Three Regulatory Changes That Could Affect the Chemical Industry in 2013

2013 could be a busy year for chemical reform given the potential emphasis on regulatory change: The White House is re-energized post election, the Environmental Protection Agency (EPA) is committed to enhance its chemical management program, and some states are increasingly concerned about the lack of movement on long discussed reforms, such as the Toxic Controlled Substances Act (TCSA).

The recent resignation of Environmental Protection Agency Administrator Lisa Jackson, who faced harsh criticism over climate change and air control regulatory issues, may provide the new EPA leadership team with an opportunity for better dialogue with stakeholders. However, as the House of Representatives and the Senate continue to be divided on many issues, the same gridlock that the chemical industry has experienced over the past few years can be expected, making any significant regulatory changes difficult to achieve.

Representatives of the chemical industry have been calling over the years for a balanced approach to regulation. In any event, the industry will continue to focus its efforts on advocacy, compliance, and commitment to health, safety, and product stewardship.

1. Toxic Substances Control Act. The need to reform the TCSA remains one of the few legislative constants in the chemical industry. The Act, issued in 1976, provides the EPA with authority to require reporting, recordkeeping and testing requirements, and restrictions relating to chemical substances and/or mixtures.
   
   Stakeholders agree on the concept of reforming the TSCA but are certainly not aligned on the details. Several questions remain, including the White House support for true reform, the position of the new EPA administrator, as well as the general scope of the reform — broad and sweeping or tailored and focused.
   
   The absence of meaningful TSCA reform could result in a new wave of state regulations. In 2010, California’s Department of Toxic Substances Control proposed several iterations of its “Safer Consumer Products” regulations, implementing the California Green Chemistry Initiative. The latest version, issued in July 2012, includes the identification of chemicals of concern, and the development of alternative assessments for chemicals in priority products. The multiplication of complex chemical regulatory initiatives driven by individual states would not be a positive development for the chemical industry.



2. Chemical Management. The EPA slightly scaled back its emphasis on chemical action plans in 2012, mainly due to pushback from the industry and the demand the plans place on the agency’s limited resources.
   
   Last June, the EPA announced an additional 18 chemical substances scheduled for assessment during 2013 and 2014. The 18 substances include chemicals associated with specific hazards, such as potential carcinogenicity; reproductive, or developmental toxicity; chemicals presenting persistent, bio-accumulative, and toxic potential; and chemicals found in bio-monitoring or reported in consumer products, including products for children.
   
   Some of these chemicals, such as five chlorinated hydrocarbons, three flame retardants, and four fragrance chemicals, may present the regulator with an opportunity to assess groups of related chemicals together. Nano-scale materials, including nanopesticides, are also receiving greater scrutiny. How the new administration will balance innovation with the need for pre-market review is unclear. The administration also needs to consider the impact of new regulations on jobs, while protecting workers and consumers from potential chemical risks.



3. Chemical Facility Anti-Terrorism Standards (CFATS). The prospect of changing CFATS in 2013 is uncertain. The standards, developed in 2007, are a set of security regulations for high-risk chemical facilities such as chemical plants, electrical generating facilities, refineries, and universities. This rule requires covered chemical facilities to prepare security Vulnerability Assessments, which identify facility security vulnerabilities, and to develop and implement site security plans, which include measures that satisfy the identified risk-based performance standards. The implementation of the program has proven challenging and may lead Congress to reconsider the Department of Homeland Security’s jurisdiction over security measures at chemical production, storage, and transport facilities that might be targeted by terrorists.