Materials were first generated to the time of final reclamation or disposal.  This, in turn, could trigger RCRA permitting requirements, and potentially result in the assessment of significant penalties for non-compliance and imposition of broad facility-wide RCRA corrective action investigation and remedial requirements.

Farella Braun + Martel has extensive experience advising clients on compliance with hazardous waste management laws and regulations, including hazardous and solid waste characterization, disposal and remediation issues.  Please contact Deb Tellier ([email protected]/415.954.4970) or John Gregory ([email protected]/415.954.4969) for additional information.


[1] 73 Fed. Reg. 64668 (October 30, 2008).

[2] The generator-based exclusion is also available to generators whose materials are reclaimed under a particular type of recycling contract (e.g., batch manufacturing agreement or tolling agreement). 

[3] Inside EPA's Superfund Report (November 3, 2008) page 20-21.

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