EPA Issues Proposed Rule to Designate PFOS and PFOA as CERCLA Hazardous Substance

On September 6, 2022 EPA issued a proposed rule to designate PFOS and PFOA as hazardous substances under CERCLA (commonly referred to as “Superfund”). Chromium electroplating, anodizing and etching were specifically listed in the rule as potentially affected industrial services. 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 cleanup releases of PFOS and PFOA could now recover cleanup costs from potentially responsible parties.

Reporting Requirements: With this designation, facilities that have knowledge of any release of PFOS or PFOA above the reportable quantity (RQ) of one pound must report the release to federal, state and local authorities. For most surface finishing operations, a single release of one pound 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.

84618. though 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 did conclude 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 – the burden associated with reporting RQs of PFOS and PFOA to federal, state, and local authorities. The direct costs were estimated to be only $560 per release of $370,000 annually for all impacted entities nationwide.

Estimated Cleanup Costs: 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 dollars and between 700 and 800 million dollars annually. The Department of Defense has estimated that its cleanup costs could be as much as two billion dollars annually.

Equity Issues: While the PFOS and PFOA hazardous substance designation could also raise potential environmental justice concerns, EPA indicated that 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.

Should Other PFAS Be Designated as Hazardous Substances: In the preamble to the proposed rule, EPA stated that 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 Timeline: The comment deadline for the proposed rule is December 7, 2022. 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 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.

The Policy Group will continue to review and analyze the rule, and work with other industry trade associations to minimize the adverse impacts of this rule on the surface finishing industry. If you have any questions or would like additional information on this rule, contact Jeff Hannapel or Christian Richter with NASF at jhannapel@thepolicygroup.com or crichter@thepolicygroup.com.