EPA Proposed Rule to Designate for PFOS and PFOA as Hazardous Substance Under CERCLA
On September 6, EPA issued a proposed rule to designate perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA) as hazardous substances under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly referred to as “Superfund.” This designation will allow EPA to respond to and clean up releases of PFOS and PFOA more quickly without having to make an imminent and substantial danger finding that is currently required for such releases. In addition, private parties that clean up releases of PFOS and PFOA could now recover cleanup costs from potentially responsible parties.
Even Small Releases Could Trigger Large Cleanup Costs—While the metalcasting industry has not used large amounts of PFOS and PFOA, as well as other per- and polyfluoroalkyl substances (PFAS), contamination from even very small releases of these chemicals can trigger significant liabilities and expensive cleanups under CERCLA. Cleanup levels could be set at single-digit or low double-digit parts per trillion. This would include cleanup of contamination from releases at metalcasting facilities or at off-site facilities where metalcasting operations may have sent materials containing PFOS or PFOA. These chemicals are ubiquitous and often found in surfactants, lubricants, cleaners, packaging, surface coatings, fire-fighting foams, and other products used or processed at metalcasting operations.
Reporting Requirements for Releases—With this designation, facilities that have knowledge of any release of PFOS or PFOA above the reportable quantity (RQ) of 1 lb. must report the release to federal, state, and local authorities. For most metalcasting operations, a single release of 1 lb. of PFOS or PFOA would be unlikely. Legal responsibility for cleanup costs of even small releases of PFOS or PFOA could, however, be substantial.
Economic Impact Analysis—The White House Office of Management and Budget (OMB) identified this rule as an economically significant regulatory action, thereby triggering the requirement for EPA to conduct a cost and benefit analysis for the proposed rule. In the administrative record for the rule, EPA specifically requested comments on the potential cost and benefit impacts of the proposal. Accordingly, EPA is still in the process of developing its required economic impact analysis for this rule.
Even though EPA stated it is not required by statute to consider costs in designating a chemical as a hazardous substance under CERCLA, EPA did evaluate some of the costs associated with the proposed rule. EPA concluded that the proposed rule would not have a significant economic impact on a substantial number of small entities. In reaching this conclusion, EPA only considered the direct costs of the rule, i.e., the burden associated with reporting RQs of PFOS and PFOA to federal, state, and local authorities. These direct costs were estimated to be only $560 per release, or $370,000 annually for all impacted entities nationwide.
EPA noted that it was unable to quantify the indirect costs associated with the proposal, such as potential cleanup costs for releases of PFOS and PFOA. These costs can be substantial, because the treatment and destruction technology for addressing releases of PFOS and PFOA are expensive and unproven to meet cleanup levels in many cases. The U.S. Chamber of Commerce has estimated that cleanup costs for private parties (i.e., non-federal sites) resulting from this designation could be over $17 billion and between $700 and $800 million annually. The U.S. Department of Defense has estimated that its cleanup costs could be as much as $2 billion annually.
Environmental Justice Concerns—While the PFOS and PFOA hazardous substance designation could also raise potential environmental justice concerns, EPA indicated it was unable to determine if the proposal would have a disproportionately high and adverse human health or environmental impacts on minority and low-income populations. EPA does, however, plan to issue an enforcement discretion guidance to address equity issues and minimize the potential impacts on small entities (e.g., small businesses and local agencies). At this time, the scope and timing for the enforcement discretion guidance is not clear, and reliance on enforcement discretion is not an adequate response to minimize the substantial impact of CERCLA liability.
Designation of Additional Hazardous Substances—In the preamble to the proposed rule, EPA also stated it intends to issue an advanced notice of proposed rulemaking (ANPRM) to request comments on whether additional PFAS should also be designated as CERCLA hazardous substances. This action could substantially expand the scope of CERCLA authority and increase cleanup costs for private parties. EPA plans to issue the ANPRM in late 2022 or early 2023.
Rulemaking Timetable—The comment deadline for the proposed rule is December 7. EPA has targeted August 2023 for issuing a final rule. Several large industry trade associations have requested a 60-day extension of the comment deadline, citing the novelty (this is the first time that any chemical has been designated as a hazardous substance under the authority of CERCLA) and significance of the rule, and the need for additional time to review, evaluate, and respond to EPA’s economic impact analysis that is still being developed.
Challenge to Precedent-Setting Rulemaking—Industry groups are mounting an aggressive challenge to EPA’s proposal because of inadequate justification for the designation and the flawed administrative process for the rulemaking. In addition, this rulemaking will set the precedent for future hazardous substance designation under CERCLA for additional PFAS and other chemical substances. Over the next year, efforts will continue to minimize the potential CERCLA liability impacts of the PFOS and PFOA designation for private parties and local governments, including the metalcasting industry