Federal Retail Hazardous Waste Reform

Federal (and state) laws and regulations, which were initially intended to address the management and disposal of industrial hazardous waste, are often an awkward fit when applied to the management and disposal of retail “hazardous waste.”  For example, many common retail products sold for household use are regulated as hazardous waste when discarded by retailers even though these same products would not be so regulated when discarded by individual consumers.  Accordingly, retailers are left to determine (and train their employees on how to determine) when a product should be treated as a “waste,” whether a particular waste must be handled as “hazardous waste,” and how to properly handle such hazardous waste pursuant to federal and state laws and regulations.  The U.S. Environmental Protection Agency (“EPA”) is currently undertaking several regulatory reform efforts that may lead to hazardous waste regulatory reforms intended to alleviate some of the awkward application of the federal hazardous waste regulatory scheme in the retail context.

Pursuant to Executive Order 13563 issued in January 2011, federal agencies are required to review existing regulations to determine “whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives.”  Federal agencies subsequently produced “retrospective review plans” outlining potential areas of regulatory reform.  With industry support, the August 2011 retrospective review plan published by EPA included, among other proposals, the review by EPA of hazardous waste requirements for retail products.

Among the first efforts currently underway to “streamline” the impact of environmental regulations on retailers is the development of proposed standards for managing and disposing of pharmaceuticals that are considered hazardous waste when discarded by “healthcare-related” facilities, including, presumably, retail pharmacies.  As early as 2008, EPA proposed a rule that would have regulated hazardous waste pharmaceuticals under the Universal Waste Program, but EPA never finalized the prior proposed rule, citing concerns raised by the public comment generated by the proposal.  EPA received an unprecedented number of comments on the prior proposed rule.  The hazardous waste pharmaceuticals standards currently under development are expected to deviate significantly from the prior proposal.  EPA has been tight-lipped on the specific components of the new proposed rule, but it is anticipated that it will address several issues regularly raised by the regulated community, such as how empty containers are to be treated and episodic large quantity generator status due to occasional generation of more than 1 kg/month of pharmaceuticals that are “acutely hazardous waste.”  EPA currently expects a new proposed rule to be published in March 2014.

Another effort EPA is undertaking includes an analysis and review of comments and other information from retailers and other sources to better understand retail-specific areas of concern with respect to federal hazardous waste requirements.  EPA is preparing a Notice of Data Availability (“NODA”), which will provide a summary of the information described above.  EPA’s expected NODA publication date has been repeatedly pushed back, but subject to federal budget activities, EPA contacts suggest that the NODA will be published late October or early November 2013.  The NODA will request comments and additional information from stakeholders and the public, as well as proposals to address the retail-specific areas of concern with respect to federal hazardous waste requirements.  Following the comment period, which typically lasts 60–90 days but could be extended even further, EPA may—but has not yet committed to—continue the rulemaking process by proposing rule changes, which would not be expected to yield actual regulatory changes for years to come.  In the interim, EPA has indicated that it may consider issuing interpretive guidance of existing regulations, although we are unaware of any interpretive guidance efforts currently underway with respect to retail hazardous waste issues.

A third effort currently underway is the development of proposed changes to the hazardous waste requirements applicable to generators of hazardous waste, which would affect retailers and the broader regulated community.  The hazardous waste generator changes currently under development are expected to make some largely nonsubstantive changes, such as reorganizing the applicable regulations.  Other changes are expected to be more substantive, including to “address situations where a generator has [an] episodic event resulting in a temporary change in regulatory status.”  Many retailers may take a particular interest in the precise scheme proposed for episodic generators due to the vagaries of retail operations, seasonal variations in products, product recalls, and other retail-specific circumstances that may lead to temporary, larger-than-normal hazardous waste generation.  We understand that proposed changes to the hazardous waste generator rules are currently planned to be published in March 2014.

Except with respect to the possibility of EPA issuing interpretive guidance of existing regulations in connection with any of the hazardous waste regulatory reform efforts described above, these three regulatory reform efforts all appear to be far from yielding immediate practical benefits.  However, each of these efforts are at critical phases, and members of the regulated community have an opportunity to shape the ultimate outcomes through the public comment process.  Furthermore, the sequester has caused a 5% reduction to EPA’s current fiscal year budget.  These budgetary constraints, which are expected to continue at least into the next fiscal year, will undoubtedly hamper the rate at which EPA is able to progress the rulemaking process.  Accordingly, the priority given to these reform efforts by EPA, and whether retail hazardous waste reforms even continue beyond the NODA to the proposed rulemaking stage, may depend in part on level and type of feedback received during the upcoming comment periods for each of the three regulatory reform efforts.

Ted Wolff is a partner in Manatt, Phelps & Phillips’ New York office and focuses his environmental practice on litigation and transactional work. He regularly counsels clients on compliance with environmental laws, including those that regulate the handling, storage, treatment and disposal of hazardous substances and waste. Mr. Wolff can be reached at (212) 790-4575 or [email protected].

Matthew Dombroski is an associate with Manatt, Phelps & Phillips in New York and regularly counsels clients on environmental matters relating to corporate and regulatory compliance. Mr. Dombroski can be reached at (212) 790-4556 or [email protected].

This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns in the third edition of this series discussed Environmental Screening Tools, Nanotechnology Regulation, Federal Chemical Regulation Reform, Efforts to Address Climate Change and What the Sequester Means for Environmental Regulation.