D.C. Circuit Rejects Environmentalist and Industry Challenges to EPA’s Nonhazardous Secondary Materials Rule; Implications for Combustion Standards Remain

Last week, the D.C. Circuit issued an unpublished per curiam decision in Solvay USA Inc. v. U.S. EPA, No. 11-1189 (D.C. Cir.), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance], rejecting all arguments from both environmentalists and industry against EPA’s non-hazardous secondary material (NHSM) regulations under the Resource Conservation and Recovery Act (RCRA).  By way of background, the characterization of non-hazardous secondary materials pursuant to the NHSM has implications under the Clean Air Act (CAA) for the standards by which those materials can be incinerated in combustion units.

By default, the rule classifies non-hazardous secondary material as solid waste (which come with more restrictive combustion standards under the CAA) unless otherwise excluded.  See 40 C.F.R. § 241.3(a), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance].  At issue here, the rule created general exclusions for:  (1) material “within the control of the generator” that is combusted on site; (2) material “used as an ingredient in a combustion unit;” and (3) discarded material that is “processed to produce a non-waste fuel or ingredient.”  Id. § 241.3(b).  In addition to the general exclusions, the definition of solid waste categorically excludes scrap tires managed under a tire collection program, resinated wood, processed coal refuse, and dewatered pulp and paper sludge that is burned on site.  See id. § 241.4(a).

In their petitions, environmentalists and industry contended that the NHSM regulations were too lenient or restrictive, respectively.  Environmentalists contended that the NHSM impermissibly excluded materials that had in fact been “discarded” and, therefore, should fall under the ambit of RCRA.  The D.C. Circuit rejected this argument, holding that “neither statute (the Clean Air Act or RCRA) nor this Court’s precedents prevent EPA from defining solid waste to exclude certain non-hazardous secondary materials combusted for energy or used as an ingredient for fuel.”  Solvay USA Inc., slip op. at 3.  Furthermore, in light of the ambiguity surrounding the term “discarded,” EPA’s characterization was entitled to Chevrondeference.  Id.

Industry’s two arguments focused on EPA’s classification of sewage sludge as a solid waste when combusted and EPA’s purported lack of jurisdiction over firm-to-firm transfers of alternative fuels that are not discarded.  As to sewage, the D.C. Circuit rejected this argument and held that RCRA’s plain language allows such regulation.  As to firm-to-firm transfers of non-discarded fuels, the D.C. Circuit held that “EPA is well within its statutory authority to assume that transferred material is  solid  waste  until  an  interested  party  demonstrates  that  the  material  ‘has  not  been discarded and is indistinguishable in all relevant aspects from a fuel product.’  40 C.F.R. § 241.3(c)(1).”  Solvay USA Inc., slip op. at 4 (emphasis added).  In other words, “EPA may place the burden upon the regulated entity to show that its material should not be regulated.”  Id. (quotation marks removed).

The opinion is available here.

By Alexander Bandza, Associate, Jenner & Block

Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.

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