June 2010
Version 1
Revisions to the Definition of Solid Waste Final Rule
Compilations: The History of Legitimate Recycling
Materials Recovery and Waste Management Division
Office of Resource Conservation and Recovery
U.S. Environmental Protection Agency
EPA530-R-10-008
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Revisions to the Definition of Solid Waste Final Rule Compilations:
The History of Legitimate Recycling
INTRODUCTION
Contents
Click a topic below to go to a section
INTRODUCTION i
THE HISTORY OF LEGITIMATE
RECYCLING 1
Purpose of Legitimacy 1
Legitimacy in the Final Exclusions 2
Effect on Current Determinations and
Exclusions 2
Codification of Legitimacy 7
Final Legitimacy Structure 11
Factor 1—Useful Contribution 12
Factor 2—Valuable Product or
Intermediate 19
Factor 3—Managed as a Valuable
Commodity 24
Factor 4—Comparison of Toxics in the
Product 31
Economics 41
Demonstration and Enforcement of
Legitimacy 46
Current Guidance and Crosswalk from
Lowrance Memo 50
CFR LANGUAGE 57
ACRONYMS 61
INDEX 62
About the 2008 DSW Rule
to encourage beneficial recycling and to help
conserve resources. The Revisions to the
Definition of Solid Waste (DSW) Final Rule
("DSW rule") amends and clarifies the
Resource Conservation and Recovery Act
(RCRA) definition of solid waste (40 CFR
261.2). In particular, this rule establishes
three self-implementing exclusions to the
definition of solid waste for hazardous
secondary materials that are reclaimed. One
of the exclusions involves hazardous
secondary materials that are legitimately
reclaimed under the control of the generator
(onsite reclamation, reclamation by the same
company, and reclamation under certain
tolling arrangements). The second exclusion
involves hazardous secondary materials that
are transferred to another company for
reclamation. The last exclusion involves
hazardous secondary materials that are
exported for reclamation. In addition, the
2008 DSW rule outlines a procedure for
case-by-case non-waste determinations.
For more information on the DSW rule, see
EPA's DSW Federal Register Notices web
page.
On October 30, 2008, the U.S.
Environmental Protection Agency (EPA)
published a final rule that streamlines
regulation of hazardous secondary materials
About the "Revisions to the Definition of Solid Waste Final Rule
Compilations"
The Revisions to the Definition of Solid Waste Final Rule Compilations provide easy access for
EPA, the states, the regulated community, and the public to important information regarding a
number of the provisions in the DSW rule: legitimate recycling, reasonable efforts and the
Introduction
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Revisions to the Definition of Solid Waste Final Rule Compilations:
The History of Legitimate Recycling
contained standard. This user-friendly reference tool reduces the need for stakeholders to search
through multiple Federal Register notices and will improve understanding of each of these three
subjects. For each compilation, EPA has incorporated information from relevant preambles,
regulations, and other materials. Please note that this reference is designed to be web-based;
therefore, the usefulness of the document is maximized when it is viewed on a computer that is
connected to the Internet.
This volume of the Compilations series provides information about the legitimacy standard under
the DSW rule. An abbreviated version of this compilation and compilations addressing the
contained standard and the reasonable efforts condition will be available at
http://www.epa.gov/epawaste/hazard/dsw/impresource.htmtfguide.
This document is not a rulemaking and does not change any of the existing solid or hazardous
waste requirements. Any reformatting of regulatory language for the new exclusions is only
intended to make the language easier to read. Moreover, EPA's intention is to include only that
CFR language that is directly relevant to the legitimate recycling standard. Note: other relevant
language to this standard may exist and may not be included in this document; users of this
document are responsible for examining all CFR language and other information that may be
relevant to the reasonable efforts condition. In addition, we also provide links to the Government
Printing Office's Electronic Code of Federal Regulations Web site (e-CFR), which is updated
almost daily.
In addition, this reference document presents matters related only to the legitimate recycling
standard of the federal definition of solid waste and hazardous waste recycling regulations. Most
states are authorized to manage their own solid and hazardous waste regulatory program.
Therefore, states may have their own regulations that apply in lieu of the federal regulations.
While most state solid and hazardous waste regulations are based on the federal requirements,
some states have developed regulations that are more stringent than the federal program. We
direct you to the following web site to determine if your state regulatory program is different
from the federal program: http://epa.gov/waste/wyl/stateprograms.htm.
For a collection of written materials about other issues related to the definition of solid waste, see
the Definition of Solid Waste Compendium. For more information regarding the various
regulations applied to facilities generating or managing hazardous waste, see Hazardous Waste
Generators: A User Friendly Reference Document.
The Compilations series is also available in Microsoft Word format from EPA upon request. For
more information on these versions and any other questions or comments concerning this
document, please contact EPA's Office of Resource Conservation and Recovery:
Mary Beth Sheridan Kathy Lett
sheridan.marybeth@epa.gov lett.kathy@epa.gov
703-308-4941 703-605-0761
Introduction
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About "The History of Legitimate Recycling" Compilation
Under the 2008 DSW rule, EPA requires hazardous secondary materials being reclaimed under
the control of the generator (40_CFR26L2(a)(2)(ii) and 40_CFR26L4(a)(23)) or transferred for
the purpose of reclamation (40_CFR26L4(a)(24) and 40_CFR26L4(a)(25)) to meet the
legitimacy standard. Materials must also meet the legitimacy standard to be applicable for a non-
waste determination at 40 CFR 260.34. EPA has long articulated the need to distinguish between
"legitimate" (i.e., true) recycling and "sham" recycling and has codified legitimacy provisions in
the DSW rule. This compilation is designed for users who want to look at the history of
legitimate recycling or compare other guidance on legitimate recycling to the requirements in the
2008 final rule. This compilation discusses the following subjects (click a topic below to jump to
a section):
• Purpose of legitimacy
• Legitimacy in the Final Exclusions
• Effect on current determinations and exclusions
• Codification of the legitimacy requirements
• Structure of the legitimacy requirements
• Details of Factors 1-4
• Economics and legitimacy
• Enforcement of legitimacy
• Current guidance and crosswalk from Lowrance Memo
• Regulatory text
This document contains multiple references to the Federal Register notices that discuss the
legitimacy provision. In order to direct the reader to a precise location in a paper copy of the
Federal Register, EPA has indicated the column of the Federal Register page in which a quote is
found in parentheses after the citation's page number (e.g., "73 FR 64701(1), October 30, 2008"
indicates the first column of page 64701).
The text in the following sections is taken nearly verbatim from the preamble to the 2008 final
rule, the 2003 and 2007 proposals for the DSW final rule, and from final regulatory language.
The excerpts presented in this compilation do not necessarily appear in the same order as in the
original source. In some cases, we have reformatted passages to improve readability. Where the
language in this compilation does not exactly match preamble or regulatory language, we have
indicated this by italicizing transitional language and bracketing changes to cited language.
Headings and titles may not necessarily appear in cited sources or may be formatted differently
from the source material. Sources are indicated below each excerpt. As noted above, any changes
to the preamble or regulatory text are for the convenience of the reader and are not to be taken as
substitutes for the actual language of the regulations or the preamble.
Introduction iii
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THE HISTORY OF LEGITIMATE
RECYCLING
Purpose of Legitimacy
The 2008 final rule preamble lays out the Agency's position regarding the purpose for requiring
the recycling be legitimate:
As discussed in the October 2003 proposal and the March 2007 supplemental
proposal to this rulemaking, the Agency has a long-standing policy that all
recycling of hazardous secondary materials must be legitimate, including both
excluded recycling and the recycling of regulated hazardous wastes. The
legitimacy provision in today's final exclusions and non-waste determinations is
designed to distinguish between real recycling activities—legitimate recycling—
and "sham" recycling, an activity undertaken by an entity to avoid the
requirements of managing a hazardous secondary material as a hazardous waste.
Because of the economic advantages in managing hazardous secondary materials
as recycled materials rather than as wastes, there is an incentive for some handlers
to claim they are recycling when, in fact, they are conducting waste treatment
and/or disposal.
Source: 73 FR 64701(1), October 30, 2008.
Another section of the 2008 preamble also addresses this point:
Under the RCRA Subtitle C definition of solid waste, certain hazardous secondary
materials, if recycled, are not solid wastes and, therefore, are not subject to
RCRA's "cradle to grave" management system. The basic idea behind this
principle is that recycling of these materials often closely resembles industrial
manufacturing rather than waste management. However, due to economic
incentives for managing hazardous secondary materials outside the RCRA
regulatory system, there is a potential for some handlers to claim that they are
recycling the hazardous secondary materials when, in fact, they are conducting
waste treatment and/or disposal. To guard against this, EPA has long articulated
the need to distinguish between "legitimate" (i.e., true) recycling and "sham"
recycling, beginning with the preamble to the 1985 regulations that discussed the
definition of solid waste (50 FR 638, January 4, 1985) and continuing through
today's final rule.
Source: 73 FR 64670(2), October 30, 2008.
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Other FR citations for this topic
The final rule addresses the purpose of legitimacy elsewhere, repeating the points already included
above. These can be found at 73 FR 64677(2) and 73 FR 64700(2), October 30, 2008.
The points above are also included in the discussions in the 2003 proposal and the 2007 supplemental
proposal on the purpose of the legitimacy provision. These can be found at 68 FR 61582(1), October
28, 2003, and 72 FR 14197(2), March 26, 2007.
Legitimacy in the Final Exclusions
The Agency decided not to codify the legitimacy requirements for existing exclusions, although
the Agency emphasized that all hazardous secondary materials recycling and hazardous waste
recycling must be legitimate :
As part of this final rulemaking, EPA has decided to codify in 40 CFR 260.43 the
requirement that materials be legitimately recycled as a requirement for the
exclusion for hazardous secondary materials that are legitimately reclaimed under
the control of the generator (40CFR26L2(a)(2)(ii) and 40CFR26L4(a)(23)) and
as a condition of the exclusion for hazardous secondary materials that are
transferred for the purpose of legitimate reclamation (40 CFR 261.4(a)(24) and 40
CFR 261.4(a)(25)). EPA is also requiring that hazardous secondary materials
must be legitimately recycled under the final non-waste determinations (40 CFR
260.34) for hazardous secondary materials that are (a) reclaimed in a continuous
industrial process and (b) indistinguishable in all relevant aspects from a product
or intermediate.
Source: 73 FR 64700(1 )-(2), October 30, 2008.
Other FR citations for this topic
EPA's final rule is different from the 2003 proposal and 2007 supplemental proposal on the question
of what the codified legitimacy provision applies to. The discussions of this in the two proposals can
be found at 68 FR 61582(2)-61583(1) and 68 FR 61564(2)-(3), October 28, 2003, and 72 FR
14198(1), March 26, 2007.
Effect on Current Determinations and Exclusions
EPA 's final rule preamble addressed whether there would be an effect from its action on current
exclusions and regulatory determinations that had already been made:
EPA is codifying a legitimacy provision in this final rule as part of the final
exclusions and non-waste determinations, but stresses that EPA retains its long-
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standing policy that all recycling of hazardous secondary materials must be
legitimate. If a facility is engaged in sham recycling, this, by definition, is not real
recycling and that material is being discarded. The legitimacy policy continues to
apply to all hazardous secondary materials that are excluded or exempted from
Subtitle C regulation because they are recycled and to recyclable hazardous
wastes that remain subject to the hazardous waste regulations. This policy is well-
understood throughout the regulated community and among the state
implementing agencies.
EPA believes that the four legitimacy factors being codified in 40 CFR 260.43 are
substantively the same as the existing legitimacy policy. These factors are a
simplification and clarification of the policy statements in the 1989 Lowrance
Memo and in various Definition of Solid Waste Federal Register notices.
Nonetheless, to avoid confusion among the regulated community and state and
other implementing regulatory agencies about the status of recycling under the
existing exclusions, the Agency has decided not to codify the legitimacy factors
for existing exclusions and, thus, states and other implementing agencies will
continue to apply the existing legitimacy policy to all recycling as they have in the
past in order to ensure that recycling is real and not a sham. The legitimacy
provisions of the final rule are codified only for the exclusions and non-waste
determinations being promulgated today. In developing the codified legitimacy
language, we did not intend to raise questions about the status of legitimacy
determinations that underlie existing exclusions from the definition of solid waste,
or about case-specific determinations that have been made by EPA or the states.
Current exclusions and other prior solid waste determinations or variances,
including determinations made in letters of interpretation and inspection reports,
remain in effect.
A number of commenters raised concerns with the application of the codified
legitimacy factors to these existing waste-specific and industry specific
exclusions. In particular, as we noted in the October 2003 proposal, EPA has
examined in depth a number of waste-specific and industry-specific recycling
activities and has promulgated specific regulatory exclusions or provisions that
address the legitimacy of these practices in much more specific terms than the
general factors being finalized as part of the exclusions and non-waste
determination process today. One example is the regulation for zinc fertilizers
made from recycled hazardous secondary materials. In the zinc fertilizer
regulation, among the requirements established by EPA are specific numerical
limits on five heavy metal contaminants and dioxins in the zinc fertilizer product
exclusion at 40 CFR261.4(a)(21). Other examples are shredded circuit boards
excluded under 40 CFR261.4(a)(14), which must be free of mercury switches,
mercury relays and nickel-cadmium and lithium batteries, and comparable fuels
excluded under 40 CFR261.4(a)(16), which must meet specific levels for
hazardous constituents. The conditions developed for the recycling exclusions in
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§261.4(a) were found to be necessary under material-specific rulemakings that
determined when the particular hazardous secondary material in question is not a
solid waste. When EPA originally made the decision that these materials are not
solid waste, the Agency took into account the relevant factors about the hazardous
secondary materials, including how the material was managed and what toxic
chemicals were present. By limiting the codified legitimacy provision to the
exclusions and non-waste determinations in today's final rule, EPA is avoiding
any implication that we are revisiting these determinations.
However, at the same time, these material-specific exclusions from the definition
of solid waste do not negate the basic requirement that the hazardous secondary
material must be "legitimately" recycled. Recycling that is not legitimate is not
recycling at all, but rather "sham recycling"—discard in the guise of recycling.
For example, under EPA's historic guidance, particularly questions (1) and (3) in
OSWER Directive 9441.1989(19), the "Lowrance Memo," a facility could not
plausibly claim the zinc fertilizer product exclusion at 40 CFR261.4(a)(21) for a
hazardous secondary material that contained absolutely no or minimal levels of
zinc, even if all the conditions of the zinc fertilizer exclusion were met. The
exclusion was developed to encourage legitimate recycling of zinc-containing
hazardous secondary materials, not to allow any hazardous waste to be discarded
to purported fertilizer in the name of recycling when the hazardous secondary
material provided no recognizable benefit to the product.
Similarly, if a facility accepted zinc-containing hazardous waste, claiming to
make zinc fertilizer, but failed to produce a product that was actually sold or was
otherwise valuable, such a process would not be legitimate recycling (under
question (4) of the Lowrance Memo in the historic legitimacy guidance), even if
the management conditions or the constituent levels in the zinc fertilizer exclusion
were met. The consequences of the latter example are illustrated in one of the
damage cases in the environmental problems study. A facility whose primary
business was mixing electric arc furnace dust (K061) with agricultural lime for
sale as a micronutrient lost its customers and could not sell its product. However,
the facility continued to accept EPA Hazardous Waste K061, and, in
approximately seven months, the facility had accepted over 60,000 tons of this
hazardous waste and stored it on the ground in piles up to 30 feet high, with no
prospect of it being used to produce a product and, thus, legitimately recycled.
While the initial recycling of the K061 hazardous waste was legitimate, when the
facility failed to produce a product that was actually sold, the K061 could no
longer be considered legitimately recycled.
In summary, all hazardous secondary materials recycling and hazardous waste
recycling, whether such recycling remains under hazardous waste regulations or is
excluded from the definition of solid waste, must be legitimate. This has been our
long-standing policy and it is well understood throughout the regulated
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community and the implementing state regulatory agencies. In order to be clear
that the legitimacy provision codified at 40 CFR 260.43 under today's final rule
would not affect how the current legitimacy policy applies to recycling under
existing exclusions, the legitimacy provision at 40 CFR 260.43 is explicitly
designated as applying only to the exclusions and non-waste determinations being
finalized in today's rule.
Source: 73 FR 64707(3)-64708(3), October 30, 2008.
EPA also addresses the effect of the rule on current determinations and other exclusions in the
preamble of the final rule where it discusses responses to public comments:
In the March 2007 supplemental proposal, EPA stated its opinion that the concept
of legitimate recycling originally proposed in October 2003 is not substantively
different from our longstanding policy, as articulated in the 1989 Lowrance
Memo and subsequent preambles. We stated that we were simply reorganizing,
streamlining, and clarifying the existing legitimacy principles. Thus, we stated in
the March 2007 supplemental proposal that we believe that the regulatory
definition of legitimate recycling, when applied to specific recycling scenarios,
would result in determinations that were consistent with EPA's earlier policy. We
went on to say that we did not believe the regulated community or implementing
agencies would need to revisit previous legitimacy determinations. However, we
did request examples of determinations which could be impacted by the
codification.
Comments: relationships with existing determinations
Commenters expressed concern that, in spite of EPA's intentions, the codification
could prompt implementing agencies to revisit past legitimacy determinations. In
addition, comments on the October 2003 proposed rule suggested that
implementing agencies could interpret the proposed regulatory text as meaning
that a recycling activity must satisfy all four of the factors to be considered
legitimate. Several commenters on the March 2007 supplemental proposal stated
that legitimacy should not apply to the existing recycling exclusions in the current
regulations and others were concerned that codification may lead implementing
agencies to consider only the four factors and not consider other key information
about the recycling activity.
EPA's response: relationships with existing determinations
Regarding the existing exclusions in the regulations, EPA acknowledges that, in
establishing a specific exclusion, we have already determined in the rulemaking
record that the specific recycling practice is excluded from the definition of solid
waste provided all the conditions of the rule are met. However, the Agency has
always enforced its rules on the basis that any recycling must be legitimate (See
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U.S. v. Self, 2 F. 3d 1071, 1079 (10th Cir. 1993); U.S. vMarine Shale Processors,
81 F. 3d 1361, 1366 (5th Cir. 1996): Marine Shale Processors v. EPA, 81 F. 3d
1371, 1381-83 (5th Cir. 1996)). This is meant to prevent a company from claiming
to be operating under an existing exclusion and simply using that as a way to
avoid full RCRA Subtitle C regulation.
However, to avoid confusion among the regulated community and state and other
implementing agencies about the status of recycling under existing exclusions, we
have decided that the focus of this rule should be the specific changes it is making
to the definition of solid waste in the form of the exclusions and non-waste
determinations finalized today. Thus, the legitimacy factors codified in 40 CFR
260.43 only apply to the exclusions and non-waste determination process being
finalized in this rule and we do not expect implementing agencies to revisit past
legitimacy determinations based on this final rule preamble language.
Also, it should be noted that the regulatory language does not preclude other
considerations when looking at the codified factors for making legitimacy
determinations. We recognize that additional information about the recycling
activity could be helpful and could be used when assessing the four legitimacy
factors and in making a determination about whether a specific recycling activity
is legitimate. In fact, we encourage the regulated community and implementing
agencies to use any and all information about the recycling process to come to an
informed decision on the legitimacy of a hazardous secondary material recycling
operation. However, given the public comment on the October 2003 proposed
rule and the March 2007 supplemental proposal, no other factors have been
identified and we believe that the four legitimacy factors codified in this rule
include the relevant principles of legitimate recycling for the purposes of the
exclusions and non-waste determinations being finalized today.
Source: 73 FR 64742(3)-64743(2), October 30, 2008.
Other FR citations for this topic
EPA briefly states its position on the legitimacy policy and previous determinations and refers to the
longer discussion included in this document at 73 FR 64700 (2), October 30, 2008.
In several places in the 2003 proposal and the 2007 supplemental proposal EPA stated that it did "not
anticipate the need for overseeing agencies to revisit previous legitimacy determinations if the
proposed criteria are finalized" for all exclusions, discussed this analysis, and asked for comments.
These discussions can be found at:
• 2003 Proposal, October 28, 2003: 68 FR 61582(1), 61582(3), 61583(2)-(3)
• 2007 Supplemental Proposal, March 26, 2007: 14198(l)-(2)
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Codification of Legitimacy
EPA 's decision on codification of the legitimacy in the final rule was as follows:
[Add] legitimacy as a condition of the exclusions and the non-waste
determinations in this rule, but [not to] finalize the language proposed in 261.2(g)
for all recycling. The new legitimacy provision can be found at 260.43.
Source: 73 FR 64675(3), October 30, 2008.
Other sections of the final rule more fully describe the Agency's decision on codification of
legitimacy:
In today's final rule, we are codifying the factors to be used in determining
whether recycling under the provisions finalized in this rule is legitimate,
applying the structure basically as proposed in March 2007 (proposed at 40 CFR
26L2(g)). The legitimacy provision is finalized in 40 CFR 260.43.
Source: 73 FR 64670(2), October 30, 2008.
As part of this final rulemaking, EPA has decided to codify in 40 CFR 260.43 the
requirement that materials be legitimately recycled as a requirement for the
exclusion for hazardous secondary materials that are legitimately reclaimed under
the control of the generator (40_CFR26L2(a)(2)(ii) and 40_CFR26L4(a)(23)) and
as a condition of the exclusion for hazardous secondary materials that are
transferred for the purpose of legitimate reclamation (40 CFR 261.4(a)(24) and 40
CFR261.4(a)(25)). EPA is also requiring that hazardous secondary materials
must be legitimately recycled under the final non-waste determinations (40 CFR
260.34) for hazardous secondary materials that are (a) reclaimed in a continuous
industrial process and (b) indistinguishable in all relevant aspects from a product
or intermediate.
Source: 73 FR 64700(1 )-64700(2), October 30, 2008.
The 2003 proposal of the rule made several statements about the Agency's intent to codify the
legitimacy:
The proposed criteria for legitimate recycling codify existing principles, without
increasing regulation. This proposal is not intended to bring new wastes into the
RCRA Subtitle C regulatory system. This proposal is not intended to bring new
wastes into the RCRA Subtitle C regulatory system.
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By removing hazardous waste regulatory controls over certain recycling practices,
and by providing more explicit criteria for determining the legitimacy of recycling
practices in general, EPA expects that this proposed rule will encourage safe,
beneficial recycling of hazardous secondary materials by industry.
Source: 68 FR 61560(2), October 28, 2003.
In recent years a wide range of RCRA stakeholders, including many state agency
officials, have expressed concern that the statements in the preamble and current
guidance on legitimate recycling do not provide sufficient clarity or predictability
for making recycling legitimacy determinations. Because of these concerns, many
stakeholders have encouraged EPA to revise and clarify the current legitimacy
criteria, and to promulgate them in the regulations.
EPA believes that today's proposed rulemaking is a good opportunity to establish
RCRA's recycling legitimacy criteria in regulations, and at the same time to make
clarifying revisions to them. Accordingly, today's proposal includes specific
regulatory provisions for distinguishing legitimate recycling from sham recycling
practices, which reorganize and clarify the existing criteria that have been
articulated in preamble statements and guidance. Today's proposal to codify
recycling legitimacy criteria is not based on any direction from the D.C. Circuit
Court.
Today's proposed legitimacy criteria are intended primarily to clarify and
simplify the same basic legitimacy principles that have been in use since 1985.
We believe that the new codified regulatory criteria will, when applied to actual
recycling scenarios, result in determinations that are consistent with those based
on current guidance. As such, we do not anticipate the need for overseeing
agencies to revisit previous legitimacy determinations if the proposed criteria are
finalized.
Source: 68 FR 61582(1), October 28, 2003.
Today's proposal is the Agency's first attempt to codify in regulatory form
general, broadly applicable principles for making recycling legitimacy
determinations.
Source: 68 FR 61582(3), October 28, 2003.
The final rule preamble also addresses some of the comments the Agency received on the
question of whether to codify legitimacy:
EPA's October 2003 proposal to codify the legitimacy criteria was in response to
the comments that have been made over the years by both industry and states that
the existing legitimacy guidance is useful, but somewhat hard for members of the
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regulated community to know about because it could only be found in preamble
discussions and guidance. The March 2007 supplemental proposal made some
adjustments to the October 2003 proposal, including a change from the term
"criteria" to "factors," but left intact the general intention to codify those
legitimacy factors for all recycling. As expected, the Agency received public
comments from both state environmental agencies and from industry on our
approach.
Comments: codification of legitimacy
State commenters were unanimously in favor of codifying the legitimacy factors
in the regulations. In response to the October 2003 proposal, twenty-three states
expressed their support for codification. In comments to the March 2007
supplemental proposal, two additional states supported codification of the
proposed factors. All twelve states that commented on legitimacy in both
proposals expressed their strong support for codification in both their 2003 and
2007 comments.
States have long advocated for establishing regulations that specifically address
the legitimacy of recycling. In response to EPA's proposals, many states
commented that they are currently relying on the concept of legitimacy as laid out
in definition of solid waste preambles and in the 1989 "Lowrance Memo"
guidance because they are the best sources of information that can be used in
evaluating a recycling operation. Codification is a priority to the states because, as
a regulation, the requirement for recycling to be legitimate would be better known
and understood by the regulated community and it would be easier for states to
monitor compliance. One commenter stated that it makes more sense to
implement a regulation than a collection of statements found in guidance.
Industry commenters, on the other hand, were split on the issue of codification.
Including comments from both the October 2003 proposal and the March 2007
supplemental proposal, just over half of the industry commenters opposed
codification of the legitimacy factors, although they tended to express support in
their comments for the purpose and goals of the legitimacy factors and agree with
the goal of identifying which processes are true recycling and which are sham
recycling. Several industry commenters stated that the guidance is working well
already and many of those opposed to codification expressed concern that if the
legitimacy factors were codified, they would lose the flexibility in the guidance
that allows the factors to apply to many varied industrial sectors and processes,
automatically becoming more stringent. Another concern expressed by the
commenters regarding codification of the legitimacy factors was that, in their
view, the terms used in the regulatory text are too ambiguous and should be
clarified before they can be part of a regulation. These commenters argue that
codification of the factors without addressing these concerns would automatically
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be more stringent than having guidance, thereby inappropriately inhibiting
legitimate recycling.
About one-third of the forty-two industry commenters on the issue of whether or
not to codify backed the codification of the legitimacy factors. Many of these
commenters represented segments of the waste management industry, but a
number of representatives of generating industries also made this comment. The
industry commenters that supported codification stated that they did so because it
would provide clarity, consistency, and predictability by making it more apparent
which hazardous secondary materials and processes are covered by the recycling
exclusions. One commenter noted the value in the legitimacy factors going
through the notice and comment process since they are being used by the states in
implementation of the regulations and another expressed an expectation that the
codified requirements would lead to more uniformity in interpretation between
implementing agencies. Several of these commenters also stated that they also
valued the flexibility of the structure of the Lowrance memo and stressed the
importance of the codified legitimacy factors retaining that flexibility.
In addition, several more industry commenters stated that they saw the value in
codifying the legitimacy factors and could support its codification under certain
conditions. The suggested conditions included the codification of only the two
proposed mandatory factors, codification of the factors in conjunction with
finalizing what we called the "broader exclusion" option in the October 2003
proposal, and codification of legitimacy factors to be used only with the definition
of solid waste exclusions that were included within the supplemental proposal in
March 2007.
EPA's response: codification of legitimacy
In today's final rule, EPA is codifying the legitimacy factors as a requirement for
today's exclusions and for the non-waste determinations, but not for all recycling.
To avoid confusion among the regulated community, as well as the state and other
implementing regulatory agencies about the status of recycling under the existing
exclusions, EPA is not codifying the legitimacy factors as specifically applicable
to existing exemptions in today's final rule. In developing the codified legitimacy
language, we did not intend to raise questions about the status of legitimacy
determinations that underlie existing exclusions from the definition of solid waste,
or about case-specific determinations that have been made by EPA or the states.
Current exclusions and other prior solid waste determinations or variances,
including determinations made in letters of interpretation and inspection reports,
remain in effect.
In codifying the legitimacy provisions for the exclusions and non-waste
determinations in today's final rule, EPA has taken into consideration all the
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comments it received in response to the October 2003 proposal and March 2007
supplemental proposal on the structure of the legitimacy factors, as well as on the
individual factors themselves and has made the appropriate changes to the factors
to address those comments.
In response to a general comment, EPA is aware of the comments that each of the
terms in the legitimacy regulations should be more clearly defined and the
suggestions for specific tests for each of the factors. We are, however, seeking a
balance between having a set of specific tests and having the flexibility needed for
a requirement that applies to the range of recycling practices in various industries
in different industrial or commercial settings.
Therefore, in response to comments, the discussion of legitimacy in today's
preamble describes more clearly what EPA means by the terms we use in the
regulatory text for this element of the final rule. The Agency also is providing
more examples of both legitimate and sham recycling than were included in the
discussions of the individual factors in the preambles for the October 2003
proposal and March 2007 supplemental proposal to illustrate the meaning of the
legitimacy factors. The Agency also is stressing the importance of case-by-case
determinations that are based on the facts of a specific situation.
Source: 73 FR 64741(3)-64742(3), October 30, 2008.
Other FR citations for this topic
EPA briefly states that it is still proposing to codify legitimacy and mentions the changes to its 2003
proposal at 72 FR 14174(2)-14174(3), March 26, 2007.
EPA describes its plan to codify legitimacy and provides a summary in the 2007 proposal of the
comments received up to that point on the questions of whether to codify the legitimacy factors. This
summary is similar to the response to comment included above and can be found at 72 FR 14198(1)-
14198(3), March 26, 2007.
EPA's codification of the legitimacy factors is also mentioned in the final rule at 73 FR 64681(3) &
64685(1), October 30, 2008, but no details other than the basic requirements are included in the
discussion.
Final Legitimacy Structure
In the final rule, EPA promulgated a structure for the legitimacy factors with two mandatory
factors and two factors that must be considered:
In this action, EPA is finalizing requirements that reclamation being undertaken
under the exclusions at §26L2(a)(2)(ii), §26L4(a)(23), (24), and (25) and the non-
waste determinations at §260.30(d) and (e) be legitimate. These requirements can
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be found in the final regulatory text at §26O34(b), §26L2(a)(2)(ii),
§26L4(a)(23)(v), and §26L4(a)(24)(iv). Each of these provisions refers to
§260.43, where the full requirements for determining the legitimacy of the
reclamation operation can be found.
The design of legitimacy in the final rule has two parts. The first is a requirement
that hazardous secondary materials being recycled provide a useful contribution to
the recycling process or to the product of the recycling process and a requirement
that the product of the recycling process is valuable. These two legitimacy factors
make up the core of legitimacy and, therefore, a process that does not conform to
them cannot be a legitimate recycling process, but would be considered sham
recycling.
The second part of legitimacy is two factors that must be considered when a
recycler is making a legitimacy determination. EPA believes that these two
factors are important in determining legitimacy, but has not made them factors
that must be met because the Agency knows that there will be some situations in
which a legitimate recycling process does not conform to one or both of these two
factors, yet the reclamation activity would still be considered legitimate. EPA
does not believe that this will be a common occurrence, but in recognition that
legitimate recycling may occur in these situations, EPA has made management of
the hazardous secondary materials and the presence of hazardous constituents in
the product of the recycling process to be factors that must be considered in the
overall legitimacy determination, but not factors that must always be met.
Source: 73 FR 64701(1)-64701(2), October 30, 2008.
Other FR citations for this topic
Public comments on the revised structure and the option of making all factors mandatory as well as the
Agency's responses can be found at 73 FR 64743(2)-64744(2), October 30, 2008.
The structure of the legitimacy requirements is also discussed in the final rule in the context of a
recycler being able to demonstrate how it made a legitimacy determination at 73 FR 64701(2)-
64701(3), October 30, 2008.
The structure of the legitimacy requirements is discussed in the 2007 proposal of the rule at 72 FR
14198(3)-14200(1), March 26, 2007.
Factor 1—Useful Contribution
The preamble to the final rule provides the regulatory text of Factor 1 as well as a description of
the factor:
Legitimate recycling must involve a hazardous secondary material that provides a
useful contribution to the recycling process or to a product of the recycling
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process.. .The hazardous secondary material provides a useful contribution if it (i)
contributes valuable ingredients to a product or intermediate; or (ii) replaces a
catalyst or carrier in the recycling process; or (iii) is the source of a valuable
constituent recovered in the recycling process; or (iv) is recovered or regenerated
by the recycling process; or (v) is used as an effective substitute for a commercial
product" (40CFR26043(b)(l)).
This factor, one of the two core legitimacy factors, expresses the principle that
hazardous secondary materials should contribute value to the recycling process.
This factor is an essential element to legitimate recycling because real recycling is
not occurring if the hazardous secondary materials being added or recovered do
not add anything to the process. This factor is intended to prevent the practice of
adding to or recovering hazardous secondary materials from a manufacturing
operation simply as a means of disposing of them, or recovering only small
amounts of a constituent, which EPA would consider sham recycling.
In response to comments received on this factor asking for more clarification on
what useful contribution means, the regulatory text includes an explanation of
how useful contribution might be achieved in (i) through (v) of §260.43(b)(l).
EPA stresses that the ways in which hazardous secondary materials can add value
and be useful in a recycling process are (i) contributing valuable ingredients to a
product or intermediate; (ii) replacing a catalyst or carrier in the recycling
process; (iii) providing a valuable constituent to be recovered; (iv) being
regenerated; or (v) being used as an effective substitute for a commercial product.
The preamble to the October 2003 proposed rule gave full descriptions of these
five situations (68 FR 61585), but the Agency has also included them in the
regulatory text to clarify this factor for the regulated community.
The Agency also wants to restate for clarification that for hazardous secondary
materials to meet the useful contribution factor, not every constituent or
component of the hazardous secondary material has to make a contribution to the
recycling activity. For example, a legitimate recycling operation involving
precious metals might not recover all of the components of the hazardous
secondary material, but would recover precious metals with sufficient value to
consider the recycling process legitimate. In addition, the recycling activity does
not have to involve the hazardous component of the hazardous secondary
materials if the value of the contribution of the non-hazardous component justifies
the recycling activity. One example of this factor from an existing exemption is
where hazardous secondary materials containing large amounts of zinc, a non-
hazardous component, are recycled into zinc micronutrient fertilizers. In cases
where the hazardous component is not being used or recycled, the Agency
stresses that the recycler is responsible for the management of any hazardous
residuals of the recycling process.
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In a situation where more than one hazardous secondary material is used in a
single recycling process and the hazardous secondary materials are mixed or
blended as a part of the process, each hazardous secondary material would need to
satisfy the useful contribution factor. This requirement prevents situations where a
worthless hazardous secondary material could be mixed with valuable and useful
hazardous secondary materials in an attempt to disguise and dispose of it. In
addition, a situation in which hazardous secondary materials that can be useful to
a process are added to that process in much greater amounts than are needed to
make the end-product or to otherwise provide its useful contribution would also
be sham recycling.
Another way the usefulness of the hazardous secondary material's contribution
could be demonstrated is by looking at the efficiency of the material's use in the
recycling process—that is, how much of the constituent in a hazardous secondary
material is actually being used. As an example, if there is a constituent in the
hazardous secondary material that could add value to the recycling process, but,
due to process design, most of it is not being recovered but is being disposed of in
the residuals, this would be a possible indicator of sham recycling. However,
there are certainly recycling scenarios where a low recovery rate could still be
legitimate. For example, under an existing exclusion, if the concentration in a
metal-bearing hazardous secondary material is low (2%-4%) and a recycling
process was able to recover a large percentage of the target metal, this factor
could be met and the recycling may be legitimate (depending on the outcome of
the analysis of the other legitimacy factors).
One way to use the efficiency of the recycling process to evaluate legitimacy is to
compare the process to typical industry recovery rates from raw materials to
determine if the recycling process is reasonably efficient. This method should
involve an examination of the overall process, not just a single step of the process.
For example, if one step in the process recovers a small percentage of the
constituent, but the overall process recovers a much larger percentage, the Agency
would consider the overall efficiency of the recycling process in determining
whether hazardous secondary materials are providing a useful contribution.
There are various ways in which hazardous secondary materials can be useful to a
recycling process and various ways are laid out in this discussion of how a facility
might demonstrate conformity with this factor. In addition, we provided a number
of different ways a material could contribute to the process in the regulatory text
describing this factor. Any one of these would be sufficient to demonstrate that
the hazardous secondary material provides a useful contribution. Overall, the
Agency considers this factor to be a critical element in determining legitimacy
and any recycling process that does not meet this factor cannot be considered
legitimate recycling.
Source: 73 FR 64701(3)-64702(3), October 30, 2008.
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The final rule also provides a discussion of how the concepts in Factor 1 are related to the
concepts in the Low ranee Memo:
Relevant Lowrance Memo Questions
(1) Is the secondary material similar to an analogous raw material or product?
Is much more of the secondary material used as compared with the
analogous raw material/product it replaces? Is only a nominal amount of it
used?
Is the secondary material as effective as the raw material or product is
replaces?
(3) What is the value of the secondary material?
Is it listed in industry news letters, trade journals, etc.?
Does the secondary material have economic value comparable to the raw
material that normally enters the process?
Discussion
The factor addressing "useful contribution" has been distilled from and clarifies
concepts in the Agency's existing policy for legitimate recycling. For example,
the preamble to the January 4, 1985, recycling regulations noted that if a
hazardous secondary material is "ineffective or only marginally effective for the
claimed use, the activity is not recycling but surrogate disposal." Similarly, the
January 8, 1988, proposed rule discussed "how much energy or material value
each waste contributes to the recycling purpose."
In the 1989 Lowrance Memo, the issue of effectiveness was addressed by the
following questions: "Is much more of the secondary material used as compared
with the analogous raw material/product it replaces?"; "Is only a nominal amount
used?"; and "Is the secondary material as effective as the raw material or product
it replaces?" The memo also addressed the value of the secondary material by
asking, "Is [the secondary material] listed in industry news letters, trade journals,
etc.?" and "Does the secondary material have economic value comparable to the
raw material that normally enters the process?"
Factor 1 takes these broad concepts of effectiveness and value and turns them into
the requirement that the hazardous secondary material in the process must provide
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a "useful contribution" to the recycling process, that is, it must actually be adding
something to the process into which they are being put. The factor provides more
specifics than the Memo or preamble by providing a list of ways that a hazardous
secondary material could provide that useful contribution to the process. EPA
requested comment on other ways in which a hazardous secondary material might
provide a useful contribution, but did not receive any from commenters.
Source: 73 FR 64708(3)-64708(l), October 30, 2008.
The final rule preamble also addresses some of the comments received by the Agency on Factor
1:
Comments: Factor 1—the hazardous secondary material provides a useful
contribution
Factor 1 expresses the fundamental principle that hazardous secondary materials
must actually be useful (i.e., contribute positively) to the recycling process and is
intended to prevent the practice of incorporating hazardous secondary materials
within manufacturing operations simply as a means of disposing of them. The
Agency firmly believes that this concept is crucial to the definition of legitimacy
and is finalizing it as part of the core definition. This factor, along with the second
factor described below, must be met for any recycling activity to be considered
legitimate recycling. The regulatory text for this factor is found in 40 CFR
26O43(b)(l).
In general, we received much support for and agreement with the underlying
principle of this factor—that the hazardous secondary materials must provide
some useful contribution to either the recycling process or the recycled product.
Commenters asked for clarification on a number of issues related to this factor,
specifically in regard to the October 2003 proposal and how the economics of
recycling is connected to this factor and how the economics of recycling should
be evaluated. In the March 2007 supplemental proposal, we described how the
economics of recycling relates not only to the useful contribution factor but, in
fact, to all of the factors of legitimacy and explained our thinking about how
evaluating the economics of recycling transactions should be undertaken.
EPA's response: Factor 1—the hazardous secondary material provides a useful
contribution
The Agency is today finalizing this factor as part of the core definition of
legitimate recycling and as a factor that must be met for the recycling to be
considered legitimate under §260.43. We also revised the October 2003 proposal
discussion regarding the consideration of economics related to this criterion, and
we expanded its consideration beyond just the useful contribution criterion.
Today, we are offering further guidance, similar to the March 2007 supplemental
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proposal, which explains how economics may be considered in making legitimacy
determinations and how it may apply to the mandatory factors and the factors that
must be taken into account.
Comments and EPA's response: Factor 1—contribution to the process
EPA also received comments on our statements in the October 2003 proposal that
indicated that not every component of a hazardous secondary material does or
must contribute to the recycling process or product of the recycling process in
order for there to be an overall contribution. In particular, one state agency
favored allowing the non-hazardous component of hazardous secondary materials
to provide the useful contribution and one industry commenter agreed that not all
of the hazardous secondary material would have to contribute for this factor to be
met. Another state agency asked us to clarify that the statement "not every
component of a hazardous secondary material would necessarily have to
contribute to the product or the process to meet this criterion" was applicable only
in the context of this factor.
It has been the Agency's longstanding policy that in a legitimacy determination
not every constituent or component in a hazardous secondary material would have
to contribute to a product of the recycling process or intermediate or to the
recycling process in order for there to be an overall contribution and this applies
to the provision in §260.43 as well. For example, the use of hazardous secondary
materials in zinc fertilizer is considered legitimate recycling when the zinc, a non-
hazardous constituent, is the main contribution to the fertilizer. Another example
is the use of [cathode-ray tube (CRT)] glass used in copper smelters as a fluxing
agent. In this case, the glass provides a useful contribution by facilitating the
manufacturing process. Thus, we agree with those commenters who raised
questions about this issue and are restating our position here.
Comments and EPA's response: Factor 1—efficiency of the process
Another issue that was discussed in the October 2003 proposal arising in the
context of useful contribution was the efficiency of a recycling process in
recovering or regenerating the useful component of the hazardous secondary
material. One example we used was the recovery of copper from a hazardous
secondary material. We stated that where the process was reasonably efficient and
recovered all but a small percentage of the copper, it looked like legitimate
recycling. However, where a small percentage of copper in the hazardous
secondary material is recovered, sham recycling may be indicated. However, we
did not discuss recovery rates in the middle range (e.g., 50% of copper recovered
from a particular recycling process) and some commenters asked for clarification,
including how the factor applies to hazardous secondary materials that are
contributing to the recycling process either as a carrier or a catalyst.
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The Agency is clarifying in today's preamble and regulatory text that the useful
contribution of a hazardous secondary material to the recycling process or product
can be demonstrated in a number of ways. We provided a number of different
ways such a material could contribute to the process in the preamble to the
October 2003 proposed rule (68 FR 61584-61585) and did not mean to imply that
the hazardous secondary material would have to meet all of the examples to
provide a useful contribution. For example, hazardous secondary materials could
provide a useful contribution to a process by serving as a carrier or catalyst and
the process efficiency would not factor into the demonstration of this factor in this
example.
In general, the regulated community should look to typical industry recovery rates
to determine if the recycling recovery rates are reasonably efficient in terms of
making a useful contribution to the recycling process or product. In addition, it
should be noted that EPA would generally look at the quantity or the rate of
recovery of the overall process, not the recovery rate of a single step in the
process, when analyzing this factor for legitimacy. For example, if one step in the
process recovers a small percentage of the constituent, but the overall process
recovers a much larger percentage, the Agency would consider the overall
efficiency of the recycling process in determining whether hazardous secondary
materials are providing a useful contribution. This assumes that there is enough of
the target constituent present in the hazardous secondary materials to contribute
meaningfully to the recycling activity.
Comments and EPA's response: Factor 1—residuals
In the discussion of useful contribution in the October 2003 proposal, in the
context of process efficiency, we stated that a "pattern of mismanagement of the
residues" may be an indicator of sham recycling (68 FR 61584). We received
several comments asking us to explain the connection between useful contribution
of the hazardous secondary materials and management of residues. Several
commenters questioned this statement and disagreed that how a facility managed
its residues had any bearing on whether the hazardous secondary materials going
into a recycling process were being legitimately recycled.
We agree with the commenters who suggested that the management of residuals
from the recycling process is not an indicator of whether the hazardous secondary
materials provide a useful contribution and thus is not a factor in determining
whether legitimate recycling is occurring. For these reasons, we are making it
clear that the management of recycling residuals is not a consideration in making
legitimacy determinations. Instead, as part of today's final rule, we are requiring
that any residuals that are generated from the recycling process be managed in a
manner that is protective of human health and the environment. Specifically, there
is a requirement for hazardous secondary material generators to make reasonable
efforts to ensure that the hazardous secondary materials are legitimately recycled
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and, among other things, that the reclaimer manages the hazardous secondary
materials in a manner that is protective of human health and the environment,
including how any recycling residuals are managed. Finally, we note that the
generation of residuals that are solid wastes are subject to the waste
characterization and identification requirements in 40 CFRPart 261 as a newly
generated waste.
Source: 73 FR 64745(l)-64746(2), October 30, 2008.
Other FR citations for this topic
The 2003 proposal has a discussion of this factor (called "Criterion 2") at 68 FR 61584(2)-61585(2),
October 28, 2003.
A discussion of EPA's decision to separate the discussion of economics in legitimacy out of this factor
as proposed in 2003 is in the 2007 supplemental proposal at 72 FR 14200(1), March 26, 2007.
The 2007 supplemental proposal discusses the role of this factor in the structure proposed in that
notice at 72 FR 14199(1)-14200(1), March 26, 2007.
A discussion of the definition of terms throughout the final legitimacy factors is at 73 FR 64744(3)-
64745(1), October 30, 2008.
Factor 2—Valuable Product or Intermediate
The preamble to the final rule provides the regulatory text of Factor 2 as well as a description of
the factor:
The recycling process must produce a valuable product or intermediate... The
product or intermediate is valuable if it is (i) sold to a third party or (ii) used by
the recycler or the generator as an effective substitute for a commercial product or
as an ingredient or intermediate in an industrial process" (40 CFR 260.43(b)(2)).
This factor, one of the two core legitimacy factors, expresses the principle that the
product or intermediate of the recycling process should be a material of value,
either to a third party who buys it from the recycler, or to the generator or recycler
itself, who can use it as a substitute for another material that it would otherwise
have to buy or obtain for its industrial process. This factor is also an essential
element of the concept of legitimate recycling because recycling cannot be
occurring if the product or intermediate of the recycling process is not of use to
anyone and, therefore, is not a real product. This factor is intended to prevent the
practice of running a hazardous secondary material through an industrial process
to make something just for the purpose of avoiding the costs of hazardous waste
management, rather than for the purpose of using the product or intermediate of
the recycling activity. Such a practice would be sham recycling.
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Most commenters on the proposed rule for this factor stated that this is a useful
way of gauging whether recycling is actually taking place, but requested that the
Agency clarify the meaning of the term valuable, as it is used in the regulatory
text. EPA is repeating and clarifying today that for the purpose of this factor, a
recyclable product may be considered "valuable" if it can be shown to have either
economic value or a more intrinsic value to the end user. Evaluations of
"valuable" for the purpose of this factor should be done on a case-by-case basis,
but one way to demonstrate that the recycling process yields a valuable product
would be the documented sale of a product of the recycling process to a third
party. Such documentation could be in the form of receipts or contracts and
agreements that establish the terms of the sale or transaction. This transaction
could include money changing hands or, in other circumstances, may involve
trade or barter. A recycler that has not yet arranged for the sale of its product to a
third party could establish value by demonstrating that it can replace another
product or intermediate that is available in the marketplace. A product of the
recycling process may be sold at a loss in some circumstances, but the recycler
would have to be prepared to show how the product is clearly valuable to the
purchaser.
However, many recycling processes produce outputs that are not sold to another
party, but are instead used by the generator or recycler. A product of the recycling
process may be used as a feedstock in a manufacturing process, but have no
established monetary value in the marketplace. Such recycled products or
intermediates would be considered to have intrinsic value, though demonstrating
intrinsic value may be less straightforward than demonstrating value for products
that are sold in the marketplace. Demonstrations of intrinsic value could involve
showing that the product of the recycling process or intermediate replaces an
alternative product that would otherwise have to be purchased or could involve a
showing that the product of the recycling process or intermediate meets specific
product specifications or specific industry standards. Another approach could be
to compare the products or intermediates physical and chemical properties or
efficacy for certain uses with those of comparable products or intermediates made
from raw materials.
Some recycling processes may consist of multiple steps that may occur at separate
facilities. In some cases, each processing step will yield a valuable product or
intermediate, such as when a metal-bearing hazardous secondary material is
processed to reclaim a precious metal and is then put through another process to
reclaim a different mineral. When each step in the process yields a valuable
product or intermediate that is salable or usable in that form, the recycling activity
would conform to this factor.
Like the other factors, this factor should be examined and evaluated on a case-by-
case basis looking at the specific facts of a recycling activity. If, for instance, a
recycling activity produces a product or intermediate that is used by the recycler
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itself, but does not serve any purpose and is just being used so that the product or
intermediate appears valuable, that would be an indicator of sham recycling. An
example of this would be a recycler that reclaims a hazardous secondary material
and then uses that material to make blocks or building materials for which it has
no market and then "uses" those building materials to make a warehouse in which
it stores the remainder of the building materials that it is unable to sell.
Source: 73 FR 64702(3)-64703(2), October 30, 2008.
The preamble to the final rule also provides a discussion of how the concepts in Factor 2 are
related to the concepts in the Lowrance Memo:
Relevant Lowrance Memo Questions
(4) Is there a guaranteed market for the end product?
Is there a contract in place to purchase the "product" ostensibly produced
from the hazardous secondary materials?
If the type of recycling is reclamation, is the product used by the
reclaimer? The generator? Is there a batch tolling agreement? (Note that
since reclaimers are normally TSDFs, assuming they store before
reclaiming, reclamation facilities present fewer possibilities of systemic
abuse).
Is the reclaimed product a recognized commodity?
Are there industry-recognized quality specifications for the product?
Discussion
Factor 2 distills several of the questions posed by the 1989 legitimacy memo. The
memo addressed the value of recycled products sold to third parties by posing the
questions, "Is there a guaranteed market for the end product?" and "Is there a
contract in place to purchase the "product" ostensibly produced from the
hazardous secondary materials?" The memo addressed the value of recycled
products used by the recycler or the generator as process ingredients by posing the
questions, "Is the product used by the (recycler)? The generator? Is there a batch
tolling agreement?" The "usefulness" of a recycled material was addressed by
posing the questions, "Is the (recycled) product a recognized commodity?" and
"Are there industry-recognized quality specifications for the product?"
The language of the factors in the legitimacy provision in the final rule reflects
these concepts in a concrete manner by, for example, making it clear that the
indicator of legitimacy is that a recycling process results in a valuable product or
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intermediate and that the product or intermediate is valuable if it is "(i) sold to a
third party or (ii) used by the recycler or the generator as an effective substitute
for a commercial product or as an ingredient or intermediate in an industrial
process."
The Lowrance Memo posed additional questions aimed at distinguishing
recycling operations that involve direct use or reuse of secondary materials from
recycling operations that involve reclamation. These concepts, however, are not
particularly relevant to distinguishing legitimate from sham recycling and are not
generally used by implementing agencies in legitimacy analyses, so we therefore
did not attempt to capture them in the codified regulatory text.
Source: 73 FR 64709(2)-(3), October 30, 2008.
The final rule preamble also addresses some of the comments received by the Agency on Factor
2:
Comments: Factor 2—the recycling process yields a valuable
product/intermediate
This factor is intended to capture the fundamental concept that legitimate
recycling must produce something of value. For the purposes of evaluating this
factor, a product of the recycling process or intermediate would be considered
valuable if it can be shown to have either economic value or value that is more
intrinsic (i.e., it is useful to the end user, even though it may not be salable as a
product or commodity in the open marketplace). The regulatory text for this factor
can be found in 40 CFR260.43(b)(2).
In general, most commenters agreed with the concept that the recycling process
must produce something of value. Many commenters also stressed the importance
of keeping the concept of "intrinsic" value—that is, a product does not have to be
sold to have value. Instead, it can be used as an effective substitute for a
commercial product or as a useful ingredient in an industrial process. However,
other commenters disagreed, contending that intrinsic value is too subjective to
use to determine compliance. One commenter also thought this factor was
redundant with the factor that hazardous secondary materials must provide a
useful contribution and should be deleted.
Another common concern in the comments was how to evaluate whether the
product or intermediate is valuable. Some commenters stressed the importance of
evaluating this factor over time, given that markets and prices fluctuate, and
others argued that it must be done on a case-by-case basis.
EPA's response: Factor 2—the recycling process yields a valuable product
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In general, the Agency agrees with the commenters who stated that a product's
value can be either monetary or intrinsic. Clearly, not all valuable products are
sold. For example, many legitimate recycling situations exist where the
intermediate or product of the recycling process has value and is used on-site, sent
off-site to another facility owned by the same company, or even traded between
companies. There are a number of already established networks where hazardous
secondary materials are exchanged among and across industries. This rule does
not interfere with those ongoing exchanges where such materials are being
legitimately recycled. One example of such a program is the U.S. Business
Council for Sustainable Development's by-product synergy program which has
conducted a number of regional pilots in which diverse industries are brought
together to facilitate feedstock and by-product exchanges. No money is
exchanged in these types of programs.
We are also clarifying in the regulatory text that the product of the recycling
process can be either a commercial product or intermediate, as long as it has value
to the end user. In addition, we are further clarifying that the regulated community
does not need to evaluate each step in the recycling process to determine if the
final products or intermediates are valuable. Rather, an individual recycler or
generator would look at its final product or intermediate and must be able to
demonstrate why it has value.
We understand the concerns of some commenters that intrinsic value is harder to
demonstrate than the value of a product of the recycling process that is sold in the
open marketplace. While this demonstration is not as straightforward, there are a
number of ways the end user can demonstrate the intrinsic value of the recycled
intermediate or product. Some examples include showing that the product of the
recycling process replaces an alternative product or material that would otherwise
have to be purchased or by demonstrating that a product of the recycling process
or intermediate meets specific product specifications or established industry
standards. Another approach to demonstrating the value of a product of the
recycling process or intermediate would be to compare its characteristics (e.g., its
physical/chemical properties or its usefulness for certain applications) with
comparable products or intermediates made from raw materials.
Finally, we disagree with the commenter who stated that this factor is equivalent
to the hazardous secondary material making a useful contribution to a product or
intermediate. It is certainly possible for a recycling process to result in the
production of a valuable product or intermediate without the hazardous secondary
materials added to the process making any contribution whatsoever. For example,
this would be the case when hazardous secondary materials are added to the
process and all of the hazardous secondary materials, including the hazardous
constituents, end up in the residuals, which are discarded, and the materials added
to the process provide no benefit whatsoever. This is the essence of sham
recycling. A vast majority of the commenters saw the need for both factors and
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after exploring the concept of legitimate recycling further, we were unable to find
any examples of legitimate recycling that did not meet both of the core factors
(i.e., the hazardous secondary material provides a useful contribution and the
recycling process produces a product of value), nor did any commenters provide
us with such examples. Thus, we are retaining both concepts as factors that must
be met in order for a process to be considered legitimate recycling.
Source: 73 FR 64746(2)-64747(l), October 30, 2008.
Other FR citations for this topic
The 2003 proposal has a discussion of this factor (called "Criterion 3") at 68 FR 61585(2)-61586(2,
October 28, 2003 The main points of this discussion are repeated in the final rule discussion included
above.
The 2007 supplemental proposal discusses the role of this factor in the structure proposed in that
notice at 72 FR 14199(1)-14199(2), March 26, 2007.
A discussion of the definition of terms throughout the final legitimacy factors is at 73 FR 64744(3)-
64745(1), October 30, 2008.
Factor 3—Managed as a Valuable Commodity
The preamble to the final rule provides the regulatory text of Factor 3 as well as a description of
the factor:
The generator and the recycler should manage the hazardous secondary material
as a valuable commodity. Where there is an analogous raw material, the
hazardous secondary material should be managed, at a minimum, in a manner
consistent with the management of the raw material. Where there is no analogous
raw material, the hazardous secondary material should be contained. Hazardous
secondary materials that are released to the environment and are not recovered
immediately are discarded" (40CFR260.43(c)(l)).
The first of the additional factors that must be considered expresses the principle
that hazardous secondary materials being recycled should be managed in the same
manner as other valuable materials. This factor requires those making a
legitimacy determination to look at how the hazardous secondary material is
managed before it enters the recycling process. In EPA's view, a recycler will
value hazardous secondary materials that provide an important contribution to its
process or product and, therefore, will manage those hazardous secondary
materials in a manner consistent with how it manages a valuable feedstock. If, on
the other hand, the recycler does not manage the hazardous secondary materials as
it would a valuable feedstock, that behavior may indicate that the hazardous
secondary materials may not be recycled, but rather released into the environment
and discarded.
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This factor may be particularly appropriate in the case where a recycler has been
paid by a generator to take its materials as a result of the economic incentives in
the hazardous secondary materials market. By looking at the management of the
hazardous secondary material before it enters the recycler's process, the entity
making the legitimacy determination can tell that a material being managed like
an analogous raw material is, in fact, valued by the recycler. If the hazardous
secondary material is not being managed like a valuable raw material because it is
uncontrolled or is being released, that indicates that the fee the recycler obtains
for taking the hazardous secondary material may be its only value to that recycler.
If the fee received were the only value to the recycler, it would mean that discard
was taking place.
This factor addresses the management of hazardous secondary materials in two
distinct situations. The first situation is when a hazardous secondary material is
analogous to a raw material which it is replacing in the process. In this case, the
hazardous secondary material should be managed prior to recycling similarly to
the way the analogous raw materials are managed in the course of normal
manufacturing. EPA expects that all parties handling hazardous secondary
materials destined for recycling—generators, transporters, intermediate facilities
and reclamation facilities—will handle them in generally the same manner in
which they would handle the valuable raw materials they might otherwise be
using in their process. "Analogous raw material," as defined elsewhere in this
preamble, is a raw material for which the hazardous secondary material
substitutes and which serves the same function and has similar physical and
chemical properties as the hazardous secondary material.
The second situation the factor addresses is the case where there is no analogous
raw material that the hazardous secondary material is replacing. This could be
either because the process is designed around a particular hazardous secondary
material—that is, the hazardous secondary material is not replacing anything—or
it could be because of physical or chemical differences between the hazardous
secondary material and the raw material that are too significant for them to be
considered "analogous."
Hazardous secondary materials that have significantly different physical or
chemical properties when compared to the raw material would not be considered
analogous even if they serve the same function because it may not be appropriate
to manage them in the same way. In this situation, the hazardous secondary
material would have to be contained for this factor to be met. A hazardous
secondary material is "contained" if it is placed in a unit that controls the
movement of that material out of the unit. This requirement is consistent with the
idea that normal manufacturing processes are designed to use valuable material
inputs efficiently rather to than allow them to be released into the environment.
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For example, if a manufacturer has an ingredient that is a dry raw material
managed in supersacks, the Agency would expect that a hazardous secondary
material that is a similar dry material also would be managed in supersacks or in a
manner that would provide equivalent protection. If, on the other hand, the
hazardous secondary material was instead managed in an outdoor pile without
appropriate controls in place to address releases to the environment, it may
indicate that it was not being handled as a valuable commodity. If, however, the
manufacturer decided to replace the dry raw material in its process with a liquid
having the same constituents, it would not be sufficient, nor would it make sense,
for the liquid to be managed in supersacks. Instead, the liquid would have to be
"contained" (for example in a tank or surface impoundment).
An important part of this factor is the statement in the regulatory text clarifying
that hazardous secondary materials that are released to the environment and not
recovered immediately are discarded. Valuable products should not be allowed to
escape into the environment through poor management and this factor clarifies
that those hazardous secondary materials that do escape (and are not immediately
recovered) are clearly discarded. Either a large release or ongoing releases of
smaller amounts could indicate that, in general, the hazardous secondary material
is not being managed as a valuable product, which could potentially lead to the
recycling process being found not to be legitimate. Hazardous secondary
materials that are immediately recovered before they disperse into the
environment—air, soil, or water—and are reintroduced in the recycling process
are not discarded. This determination must be made on a case-by-case basis,
however.
EPA has determined that it is appropriate that this factor is one of the two that
must be considered rather than a factor that must be met because there are
situations in which this factor is not met, but recycling appears to be legitimate.
An example of this kind of situation is described in the March 2007 supplemental
proposal (72 FR 14199). In the example, a hazardous secondary material that is a
powder-like material is shipped in a woven super sack and stored in an indoor
containment area, whereas the analogous raw material is shipped and stored in
drums. A strict reading of this factor may determine that the hazardous secondary
material is not being managed in a manner consistent with the raw material even
if the differences in management are not actually impacting the likelihood of a
release. By designing the legitimacy factors so that this one has to be considered,
but not necessarily met, the individual facts of situations like the one described
here can be evaluated on a case-by-case basis to determine if they affect the
legitimacy of the recycling activity.
In summary, given the nature of the legitimacy factors and their need to apply to
all the practices covered by the exclusions in this final rule, it is not appropriate or
practicable for EPA to develop a specific management standard. In the absence of
such a management standard, EPA is using this factor: materials must be managed
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as analogous raw materials or, if there are no analogous raw materials, the
materials must be contained. EPA's intent with this factor is that hazardous
secondary materials are managed in the same manner as materials that have been
purchased or obtained at some cost, just as raw materials are. Just as it is good
business practice to ensure that raw materials enter the manufacturing process
rather than being spilled or released, we would expect hazardous secondary
materials to be managed effectively and efficiently in order that their full value to
the manufacturing process would be realized.
Source: 73 FR 64703(2)-64704(2), October 30, 2008.
The 2003 proposal included another example of how this factor would be applied:
To illustrate, hazardous metal-bearing secondary materials can often be used as
substitutes for "raw" metal ore concentrates in making metal products. Assuming
both types of materials have similar physical properties, the Agency would expect
the secondary materials and the metal ore concentrates to be managed in the same
or similar units. If, however, in this example the secondary materials were
managed in outdoor piles, while the ore concentrate materials were managed in
containers, an overseeing agency might well determine that the practice of storing
the secondary materials in outdoor piles indicates sham recycling. (In addition,
any releases of the hazardous secondary materials to the environment would also
be considered discard under RCRA.)
Source: 68 FR 61583(3), October 28, 2003.
The final rule preamble also provides a discussion of how the concepts in Factor 3 are
related to the concepts in the Lowrance Memo:
Relevant Lowrance Memo Questions:
(5) Is the secondary material handled in a manner consistent with the raw
material/product it replaces?
Is the secondary material stored in a similar manner as the analogous raw
material (i.e., to prevent loss?)
Are adequate records regarding the recycling transactions kept?
Do the companies involved have a history of mismanagement of hazardous
wastes?
Discussion
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Although worded somewhat differently, this factor is essentially the same as the
fifth question in the Lowrance Memo. Similarly, the 1985 preamble asked
whether recyclable hazardous secondary materials were "handled in a manner
consistent with their use as raw materials or commercial product substitutes."
In one respect, however, Factor 3 is less restrictive than the Lowrance Memo—
the memo posed an additional question, "Is the secondary material stored on the
land?" This could be read as implying that storage on the land is an indication of
sham recycling. Of course, this question is just one of the more than two dozen
questions from the Lowrance memo, that, when taken as a whole, help draw the
distinction between legitimate recycling and sham recycling. Also, the Agency is
aware of situations where storage of raw materials on the land is a normal part of
the manufacturing process. Thus, Factor 3 does not identify land storage as a
specific indicator of sham recycling.
Source: 73 FR 64709(3), October 30, 2008.
The final rule preamble also addresses some of the comments received by the Agency on Factor
3:
Comments: Factor 3—how the hazardous secondary material to be recycled is
managed
This factor on the management of hazardous secondary materials was designed to
illustrate that hazardous secondary materials that are bound for recycling should
be managed to prevent releases into the environment in the same way that
valuable commodities would reasonably be expected to be managed. Hazardous
secondary materials that are recycled are valuable production inputs. As such, we
believe that such materials should be managed in a way that retains their value
and prevents significant losses to the environment. Hazardous secondary materials
that are mismanaged to the extent that they are released into the environment are
not recycled.
This factor is one of the two legitimacy factors that EPA believes needs to be
considered. However, in some cases, it may not be clear that the factor is met or it
may not be met, yet the recycling activity can still be legitimate. The regulatory
text for the factor can be found in 40 CFR260.43(c)O) and it states that the
handler should manage the hazardous secondary material "as a valuable
commodity." If an analogous raw material exists, the hazardous secondary
material should be managed, "at a minimum, in a manner consistent with the
management of the raw material." If there is no analogous raw material, the
proposal states that the hazardous secondary material should be "contained."
The response from commenters on this factor was mixed in response to both the
October 2003 proposal and the March 2007 supplemental proposal. Many states
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and environmental organizations commented that the factor should be mandatory
and some argued that it should include a strict test. Many commenters from the
generating industry and the waste management industry stated that they support
this factor and believe that it is a fair and reasonable indicator of legitimacy.
Some industry commenters thought that this factor should be mandatory, whereas
others commented that the factor should neither be codified nor mandatory. At
least one commenter stated that the factor was not necessary because of other
existing disincentives for mismanagement. Representatives from extractive
industries were most strongly opposed to this factor, stating that EPA cannot
include legitimacy requirements on secondary materials that are going to be
recycled because they are not in EPA's jurisdiction.
EPA's response: Factor 3—how the hazardous secondary material to be recycled
is managed
Today, we are finalizing this factor as one of the two factors that must be
considered during a legitimacy determination, but not necessarily met. We
modified the language of this factor since the October 2003 proposal and are
finalizing it basically as proposed in the March 2007 supplemental proposal.
EPA has decided that it is most appropriate to finalize this factor as one of the
factors that must be considered rather than as a mandatory factor. Although we
believe that this factor is an important part of a legitimacy determination because
hazardous secondary materials that are not being managed carefully may be
materials that the recycler does not value for its process, the factor is not part of
what the Agency considers the core of legitimacy. In addition, as discussed in
section IX of this preamble, EPA and commenters were able to identify situations
in which this factor is not met, but the recycling appears to be legitimate because
the hazardous secondary materials are still being managed in a responsible
manner. EPA does not want to restrict legitimate recycling and, therefore, in these
cases, the facility could make a determination of legitimacy without meeting this
factor, but should be prepared to explain why its recycling is legitimate.
EPA also believes that this factor can be critical when considering whether
hazardous secondary materials are legitimately recycled and EPA disagrees with
commenters who argued that evaluating "materials management" is outside the
scope of RCRA because hazardous secondary materials are not solid wastes due
to being excluded. EPA believes that the commenters' argument is circular. The
hazardous secondary materials are excluded only if the recycling is legitimate.
How materials are managed is part of determining legitimate recycling. EPA has
the authority to define legitimate recycling and, therefore, has the authority to
require this evaluation.
Comments: definition of terms in Factor 3
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Commenters stated that compliance with this factor is dependent on the regulated
community and regulators understanding what EPA means by it. In the October
2003 proposal, we proposed that the factor read, "[w]here there is no analogous
raw material, the secondary material should be managed to minimize the potential
for releases to the environment." Many commenters stated that the term
"minimize" in this context was particularly unclear. State commenters argued that
the term "minimize" did not provide enough guidance or could be interpreted to
allow unclear amounts of hazardous secondary materials to be released, leaving
room for potential mismanagement of that material, whereas some industry
commenters asked if this standard meant they would have to meet or exceed
controls required for regulated hazardous wastes in their recycling operations.
Several commenters also asked about the term "valuable commodity" and how
"valuable" is defined.
EPA's response: definition of terms in Factor 3
EPA agrees that terms for this factor should be more clear to facilitate
compliance. Although we have not developed a specific test or codified
definitions to explain this factor, we have adjusted some of the language in the
factor to address this concern and are providing further explanation of what we
intend by this factor in today's preamble so that it is better understood and can be
consistently applied.
In the March 2007 supplemental proposal, we modified the language for this
factor to state instead that "[w]here there is no analogous raw material, the
hazardous secondary material should be contained." This change addressed the
ambiguity of the word "minimize," as well as state comments that the storage
requirements in this factor needed to be better defined. The Agency believes that
facilities that value hazardous secondary materials as part of their manufacturing
process will contain those materials to prevent their release. The term "contained"
is also being used elsewhere in the exclusions being finalized. EPA is defining
this term in the same way throughout: a recyclable material is "contained" if it is
placed in a unit that controls the movement of that material out of the unit into the
environment. We also believe that the standard for contained is more clear for
states and industry than the standard to minimize potential releases to the
environment was in the October 2003 proposal.
We also want to clarify the use of several other terms on which we received
comments. These terms are discussed briefly here and in more depth in section IX
of this preamble, where the legitimacy factors are fully described. "Analogous
raw material," also defined elsewhere in the exclusions, is a raw material for
which a hazardous secondary material is a substitute and which serves the same
function and has similar physical and chemical properties as the hazardous
secondary material. Materials generally would not be considered analogous if
their chemical makeup were very different from one another—particularly if the
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hazardous secondary materials contain hazardous constituents that necessitate
management processes that the raw material does not—or if their physical
properties are different.
Regarding the term "valuable commodity," EPA believes that hazardous
secondary materials should be managed in the same or similar manner as raw
materials that have been purchased or obtained at some cost. The legitimacy
criteria are designed to determine whether a process is like manufacturing rather
than like waste management. We believe that the standard for management of the
hazardous secondary materials is reasonable for helping assess whether disposal
in the guise of normal manufacturing is occurring.
Source: 73 FR 64747(1 )-64748(l), October 30, 2008.
Other FR citations for this topic
The 2003 proposal has a discussion of this factor (called "Criterion!") at 68 FR 61583(3)-61584(2),
October 28, 2003. The main points of this discussion are repeated in the final rule discussion included
above.
The 2007 supplemental proposal discusses the role of this factor in the structure proposed in that
notice at 72 FR 14199(1)-14199(2), March 26, 2007.
A discussion of the definition of terms throughout the final legitimacy factors is at 73 FR 64744(3)-
64745(1), October 30, 2008.
Factor 4—Comparison of Toxics in the Product
The preamble to the final rule provides the regulatory text of Factor 4 as well as a description of
the factor:
The product of the recycling process does not (i) contain significant
concentrations of any hazardous constituents found in Appendix VIII of part 261
that are not found in analogous products; or (ii) contain concentrations of any
hazardous constituents found in Appendix VIII of part 261 at levels that are
significantly elevated from those found in analogous products; or (iii) exhibit a
hazardous characteristic (as defined in part 261 subpart C) that analogous
products do not exhibit" (40 CFR260.43(c)(2)).
The second of the additional factors that must be considered requires those
making a legitimacy determination to look at the concentrations of the hazardous
constituents found in the product made from hazardous secondary materials and
compare them to the concentrations of hazardous constituents in analogous
products. Any of the following three situations could be an indicator of sham
recycling: a product that contains significant levels of hazardous constituents that
are not found in the analogous products; a product with hazardous constituents
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that were in the analogous products, but contains them at significantly higher
concentrations; or a product that exhibits a hazardous characteristic that analogous
products do not exhibit. Any of these situations could indicate that sham recycling
is occurring because in lieu of proper hazardous waste disposal, the recycler could
have incorporated hazardous constituents into the final product when they are not
needed to make that product effective in its purpose. This factor, therefore, is
designed to determine when toxics that are "along for the ride" are discarded in a
final product and, therefore, the hazardous secondary material is not being
legitimately recycled.
To evaluate this factor, a recycler will ordinarily compare the product of the
recycling process to an analogous product made of raw materials. For example, if
a recycling process produced paint, the levels of hazardous constituents in the
paint will be compared with the levels of the same constituents found in similar
paint made from virgin raw materials.
A recycler is also allowed to perform this evaluation by comparing the hazardous
constituents in the hazardous secondary material feedstock with those in an
analogous raw material feedstock. If the hazardous secondary material feedstock
does not contain significantly higher concentrations of hazardous constituents
than the raw material feedstock, then the end product of the recycling process
would not contain excess hazardous constituents "along for the ride" either. EPA
is clarifying here that this method of showing that the product does not have
"toxics along for the ride" is acceptable. There may be cases in which it is easier
to compare feedstocks than it is to compare products because the recycler knows
that the hazardous secondary material is very similar in profile to the raw
material. A comparison of feedstocks may also be easier in cases where the
recycler creates an intermediate which is later processed again and may end up in
two or more products, when there is no analogous product, or when production of
the product of the recycling process has not yet begun.
This factor identifies three ways to evaluate whether or not unacceptable amounts
of hazardous constituents are passed through to the products of the recycling
process. (As explained above, these methods also could be used to compare the
hazardous secondary material feedstock to a raw material feedstock, if the
recycler prefers.) The first method specifies that when analogous products made
from raw materials do not contain hazardous constituents, the product of the
recycling process should not contain significant amounts of hazardous
constituents. For example, if paint made from reclaimed solvent contains
significant amounts of cadmium, but the same type of paint made from virgin raw
materials does not contain cadmium, it could indicate that the cadmium serves no
useful purpose and is being passed though the recycling process and discarded in
the product.
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The second method addresses analogous products that do contain hazardous
constituents and asks whether the concentrations of those hazardous constituents
are significantly higher in the product of the recycling process than in the product
made from raw materials. Concentrations of hazardous constituents in the product
of the recycling process that are significantly higher than in the product made
from virgin raw materials could again be an indicator of sham recycling. For
example, if a lead-bearing hazardous secondary material was reclaimed and then
that material was used as an ingredient in making ceramic tiles and the amount of
lead in the tiles was significantly higher than the amount of lead found in similar
tiles made from virgin raw materials, the recycler should look more closely at the
factors to determine the overall legitimacy of the process.
The third method under this factor is whether the product of the recycling process
exhibits a hazardous characteristic that analogous products do not exhibit.
Requiring an evaluation of hazardous characteristics ensures that products of the
recycling process do not exhibit the characteristics of toxicity, ignitability,
corrosivity, or reactivity when the analogous products do not. The Agency
believes that most issues associated with "toxics along for the ride" will involve
the presence of toxic constituents, which are addressed under the first two parts of
the factor. That is, we believe that it is likely that there are few instances where
hazardous secondary materials are used in the process and hazardous constituents
are not present at significantly higher levels, but the product made from the
hazardous secondary material nevertheless exhibits the hazardous characteristic of
toxicity when the analogous product does not. It is possible, though, that the use
of hazardous secondary materials as an ingredient could cause a product to exhibit
a hazardous characteristic, such as corrosivity, that is not exhibited by analogous
products.
The Agency has determined that it is appropriate for this factor to be considered
in legitimacy determinations under the final exclusions and in the non-waste
determinations in this action, but thinks that there may be situations in which the
factor is not met but the recycling would still be considered legitimate. An
example of this kind of situation that has been addressed by the Agency under the
current regulatory scheme would be in the use and reuse of foundry sands for
mold making in a facility's sand loop. Because of repeated exposure to metals in a
foundry's process, the sands used to make the molds may have significantly
higher concentrations of hazardous constituents than virgin sand. However,
because the sand is part of an industrial process where there is little chance of the
hazardous constituents being released into the environment or causing damage to
human health and the environment when it is kept inside, because there is lead
throughout the foundry's process, and because there is a clear value to reusing the
sand, this would be an example of a situation where this factor is not met, but it
does not affect the legitimacy of the recycling process.
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In fact, EPA has concluded as a general matter that foundries engaged in the reuse
of lead-containing foundry sands are recycling those sands legitimately and these
sands would not be regulated under RCRA Subtitle C (under the circumstances
described in EPA's March 2001 memorandum on this subject).1 Thus, while the
used sands in the sand loop arguably have toxics-along-for-the ride, EPA did not
raise questions about the legitimacy of the recycling, given the overall nature of
the operations. If the used foundry sand were being recycled into a different
product, such as a material used on the ground or in children's play sand, the
legitimacy determination would be very different and significant levels of metals
would likely render the recycling illegitimate. The same conclusions would be
reached applying the factors codified in 260.43.
Another example of recycling that may be legitimate although this factor has not
been met could be when the material has concentrations of toxics that could be
considered "significantly higher" than the analogous product, but meets industry
specifications for the product that include specific specifications for the hazardous
constituent of concern. Meeting accepted industry standards would be a strong
indication that this material is being legitimately recycled. A third example could
be in the mining and mineral processing industry. In many mineral processing
operations, the very nature of an operation results in hazardous constituents
concentrating in the product as it proceeds through the various steps of the
process. In many cases, there is not an analogous product to compare the products
of these processes so this factor may not be relevant because of the nature of the
operations. As with the above example, if a facility considers a factor and decides
that it is not applicable to its process, the Agency suggests that the facility
evaluate the presence of hazardous constituents in its product and be prepared to
demonstrate both that it considered this factor and the reasons it believes the
factor is not relevant.
As discussed in more detail in the comments section of this preamble (section
XVIII) and in the response to comments document in the docket, commenters on
this factor requested clarification concerning what EPA meant by the terms used
in this factor. In response to some of these comments, EPA has made two
clarifications in the regulatory text by (1) specifying that the hazardous
constituents referred to in the regulation are those that are found in Appendix VIII
to 40 CFR part 261 and (2) clarifying that the hazardous characteristics to which
EPA is referring to are those in 40 CFR part 261 subpart C.
The Agency also received much comment on the term "significant" and what the
Agency intended by this term. EPA has decided to keep the term in the final rule.
The alternative to using "significant" or a similarly flexible term to determine
when there may be hazardous constituents in the product made from recycled
ILetter. Elizabeth Cotsworth, Director Office of Solid Waste, to Amy Blankenbiller, American Foundry Society,
March 28, 2001.
http://vosemite.epa.gov/osw/rcra.nsf/Oc994248c239947e85256d090071175f/4C9A2EEE6E5F859B85256AC5004FClC2/Sfile/14534.pdf
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hazardous secondary materials that are not in the analogous products made from
raw materials would be to set an absolute standard. In its discussion of legitimacy
in the October 2003 proposed rule, EPA discussed possible "bright line" or risk-
based approaches as a way to set absolute lines to define "significant" based on
either a numerical limit or a risk level (68 FR 61587-61588). EPA recognizes that
the "bright line" or the risk-based approach may provide greater clarity and
predictability to the regulated community, but that in both cases the Agency
would have to establish a line for what is acceptable and the line may either be
somewhat arbitrary or it may exclude recycling practices that, if carefully
considered, should be considered legitimate. Based on the comments received on
those approaches, we are convinced that they would not be workable.
On the other hand, a case-by-case analysis of a recycling process can take into
consideration the relevant principles and facts for that activity, leading to a
determination of significance based on the facts of the activity. Because this
factor must apply to various different recycling activities, we believe the case-by-
case approach is most appropriate.
EPA, therefore, is finalizing its proposed option of using the term "significant" in
40 CFR 260.43(c)(2)(i) and (ii). Evaluating the significance of levels of hazardous
constituents in products of the recycling process may involve taking into
consideration several variables, such as the type of product, how it is used and by
whom, whether or not the elevated levels of hazardous constituents compromise
the efficacy of the product, the availability of the hazardous constituents to the
environment, and others. For example, if a hazardous secondary material has been
reclaimed and made into a product that will be used by children, and that product
contains hazardous constituents that are not in analogous products, that product
will likely need to be closely scrutinized. On the other hand, low levels of a
hazardous constituent in a product from that same reclamation operation that is
used as an ingredient in an industrial process or for another industrial application
may not be significant and must be evaluated in the context of the product's use.
EPA provided several additional examples in implementing this factor in the
October 2003 proposed rule which will be repeated here. If zinc galvanizing metal
made from hazardous secondary materials that were reclaimed contains 500 parts
per million (ppm) of lead, while the same zinc product made from raw materials
typically contains 475 ppm, this difference in concentration would likely not be
considered "significant" in the evaluation of this factor. If, on the other hand, the
lead levels in the zinc product made from reclaimed hazardous secondary
materials were 1,000 ppm, it may indicate that the product was being used to
illegally dispose of lead and that the activity is sham recycling, unless other
factors would demonstrate otherwise.
In another example, if a "virgin" solvent contains no detectable amounts of
barium, while spent solvent that has been reclaimed contains a minimal amount of
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barium (e.g., 1 ppm), this difference might not be considered significant. If,
however, the barium in the reclaimed solvent were at much higher levels (such as
50 ppm), it may indicate discard of the barium and sham recycling.
Unfortunately, because of the variety of possible recycling scenarios under the
exclusions and in the non-waste determinations covered by this final rule, we
cannot provide examples for how this factor might work for all possible recycling
situations. The Agency stresses that the determination of legitimacy for this factor
should consider both the use and the users of the product in addition to the
concentration of the hazardous constituents or the presence of a hazardous
characteristic, as well as other relevant information. In addition, in some cases,
the implementing agency may accept a risk argument from a recycler to show that
the recycling activity meets this factor. If the recycler can show that despite
elevated concentrations of hazardous constituents, such constituents pose little or
no risk to human health or the environment, the implementing agency may
consider that as evidence that the elevated concentrations are not significant.
Source: 73 FR 64704(2)-64706(2), October 30, 2008.
The final rule preamble also provides a discussion of how the concepts in Factor 4 are related to
the concepts in the Lowrance Memo:
Relevant Lowrance Memo Questions
(1) Is the secondary material similar to an analogous raw material or product?
Does it contain Appendix VIII constituents not found in the analogous raw
material/product (or at higher levels)?
Does it exhibit hazardous characteristics that the analogous raw
material/product would not?
Does it contain levels of recoverable material similar to the analogous raw
material/product?
(6) Other relevant factors
Are the toxic constituents actually necessary (or of sufficient use) to the
product or are they just "along for the ride"?
Discussion
The Lowrance Memo and the definition of solid waste preamble statements from
which it was developed have addressed the question of "toxics along for the ride"
in a slightly different way than the factor in the final rule. The Lowrance Memo,
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for example, allows for examination of toxic constituents in the hazardous
secondary material destined for recycling and/or in the recycled product. As noted
above, Factor 4 is intended to primarily address the question of "toxics along for
the ride" in the products of recycling. We believe that the presence of toxic
constituents in recyclable hazardous secondary materials is less relevant to
assessing the legitimacy of recycling, primarily because much if not most
recycling (as well as manufacturing) involves removing or destroying such
harmful materials. As reflected in the factor, the central question is whether or not
(and in what amount) hazardous constituents pass through the recycling process
and become incorporated into the products of recycling. While some may argue
that the approach of focusing on toxic constituents in recycled products may be
somewhat less restrictive than the policy it would replace, we believe it is a better
indicator of legitimate recycling. In cases where a recycler would prefer to
compare the virgin feedstock to the hazardous secondary material going into the
process, the rule makes it clear that this would be an adequate stand-in for the
comparison described in the regulatory text.
Source: 73 FR 64709(3)-64710(l), October 30, 2008.
The final rule preamble also addresses some of the comments received by the Agency on
Factor 4:
Comments: Factor 4—comparisons of toxics in the product
This factor was designed to prevent hazardous constituents from being
"discarded" by being incorporated into a product made from hazardous secondary
materials. The factor identifies this situation as being hazardous constituents that
are in a product made from hazardous secondary materials when they are not in
analogous products, or when hazardous constituents are at significantly higher
levels in products made from hazardous secondary materials than in analogous
products that contain such hazardous constituents, or when the product exhibits
one or more of the hazardous characteristics and the analogous product does not.
An analogous product can either be the final product of manufacturing or, in some
cases, an intermediate in a process. These hazardous constituents are often called
"toxics along for the ride" (TARs) and, if present, could be an indicator of
discard.
This factor is the second of the two legitimacy factors that EPA believes needs to
be considered but, in some cases, does not need to be met for the recycling
activity to be considered legitimate. We modified the language of this factor since
the October 2003 proposal and are finalizing the factor basically as proposed in
the March 2007 supplemental proposal. The regulatory text for the factor can be
found in 40 CFR260.43(c)(2) and it states that the person making the
determination should look at the product of the recycling process and compare it
to analogous products that are made without hazardous secondary materials. The
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person making the determination should examine the concentrations of hazardous
constituents to learn whether the product of the recycling process contains
significant concentrations of hazardous constituents when the analogous product
contains none, whether it contains significantly elevated levels of hazardous
constituents when compared to the analogous product that contain such hazardous
constituents, or whether it exhibits a hazardous characteristic when the analogous
product does not.
The Agency received many comments on the fourth factor in response to both the
October 2003 proposal and the March 2007 supplemental proposal. The
comments the Agency received on Factor 4 were very mixed, ranging from
commenters who argued that this factor should be one of the factors that must be
met to those who stated that the factor is irrelevant and should not be considered
as part of a legitimacy determination.
EPA's response: Factor 4—comparisons of toxics in the product
Today, we are finalizing this factor as one of the two factors that must be
considered during a legitimacy determination, but not necessarily met. EPA
maintains that this factor is an important way of determining whether a recycling
process is, in fact, true recycling rather than a "sham."
If hazardous secondary materials with a toxic constituent or toxic constituents in
amounts or concentrations greater than analogous raw materials are simply being
run through a manufacturing process, it is an indication that those hazardous
secondary materials may be being discarded in the guise of recycling. Toxics that
are illegally disposed of in this manner can become exposure risks and could
harm human health and the environment. EPA has jurisdiction over materials
being discarded and, therefore, is requiring that this factor be considered in
legitimacy determinations. The factor is not one of the mandatory factors because
the Agency has identified situations where higher levels of toxic constituents may
not be relevant or applicable and, thus, would not be an indicator of "sham"
recycling if this factor is not met, as discussed in section IX of this preamble. In
these cases, the facility could make a determination of legitimacy without meeting
this factor, but should be prepared to explain why its recycling is legitimate.
Comments: Factor 4—the term "significant" and alternative approaches
Many of these comments sought further guidance on the meaning of the term
"significant" in the proposed regulatory text, stating that the definition in the
proposal was unclear or subjective, which may lead to a wide range of possible
interpretations of the term. Commenters also expressed concern that a definition
that is too vague may discourage recycling. In a related topic, commenters also
responded to EPA's request for comments on two alternate approaches in the
October 2003 proposal: (1) an approach that would establish a "bright line" for
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complying with the factor by specifically defining the terms "significant amounts"
and "significantly elevated" in the regulatory text and (2) an approach that would
require the use of risk assessment tools to determine if a product with elevated
levels of a hazardous constituent due to use of hazardous secondary materials in
its manufacture process posed a greater risk to human health or the environment
than the analogous product made from raw materials.
On the whole, commenters were not enthusiastic about the two alternative
approaches that EPA suggested. Most commenters stated that a specific test of
either nature would not be appropriate because of the wide variety of recycling
situations to which it would have to apply.
EPA's response: Factor 4—the term "significant" and alternative approaches
The Agency believes that designing a specific test, such as those described in the
preamble to the October 2003 proposal, that is applicable to the many different
recycling scenarios possible in the exclusions and non-waste determinations
would be difficult, if not impossible. Thus, we agree with those commenters who
argued against adopting such a specific test. Therefore, the Agency has more
clearly described in this preamble to the final rule what it means by "significant"
so that members of the regulated community can be confident in their evaluations
of whether their products made from hazardous secondary materials contain
"toxics along for the ride." Therefore, members of the regulated community will
neither be discouraged from recycling nor be forced to seek an opinion from a
regulatory agency in every case. Details on implementation of this factor are in
section IX of today's preamble.
Comments: Factor 4—comparing the products instead of hazardous secondary
materials
Most commenters responded positively to a change the Agency made in its
October 2003 proposal to compare the product of the recycling process to the
analogous product made from raw materials rather than comparing the hazardous
secondary materials to the analogous raw materials. EPA discussed this shift in its
October 2003 proposal at 68 FR 61586-61587.
However, several commenters argued that the change is an attempt by the Agency
to regulate products or stated that certain unique elements of their production
processes made it so that this factor should not apply to their industry or their
particular process. In addition, some commenters were concerned that under this
factor, in some cases, the generator would have to know what was being done
with its hazardous secondary material several steps downstream in the recycling
process when it was incorporated into a final product.
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EPA's response: Factor 4—comparing the products instead of hazardous
secondary materials
The Agency believes that for an entity to ensure that hazardous secondary
materials are being legitimately recycled and not discarded, it needs to know what
happens to the hazardous secondary materials once they leave the generator's
control. However, in response to these comments, we are clarifying in today's
preamble that the final legitimacy factor allows the entity conducting the
legitimacy determination to make the comparison on "toxics" either between the
final products or between the hazardous secondary material and the analogous
raw material it replaces. If the comparison of materials going into the process
shows no significant difference in levels of toxics, the product of the recycling
process will not significantly differ from analogous products in those levels either.
In cases where the generator finds it too complex to compare the product from its
recycling process to the analogous product made from the virgin raw material, it
can, instead, compare the chemistry of the materials going into the process to
evaluate this factor.
Comments and EPA's response: relevance of Factor 4 to a particular process
Regarding the implementation of this factor, several commenters raised the
concern that many products that are made from hazardous secondary materials do
not have analogous products made from raw materials because they are always or
have always been made from a combination of primary and in-process materials
and that these are cases where this factor is not relevant to that particular
recycling process. The commenters stated that this is especially true in the mineral
extraction industries, but also may be the case in other industries as well.
The Agency is aware that there are situations where there may not be analogous
products made from raw materials. In that case, the facility can opt to compare the
toxic constituents in the hazardous secondary material it is using against those in
an analogous raw material instead. We also note that while this factor needs to be
considered, it is not mandatory because EPA recognizes that in some situations, it
will not be relevant to a particular industrial process. In the case where the facility
considers this factor and decides that it is not applicable to its process, the Agency
suggests that the facility evaluate the presence of hazardous constituents in its
product and document both that it considered this factor and the reasons it
believes the factor is not relevant.
Source: 73 FR 64748(l)-74749(3), October 30, 2008.
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Other FR citations for this topic
The 2003 proposal has a discussion of this factor (called "Criterion 4") at 68 FR 61586(2)-61587(3),
October 28, 2003. The main points of this discussion are repeated in the final rule discussion included
above.
The 2007 supplemental proposal discusses the role of this factor in the structure proposed in that
notice at 72 FR 14199(1)-14200(1), March 26, 2007.
A discussion of the definition of terms throughout the final legitimacy factors is at 73 FR 64744(3)-
64745(1), October 30, 2008.
Economics
The final rule included a discussion of how economics relates to the concept of legitimacy and
how it can inform legitimacy determinations. The 2003 proposal included language on
economics in the second "criterion "—whether the hazardous secondary material provides a
useful contribution—but EPA did not finalize this language, believing that guidance and
clarification on this topic was more appropriate:
Consideration of economics has long been a part of the Agency's concept of
legitimacy, as is evident in the Lowrance Memo and earlier preamble text (50 FR
638, January 4, 1985 and 53 FR 522, January 8, 1988; see also American
Petroleum Institute v. EPA ("API II"), 216 F.3d 50, 57-58 (DC Cir. 2000)). This
final rule does not codify specific regulatory language on economics as part of the
legitimacy provision, but EPA offers further guidance and clarification on how
economics may be considered in making legitimacy determinations, which is
similar to the preamble discussion in the March 2007 supplemental proposal.
Specifically, EPA believes that consideration of the economics of a recycling
activity can be used to inform and help determine whether the recycling operation
is legitimate. Positive economic factors would be a strong indication of legitimate
recycling, whereas negative economic factors would be an indication that further
evaluation of the recycling operation may be warranted in assessing the
legitimacy factors.
Considering the economics of a recycling activity can also inform whether the
hazardous secondary material inputs provide a useful contribution and whether
the product of recycling is of value. Economic information that may be useful
could include (1) the amount paid or revenue generated by the recycler for
recycling hazardous secondary materials; (2) the revenue generated from the sale
of recycled products; (3) the future cost of processing existing inventories of
hazardous secondary materials; and (4) other costs and revenues associated with
the recycling operation. The economics of the recycling transaction may be more
of an issue when hazardous secondary materials are sent to a third-party recycler,
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but even when the hazardous secondary materials are recycled under the control
of the generator, the generator must still show that the hazardous secondary
materials are, at a minimum, providing a useful contribution and producing a
valuable product.
Useful economic information
(1) The amount paid or revenue generated by the recycler for recycling hazardous
secondary materials is one example of how economic information can help
support a legitimacy determination. We have three primary illustrations to
exemplify this. First, the basic economic flows can suggest whether the recycling
operation will process inputs, including hazardous secondary materials, and
produce products over a reasonable period of time, recognizing that there will be
lean and slow times. A general accounting of the major costs, revenues, and
economic flows for a recycling operation over a reasonable period of time can
provide information for considering whether recycling is likely to continue at a
reasonable rate, compared to the rate at which inputs are received, or whether it is
likely that significant amounts of hazardous secondary materials would be
accumulated and then abandoned when the facility closes. Any bona fide sources
of revenues would be included in this consideration, such as payments by
generators to recyclers for accepting hazardous secondary materials and subsidies
supporting recycling. However, in order to have some level of confidence that
beneficial products are or will be produced over a reasonable time frame, we
believe that at least some portion of the revenues should be from product sales (or
savings due to avoided purchases of products if the hazardous secondary materials
are used directly by the recycler). This is consistent with the factor requiring that
the hazardous secondary material must be recycled to make a valuable product or
intermediate.
Two scenarios illustrate this first example: a recycling operation that generates
revenues from the sale of recycled products that greatly exceed the costs of the
operation is an indication of a process that turns the hazardous secondary
materials into useful products, and is unlikely to over accumulate them. A very
different example is an operation that has, relative to its revenues, large
inventories of unsold product and large future liabilities in terms of stocks of
unprocessed hazardous secondary materials. This operation could potentially fail
the "useful contribution" and "produces a valuable product or intermediate"
legitimacy factors, and would draw closer attention to determine whether it is
engaged in treatment and/or abandonment in the guise of recycling.
Second, when the economics of a recycling operation that uses hazardous
secondary materials to produce and sell final products are similar to a
manufacturing operation using raw materials to produce and sell final products,
we believe that such an operation is likely to be legitimate. For instance, if the
recycler pays for hazardous secondary materials as a manufacturer would pay for
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raw materials, the recycler sells products from the recycling process as a
manufacturer would sell products from manufacturing, and the revenues
generated equal or exceed costs, then the hazardous secondary materials appear to
be valuable (i.e., the recycler is willing to pay for them) and appear to make a
useful contribution to a valuable recycled product.
However, we also recognize that the economics of many legitimate recycling
operations that utilize hazardous secondary materials differ from the economics of
more traditional manufacturing operations. For example, many recyclers are paid
by generators to accept hazardous secondary materials. Generators may be willing
to pay recyclers because generators can save money if the recycling is less
expensive than disposing of the hazardous secondary materials in landfills or
incinerators. Also, some recyclers receive subsidies that may be designed to
develop recycling infrastructure and markets or to achieve other benefits of
recycling. For instance, the recycling of electronic materials can be legitimate
even when the recycler is subsidized for processing the material.
Third, any analysis of the economics of a recycling operation should recognize
that a recycler may be able to charge generators and still be a legitimate recycling
operation. Because these hazardous secondary materials are hazardous wastes if
disposed of, typically the generators' other alternative management option already
carries a cost that is based on the existing market for hazardous waste
transportation, treatment, and disposal. Hence, unless there is strong competition
in recycling markets or the hazardous secondary materials are extremely valuable,
a recycler may be able to charge generators simply because alternative disposal
options cost more.
Recognizing that such a dynamic exists can assist those making legitimacy
determinations in evaluating recycling operations. For example, if a recycler is
charging generators fees (or receiving subsidies from elsewhere) for taking
hazardous secondary materials and receives a far greater proportion of its revenue
from acceptance of the fees than from the sale of its products, both the useful
contribution and the valuable product factors may warrant further review, unless
other information would indicate that such recycling is legitimate. Fees and
subsidies may indicate that the economic situation allows the recycler to charge
high fees, regardless of the contribution provided by the inputs, including
hazardous secondary materials. In this situation, recyclers may also have an
increased economic incentive to over-accumulate or overuse hazardous secondary
materials or to manage them less carefully than one might manage more valuable
inputs. Additionally, if there is little competition in the recycling market, and/or if
acceptance fees seem to be set largely to compete with the relative costs of
alternative disposal options rather than to reflect the quality or usefulness of the
input to the recycling operation, this may also suggest a closer look at the useful
contribution factor.
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(2) A comparison of revenue from sales of recycled products to payments by
generators is another example of how economic information can help support an
evaluation of "valuable product." It is possible that product sales revenues could
be dwarfed by the acceptance of fees because markets for particular products are
highly competitive or because high alternative disposal costs allow for high
acceptance fees. However, relatively low sales revenues could also require a
review of other factors, such as whether product sales prices are lower than other
comparable products, products are being stockpiled rather than sold, or very little
product is being produced relative to the amount of inputs to the recycling
operation. These indicators may suggest that the product of the recycling process
is not valuable and, thus, sham recycling may be occurring.
(3) A consideration of the future cost of processing or alternatively managing
existing inventories of hazardous secondary material inputs is another example of
how economic information can inform a legitimacy determination. When
hazardous secondary materials make a significant useful contribution to the
recycling process, a recycler will have an economic incentive to process the input
materials relatively quickly and efficiently, rather than to maintain large
inventories. While recyclers often need to acquire sufficient amounts of hazardous
secondary materials to make it economically feasible to recycle them, there
should be little economic incentive to over-accumulate such materials that make a
useful contribution. Overly large accumulations of input materials may indicate
that the hazardous secondary materials are not providing a useful contribution or
that the recycler is increasing its future costs of either processing or disposing of
the material, and may be faced with an unsound recycling operation in the future.
However, it is important to keep in mind that possible explanations for this may
exist. For example, the recycler may have acquired a large stock of hazardous
secondary materials because the price was unusually low or perhaps the
hazardous secondary materials are generated episodically and the recycler has few
opportunities to acquire them.
(4) An analysis of costs and revenues specific to on-site recycling is an additional,
albeit specific, example of economic information to consider. When recycling is
conducted under the control of the generator, the recycler may not account
formally for some of the costs and savings of the operation. Still, when deciding
whether to undertake or continue the recycling operation or to utilize alternative
outside recycling or disposal options, the on-site recycler (under the control of the
generator) will evaluate the basic economic factors as a part of doing business.
One such factor could be an accounting of the costs of virgin materials avoided by
using hazardous secondary materials. Similarly, sales of recycled products under
the control of the generator that are sold to an external market may support the
valuable product criterion.
Source: 73 FR 64706(2)-64707(3), October 30, 2008.
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The final rule includes additional detail about the decision to discuss economics as guidance and
not incorporate it into one factor in its response to comments:
EPA agrees with those commenters who argued that economic considerations are
inherent within the legitimacy factors. We believe that one specific factor cannot
encompass all economic scenarios for the entire universe of hazardous secondary
materials recycling. Furthermore, we do not believe that a separate enforceable
factor in the regulations strengthens the definition of legitimate recycling, but we
do believe that articulating how economic considerations can influence the
legitimacy factors adds real value to the legitimacy determinations made by state
regulators and the regulated community.
Based on the comments we received, the Agency is not codifying specific
regulatory language on economic considerations. Instead, today's preamble offers
guidance and clarification on how economics may be considered in making
legitimacy determinations, similar to the preamble discussion in the March 2007
supplemental proposal.
Source: 73 FR 64749(3)-64750(l), October 30, 2008.
EPA also responded in this section of the preamble to comments stating that there should be a
specific test to use on the economics of a recycling transaction to determine legitimacy:
Commenters that supported a specific test believed it could include an accounting
of economic flows over a period of time to determine longevity; an annual
regulatory review of markets and a facility's economics; a "rebuttable
presumption that the recycling is legitimate where the recycler pays for the
secondary materials," similar to manufacturing operations; and a requirement that
payment for recycled products and intermediates be more than nominal if
considered to be a sign of positive economics. One comment was also submitted
which expressly opposed a specific test, citing that markets fluctuate too much to
analyze the flows of revenues.
EPA believes that none of the examples suggested by the commenters are
applicable to a broad universe of recycling activities. We also acknowledge that
fluctuations in markets for hazardous secondary materials and recycled products,
and subsequent impacts in revenue flows, create another challenging aspect of
developing a test for the consideration of economics. Therefore, we believe that it
is not possible to craft an economic test for legitimacy that can accommodate all
legitimate recycling activities.
Source: 73 FR 64750(1), October 30, 2008.
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Other FR citations for this topic
Economics and legitimacy were discussed in the 2007 supplemental proposal at 72 FR 14200(1)-
14201(3), March 26, 2007.
The economics of a legitimacy transaction was discussed as part of "Criterion 2" in the 2003 proposal
of this rulemaking at 68 FR 61584 (2)-61584(3), October 28, 2003.
Demonstration and Enforcement of Legitimacy
EPA 's final rule states at section 260.43(a) that
Persons regulated under §260.34 or claiming to be excluded from hazardous
waste regulation under §26L2(a)(ii), §26L4(a)(23), (24), or (25) because they are
engaged in reclamation must be able to demonstrate that the recycling is
legitimate.
Source: 73 FR 64759(2), October 30, 2008.
EPA describes the requirement to demonstrate legitimacy more thoroughly in the preamble to
the rule:
[40 CFR 260.431 states that anyone claiming an exclusion at §26L2(a)(2)(ii),
§26L4(a)(23), §26L4(a)(24), or §26L4(a)(25) or using a non-waste
determination at §260.30(d) or (e) must be able to demonstrate that its recycling
activity is legitimate. The Agency has included the language "In determining if
their recycling is legitimate, persons must address the requirements of §260.43(b)
and must consider the requirements of §260.43(c)" to make it clear that the factors
in paragraph (b) must be met, while the factors in paragraph (c) must be
considered and evaluated in determining whether the recycling activity overall is
legitimate.
Although there is no specific recordkeeping requirement that goes with the ability
to demonstrate legitimacy, EPA would expect that in the event of an inspection or
an enforcement action by an implementing agency, the recycler would be able to
show how it made the overall legitimacy determination per §26L2(f). In the event
that the process does not conform to one of the two factors under §260.43(c), the
facility should be able to show that it considered that factor and why the recycling
activity overall remains legitimate. For example, under existing exclusions from
the definition of solid waste, reuse of lead contaminated foundry sands may or
may not be legitimate, depending on the use. The use and reuse of foundry sands
for mold making in a facility's sand loop under normal industry practices has
been found to be legitimate because the sand is part of an industrial process where
there is little chance of the hazardous constituents being released into the
environment or causing damage to human health and the environment when it is
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kept inside, because there is lead throughout the foundry's process, and because
there is a clear value to reusing the sand. However, in the case of lead
contaminated foundry sand used as children's play sand, the same high levels of
lead would disqualify this use from being considered legitimate recycling. The
same result would be reached when applying Factor 4.
Source: 73 FR 64701(2)-64701(3), October 30, 2008.
EPA also discusses demonstration and documentation of legitimacy in the Response to
Comments section of the preamble:
We note, however, that in the cases where a recycling practice does not meet one
or both of these factors, the hazardous secondary material generator and/or
recycler should be able to demonstrate why the recycling is in fact still legitimate.
Source: 73 FR 64743(2), October 30, 2008.
Comments and EPA's response: documentation of legitimacy
Several of the public comments stated that it is important that the hazardous
secondary material generator or recycler of a recycled material maintain
documentation that substantiates how the recycling activity complies with the
legitimacy requirements. The comments stated that these records would show
how the recycling activity meets the factors or, if a factor is not applicable, the
records would document why it is not necessary for it to meet that factor. In this
way, the hazardous secondary material generator or recycler could show that it
considered all the factors. Other commenters objected to any recordkeeping
requirements documenting that a recycling activity is legitimate.
After considering the comments, the Agency has determined that for the purpose
of the legitimacy factors in the final rule, 40 CFR261.2(f) applies. Section
261.2(f) states that, in the context of an enforcement action to implement Subtitle
C of RCRA, a person claiming that a material is not a solid waste or is
conditionally exempt from regulation is responsible for showing that they meet
the terms of the exclusion and must provide appropriate documentation to show
why they are eligible. For the legitimacy requirements finalized today, this
provision would require that persons claiming that their recycling activity is
legitimate would have the burden to provide documentation showing how the
hazardous secondary materials provide a useful contribution to the recycling
process and how the product of the recycling activity—whether it is a consumer
product or a process intermediate—is valuable. In addition, the documentation
would have to show that the hazardous secondary material generator or recycler
considered the other two factors and determined for each of them that either the
activity meets the factor or that the factor does not apply to this recycling activity
and why it is not relevant or appropriate to consider.
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In addition, as part of today's transfer-based exclusion, the hazardous secondary
material generator has to undertake reasonable efforts to ensure its hazardous
secondary materials will be legitimately recycled pursuant to §260.43. As part of
the reasonable efforts requirements, generators must document their reasonable
efforts per §26L4(a)(24)(v)(C).
Source: 73 FR 64750(2)-64750(3), October 30, 2008.
Demonstrating legitimacy is also discussed in the preamble in the context of three of the four
individual factors:
Factor 1
There are various ways in which hazardous secondary materials can be useful to a
recycling process and various ways are laid out in this discussion of how a facility
might demonstrate conformity with this factor. In addition, we provided a number
of different ways a material could contribute to the process in the regulatory text
describing this factor [note: i.e., (i) contributing valuable ingredients to a product
or intermediate, (ii) replacing a catalyst or carrier in the recycling process, (iii)
providing a valuable constituent to be recovered, (iv) being regenerated, or (v)
being used as an effective substitute for a commercial chemical product]. Any one
of these would be sufficient to demonstrate that the hazardous secondary material
provides a useful contribution.
Source: 73 FR 64702(2)-64702(3), October 30, 2008.
Factor 2
Evaluations of "valuable" for the purpose of this factor should be done on a case-
by-case basis, but one way to demonstrate that the recycling process yields a
valuable product would be the documented sale of a product of the recycling
process to a third party. Such a documentation could be in the form of receipts or
contracts and agreements that establish the terms of the sale or transaction. This
transaction could include money changing hands or, in other circumstances, may
involve trade or barter. A recycler that has not yet arranged for the sale of its
product to a third party could establish value by demonstrating that it can replace
another product or intermediate that is available in the marketplace. A product of
the recycling process could be sold at a loss in some circumstances, but the
recycler would have to be prepared to show how the product is clearly valuable to
the purchaser [....]
Demonstrations of intrinsic value could involve showing that the product of the
recycling process or intermediate replaces an alternative product that would
otherwise have to be purchased or could involve a showing that the product of the
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recycling process or intermediate meets specific product specifications or specific
product standards. Another approach could be to compare the product's or
intermediate's physical and chemical properties or efficacy for certain uses with
those of comparable products or intermediates made from raw materials.
Source: 73 FR 64702(3)-64703(l), October 30, 2008.
Factor 4
[The discussion regarding demonstrating for Factor 4 revolves around the factor being a
"factor to be considered":]
[T]he Agency suggests that the facility evaluate the presence of hazardous
constituents in its product and be prepared to demonstrate both that it considered
the factor and the reasons it believes the factor is not relevant.
Source: 73 FR 64705(3), October 30, 2008
Enforcement of legitimacy is discussed with the enforcement of the finalized exclusions:
In addition, the Agency affirms in this preamble that §261.2(f) applies to all
claims that hazardous secondary materials are not solid waste because they are
being legitimately recycled, including those that are not specifically addressed in
this final rule. Respondents in enforcement cases should be prepared to
demonstrate that they meet the terms of the exclusion or exemption, which
includes demonstrating that the recycling is legitimate. Appropriate
documentation must be provided to the enforcing agency to demonstrate that the
material is not a solid waste or is exempt from regulation. In addition, the recycler
of the hazardous secondary material should be prepared to show it has the
necessary equipment to perform the recycling operation. Furthermore, any release
of the hazardous secondary materials to the environment that is not immediately
cleaned up would be considered discarded and, thus, the hazardous secondary
material that was released would be a solid waste and potentially subject to the
RCRA hazardous waste regulations.
Source: 73 FR 64700(1), October 30, 2008.
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Other FR citations for this topic
The Agency repeats its point that a facility may be required to demonstrate how its recycling is
legitimate in the final rule at 73 FR 64744 (1), October 30, 2008.
In the final rule, discussion of the demonstration of Factor 1 is found also at 73 FR 64746 (1), October
30, 2008 and discussion of the demonstration of Factor 2 is found also at 73 FR 74746(3), October 30,
2008.
In addition, the 2003 proposal discussed the demonstration of Factor 2 (Criterion 3) at 68 FR
61585(3)-61586(3), October 28, 2003. This discussion is very similar to the corresponding discussion
in the final rule.
The demonstration of legitimacy is discussed in the context of Question (1) of the reasonable efforts
condition at 73 FR 64687(1), 73 FR 64687(3), and 73 FR 64700(1), October 30, 2008.
A discussion of the enforcement of the legitimacy provision that is very similar to the one above is at
73 FR 64683(2), October 30, 2008.
Current Guidance and Crosswalk from Lowrance Memo
In the preamble to the 2003 proposal, EPA described the existing guidance on how to determine
if recycling is legitimate:
In the January 4, 1985 preamble to the final rule that established the current
definition of solid waste regulations, EPA described several indications of sham
recycling. A similar discussion that addressed legitimacy as it pertains to burning
materials for energy recovery was presented in the preamble to the January 8,
1988 proposed amendments to the definition of solid waste (53 FR 522), portions
of which were never finalized. On April 26, 1989, the Office of Solid Waste
issued a memorandum that consolidated preamble statements concerning
legitimate recycling into a single list of criteria to be considered in evaluating
legitimacy (OSWER directive 9441.1989(19)). This memorandum has been, and
still is, the primary source of guidance for the regulated community and for
overseeing agencies in distinguishing between legitimate and sham recycling.
As explained in the 1989 memorandum, a legitimacy determination involves
evaluating case-specific information to determine whether or not a secondary
material being recycled is in effect being used as a commodity, rather than as a
waste. The 1989 memorandum identified six criteria to be considered in
evaluating this fundamental question, explaining that each recycling scenario is
likely to require a case-specific evaluation. The memorandum further explained
that, depending on the case-specific facts and circumstances, certain criteria may
weigh more heavily than others in making legitimacy determinations. The general
criteria presented in the 1989 guidance memorandum are as follows:
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• Is the secondary material similar to an analogous raw material or product?
• What degree of processing is required to produce a finished product?
• What is the value of the secondary material?
• Is there a guaranteed market for the end product?
• Is the secondary material handled in a manner consistent with the raw
material/product it replaces?
• Other relevant factors (e.g., economics of the recycling process, toxic
constituents "along for the ride")?
Source: 68 FR 61582(l)-(2), October 28, 2003.
EPA provided an analysis in the final rule that described how the promulgated legitimacy factors
compare to the previous primary guidance on legitimacy, the Low ranee Memo.
EPA also maintains that the legitimacy provision being finalized as part of the
exclusions and non-waste determinations is substantively the same as existing
policy because we developed the legitimacy factors in 40 CFR 260.43 by closely
examining the questions and sub-questions in the Lowrance Memo and in the
Federal Register preambles and converting them into four more direct questions.
The following explanations show how each of the four factors is derived from the
Lowrance Memo and other existing policy statements.
Factor 1—The Hazardous Secondary Material Provides a Useful
Contribution
Relevant Lowrance Memo Questions
(1) Is the secondary material similar to an analogous raw material or product?
Is much more of the secondary material used as compared with the
analogous raw material/product it replaces? Is only a nominal amount of it
used?
Is the secondary material as effective as the raw material or product is
replaces?
(3) What is the value of the secondary material?
Is it listed in industry news letters, trade journals, etc.?
Does the secondary material have economic value comparable to the raw
material that normally enters the process?
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Discussion
The factor addressing "useful contribution" has been distilled from and clarifies
concepts in the Agency's existing policy for legitimate recycling. For example,
the preamble to the January 4, 1985, recycling regulations noted that if a
hazardous secondary material is "ineffective or only marginally effective for the
claimed use, the activity is not recycling but surrogate disposal." Similarly, the
January 8, 1988, proposed rule discussed "how much energy or material value
each waste contributes to the recycling purpose."
In the 1989 Lowrance Memo, the issue of effectiveness was addressed by the
following questions: "Is much more of the secondary material used as compared
with the analogous raw material/product it replaces?"; "Is only a nominal amount
used?"; and "Is the secondary material as effective as the raw material or product
it replaces?" The memo also addressed the value of the secondary material by
asking, "Is [the secondary material] listed in industry news letters, trade journals,
etc.?" and "Does the secondary material have economic value comparable to the
raw material that normally enters the process?"
Factor 1 takes these broad concepts of effectiveness and value and turns them into
the requirement that the hazardous secondary material in the process must provide
a "useful contribution" to the recycling process, that is, it must actually be adding
something to the process into which they are being put. The factor provides more
specifics than the Memo or preamble by providing a list of ways that a hazardous
secondary material could provide that useful contribution to the process. EPA
requested comment on other ways in which a hazardous secondary material might
provide a useful contribution, but did not receive any from commenters.
Factor 2—The Recycling Process Produces a Valuable Product or
Intermediate
Relevant Lowrance Memo Questions
(4) Is there a guaranteed market for the end product?
Is there a contract in place to purchase the "product" ostensibly produced
from the hazardous secondary materials?
If the type of recycling is reclamation, is the product used by the
reclaimer? The generator? Is there a batch tolling agreement? (Note that
since reclaimers are normally TSDFs, assuming they store before
reclaiming, reclamation facilities present fewer possibilities of systemic
abuse).
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Is the reclaimed product a recognized commodity?
Are there industry-recognized quality specifications for the product?
Discussion
Factor 2 distills several of the questions posed by the 1989 legitimacy memo. The
memo addressed the value of recycled products sold to third parties by posing the
questions, "Is there a guaranteed market for the end product?" and "Is there a
contract in place to purchase the "product" ostensibly produced from the
hazardous secondary materials?" The memo addressed the value of recycled
products used by the recycler or the generator as process ingredients by posing the
questions, "Is the product used by the (recycler)? The generator? Is there a batch
tolling agreement?" The "usefulness" of a recycled material was addressed by
posing the questions, "Is the (recycled) product a recognized commodity?" and
"Are there industry-recognized quality specifications for the product?"
The language of the factors in the legitimacy provision in the final rule reflects
these concepts in a concrete manner by, for example, making it clear that the
indicator of legitimacy is that a recycling process results in a valuable product or
intermediate and that the product or intermediate is valuable if it is "(i) sold to a
third party or (ii) used by the recycler or the generator as an effective substitute
for a commercial product or as an ingredient or intermediate in an industrial
process."
The Lowrance Memo posed additional questions aimed at distinguishing
recycling operations that involve direct use or reuse of secondary materials from
recycling operations that involve reclamation. These concepts, however, are not
particularly relevant to distinguishing legitimate from sham recycling and are not
generally used by implementing agencies in legitimacy analyses, so we therefore
did not attempt to capture them in the codified regulatory text.
Factor 3—Managed as a Valuable Commodity
Relevant Lowrance Memo Questions
(5) Is the secondary material handled in a manner consistent with the raw
material/product it replaces?
Is the secondary material stored in a similar manner as the analogous raw
material (i.e., to prevent loss?)
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Are adequate records regarding the recycling transactions kept?
Do the companies involved have a history of mismanagement of hazardous
wastes?
Discussion
Although worded somewhat differently, this factor is essentially the same as the
fifth question in the Lowrance Memo. Similarly, the 1985 preamble asked
whether recyclable hazardous secondary materials were "handled in a manner
consistent with their use as raw materials or commercial product substitutes."
In one respect, however, Factor 3 is less restrictive than the Lowrance Memo—
the memo posed an additional question, "Is the secondary material stored on the
land?" This could be read as implying that storage on the land is an indication of
sham recycling. Of course, this question is just one of the more than two dozen
questions from the Lowrance memo, that, when taken as a whole, help draw the
distinction between legitimate recycling and sham recycling. Also, the Agency is
aware of situations where storage of raw materials on the land is a normal part of
the manufacturing process. Thus, Factor 3 does not identify land storage as a
specific indicator of sham recycling.
Factor 4—The Product Does Not Contain Significant TARs
Relevant Lowrance Memo Questions
(1) Is the secondary material similar to an analogous raw material or product?
Does it contain Appendix VIII constituents not found in the analogous raw
material/product (or at higher levels)?
Does it exhibit hazardous characteristics that the analogous raw
material/product would not?
Does it contain levels of recoverable material similar to the analogous raw
material/product?
(6) Other relevant factors
Are the toxic constituents actually necessary (or of sufficient use) to the
product or are they just "along for the ride"?
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Discussion
The Lowrance Memo and the definition of solid waste preamble statements from
which it was developed have addressed the question of "toxics along for the ride"
in a slightly different way than the factor in the final rule. The Lowrance Memo,
for example, allows for examination of toxic constituents in the hazardous
secondary material destined for recycling and/or in the recycled product. As noted
above, Factor 4 is intended to primarily address the question of "toxics along for
the ride" in the products of recycling. We believe that the presence of toxic
constituents in recyclable hazardous secondary materials is less relevant to
assessing the legitimacy of recycling, primarily because much if not most
recycling (as well as manufacturing) involves removing or destroying such
harmful materials. As reflected in the factor, the central question is whether or not
(and in what amount) hazardous constituents pass through the recycling process
and become incorporated into the products of recycling. While some may argue
that the approach of focusing on toxic constituents in recycled products may be
somewhat less restrictive than the policy it would replace, we believe it is a better
indicator of legitimate recycling. In cases where a recycler would prefer to
compare the virgin feedstock to the hazardous secondary material going into the
process, the rule makes it clear that this would be an adequate stand-in for the
comparison described in the regulatory text.
Lowrance Memo Questions Not Covered in Factors
A few of the questions from the Lowrance Memo are not covered by the factors in
the regulatory text for the legitimacy provision in §260.43. The above discussions
address why EPA believes this is appropriate. In the case of the role economics
can play in a legitimacy determination, this preamble has discussed how it can
inform an overall legitimacy determination, but there is no particular factor on
economics.
Relevant Lowrance Memo Questions
(2) What degree of processing is required to produce a finished product?
Can the secondary material be fed directly into the process (i.e., direct use)
or is reclamation (or pretreatment) required?
How much value does final reclamation add?
Is the secondary material stored on the land? (a sub-question of (5) Is the
secondary material handled in a manner consistent with the raw material/
product it replaces?)
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(6) Other relevant factors
What are the economics of the recycling process? Does most of the
revenue come from charging generators for managing their wastes or from
the sale of the product?
For the reasons outlined above, EPA believes that the legitimacy factors in 260.43
are equivalent to the existing legitimacy policy that applies to all recycling.
Source: 73 FR 64708(3)-64710(2), October 30, 2008.
Other FR citations for this topic
The existing legitimacy guidance is mentioned in several places in all three notices.
• October 28, 2003: 61581(3)-61582(1)
• March 26, 2007: 14197(2)
• October 30, 2008: 64670(2), 64677(2), 64700(2)
The 2003 proposal addressed the question of how the proposed criteria related to the Lowrance memo
with discussions similar to the one in the final rule. These discussions can be found in the October 28,
2003 notice at 68 FR 61585(2) (Factor I/ Criterion 2), 68 FR 61586(l)-(2) (Factor 2/ Criterion 3), 68
FR 61584(l)-(2) (Factor 3/ Criterion 1), and 68 FR 61587(1) (Factor 4/ Criterion 4)
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CFR LANGUAGE
The final regulatory text for legitimacy is presented below. The proposed regulatory text for
legitimacy can be found at 72 FR 14216 (l)-(2), March 26, 2007 for the supplemental proposal
and68FR 61596(2)-(3), October 28, 2003 for the 2003 proposed rule.
260.34 Standards and criteria for non-waste determinations.
[Preceding CFR text not included]
§260.34(b): The Administrator may grant a non-waste determination for hazardous secondary
material which is reclaimed in a continuous industrial process if the applicant demonstrates that
the hazardous secondary material is a part of the production process and is not discarded. The
determination will be based on whether the hazardous secondary material is legitimately recycled
as specified in §260.43 and on the following criteria:
(1) The extent that the management of the hazardous secondary material is part of the
continuous primary production process and is not waste treatment;
(2) Whether the capacity of the production process would use the hazardous secondary
material in a reasonable time frame and ensure that the hazardous secondary material will
not be abandoned (for example, based on past practices, market factors, the nature of the
hazardous secondary material, or any contractual arrangements);
(3) Whether the hazardous constituents in the hazardous secondary material are reclaimed
rather than released to the air, water or land at significantly higher levels from either a
statistical or from a health and environmental risk perspective than would otherwise be
released by the production process; and
(4) Other relevant factors that demonstrate the hazardous secondary material is not
discarded.
[Remaining CFR text not included]
260.43 Legitimate Recycling of Hazardous Secondary Materials Regulated under
§260.34, §261.2(a)(2)(ii), and §261.4(a)(23), (24), or (25).
§260.43(a) Persons regulated under §260.34 or claiming to be excluded from hazardous waste
regulation under §261.2(a)(2)(ii), §261.4(a)(23), (24), or (25) because they are engaged in
reclamation must be able to demonstrate that the recycling is legitimate. Hazardous secondary
material that is not legitimately recycled is discarded material and is a solid waste. In
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determining if their recycling is legitimate, persons must address the requirements of §260.43(b)
and must consider the requirements of §260.43(c) below.
(b) Legitimate recycling must involve a hazardous secondary material that provides a useful
contribution to the recycling process or to a product or intermediate of the recycling process, and
the recycling process must produce a valuable product or intermediate.
(1) The hazardous secondary material provides a useful contribution if it
(i) Contributes valuable ingredients to a product or intermediate; or
(ii) Replaces a catalyst or carrier in the recycling process; or
(iii) Is the source of a valuable constituent recovered in the recycling process; or
(iv) Is recovered or regenerated by the recycling process; or
(v) Is used as an effective substitute for a commercial product.
(2) The product or intermediate is valuable if it is
(i) Sold to a third party; or
(ii) Used by the recycler or the generator as an effective substitute for a
commercial product or as an ingredient or intermediate in an industrial process.
(c) The following factors must be considered in making a determination as to the overall
legitimacy of a specific recycling activity.
(1) The generator and the recycler should manage the hazardous secondary material as a
valuable commodity. Where there is an analogous raw material, the hazardous secondary
material should be managed, at a minimum, in a manner consistent with the management
of the raw material. Where there is no analogous raw material, the hazardous secondary
material should be contained. Hazardous secondary materials that are released to the
environment and are not recovered immediately are discarded.
(2) The product of the recycling process does not
(i) Contain significant concentrations of any hazardous constituents found in
Appendix VIII of part 261 that are not found in analogous products; or
(ii) Contain concentrations of any hazardous constituents found in Appendix VIII
of part 261 at levels that are significantly elevated from those found in analogous
products; or
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(iii) Exhibit a hazardous characteristic (as defined in part 261 subpart C) that
analogous products do not exhibit.
(3) In making a determination that a hazardous secondary material is legitimately
recycled, persons must evaluate all factors and consider legitimacy as a whole. If, after
careful evaluation of these other considerations, one or both of the factors are not met,
then this fact may be an indication that the material is not legitimately recycled.
However, the factors in this paragraph do not have to be met for the recycling to be
considered legitimate. In evaluating the extent to which these factors are met and in
determining whether a process that does not meet one or both of these factors is still
legitimate, persons can consider the protectiveness of the storage methods, exposure from
toxics in the product, the bioavailability of the toxics in the product, and other relevant
considerations.
261.2(a)(2)(ii) Exclusion for Hazardous Secondary Materials That Are Legitimately
Reclaimed Under the Control of the Generator in Non-Land-Based Units.
§26L2(a)(2)(ii):A hazardous secondary material is not discarded if it is generated and reclaimed
under the control of the generator as defined in §260.10, it is not speculatively accumulated as
defined in §261.1(c)(8), it is handled only in non-land-based units and is contained in such units,
it is generated and reclaimed within the United States and its territories, it is not otherwise
subject to material-specific management conditions under §261.4(a) when reclaimed, it is not a
spent lead acid battery (see §266.80 and §273.2), it does not meet the listing description for
K171 or K172 in §261.32, and the reclamation of the material is legitimate, as specified under
§260.43. (See also the notification requirements of §260.42). (For hazardous secondary materials
managed in land-based units, see §261.4(a)(23)).
261.4(a)(23) Exclusion for Hazardous Secondary Materials That Are Legitimately
Reclaimed Under the Control of the Generator in Land-Based Units.
§26L4(a)(23): Hazardous secondary material generated and reclaimed within the United States
or its territories and managed in land-based units as defined in §260.10 of this chapter is not a
solid waste provided that:
[Preceding CFR text not included}
(v) The reclamation of the material is legitimate, as specified under §260.43 of this
chapter; and
[Remaining CFR text not included]
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261.4(a)(24) Exclusion for Hazardous Secondary Materials That Are Transferred
for the Purpose of Legitimate Reclamation.
§26L4(a)(24): Hazardous secondary material that is generated and then transferred to another
person for the purpose of reclamation is not a solid waste, provided that:
[Preceding CFR text not included}
(iv) The reclamation of the material is legitimate, as specified under §260.43 of this
chapter;
[Remaining CFR text not included]
261.4(a)(25) Exclusion for Hazardous Secondary Materials Exported for
Reclamation.
§26L4(a)(25): Hazardous secondary material that is exported from the United States and
reclaimed at a reclamation facility located in a foreign country is not a solid waste, provided that
the hazardous secondary material generator complies with the applicable requirements of
paragraph (a)(24)(i)-(v) of this section (excepting paragraph (a)(v)(B)(2) of this section for
foreign reclaimers and foreign intermediate facilities)[....]
[Remaining CFR text not included]
261.2 Definition of Solid Waste.
[Preceding CFR text not included]
§261.2(f): Documentation of claims that materials are not solid wastes or are conditionally
exempt from regulation. Respondents in actions to enforce regulations implementing subtitle C
of RCRA who raise a claim that a certain material is not a solid waste, or is conditionally exempt
from regulation, must demonstrate that there is a known market or disposition for the material,
and that they meet the terms of the exclusion or exemption. In doing so, they must provide
appropriate documentation (such as contracts showing that a second person uses the material as
an ingredient in a production process) to demonstrate that the material is not a waste, or is
exempt from regulation. In addition, owners or operators of facilities claiming that they actually
are recycling materials must show that they have the necessary equipment to do so.
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ACRONYMS
CFR Code of Federal Regulations
CRT cathode-ray tube
D.C. District of Columbia
DSW definition of solid waste
e-CFR electronic Code of Federal Regulations
EPA U.S. Environmental Protection Agency
FR Federal Register
OSWER Office of Solid Waste and Emergency Response
RCRA Resource Conservation and Recovery Act
TARs Toxics Along for the Ride
Acronyms
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INDEX
analogous product 31, 32, 33, 34, 35, 37, 38, 39, 40, 58, 59
analogous raw material 15, 24, 25, 26, 27, 28, 29, 30, 32, 36, 38, 39, 40, 51, 52, 53, 54, 58
Appendix VIII hazardous constituents 31, 34, 36, 54, 58
case-by-case 11, 20, 22, 26, 35, 48
contained ii, 4, 24, 25, 26, 28, 30, 58, 59
core factor 23
degree of processing 51, 55
demonstrate legitimacy 46
discard, discarded 3, 4, 23, 24, 25, 26, 27, 32, 35, 37, 38, 40, 49, 57, 58, 59
economics iii, 16, 41, 42, 43, 45, 51, 55, 56
effectiveness 15, 52
efficiency 14, 17, 18
enforcement iii, 46, 47, 49
fees 43,44
hazardous characteristic 31, 33, 34, 36, 37, 54, 59
industry standards 20, 23, 34
intrinsic value 20,22,23,48
inventories 41, 42, 44
Lowrance Memo iii, 3, 4, 5, 9, 15, 21, 22, 27, 28, 36, 41, 50, 51, 52, 53, 54, 55
minimize 29, 30
non-waste determination 1,2,3, 5,6,7, 10, 11,33,35,39,46, 51, 57
product specifications 20, 23, 49
reclaim, reclamation i
recordkeeping 46, 47
release 26, 27, 28, 29, 30, 49
residuals 13, 14, 18,23
revenues 41, 42, 43, 44, 45, 56
risk-based approach 34
secondary material feedstock 32
sham recycling... 1, 3, 4, 8, 9, 11, 12, 13, 14, 17, 18, 19, 20, 22, 23, 27, 28, 31, 32, 35, 38, 44, 50,
53,54
specific test 11, 30, 39,45
stored 4, 26, 27, 28, 53, 54, 55
Toxics Along for the Ride (TARs) 32,33,36,37,39,51,54,55
transfer i
useful contribution 12, 13, 14, 15, 16, 17, 18, 22, 23, 41, 42, 43, 44, 47, 48, 52, 58
valuable commodity 24, 26, 28, 30, 58
valuable product/intermediate 19, 20, 21, 22, 23, 26, 28, 42, 43, 44, 48, 53, 58
Index 62
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