UNITED STATES ENVIRON ENTAL PROTECTION AGENCY 

WASHINGTON D C 20460 

NOV 1 8 20i0 

Mr. Dave Berrey 

Indiana Department of Environmental Management 

Office of Land 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 of Environmental 

Management (IDEM) on October 22, 2010, which provided the public the opportunity to 

comment on IDEM's ''tentative approval" of a request by ShoreMet LLC (ShoreMet) for a 

variance from classification as a solid waste under 329 lAC 3.1-5-4, the Indiana equivalent of the 

federal partially-reclaimed/commodity-like variance of 40 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 that ShoreMet seeks a variance for incoming metal 

bearing listed hazardous wastes F006, F007, and F019. EPA understands that 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.) If 

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 of the 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 of the 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 treat these listed hazardous wastes only if the company 

complies with the requirements of a 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 of the variance 

criteria by authorized states. Consequently, we are concerned that this inconsistency results in 

the application of variance 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 of the 

upcoming Definition of Solid Waste proposed rule, scheduled for signature in June of 2011. 

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. 

If you have any questions or concerns or would like to discuss this letter or the attached 

analysis, please contact Jim O'Leary, of my 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 of Resource 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 Nabb, 

Indiana facility. The variance is requested to apply at the point the incoming hazardous wastes 

arrive at ShoreMet's facility. The Indiana Department of Environmental 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 if IDEM 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 of the information provided by ShoreMet, however, 

appears to be relevant only to a determination of whether 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 

determination of whether 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 of processing the material has undergone and 

the degree of further processing that is required. 

ShoreMet receives metal bearing sludges generated from the treatment of electroplating 

wastewaters and conversion coating of aluminum. Typically, the processing that occurs at 

facilities that generate these types of sludges 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 of the 

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 of water. As ShoreMet admits, "these 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 to 
explain, "The addition of raw materials that contain significant amounts of water would result in 

a steam explosion in [the smelters'] furnaces." (Petition, pp. 6-7.) Materials that contain water 

must therefore be dried before they are added to the smelting furnace." (Petition, p. 7.) 

ShoreMet itself conducts 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 of high 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 if the "initial reclamation step is so substantial that the resulting material is 

more commodity-like than waste-like 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 

value." (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 analysis required 

for 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 of at 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.) 

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While EPA agrees that the concentration of recoverable metals found in F006 and FO 19 

sludges may exceed the concentration of metals in virgin ore, EPA does not believe that this 

conclusion is relevant to the analysis of whether the incoming material is commodity-like. 

Rather, the incoming material may be commodity-like if it 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 of mining ore to produce the equivalent 

weight of metals." (Petition p. 11.) IDEM did not specifically comment on this information, but 

appears to have considered the "other relevant factors" criterion in its approval. 

EPA encourages recycling ofhazardous wastes to obtain the sustainability benefits of 

recovering and reusing the valuable materials remaining in wastes and of minimizing 

environmental impacts from raw material production. The RCRA hazardous waste regulations 

strike a difficult balance between encouraging sound hazardous waste recycling and ensuring 

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that management of recycled 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 of the materials demonstrates that they are not 

discarded. Proper management of reclaimed 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, if Indiana 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 of control to ensure 

protection of human 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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