Per- and polyfluoroalkyl substances (PFAS) continue to garner regulatory attention at the federal and state levels. One of the regulatory milestones set forth in the Biden EPA’s 2021 PFAS Strategic Roadmap was the finalization and implementation of a one-time reporting rule that the Agency had proposed in June 2021 under TSCA Section 8(a)(7). This rule will require manufacturers, including importers, of PFAS to provide EPA with certain information regarding their introduction of PFAS into commerce, as well as on the resulting exposure to and downstream uses of such PFAS. Although the public comment period on this rule has long since closed, we are only months away from the targeted date by which EPA has promised to publish the final regulation. Specifically, EPA must promulgate the final rule by January 1, 2023. Thereafter, subject businesses must submit the requisite information to EPA within six months following the effective date of the final rule.
As proposed, the rule applies to PFAS identified on the TSCA Chemical Substance Inventory that meet the TSCA definition of a “chemical substance” under TSCA section 3(2). To date, the EPA has identified 1,364 PFAS that may be potentially covered by this rule as of April 2021, 669 of which are on the active Inventory (i.e., in U.S. commerce).
The data required for submission under the proposed rule is similar to that which subject companies must submit every four years under the Chemical Data Reporting (CDR) rule. Indeed, because of the possible duplication of information that may be required under the PFAS reporting rule and in CDR reports, the EPA has indicated a willingness to allow parties subject to the PFAS reporting rule to simply cross reference past CDR reports that they have submitted.
In broad brush, the information that manufacturers and importers would have to provide for covered PFAS consists of the following:
- the chemical identity and molecular structure of each chemical substance or mixture;
- categories or proposed categories of use for each substance or mixture (i.e., a company which only distributed a PFAS product, but which knows at the time of processing that it would be incorporated into an article would categorize it as such);
- total amount of each substance or mixture manufactured or processed, the amounts manufactured or processed for each category of use, and reasonable estimates of the respective proposed amounts;
- descriptions of byproducts resulting from the manufacture, processing, use, or disposal of each substance or mixture;
- the environmental and health effects of each substance or mixture;
- the number of individuals exposed, and reasonable estimates on the number of individuals who will be exposed, to each substance in the workplace, including reasonable estimates regarding the duration of such exposure; and
- the manner or method of disposal of each substance or mixture.
A major distinction between the PFAS rule, as proposed, and the CDR Rule is that the former is subject to far fewer exclusions and exemptions. The implication is that businesses besides those that manufacture or import chemicals or formulations in bulk may be subject to the final rule. The EPA’s proposal to limit the applicability of traditional TSCA carveouts to the proposed rule has been a primary subject of public comments submitted by industry.
The only exclusion directly adopted in the proposed rule is the one applicable to chemical substances subject to other federal statutes, including the Federal Insecticide, Fungicide, and Rodenticide Act and the Food, Drug, and Cosmetic Act. On the other hand, the proposed PFAS rule would apply to byproducts, whereas, for example, both the new chemicals regulations in TSCA Section 5 and the CDR Rule recognize an exemption for byproducts. The most notable CDR/Section 5 exclusion that may not carry over to the PFAS rule is the one applicable to articles. Such an exclusion is not included within the scope of the proposed rule and, if this aspect of the proposed rule remains unchanged in the final regulations, the rule would apply to a much broader range of businesses than those that typically are subject to TSCA.
Specifically, manufacturers and importers of fabricated equipment and parts would also need to evaluate and report on their PFAS-related activities. This broader coverage could prove problematic, as such businesses may not have ready access to the information that would have to be reported. (Consider that most articles, including those that will be incorporated into other articles, are not distributed with an accompanying safety data sheet.) The EPA’s proposed rule acknowledges this difficulty and sets forth the Agency’s expectation that manufacturers and importers of articles should document their efforts to obtain the information necessary to satisfy the rule’s reporting requirements. Although the EPA has not addressed what specific steps it would expect such companies to take, one would expect that, at minimum, it would include submitting questionnaires and making other good faith efforts to obtain relevant information from businesses in their supply chain.
Moreover, whereas the CDR Rule exempts small manufacturers from reporting requirements, the proposed PFAS rule contains no such exemption.
Additional Liability Considerations
Companies that fail to comply with the PFAS reporting rule would be subject to civil and, depending on the gravity of the violation, criminal enforcement. Moreover, the proposed rule may increase companies’ liability exposure in indirect ways. The fundamental purpose for the rule is to allow the EPA to identify manufacturers and importers of PFAS and understand how these chemicals are being distributed in commerce. Not only will this information help the Agency prioritize which PFAS to subject to forthcoming regulations, but it can serve as the basis for governmental investigations and enforcement actions against companies that, for example, have a significant PFAS footprint or a nexus to areas of known PFAS contamination. (For steps that the EPA is taking to enforce PFAS remediations, see this recent client alert.) In this connection, it is worth noting that EPA plans to share the information received pursuant to the proposed rule with state regulators. Moreover, such information stands to be made publicly available, unless the confidentiality provisions of the Freedom of Information Act are deemed applicable.
The Benefits of Planning Ahead
Given the stakes, companies may require considerable lead time—in some cases, perhaps, more than the six months that the EPA has proposed—to develop and implement strategies to comply with the rule. Moreover, companies may wish to consider the benefits of approaching the information-gathering that they may have to perform along the lines of a due diligence exercise or internal investigation conducted under the auspices of counsel. Such an approach may prove especially beneficial to companies concerned that the evaluations required by the rule may identify a broader and more profound nexus to PFAS or non-compliance with other provisions of TSCA. For such companies, the early involvement of legal counsel can help maximize the degree of privilege and confidentiality that may be asserted over communications regarding potentially responsive information. It might also better situate such companies to react promptly to any legal violations and to take advantage of the penalty relief offered under the EPA’s Audit Policy.
Pillsbury has practitioners experienced in TSCA, PFAS matters, and internal investigations.