At the end of last week, Minnesota became the first state to ban use of trichloroethylene (TCE). TCE is used as a solvent in degreasing and other manufacturing operations, an intermediate for refrigerant manufacturing processes, and spot cleaning in dry cleaning facilities.

The use restriction provides that beginning June 1, 2022, an owner or operator of a facility required to have an air emissions permit issued by the Minnesota Pollution Control Agency may not use TCE at its permitted facility, including for manufacturing, processing or cleaning operations. There are exceptions delineated under the rule for circumstances establishing compliance with the health-based value and health risk limits for TCE as established by the Department of Health as of Jan. 1, 2019. The legislation also enumerates categories under which the commissioner of the Pollution Control Agency shall grant exemptions (closed systems, holding TCE for distribution to third party and licensed hospitals or academic medical facilities) or may grant exemptions (use exclusive to research or experimental purposes, processing facilities for waste disposal). Finally, the legislation sets forth the process to apply either for extension for elimination of use or to be granted an exception from the use ban and establishes an interest-free loan program for small businesses to reduce use of TCE.

This development is part of a broader regulatory landscape addressing TCE. In late 2017 and early 2018, U.S. EPA proposed rules to ban certain uses of TCE on a nationwide basis under Section 6 of the Toxic Substances Control Act (TSCA). U.S. EPA has not acted on those proposed rules. However, on Feb. 21, 2020, U.S. EPA released its revised draft risk assessment of TCE. The draft finds an unreasonable risk of occupational exposure through dermal and inhalation pathways. If that finding remains in the final risk assessment, the Agency will be required under TSCA to take risk mitigation steps that could include nationwide bans or restrictions on specific uses.

These kinds of restrictions or bans on the use of chemicals can affect company operations, but companies can take steps well in advance to minimize potential disruptions. There also may be market opportunities or new sources for investment that flow from measures to replace existing chemicals with less toxic alternatives or improve emission controls. Initiatives toward green chemistry and responsible stewardship can be part of programs to improve a company’s Environmental, Social and Governance (ESG). Once formal use restrictions or chemical bans are enacted, though, it can accelerate the need to implement change, resulting in a new set of complex factors for consideration.

At the outset, companies can look ahead to prepare for and anticipate chemical restrictions so that they have sufficient time to identify substitutes and make any changes necessary to existing processes. Once restrictions or bans are imposed, companies may want to consider a compliance plan for the law or regulation banning the chemical, determining with counsel appropriate steps to implement necessary changes. Bans that only impact one portion of a company’s operations can also complicate the decision-making process around implementation. Another important measure to consider, after review with counsel, is an assessment of a stewardship and hazard plan for the replacement chemical or any process changes that may be necessary as part of the phase-out. Analytical techniques continue to permit detections of smaller and smaller particles and research continues to evolve. What science supports today as a safe alternative should not be assumed to be the equivalent of permission of unrestricted use or emissions of the replacement chemical(s). A company with a responsible management plan for exposure and emissions over the life cycle of its products will be better situated to address potential future scrutiny of replacement chemicals. Finally, companies facing litigation related to a banned chemical must be prepared to address the ban as a potential evidentiary issue (usually through distinguishing the basis for enacting the chemical ban from the proof required for the claims at issue) and to balance the need to be responsive with messaging to supply chain partners, community neighbors, shareholders, employees or regulators with the overall risk mitigation strategy.