04.01.2009 EPA Issues Final Rule to Exclude Certain Recycling Activities from RCRA NC Bar Association Energy & Natural Resources Law Section Newsletter; Vol. 20, No. 2
Reproduced with the express and limited permission of the North Carolina Bar Association. All rights reserved.

EPA recently finalized revisions to the regulatory definition of “solid waste” that will exclude many forms of secondary material recycling from regulation under RCRA. The changes should significantly reduce the regulatory burdens imposed on facilities seeking to recycle these used materials. The new rules also finalize criteria for determining whether recycling activities are “legitimate” and establish a voluntary procedure for generators to request a determination that recycled secondary materials are not solid wastes. The changes became effective on December 29, 2008, but will not apply in most states unless and until they are adopted into state regulations.


EPA defines a “secondary material” as a material that has been used in an industrial process and that would be considered a waste if it were discarded. There are five general classes of secondary materials: spent materials, sludges, by-products, commercial chemical products, and scrap metal. Due to the potential for environmental harm, EPA has chosen to regulate several recycling activities involving these secondary materials, including burning secondary materials for energy, reclaiming secondary materials, and speculatively accumulating secondary materials. Facilities that recycle secondary materials in these ways are deemed to have discarded the materials, which, in turn, makes those materials solid wastes subject to regulation under RCRA.

The new rules deal with reclamation of secondary materials, i.e., activities that process a secondary material in order to recover something of value, or activities that regenerate a secondary material. An example of reclamation is reprocessing a spent solvent in order to remove impurities and make it usable again. Historically, EPA has treated many secondary materials destined for reclamation as solid wastes that are subject to regulation under RCRA. The new rules change this policy by excluding a number of reclamation activities from regulation, provided the facility engaged in these activities satisfies certain requirements.

Summary of the New Rules

If parties generate, transport and reclaim the secondary materials regulated under the new rules in accordance with the applicable requirements, those materials are not considered solid wastes, and hence are excluded from regulation under RCRA. The new regulations divide reclamation activities for secondary materials into three basic types: (1) reclamation that is performed by the generator at the same facility (“onsite reclamation”); (2) reclamation that is performed by the generator at a separate facility that is “under the control of the generator” (“generator-controlled reclamation”); and (3) reclamation that is performed by a third party (“third-party reclamation”). A separate reclamation facility is under the control of the generator if the generator owns both the generating facility and the reclaiming facility, or if one entity (such as a parent corporation) controls both facilities. Not surprisingly, the requirements for third-party reclamation are stricter than the requirements for onsite reclamation or generator-controlled reclamation.

For onsite reclamation and generator-controlled reclamation, there are four basic requirements:

  • The generating facility and the reclaiming facility (if different) must contain all hazardous secondary materials in land-based or non-land-based units;
  • The reclaiming facility may not speculatively accumulate spent secondary materials;
  • The reclamation activities must meet the criteria for “legitimate recycling” (discussed below); and
  • Both the generating facility and the reclaiming facility (if different) must notify EPA of their activities.

In its discussion of these requirements, EPA noted that the requirement to submit a notification regarding secondary material recycling is not a condition of the exclusion, which suggests that the other three requirements are conditions of the exclusion. Thus, facilities that fail to meet the first three requirements will have improperly disposed of a solid – and potentially hazardous – waste, and they will be subject to a variety of RCRA’s enforcement authorities. Though failing to provide the required notice will constitute a violation of RCRA, it will not subject the materials destined for reclamation to regulation as solid or hazardous wastes. Of course, there are a number of additional, specific obligations associated with each of these general requirements.

For third-party reclamation, the scope of the exclusion is more limited and its requirements are more substantial. In terms of scope, generators, transporters, intermediate facilities and reclamation facilities are eligible for the exemption, but brokers are not. In addition, only spent materials, listed sludges, and listed byproducts are eligible for the exemption, and the new exclusion does not apply to materials that are excluded from regulation under other, previously existing exclusions, such as the exclusion for broken cathode ray tubes.

With respect to substantive requirements, all parties must meet obligations similar to the four requirements described above for onsite reclamation and generator-controlled reclamation. In addition, generators of secondary materials that are destined for third-party reclamation must make reasonable efforts to ensure that third party reclaimers are properly handling their secondary materials. Specifically, generators must determine:

  • Whether the reclamation process meets the legitimate recycling criteria (discussed below);
  • Whether publicly available information reflects that the reclamation facility and any intermediate facility have notified EPA of their activities;
  • Whether publicly available information reflects any hazardous waste violations in the previous three years;
  • Whether the reclamation facility and any intermediate facilities have the necessary equipment to comply with applicable regulatory requirements; and
  • If the reclamation process generates any residuals, whether the reclamation facility has the necessary permits or vendors to properly dispose of those residuals.

Generators must make these determinations at least once every three years. Furthermore, reclamation facilities and intermediate facilities must:

  • Maintain records of shipments for three years;
  • Satisfy storage requirements for secondary materials awaiting reclamation;
  • Properly manage recycling residuals; and
  • Provide financial assurance to demonstrate the facility’s ability to reclaim the secondary materials, to decontaminate its equipment at closure, and to remediate any releases of secondary materials to the environment.

The new rules describe the procedure for estimating the extent of a facility’s financial assurance obligations. And, again, there are a number of specific requirements associated with each general obligation described above.

Criteria for Legitimate Recycling

As noted above, for secondary material reclamation to be excluded from the definition of solid waste, the recycling activity at issue must be “legitimate.” EPA promulgated four criteria to determine legitimacy:

  • Whether the secondary material makes a useful contribution to the recycling activity;
  • Whether the recycling process produces a valuable product or intermediate;
  • Whether the generator and the recycler manage the secondary material as a valuable product; and
  • Whether the product of the recycling process contains toxic substances that are not present in analogous “virgin” products.

Though these criteria explicitly apply only to the new exclusion for reclamation of secondary materials, in substance, they are virtually identical to EPA’s long standing guidance for determining whether any recycling process is legitimate.

Non-Waste Determination Procedure

Lastly, EPA has created a new, voluntary procedure for facilities to request a determination that a recycling process for secondary materials is not subject to RCRA. Such a determination is available for reclamation that occurs through a continuous industrial process or where the secondary material is indistinguishable from a product or intermediate. If the facility reclaims the secondary material through a continuous industrial process, EPA will consider four criteria in its determination: (1) the extent to which management of the material is part of the industrial process; (2) the capacity of the industrial process to use the secondary material in a reasonable time; (3) whether the hazardous constituents in the secondary material are reclaimed, rather than released to the environment; and (4) any other relevant information about the process. To determine whether a secondary material is indistinguishable from a product or intermediate, EPA will consider five criteria: (1) whether there is a market for the material; (2) whether the physical and chemical properties of the material are similar to commercial products; (3) the capacity of the market to use the material in a reasonable period of time; (4) whether the hazardous constituents in the material are released to the environment at significantly higher concentrations than by commercial products; and (5) any other relevant facts.


The new rules involve a number of changes to the existing regulatory program, and state governments are struggling to understand what they mean and how to implement them. Indeed, because the rules make the requirements less restrictive, states are not obligated to adopt them. For example, the North Carolina Department of Environment and Natural Resources (“DENR”) has scheduled a series of public meetings about the new rules to determine whether DENR will incorporate them into North Carolina’s program. Thus, any facility that intends to take advantage of the new rules should ensure that their state agency has adopted the changes before taking action.