UNITED STATES ENVIRON ENTAL PROTECTION AGENCY WASHI NGTON D C 20460



### NOV 1 8 20i0

Mr. Dave Berrey Indiana Department of Environmental Management Office ofLand Quality 100 North Senate Avenue MC-66-20 , IGCN Indianapolis, Indiana 46204-2251 OFFICE OF SOUO WASTE AND EMERGENCY RESPONSE

Re: EPA Comments on IDEM's Tentative Approval ofShoreMet's Request for a Variance from Classification as a Solid Waste for Partially-Reclaimed Materials that are Commodity

-Like
Dear Mr

. Berrey:
I am writing in response to the notice issued by the Indiana Department ofEnvironmental Management (IDEM) on October 22, 2010, which provided the public the opportunity to comment on IDEM ' s ''tentative approval" ofa request by ShoreMet LLC (ShoreMet) for a variance from classification as a solid waste und er 329 lAC 3.1-5-4, the Indiana equivalent ofthe federal partially-reclaimed/commodity-like variance of40 CFR 260

.30(c).
EPA has reviewed both ShoreMet' s petition for the variance dated July 26, 2010, and IDEM's draft approval. EPA understands tha t ShoreMet seeks a variance for incoming metal bearing listed hazardous wastes F006, F007, and F019. EPA understands tha t IDEM has tentatively approved ShoreMet's request with regard to incoming listed hazardous wastes F006 and F019. (IDEM 's draft approval is silent with regard to listed hazardous waste F007.) I f IDEM grants the variance, hazardous wastes received by, treated. stored, and shipped from ShoreMet's Nabb, Indiana facility would be subject only to the conditions imposed through IDEM's proposed variance, rather than the requirements ofthe Resource Conservation and Recovery Act (RCRA) hazardous waste management regulations.
As explained in the attached analysis, my office and EPA Region 5 believe that IDEM should not grant final approval ofShoreMet' s request for a variance for any ofthe incoming metal-bearing hazardous wastes. To summarize the analysis, EPA does not believe that the incoming wastes are sufficiently commodity-like to qualify for the variance. EPA believes that ShoreMet should be allowed to store and trea t these listed hazardous wastes only ifthe company complies with the requirements ofa properly

-issued RCRA permit, including requirements for fmancial assurance and closure

. EPA urges IDEM to reconsider its tentative approval

.EPA recognizes that Indiana is authorized to grant variances using the state partiallyreclaimed/commodity-like variance provision, which is equivalent to the federal provision. However, we have become aware that there has been inconsistent application ofthe variance criteria by authorized states. Consequently, we are concerned that this inconsistency results in the application ofvariance requirements that are much less stringent than the RCRA hazardous waste regulations to materials that are waste rather than commodity-like. We offer these comments as a near term step for addressing this inconsistency. At the same time, we are working on a long-term mechanism to address this inconsistency. Specifically, we are considering clarifying and proposing changes to the federal variance provision as part ofthe upcoming Definition ofSolid Waste proposed rule, scheduled for signature in June of2011. Should we finalize changes that are more stringent than the current federal variance provision, states would be required to adopt the changes and implement them at facilities such as ShoreMet.
Ifyou have any questions or concerns or would like to discuss this letter or the attached analysis, please contact Jim O'Leary, ofmy staff, at olean ti'lla ep:t or 703-308-8827, or Michael Cunningham at c) · , , ,.., mich d t cpa.Jv\ , or 312-886-4464

.

cc: Bruce Kizer, IDEM Bruce H. Palin, IDEI'y1 Danny Mislenkov, ShoreMet LLC Bruce Sypniewski, Region 5 Robert Kaplan, Region 5 Sincerely, 

# )l / ty' S ·e udzinski, Acting Director Office ofResource Conservation and Recovery

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### Analysis ofShoreMet LLC's July 26,2010, Petition for a Solid Waste Variance
In its July 26, 201 0, Petition, ShoreMet requested a variance from classification as solid waste for incoming listed hazardous wastes F006, F007, and F019 that it receives at its Na bb, Indiana facility. The variance is requested to apply at the point the incoming hazardous wastes arrive at ShoreMet's facility. The Indiana Department ofEnvironmental Management (IDEM) may grant such a variance under 329 lAC 3.1-5-4 (which adopted and incorporated by reference the federal standards and criteria for variances at 40 C.F.R. 

### § 260.31) for materials that have been reclaimed but must be reclaimed further before recovery is completed ifIDEM determines that, after initial reclamation, the resulting material is commodity-like.
ShoreMet provided information addressing the six criteria identified in 40 C.F.R. § 260.31 (c) for making this decision. Some ofthe information provided by ShoreMet, however, appears to be relevan t only to a determination ofwhether the company's outgoing metal concentrates (after ShoreMet conducts its reclamation processes) are commodity-like. For example, ShoreMet claims that the "product produced for sale to smelters and refiners meets the applicable criteria for ' partially reclaimed material."' (Petition, p. 6.) EPA believes that information pertaining to only the outgoing metal concentrates is not relevant to the determina tion ofwhether a variance should be issued for the incoming listed hazardous waste sludges. IDEM reviewed the Petition in accordance with the six criteria identified in 40 C.F.R. 

### § 260.31(c) and concluded that ShoreMet's incoming wastewater treatment sludges, listed as F006 and F019 wastes, qualify for a variance. (Draft approval p. 2.) (IDEM's draft approval is silent with regard to F007 plating bath solutions, so EPA concludes that IDEM has not approved
a variance for this material.) As discussed below, EPA disagrees, and believes that the information provided by ShoreMet clearly establishes that the incoming listed hazardous waste sludges are not commodity-like. Accordingly, ShoreMet should apply for and obtain a Resource Conservation and Recovery Act (RCRA) permit to store and treat these incoming hazardous waste sludges before reclaiming them.
1. 

### 40 C.F.R. § 

### 260.31(c)(l): The degree ofprocessing the material has undergone and the degree offurther processing that is required. ShoreMet receives metal bearing sludges generated from the treatment ofelectroplating wastewaters and conversion coating ofaluminum. Typically, the processing that occurs at facilities that generate these types ofsludges is limited to dewatering or reducing the water content using filter presses or similar equipment, before shipping them offsite either for recycling
or disposal. ShoreMet does not provide any information indicating that the incoming sludges have been processed more significantly than the normal dewatering which is part ofthe generator's wastewater treatment system and is conducted whether the sludges are sent for disposal or for reclamation. When the manifested hazardous waste sludges arrive at ShoreMet's gates, they contain a significant amount ofwater. As ShoreMet admits, "t hese sludges that ShoreMet will process under the proposed variance contain 50-80% water, which makes them unsuitable for use as raw materials in a smelting process." (Petition, p. 6.) ShoreMet goes on toexplain, "The addition ofraw materials that contain significant amounts ofwater would result in a steam explosion in [the smelters'] furnaces." (Petit ion, pp. 6-7

.) Materials that contain water must therefore be dried before they are added to the smelting furnace." (Petition, p . 7.) ShoreMet itselfconducts more significant processing at its facility to produce smelter-ready metal concentrates from the incoming sludges. As described in the petition, ShoreMet first screens incoming material to meet the established minimum metals content in order to be accepted by the refinery or smelter

. (Petition, p. 9.) Then, ShoreMet uses custom designed and built rotary units and dryers , stationary ovens, and ancillary equipment to handle , analyze, test, blend and dry the material to produce a uniform product ofhigh metals concentration that can be used directly by smelters. (Petition p. 7.)
EPA has stated that a variance from solid waste applies to wastes after they have been initially reclaimed ifthe "initial reclamation step is so substantia l that the resulting material is more commodity-lik e than waste-li ke even though no end-product has been recovered." (50 FR 655 , January 4, 1985) Based on the information provided by ShoreMet, EPA believes that the company's incoming hazardous waste sludges have undergone only a very minimal degree of processing at the generating facility, and that the information provided by ShoreMet clearly establishes that these incoming wastes must undergo significantly more processing before they are suitable for use by smelters. Accordingly, this criterion weighs against a finding that these incoming hazardous waste sludges are commodity-like despite the fact that the sludges may have been initially reclaimed by the generators

. 2. 40 C.F.R. § 260.31(c){2): The value of the material after it has been reclaimed. EPA is aware that, in many cases, generators send hazardous waste sludges with little economic value to partial reclamation facilities , like ShoreMet, to avoid higher land disposal costs. The economic value ofthese sludges do not increase until they have undergone substantial processing (e.g. , prescreening, thermal treatment and blending). ShoreMet admits that the incoming wastes have insignificant economic value prior to its own further processing when it states "The process adds value to raw sludges that would otherwise have little or no economic va lue. " (Petition, p. 4.) Although the metal concentrates produced by ShoreMet from the incoming sludges may indeed have economic value , this fact is irrelevant to the ana lysis required f or the incoming wastes. Accordingly, this criterion also weighs against a finding that the incoming hazardous waste sludges are commodity-like. 3. 40 C.F.R. § 260.31(c)(3): The degree to which the reclaimed material is like an analogous raw material.
To demonstrate that the incoming sludges are similar to analogous raw material, ShoreMet states that its "Operation Plan will require that sludges have a minimum commodity metal concentration of 4% dry weight for base metals and a gross metal value ofat least $.50 per dry pound for precious metals." (Petition p. 8.) ShoreMet compares the sludges to virgin ores by asserting that the sludges ' metal content "is approximately double the concentration of similar metals found in natural ores . " (Petition p. 8.)

2While EPA agrees that the concentration ofrecoverable metals found in F006 and FO 19 sludges may exceed the concentration ofmetals in virgin ore, EPA does not believe that this conclusion is relevant to the analysis ofwhether the incoming material is commodity-like. Rather, the incoming material may be commodity-like ifit can be substituted for a material that is smelter

-ready (i.e. feedstock to a primary process). (50 FR 655, January 4, 1985.) Smelters do not directly process virgin ores. As stated above, ShoreMet admits that these sludges are

" unsuitable for use as raw materials in a smelting process." (Petition, p. 6.) ShoreMet further admits that these smelters are not able to process sludges without significant preprocessing. (Petition p. 7.) Accordingly, this criterion also weighs against a finding that the incoming hazardous waste sludges are commodity-like.
4. 40 C.F.R. § 260.31(c)(4): The degree to which an end market for the reclaimed material is guaranteed. The ShoreMet Petition is silent regarding any guaranteed end market for the incoming hazardous waste sludges. In fact, F006 and F019 sludges generated in the United States are often land disposed. The company stated that "sludges processed by ShoreMet will be used to produce products that will be sold promptly to smelters." Although this information concerning the end market for ShoreMet's metal concentrates may be relevant to whether a variance should be issued for those outgoing materials , it is irrelevant to the analysis for the incoming sludges. Accordingly, this criterion also weighs against a finding that the incoming hazardous waste sludges are commodity-like.
S. 40 C.F.R. § 260.31(c)(S): The extent to which the reclaimed material is handled to minimize loss In support of its Petition, ShoreMet identifies the procedures and safeguards it has in place to minimize loss ofthe incoming hazardous waste sludges. ShoreMet's admissions that the incoming sludges have little or no economic value undermine an assumption that the material will continue to be managed to minimize loss. Accordingly, this criterion also weighs against a finding that the incoming hazardous waste sludges are commodity-like.
6. 40 C.F.R § 260.31(c)(6): Other relevant factors. ShoreMet also asked IDEM to consider two additional factors: (1) that "it provides a sound recycling alternative for materials that would otherwise be buried in a landfill" ; and (2) the "avoidance of [the] cost and environmental impact ofmining ore to produce the equivalent weight ofmetals. " ( Petition p. 11.) IDEM did not specifica lly comment on this information, but appears to have considered the " other relevant factors " criter ion in its approval.
EPA encourages recycling ofhazardous wastes to obtain the sustainability benefits of recovering and reusing the valuable materials remaining in wastes and ofminimizing environmental impacts from raw material production. The RCRA hazardous waste regulations strike a difficult balance between encouraging sound hazardous waste recycling and ensuring

3that management ofrecycled materials, which can cause serious environmental damages, is safe and environmentally protective. The regulations offer a variance for commodity-like materials because, like products, the commodity

-like nature ofthe mate rials demonstrates that they are not discarded. Proper management ofreclaimed listed hazardous waste sludges that are not commodity-like is ensured by the hazardous waste regulations designating these materials as solid, and thus hazardous, waste (40 C.F.R. § 261.2(c) , as adopted by 329 lAC 3.1-6-1). Because, as discussed above, we do not find that the incoming listed hazardous waste sludges received by ShoreMet are commodity-like, we believe these sludges should be subject to full RCRA hazardous waste regulation, including a properly

-issued RCRA permit with requirements for financial assurance and closure (or, ifIndiana were to adopt the 2008 Final Definition of Solid Waste Rule, any applicable conditional exclusions). We believe that full regulation of ShoreMet's sludge recycling and management provides the appropriate level ofcontrol to ensure protection ofhuman health and the environment while also accruing the benefits of hazardous waste recycling. Accordingly, the other relevant factors presented by ShoreMet do not overcome the evidence supporting a finding that the incoming hazardous waste sludges are not commoditylike. ·

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