Retailers need to prepare for a major shift in chemical regulation policy recently announced by the U.S. Environmental Protection Agency (EPA) that could affect a broad range of products currently being sold in the US. Under this sweeping new policy, EPA plans to address chemical risks by directly regulating articles that are manufactured with those chemicals. Crowell environmental attorneys, Warren Lehrenbaum and Jennifer Giblin, addressed this and other important developments at EPA in a wide-ranging question and answer session with the Retail Industry Leaders Association on Tuesday, October 5, 2021.

For decades, chemicals manufactured, imported and distributed in the US have been regulated by EPA under the Toxic Substances Control Act (TSCA). Traditionally, EPA has taken the position that even though manufactured articles (like all other things) are comprised of chemicals, regulation under TSCA aimed at chemicals would exempt articles from their scope. As a consequence, retailers and other importers and distributors of articles were rarely the subject of direct regulation by EPA under TSCA. However, in a recent speech, Michal Freedhoff (EPA Assistant Administrator for Chemical Safety and Pollution Prevention) declared that EPA’s past practice of exempting articles from regulation will no longer be the norm. Instead, the Agency plans to focus greater attention on directly regulating the manufacture, import and distribution of articles as a way of regulating the chemicals contained in those articles.

Recent rulemaking efforts have foreshadowed this shift in policy. In January 2021 EPA issued a regulation prohibiting the distribution of articles containing a commonly-used plasticizer and flame retardant, phenol, isopropylated phosphate (3:1) (“PIP”). Because of the widespread use of this chemical (it’s commonly found in electrical and electronics components of all types) and the devastating consequences that would result from a ban on products containing the substance, the regulation was met with a loud outcry from a broad swath of industry. EPA responded to this outcry by delaying implementation of the PIP rule. However just a few months later, on June 28, 2021, EPA issued another proposed rule that would apply directly to importers of articles – in this instance, articles containing PFAS chemicals.

EPA’s recent actions and statements suggest that the Agency does not fully appreciate the complexities of modern supply chains and the obstacles faced by retailers seeking to ascertain the chemical composition of the articles they import or distribute. As a consequence, to avoid unnecessary disruptions in the future as EPA implements its new policy of regulating articles containing chemical substances, it is essential for the retail industry to communicate its concerns to EPA and educate the Agency on the complexities of global supply networks. According to Mr. Lehrenbaum, engaging in dialogue with the Agency and commenting on proposed regulations aimed at articles are key steps retailers can take to ensure that their perspectives are understood and accounted for in future regulations aimed at articles.  Finally, to anticipate what chemical(s) might be the next target of EPA regulation focused on articles, Mr. Lehrenbaum suggested keeping track of risk evaluations and risk management regulations being developed by EPA for Chemicals Undergoing Risk Evaluation under TSCA.

Ms. Giblin also alerted retailers to the upcoming U.S. Department of Transportation January 1, 2022 regulatory deadline for manufacturers and each subsequent distributor of lithium cells or batteries, including lithium cells and batteries that are contained in or packed with equipment, to make a “test summary” available. The test summary demonstrates that the cell or battery meets UN testing. The international air transportation regulations have required test summaries since January 1, 2020, and as of January 1st, the U.S. regulations will require a test summary for all modes of transport, including ground transportation. More information regarding the lithium battery test summary requirement can be found here.