EPA Offers Insights for Retailer Waste Management
On September 12, 2016, more than two years after issuing a Notice of Data Availability (NODA) regarding the management of hazardous wastes in the retail sector, the U.S. Environmental Protection Agency (EPA) published what it has termed a “strategy” for dealing with the issue. The “Strategy for Addressing the Retail Sector under RCRA’s Regulatory Framework” reviews the EPA’s current understanding of the unique Resource Conservation and Recovery Act (RCRA) challenges faced by retailers who accept damaged, defective or otherwise unwanted product returns from their customers.
It also identifies actions the EPA has taken to date to deal with the issue, and it outlines a regulatory path forward to provide retailers and others in the reverse distribution process with guidance for managing these returns effectively while complying with RCRA.
The devil is in the details, but the Strategy is a promising step towards providing the regulated community with greater clarity regarding its obligations in this complicated and confusing area.
The EPA has acknowledged repeatedly, in the Strategy, the NODA, and elsewhere, that the RCRA regulatory framework does not fit easily with waste management practices of the retail industry. Because of the wide variety of products sold by retailers, the unknown composition of many of the products, high staff turnover, and the multiple steps and parties in the reverse distribution process, retailers have found it increasingly difficult to handle returned products that might be considered regulated “hazardous wastes.”
Yet delaying the determination of a returned product’s hazardous waste status may subject a retailer to significant penalties, if the EPA or a state agency determines that the product was a hazardous waste all along. And presumptively treating every unwanted product as a hazardous waste at the time it is returned to a store would result in significant and unjustified costs to store, transport and dispose of such products, in addition to significant waste of products that could otherwise have been reused, resold or donated to third parties. So guidance clearly is in order.
The Strategy moves toward providing this guidance with a “three-pronged” approach. First, the EPA will issue policy, guidance, and rulemaking to ensure a “better fit” between RCRA and the retail industry. Second, it will continue to research product distribution and waste management practices in the retail industry. (In furtherance of that goal, the EPA published a flowchart containing its current understanding of product “flows” between retail sites, vendors, reverse distribution centers, and product end-of-life management facilities.) Third, the EPA committed to address any additional outstanding issues that are identified from its ongoing research.
The EPA notes that it has recently proposed regulations that touch indirectly on retailers’ concerns. In its recent Definition of Solid Waste Rule, for example, the EPA revised its exclusion for hazardous secondary materials that are “legitimately recycled.” This rule, the EPA stated, could be used for handling the aerosol cans that constitute a sizable part of the hazardous waste stream at retail facilities and reverse distribution centers. Similarly, the EPA’s recently proposed Hazardous Waste Generator Improvements Rule provided some relief for episodic generators, which include many retailer sites, and allows for consolidation of conditionally exempt small quantity generator waste at large quantity generators under the control of the same person.
And its proposed Pharmaceuticals Rule provides guidance for health care facilities engaged in the disposal and reverse distribution of pharmaceuticals that may be relevant to retail pharmacies and other sites selling and distributing pharmaceuticals.
Perhaps most promising for retailers is the EPA’s exploration of the possibility of re-characterizing a number of returned consumer products as “universal wastes,” rather than fully regulated hazardous wastes. Indeed, the EPA stated that it intended to issue a proposed rule specifically designating aerosol cans as candidates for universal waste. Universal waste management standards are less stringent and less expensive than those for other hazardous wastes, which may make it more likely that the standards will be complied with. The risks posed by such standards for many categories of returned retail products in addition to aerosol cans is likely sufficiently low that the EPA may add more categories in the future.
The EPA makes clear, however, that it does not intend to extend the RCRA household waste exclusion to returned consumer products. This exclusion currently applies to waste ordinarily generated at households, and it allows disposal without any special treatment. The EPA indicates that it allows this exclusion because “the legislative history of RCRA indicated an intent to exclude such wastes and not because these wastes can never pose the risks associated with hazardous wastes.”
The Strategy is a promising step in the EPA’s attempt to grapple with how to incorporate retail hazardous waste management concerns into the RCRA framework. But the Agency has a long way to go before it provides the comprehensive retail RCRA waste management program guidance that is needed.
In addition, the EPA’s acknowledgement of the difficulty of applying RCRA standards to retailers should not be interpreted to mean that the EPA has tapered its enforcement efforts in this area. To the contrary, the EPA just recently reached a major settlement with Whole Foods Market regarding RCRA recordkeeping violations at a number of its stores in the South and Southwest.
In light of the EPA’s continuing enforcement activities, retailers should develop, if they haven’t already, a comprehensive product return management program that incorporates the EPA’s most recent guidance, make broad waste determinations for classes of products that are more likely to be deemed hazardous upon disposal, and modify their practices accordingly. Doing so will provide retail store staff with guidance for sensibly managing returned products in a more cost-effective, safe, and efficient manner.
 Hazardous Waste Management and the Retail Sector: Providing and Seeking Information on Practices to Enhance the Effectiveness to the Resource Conservation and Recovery Act Program, 79 Fed. Feg. 8926 (Feb. 14, 2014).
 The Strategy is available at https://www.epa.gov/hwgenerators/strategy-addressing-retail-sector-under-resource-conservation-and-recovery-acts.
 See EPA’s Conceptual Framework for Flow of Retail Items (Consumer Goods) and Wastes, available at available at https://www.epa.gov/hwgenerators/strategy-addressing-retail-sector-under-resource-conservation-and-recovery-acts.
 Definition of Solid Waste; Final Rule, 80 Fed. Reg. 1694 (Jan. 13, 2015) (revising 40 C.F.R. § 260.43).
 Strategy at 3.
 See Hazardous Waste Generator Improvement; Proposed Rule, 80 Fed. Reg. 57,918 (Sept. 25, 2015).
 See Management Standards for Hazardous Waste Pharmaceuticals; Proposed Rule, 80 Fed. Reg. 58,014 (Sept. 25, 2015).
 Strategy at 7.
 Id. at 4.
 See EPA press release, September 20, 2016, available at https://www.epa.gov/newsreleases/whole-foods-agrees-improve-waste-management-epa-settlement.