Yesterday, EPA issued a “No Action Assurance” memorandum staying enforcement of a rule prohibiting the manufacturing, processing, and distribution of PIP (3:1), and gave notice that it is extending the comment period on final rules promulgated on January 6, 2021 regulating PIP (3:1) and four other PBTs. The extension will give affected parties additional time to comment on—and EPA additional time to consider—the wide-ranging implications of the rules. To facilitate this additional consideration, EPA will publish a Notice in the Federal Register reopening comments on the five rules for a period of sixty (60) days from the date of publication. The Agency notes that it is particularly concerned with comments on PIP (3:1). Members of affected industries should determine whether their supply chains utilize any of the five PBTs affected and, if so, whether it makes sense to participate in the renewed public comment period.

EPA’s No Action Assurance memorandum on PIP (3:1) provides that EPA will exercise its enforcement discretion not to pursue enforcement regarding the prohibition on processing and distribution of PIP (3:1) for use in articles for 180 days, or until the effective date of a final action addressing the compliance date for the prohibition on PIP (3:1), whichever occurs earlier. Specifically, EPA will not pursue enforcement of the following violations:

• Prohibitions on processing and distributing in commerce of PIP (3:1) for use in articles, including in PIP (3:1)-containing articles; and

• The requirement in 40 CFR § 751.407(d)(2) that records required under 40 CFR § 751.407(d)(1) must include a statement that the PIP (3:1), or the PIP (3:1)-containing articles, are in compliance with 40 CFR § 751.407(a). Note that this exercise of enforcement discretion applies only to entities covered by the enforcement discretion in the prior bullet.

EPA’s memorandum provides a non-exhaustive list of articles that may be covered by the No Action Assurance, including, but not limited to, electronics, electronic components, electrical equipment and components, home appliances, manufacturing equipment for semiconductors, heavy equipment, off-road vehicles, curtains used in mining applications, military tents, and vehicles that do not qualify as motor vehicles for purposes of the rule. 

EPA’s No Action Assurance is expressly conditioned on compliance with all other applicable aspects of the final PIP (3:1) rule, including:

• The requirement in 40 CFR § 751.407(c) that after March 8, 2021, PIP (3:1) and PIP (3:1)-containing products may not be released to water during manufacturing, processing and distribution in commerce, and that regulations and best management practices to prevent this from occurring must be complied with;

• The requirement in 40 CFR § 751.407(d) that after March 8, 2021, all persons who manufacture, process, or distribute in commerce PIP (3:1) or PIP (3:1)-containing products must maintain ordinary business records related to compliance with the final rule, and maintain those records for a period of three years from generation; and

• The requirement in 40 CFR § 751.407(e) that anyone who processes or distributes in commerce PIP (3:1) or PIP (3:1)-containing products for any use after July 6, 2021 must, prior to or concurrent with the shipment, notify the recipient of the restrictions set out by the final rule in writing. Companies will effectively need to ascertain whether PIP (3:1) is utilized in their supply chain before that date.

The January 6, 2021 rules were promulgated under the Toxic Substances and Control Act (TSCA), 15 U.S.C. 2601 et seq.  TSCA requires EPA to take expedited action to address certain substances that have been identified as persistent, bioaccumulative, and toxic (PBT) and that pose some risk to human health or the environment. The final rules address five such PBTs, including decabromodiphenyl ether (decaBDE), pentachlorothiophenol (PCTP), and isopropylated phosphate (3:1) (PIP (3:1)). EPA only stayed enforcement of the final rule on PIP (3:1), (86 FR 894), which is widely-present in manufacturing and has broad application as a plasticizer, flame retardant, an anti-wear additive, and is used for various purposes in hydraulic fluids, lubricants, industrial coatings, paint, adhesives, sealants, and plastic articles. Because of PIP (3:1)’s broad applicability, EPA included certain limited exclusions, including to the automotive, aviation, lubricants, and grease industries, based on EPA’s understanding of PIP (3:1) prior to January 6, 2021.

After EPA published the final rule on PIP (3:1), other industries and EPA discovered that PIP (3:1) is far more ubiquitous in manufacturing than previously thought, and that the original compliance deadline of March 8 was not feasible. For example, PIP (3:1) is found in the plastic insulation for wires and cables in countless electrical parts.  Electronics are integral in so many products that it is possible some companies do not yet know that the rule affects them.  Without yesterday’s No Action Assurance, EPA states that the final rule would have had “a broad ranging impact that the agency did not intend,” potentially bringing several sectors of manufacturing to a halt.  To avoid this unintended consequence, EPA is reopening the rule for public comment, giving stakeholders a second chance to present relevant information to EPA and request an exclusion or a longer compliance period to avoid critical supply chain disruptions and more time to identify, replace, and certify the absence of PIP (3:1) in their articles.

If your business utilizes PIP (3:1) or any of the other four PBTs for which comment periods have been extended, consider commenting on EPA’s rulemaking. KMCL attorneys are closely tracking developments and welcome questions and concerns.