[pullquote]If anyone on planet Earth thinks the Toxic Substances Control Act (TSCA), as amended, is not commercially consequential, think again. The implementation of the 2016 amendments by the U.S. Environmental Protection Agency (EPA) is triggering tremendous commercial disruption. The EPA’s March 8, 2021, announcement seeking comment on five final rules for persistent, bioaccumulative, and toxic (PBT) chemicals issued on January 6, 2021, and, importantly, granting a rare “No Action Assurance” regarding the PIP (3:1) rule, is demonstrable proof of TSCA’s enormous reach. The reasons behind this regulatory action are revealing and demonstrate why the PIP (3:1) experience is a cautionary tale.
Background
As mandated under TSCA, the EPA issued the five rules under Section 6(h) for PBT chemicals. One of the five is PIP (3:1), a commonly used plasticizer, flame retardant, and anti-wear additive, among other uses. The rule prohibits the processing and distribution in commerce of PIP (3:1), and the products or articles containing the chemical substance, for all uses, except for certain exemptions. The prohibitions went into effect March 8, 2021.
Importantly, the rule doesn’t allow sell-through opportunities for products already in commerce. During the rulemaking, one commenter urged the EPA to revise the PIP (3:1) ban to provide a sell-through provision that allows distribution of PIP (3:1) articles that are manufactured and imported prior to the compliance deadlines without restriction. The commenter stated that a sell-through provision is needed to prevent an “untold number of lawfully manufactured and imported articles from suddenly becoming unsaleable, which would result in significant costs for retailers and importers.” The EPA disagreed and stated “outside of articles produced as a result of excluded activities, there is little evidence to suggest that PIP (3:1) is present in commercial and industrial articles. The Agency maintains it is practicable to implement the prohibition within 60 days of the publication of the final regulation.”
As March 8 rolled around, the EPA learned it was wrong and regulated industries appreciated they had been asleep at the switch. Shortly after the New Year began, and as the deadline approached, regulated entities realized, to their horror, that the rule applies to hundreds if not thousands of electronic articles. Electronics manufacturers were especially concerned because, the EPA noted, the prohibition on PIP (3:1) could “impact articles used in a wide variety of electronics, from cell phones, to robotics used to manufacture semiconductors, to equipment used to move COVID-19 vaccines and keep them at room temperature.” Industry stakeholders urgently informed the EPA that the prohibition could adversely impact commerce, and emphasized that the complexity of international supply chains makes locating the presence of PIP (3:1) in components challenging.
In response, the EPA announced its decision to exercise enforcement discretion regarding the prohibitions on processing and distribution of PIP (3:1) for use in articles, and the articles to which PIP (3:1) has been added. The EPA “is taking this action to ensure that the supply chain of these important articles is not interrupted while EPA continues to collect the information needed to best inform subsequent regulatory efforts and allow for the issuance of a final agency action to extend the March 8, 2021, compliance date as necessary.”
The Cautionary Part of This Tale
TSCA is not just a chemical producer law. The PIP (3:1) cautionary tale demonstrates the new reality: TSCA is every bit as commercially consequential for article manufacturers as it is for industrial chemical manufacturers. Today, regulated entities cannot assume the historic exemptions that have applied to articles will necessarily continue to apply in new TSCA rules pertinent to existing chemicals. Bottom line: manufacturers of all sorts must monitor TSCA rules relating to existing chemicals. No one wants to be caught flat-footed and experience the commercial chaos that applied to PIP (3:1) stakeholders before the March 8 deadline. The EPA is to be commended for its rapid response and willingness to issue a No Action Assurance.
