Your hazardous secondary materials recycling: legit or sham?
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February 17, 2015
Your hazardous secondary materials recycling: legit or sham?
By Elizabeth M Dickinson, JD, Senior Legal Editor - EHS

EPA’s new Definition of Solid Waste (DSW) Rule, which the U.S. Environmental Protection Agency (EPA) finalized in December 2014 and which goes into effect in July 2015, is complicated. While a lot of focus has been on the DSW Rule’s revised “generator-controlled exclusion” and two new exclusions—the “verified recycler” exclusion and the “remanufacturing of solvents” exclusion—in reality, it is three definitions that are at the heart of the Rule. Understanding these definitions is key to successfully utilizing the three conditional exclusions and essential to DSW Rule compliance.

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Infographic HSM

Contained

The DSW Rule defines “contained” in order to prevent mismanagement of hazardous secondary materials (HSMs) during storage. The new definition specifies that storage units must be in good condition, properly labeled, not hold incompatible materials, and address potential risks of fires or explosions.

Defined now in 40 CFR 260.10, “contained” means “held in a unit (including a land-based unit)” that meets these criteria:

  • The unit is in good condition, with no leaks or other continuing or intermittent unpermitted releases of the HSM to the environment, and is designed, as appropriate for the HSM, to prevent releases of HSM to the environment. Unpermitted releases are releases that are not covered by a permit (such as a permit to discharge to water or air) and may include, but are not limited to, releases through surface transport by precipitation runoff, releases to soil and groundwater, windblown dust, fugitive air emissions, and catastrophic unit failures;
  • The unit is properly labeled or otherwise has a system (such as a log) to immediately identify the HSM in the unit;
  • The unit holds HSMs that are compatible with other HSMs placed in the unit and is compatible with the materials used to construct the unit and addresses any potential risks of fires or explosions; and
  • HSMs in units that meet the applicable requirements of 40 CFR 264 or 40 CFR 265 are presumptively contained.

Sham recycling

A new definition at 40 CFR 261.2(g) codifies EPA’s concept of “sham recycling”:
A hazardous secondary material found to be sham recycled is considered discarded and a solid waste. Sham recycling is recycling that is not legitimate recycling as defined in 40 CFR 260.43.”

This explicit prohibition of sham recycling applies to all HSMs being recycled and codifies implicit requirements that have been largely implemented through EPA guidance. To the EPA, sham recycling is an activity undertaken by an entity to avoid the requirements of managing an HSM as a hazardous waste. Because of the economic advantages in managing HSMs as recycled materials rather than as hazardous wastes, there is an incentive for some handlers to claim they are recycling when, in fact, they are conducting waste treatment and/or disposal. This is what the EPA is trying to prevent with this new definition and with the DSW Rule as a whole.

Legitimate recycling

The opposite of sham recycling is legitimate recycling. It’s been EPA’s long-standing policy that all recycling of HSMs must be legitimate, including both excluded recycling and the recycling of regulated hazardous wastes. The DSW Rule revised the definition of “legitimate recycling” to include implicit requirements implemented in the past through EPA guidance. According to the revised 40 CFR 260.43:

“Recycling of hazardous secondary materials for the purpose of the exclusions or exemptions from the hazardous waste regulations must be legitimate. Hazardous secondary material that is not legitimately recycled is discarded material and is a solid waste.”

The earlier version of this definition (in the 2008 DSW Rule) suggested that Factors 1 and 2 were mandatory but that Factors 3 and 4 need only be considered. The revised definition clarifies that all four factors identified in the regulation must be met. They are:

  • Factor 1: Recycling must involve an HSM that provides a “useful contribution” to the recycling process or intermediate of the recycling process.
  • Factor 2: The recycling process must produce a “valuable product” or “intermediate.”
  • Factor 3: An HSM must be “managed as a valuable commodity” when under the control of a generator or recycler.
  • Factor 4: The product of the recycling process must be “comparable to a legitimate product” or intermediate.

The four legitimacy factors

To provide the first factor’s “useful contribution,” the HSM must:

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

For a product or intermediate to be valuable in accordance with the second factor, it must be either (1) sold to a third party, or (2) used by the recycler or the generator as an effective substitute for a commercial product or as an ingredient or intermediate in an industrial process.

The third factor means that the HSM must be managed in a manner consistent with how an analogous raw material would be managed (or in an equally protective manner). If there is no analogous raw material, the HSM must be contained.

The final fourth factor gives several detailed examples of how the recycled product can be comparable to a legitimate or intermediate product depending whether there is an analogous product or intermediate. Note that if the recycled product has levels of hazardous constituents that are not comparable to or lower than those in a legitimate product, the recycled product may not be considered to be legitimately recycled. Elevated levels of hazardous constituents require recyclers to conduct the necessary assessment and prepare documentation to show why the recycling is still legitimate.

Before the DSW Rule’s effective date

While the DSW Rule will not be in effect in most states until a state adopts the Rule, it’s not too early for on-site and off-site recyclers to evaluate their practices and prepare for compliance with the Rule’s provisions. The DSW Rule potentially affects over 5,000 industrial facilities in 634 industries that generate or recycle HSMs. Reviewing the Rule and in particular the contained standard and the four legitimacy factors will be an important step in escaping the “sham recycling” label and its consequences.

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