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EPA Introduces Guidance for Managing Retail Wastes

September 2016

The U.S. Environmental Protection Agency’s (EPA) recently-published “Strategy for Addressing the Retail Sector under RCRA’s Regulatory Framework”1 begins to address the myriad challenges retailers and others involved with the reverse distribution of used, damaged, and otherwise unwanted consumer products face when attempting to comply with the Resource Conservation and Recovery Act (RCRA). As EPA noted in a 2014 Notice of Data Availability (NODA), RCRA does not provide the clearest framework for dealing with hazardous waste generation and handling issues that first arise at retail facilities.2 The Strategy is part of EPA’s early attempts to publicize actions EPA has taken to date to deal with the issue. It is a promising step toward providing a regulatory path forward for retailers and others in the reverse distribution process.

RCRA is particularly challenging for retailers, transporters, and reverse logistics providers because it does not clearly identify the point at which waste generation begins where, as is often the case, returned products may be candidates for reuse, refurbishment, or resale. In addition, 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, companies along the entire reverse distribution chain have found it increasingly difficult to determine when and how to characterize products as “hazardous wastes” subject to RCRA’s stringent requirements.

The Strategy outlines a “three-pronged” approach to providing additional guidance to the regulated community. First, 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, EPA published a “Conceptual Framework” containing a flowchart that summarizes its current understanding of the product “flows” between retail sites, vendors, reverse distribution centers, and product end-of-life management facilities.3 Whether the Conceptual Framework contains sufficient detail to provide fine-grained guidance in a comprehensive set of circumstances remains to be seen. Third, EPA committed to address any additional outstanding issues that are identified from its ongoing research.

EPA also notes that it has recently proposed regulations that touch indirectly on retailers’ concerns. In its recent Definition of Solid Waste Rule,4 for example, EPA revised its exclusion for hazardous secondary materials that are “legitimately recycled.” This rule, 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.5 Similarly, EPA’s recently proposed Hazardous Waste Generator Improvements Rule would provide some relief for episodic generators, which include many retailer sites, and would allow for consolidation of conditionally exempt small quantity generator waste at large quantity generators under the control of the same person.6 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.7

Perhaps most promising for retailers and others involved the reverse distribution process is EPA’s exploration of the possibility of re-characterizing a number of returned consumer products as “universal wastes,” rather than fully-regulated hazardous wastes.8 Universal waste management standards are intended to apply to materials that otherwise may be designated as hazardous but nevertheless are contained in relatively common products such as batteries and pesticides that are often disposed of by consumer households without regulation.9 Universal waste requirements are less stringent and less expensive than those for other hazardous wastes. Given the relatively low risk posed by many consumer products that otherwise meet a hazardous waste listing or characteristic, it is probable that EPA will regulate a wider range of consumer product returns as universal waste in the future.

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. 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.”10

The Strategy is a promising step in 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, EPA’s acknowledgement of the difficulty of applying RCRA standards to retailers should not be interpreted to mean that EPA has tapered its enforcement efforts in this area. To the contrary, 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.11

In light of EPA’s continuing enforcement activities, retailers and all other companies involved in the retail reverse distribution process should develop a comprehensive product return management program that incorporates EPA’s most recent guidance. Doing so will provide employees with guidance for sensibly managing returned products in a more cost-effective, safe, and efficient manner.

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1    The Strategy is available at https://www.epa.gov/hwgenerators/strategy-addressing-retail-sector-under-resource-conservation-and-recovery-acts.
2    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. Reg. 8926 (Feb. 14, 2014).
3    See EPA’s Conceptual Framework for Flow of Retail Items (Consumer Goods) and Wastes, available at https://www.epa.gov/hwgenerators/strategy-addressing-retail-sector-under-resource-conservation-and-recovery-acts.
4    Definition of Solid Waste; Final Rule, 80 Fed. Reg. 1694 (Jan. 13, 2015) (revising 40 C.F.R. § 260.43).
5    Strategy at 3.
6    See Hazardous Waste Generator Improvement; Proposed Rule, 80 Fed. Reg. 57,918 (Sept. 25, 2015).
7    See Management Standards for Hazardous Waste Pharmaceuticals; Proposed Rule, 80 Fed. Reg. 58,014 (Sept. 25, 2015).
8    Strategy at 7. Indeed, EPA stated that it intended to issue a proposed rule specifically designating aerosol cans as candidates for universal waste. See id.
9    See Hazardous Waste Management System; Modification of the Hazardous Waste Recycling Regulatory Programs; Proposed Rule, 58 Fed. Reg. 8102 (Feb. 11, 1993).
10  Strategy at 4.
11  See EPA press release, September 20, 2016, available at https://www.epa.gov/newsreleases/whole-foods-agrees-improve- waste-management-epa-settlement