The Toxic Substances Control Act (“TSCA”) authorizes EPA to regulate virtually all aspects of the manufacture, import, distribution and use of chemical substances in the United States. Unlike many of the federal environmental statutes that EPA administers – which target pollution, waste or site cleanup – TSCA regulates chemicals at the product stage both before and after being introduced into commerce. Under TSCA, EPA imposes numerous regulatory obligations on the domestic manufacturer and importer of industrial chemicals. If your company engages in either of these activities, you may have imminent reporting obligations under the TSCA Chemical Data Reporting (“CDR”) rule. Failure to promptly report has been an EPA enforcement focus in past CDR years.

What is the CDR rule?

Section 8(a) of TSCA provides EPA broad authority to obtain information on chemicals in U.S. commerce. To implement this statutory authority, EPA has promulgated CDR regulations at 40 C.F.R. § 711 that require chemical manufacturers and importers to provide the Agency with information on the production, distribution and use of certain chemicals. EPA can then use this information for the administration of TSCA, including to impose testing and other regulatory actions on chemicals in commerce. EPA will also likely use the information contained in this round of CDR submissions to develop the preliminary list of companies subject to fees for the next set of chemicals EPA selects for TSCA section 6 risk evaluations. EPA has already issued the final list of business subject to the $1.35 million fee for each of the 20 high-priority chemicals EPA selected for risk evaluation in December 2019.     

Is my company subject to CDR reporting?

CDR reporting obligations apply to any company with one or more U.S. sites that manufacture or import a chemical subject to TSCA¹, which is listed on the TSCA Inventory (as of June 1, 2020), in a quantity greater than 25,000 pounds in calendar year 2016, 2017, 2018 or 2019. Alternatively, chemicals of enhanced regulatory interest are subject to a 2,500 pound per site reporting threshold. These are defined as those chemicals that, as of June 1, 2020, are subject to a: proposed or final significant new use rule; proposed or final chemical of concern list rule; proposed or final TSCA section 6 rule; an order under TSCA section 4, 5(e) or 5(f); or relief granted in a civil action under TSCA sections 5 or 7. 

To ease the regulatory CDR burden, EPA has developed certain exclusions and exemptions from CDR reporting. Full exemptions are provided for certain:

• polymers;

• microorganisms;

• listed natural gas streams;

• naturally occurring chemicals and water;

• chemicals manufactured or imported solely in small quantities for research and development;

• chemicals manufactured solely in a manner described in 40 C.F.R. § 720.30(g) or (h) (which includes certain byproducts, impurities, non-isolated intermediates and reaction products);

• chemicals imported solely as part of an “article” (TSCA terminology for a finished product); and

• “small” manufacturers and importers.

There are also partial exemptions from CDR for listed petroleum process streams and chemicals of low current interest. Notably, chemicals that are manufactured or imported for export only are not exempt from CDR.  

When are CDR Reports due to EPA?

CDR submissions are due to EPA every four years and 2020 is a reporting year. The 2020 CDR submissions are due to EPA by November 30, 2020. CDR submissions were last reported to EPA in 2016, when 5,660 sites reported more than 8,700 substances that were manufactured or imported above the quantity thresholds from 2012-2015.

What information must be reported to EPA?

CDR submissions require a fairly rigorous deep dive into a company’s records. EPA collects information about the site of manufacture or import, chemical identity information, production volumes, worker exposure data and processing and use information about the chemical(s) subject to reporting. Information must be reported using EPA’s Central Data Exchange. A separate Form U must be created and submitted for each site and will include all of the reportable chemical substances for that site. Any claims of confidential business information included in the CDR submission must be substantiated.

Will my company be subject to enforcement for failure to make a CDR submission or for reporting information incorrectly?

In contrast to some of the state-delegated statutory programs, TSCA enforcement at EPA has been generally increasing. In prior reporting years, CDR has been a TSCA enforcement focus. EPA files CDR enforcement actions for failure to timely report, reporting inaccurate information, or reporting information that inadvertently reveals a violation of another TSCA requirement. For example, a CDR submission that reveals to EPA that a company has been improperly manufacturing or importing a chemical not listed on the TSCA Inventory for a non-exempt commercial purpose will provide EPA the basis for a TSCA section 5 enforcement action. In addition, a company that failed to self-identify as being subject to fee obligations for any of the 20 high-priority chemicals EPA selected for risk evaluation in December 2019, but reports manufacturing or importing one of those chemical in its CDR submission, could also be exposing itself to enforcement risk. Under section 16 of TSCA, and as adjusted for inflation, a violation of any requirement or rule issued under Title I of TSCA is subject to a maximum daily civil penalty of $40,576 per violation. In addition to direct enforcement, EPA may also use CDR submissions to prioritize companies for TSCA inspections and more comprehensive regulatory scrutiny.

Due to the potentially significant enforcement liability TSCA imposes, companies should consider using EPA’s Audit Policy to self-disclose any TSCA violations discovered during the preparation of a CDR submission for potential relief from gravity-based penalties. Any such disclosure should, however, be considered carefully, as EPA has assessed penalties against companies making TSCA self-disclosures where the disclosure did not meet all nine conditions of the Audit Policy. Even if all nine conditions of the Audit Policy are met, EPA also retains its discretion to collect any economic benefit that may have been realized by a company as a result of noncompliance with TSCA.   

Based on the potential enforcement risk associated with CDR submissions, companies should proceed carefully with CDR reporting and seek assistance from counsel to ensure reports are submitted promptly and correctly, and to ensure steps are taken to maximize privilege and confidentially claims.

¹ While TSCA’s jurisdiction is broad, it generally excludes chemicals specifically regulated under other statutory schemes, including pesticides, food, food additives, drugs, cosmetics, tobacco and nuclear materials, when they are manufactured, imported, processed, or distributed in commerce for use as such.