June 2010

Version 1



## Revisions to the Definition of Solid Waste Final

Rule Compilations: The Legitimate Recycling
Standard

Materials Recovery and Waste Management Division Office of Resource Conservation and Recovery U.S. Environmental Protection AgencyRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

Introduction i 

# INTRODUCTION

Contents Click a topic below to go to a section

INTRODUCTION .......................................... I
THE LEGITIMATE RECYCLING
STANDA RD ................................................. 1 Purpose of Legitimacy ................................. 1 Applicability of the Legitimacy Provision in

the Final Rule............................................... 1
Factor 1—Useful Contribution................. 3
Factor 2—Valuable Product or

Intermediate............................................. 5 Factor 3—Managed as a Valuable Commodity .............................................. 7 Factor 4—Comparison of Toxics in the

Product .................................................... 9
Economics ................................................. 14
Demonstration and Enforcement of Legitimacy.................................................. 17
CFR LANG UAGE ...................................... 19
ACRONYMS .............................................. 23

INDEX........................................................ 24



## About the 2008 DSW Rule

On October 30, 2008, the U.S. Environmental Protection Agency (EPA) published a final rule that streamlines regulation of hazardous secondary materials to encourage beneficial recycling and to help conserve resources. The Revisions to the Definition of Solid Waste (DSW) Final Rule (“DSW rule”)

amends and clarifies the Resource Conservation and Recovery Act (RCRA) definition of solid waste ( 40 CFR 261.2 ). In particular, this rule establishes three self-implementing exclusions to the

definition of solid waste for hazardous secondary materials that are reclaimed.

One of the exclusions involves hazardous secondary materials that are legitimately reclaimed under the control of the generator (onsite reclamation, reclamation by the same company, and reclamation under certain tolling arrangements). The second exclusion involves hazardous secondary materials that are transferred to another company

for reclamation. The last exclusion involves hazardous secondary materials that are exported for reclamation. In addition, the 2008 DSW rule outlines a procedure for case-by-case non-waste

determinations.

For more information on the DSW rule,

see EPA’s DSW Federal Register Notices web page

.



## About the “Revisions to the Definition of Solid Waste Final Rule Compilations”

The Revisions to the Definition of Solid Waste Final Rule Compilations provide easy access for EPA, the states, the regulated community, and the public to important information regarding a number of the provisi ons in the DSW rule: legitimate recycling,

reasonable efforts and the cont ained standard. This user-fri endly reference tool reduces the need for stakeholders to search through multiple Federal Register notices and will improve understanding of each of these three subjects. For each compilation, EPA hasRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

Introduction ii incorporated information from relevant pr eambles, regulations, and other materials. Please note that this reference is designed to be web-based; therefore, the usefulness of

the document is maximized when it is viewed on a computer connected to the Internet.

This volume of the Compilations series provides information about the legitimate recycling standard under the DSW rule. A mo re in-depth version of this compilation, covering the history of legitimate recycling, and compilations addressing the contained

standard and the reasonable effort s condition will be available at http://www.epa.gov/epawaste/hazard/dsw/impresource.htm#guide

.

This document is not a rulemaking and does not change any existing solid or hazardous waste requirements. Any reformatting of regul atory language for the new exclusions is only intended to make the language easier to read. Moreover, EPA’ s intention is to include only that CFR language that is dir ectly relevant to th e legitimate recycling standard. Note: other relevant language to this standard may exist and may not be included in this document; users of this doc ument are responsible for examining all CFR language and other information that may be rele vant to the legitimate recycling standard. Any language in this document, including any reformatted CFR language to assist in ease of reading, is not a substitute for the CFR itself or the requirements in the CFR. In addition, we also provide links to the Government Printing Office’ s Electronic Code of Federal Regulations Web site (e-CFR), which is updated almost daily.

In addition, this reference document presents matters related only to the legitimate recycling standard of the federal definition of solid waste and hazardous waste recycling regulations. Most states are authorized to manage their own solid and hazardous waste regulatory programs. Therefore, states may ha ve their own regulations that apply in lieu of the federal regulations. While most state regulations are based on the federal requirements, some states have developed re gulations that are more stringent than the federal program. We direct you to the follo wing web site to determine if your state regulatory program is different from the federal program: http://epa.gov/waste/wyl/stateprograms.htm

.

For a collection of written materials about othe r issues related to the definition of solid waste, see the Definition of Solid Waste Compendium . For more information regarding the various regulations applie d to facilities generating or managing hazardous waste, see

Hazardous Waste Generators: A User Friendly Reference Document

.

The Compilations series is also available in Mi crosoft Word format from EPA upon request. For more informati on on these versions and any other questions or comments concerning this document, please contact EPA’s Office of Res ource Conservation and Recovery:

Mary Beth Sheridan sheridan.marybeth@epa.gov

703-308-4941 Kathy Lett lett.kathy@epa.gov

703-605-0761Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

Introduction iii 

## About “The Legitimate Recycling Standard” Compilation

Under the 2008 DSW rule, EPA requires hazard ous secondary materials being reclaimed

under the control of the generator ( 40 CFR 261.2 (a)(2)(ii) and 40 CFR 261.4 (a)(23)) or transferred for the purpo se of reclamation ( 40 CFR 261.4 (a)(24) and 40 CFR

261.4 (a)(25)) to meet the legitimate recycling st andard. Materials for which an applicant applies for a non-waste determinations at 40 CFR 260.34 must also meet the legitimacy standard. EPA has long articulated the need to distinguish between "legitimate" (i.e., true) recycling and "sham" recycling and has codi fied legitimacy provisions in the DSW rule. This compilation is designed for users who want to read about the legitimate recycling

standard under the 2008 DSW Rule. This co mpilation discusses the following subjects (click a topic below to jump to a section):

• Purpose of legitimacy

• Applicability of the legitimacy requirements

• Structure of the legitimacy requirements

• Details of Factors 1–4

• Economics

• Demonstration and enforcement of legitimacy

• Regulatory text

The text in the following sections is taken nearly verbatim from the preamble to the 2008 final rule and from final regulatory language . The excerpts presented in this compilation do not necessarily appear in the same order as in the original source. In some cases, we have reformatted passages to improve readab ility. Where the language in this compilation does not exactly match preamble or regulat ory language, we have indicated this by bracketing the text (with the exception of headings and bold titles). As noted above, any changes to the preamble or regulatory text ar e for the convenience of the reader and are

not to be taken as substitutes for the actual language of the regulati ons or the preamble.

EPA has also developed a longer version of the legitimacy compilation. The longer

version is useful for those users who want to look at the history of legitimate recycling or compare other guidance on legitimate recycling to the requirements in the 2008 final rule. The longer version is available at www.epa.gov/epawaste/hazard/ dsw/impresource.htm#guide and includes excerpts from the 2003 and 2007 proposals for the DSW final rule . It also includes topics such as the rationale for codifying the legitimacy factor s and a description of how these factors compare to earlier guidance such as the “Lowrance Memo.”Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 1 

# THE LEGITIMATE RECYCLING
STANDARD

Purpose of Legitimacy

Under the RCRA Subtitle C definition of so lid waste, certain hazardous secondary materials, if recycled, are not solid wastes and, therefore, are not subject to RCRA’s “cradle to grave” management system. The ba sic idea behind this principle is that recycling of these materials often closely re sembles industrial manufacturing rather than waste management. However, due to economic incentives for managing hazardous secondary materials outside the RCRA regulator y system, there is a potential for some handlers to claim that they are recycling the hazardous secondary materials when, in fact, they are conducting waste treatment and/or di sposal. To guard against this, EPA has long

articulated the need to disti nguish between “legitimate” (i.e ., true) recycling and “sham” recycling, beginning with the preamble to the 1985 regulations that discussed the definition of solid waste (50 FR 638, Janua ry 4, 1985) and continuing through [the 2008 DSW] final rule. [73 FR 64670] The legitimacy provision in [the] final exclusions and non-waste determinations is designed to dist inguish between real recycling activities— legitimate recycling—and “sham” recycling, an activity undertak en by an entity to avoid the requirements of managing a hazardous sec ondary material as a hazardous waste. [73 FR 64701]



## Applicability of the Legitimacy Provision in the Final Rule

As part of [the DSW Rule], EPA has decided to codify in 40 CFR 260.43 the requirement that materials be legitimately recycled as a requirement for the exclusion for hazardous secondary materials that are legitimately re claimed under the contro l of the generator ( 40

CFR 261.2 (a)(2)(ii) and 40 CFR 261.4 (a)(23)) and as a condition of the exclusion for hazardous secondary materials that are tr ansferred for the purpose of legitimate reclamation ( 40 CFR 261.4 (a)(24) and 40 CFR 261.4 (a)(25)). EPA is also requiring that hazardous secondary materials must be legi timately recycled under the final non-waste determinations ( 40 CFR 260.34 ) for hazardous secondary materials that are (a) reclaimed in a continuous industrial process and (b) indi stinguishable in all re levant aspects from a product or intermediate. [73 FR 64700] Thes e requirements can be found in the final regulatory text at § 260.34 (b), § 261.2 (a)(2)(ii), § 261.4 (a)(23)(v), and § 261.4 (a)(24)(iv). Each of these provisions refers to § 260.43 , where the full requirements for determining the legitimacy of the reclamati on operation can be found. [73 FR 64701]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 2 EPA [codified] a legitimacy provi sion in [the] final rule as part of the final exclusions and non-waste determinations, but stresses that EPA retains its long-standing policy that all recycling of hazardous secondary materials mu st be legitimate. If a facility is engaged in sham recycling, this, by definition, is not real recycling and th at material is being discarded. The legitimacy policy continues to apply to all hazardous secondary materials that are excluded or exempted from Subtitle C regulation because they are recycled and to recyclable hazardous wastes that remain subject to the hazardous waste regulations. This policy is well-understood throughout th e regulated community and among the state implementing agencies. [73 FR 64707

– 64708]

EPA believes that the four legitimacy factors [...] codified in 40 CFR 260.43 are substantively the same as the existing legitimacy policy. These factors are a simplification and clarification of the polic y statements in the 1989 Lowrance Memo and

in various Definition of Solid Waste Fe deral Register notices. [73 FR 64708]

Nonetheless, to avoid confusion among th e regulated community and state and other implementing regulatory agencies about th e status of recycling under the existing exclusions, the Agency has decided not to codify the legitimacy factors for existing exclusions and, thus, states and other implem enting agencies will continue to apply the existing legitimacy policy to all recycling as they have in the past in order to ensure that recycling is real and not a sh am. The legitimacy provisions of the final rule are codified only for the exclusions and non-waste determinations being promulgated [in the final rule]. In developing the codified legitim acy language, [EPA] did not intend to raise questions about the status of legitimacy dete rminations that underl ie existing exclusions

from the definition of solid wa ste, or about case-specific dete rminations that have been made by EPA or the states. Curre nt exclusions and other prio r solid waste determinations or variances, including determinations made in letters of interpretation and inspection reports, remain in effect. [73 FR 64708]

In summary, all hazardous secondary materi als recycling and hazardous waste recycling, whether such recycling remains under hazardous waste regulations or is excluded from the definition of solid waste, must be legitim ate. This has been our long-standing policy and it is well understood throughout the regu lated community and the implementing state regulatory agencies. In order to be clear that the legitimacy provision codified at 40 CFR

260.43 under [the] final rule would not affect how the current legitimacy policy applies to recycling under existi ng exclusions, the legitimacy provision at 40 CFR 260.43 is explicitly designated as applying only to th e exclusions and non-waste determinations being finalized in [the final] rule. [73 FR 64708]



## Final Legitimacy Structure

Under the first paragraph of 40 CFR 260.43 , hazardous secondary materials that are not legitimately recycled are discarded material s and, therefore, are solid wastes. This paragraph also states that a nyone claiming an exclusion at § 261.2 (a)(2)(ii), § 261.4 (a)(23),Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 3 § 261.4 (a)(24), or § 261.4 (a)(25) or using a non-wa ste determination at § 260.30 (d) or (e)

must be able to demonstrate that its r ecycling activity is le gitimate.[73 FR 64701]

The design of legitimacy in the final rule has two parts. The first is a requirement that hazardous secondary materials being recycled provide a useful contribution to the recycling process or to the product of the r ecycling process and a requirement that the product of the recycling process is valuable. These two legitimacy factors make up the core of legitimacy and, therefore, a process

that does not conform to them cannot be a legitimate recycling process, but would be considered sham recycling. [73 FR 64701]

The second part of leg itimacy is two factors that must be considered when a recycler is making a legitimacy determination. EPA believes that these two factors are important in determining legitimacy, but has not made

them factors that must be met because the Agency knows that there will be some situatio ns in which a legitimate recycling process

does not conform to one or both of these two factors, yet the recl amation activity would still be considered legitimate. EPA does not believe that this will be a common occurrence, but in recognition that legitimat e recycling may occur in these situations, EPA has made management of the hazardous secondary materials and the presence of hazardous constituents in the produc t of the recycling process to be factors that must be considered in the overall legitimacy determin ation, but not factors th at must always be met. [73 FR 64701]



### Factor 1—Useful Contribution

‘‘Legitimate recycling must involve a hazar dous secondary material that provides a useful contribution to the recycling process or to a product of the recycling process * * * The hazardous secondary material provides a useful contribution if it (i) contributes valuable ingredients to a product or intermediate ; or (ii) replaces a ca talyst or carrier in the recycling process; or (iii) is the sour ce of a valuable constituent recovered in the recycling process; or (iv) is recovered or re generated by the recycli ng process; or (v) is used as an effective substitute for a commercial product’’ (40 CFR 260.43 (b)(1)). [73 FR 64701]

This factor, one of the two core legitimacy f actors, expresses the principle that hazardous secondary materials should contribute value to the recycling process. This factor is an essential element to legitimate recycling b ecause real recycling is not occurring if the hazardous secondary materials being added or recovered do not add anything to the process. This factor is intended to prev ent the practice of a dding to or recovering hazardous secondary materials from a manuf acturing operation simply as a means of The Four Legitimacy Factors

Core Factors:

• Factor 1—Useful Contribution

• Factor 2—Valuable Product or

Intermediate

Factors that Must Be Considered:

• Factor 3—Managed as a Valuable Commodity

• Factor 4—Comparison of Toxics in the

Produc tRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 4 disposing of them, or recovering only small amounts of a constituent, which EPA would consider sham recycling. [73 FR 64701

– 64702]

In response to comments received on this f actor asking for more clarification on what useful contribution means, the regulatory te xt includes an explanation of how useful contribution might be achiev ed in (i) through (v) of § 260.43 (b)(1). EPA stresses that the ways in which hazardous secondary materials ca n add value and be useful in a recycling process are (i) contributing valuable ingred ients to a product or intermediate; (ii) replacing a catalyst or carri er in the recycling process; (iii) providing a valuable constituent to be recovered; (iv) being regenerated; or (v ) being used as an effective substitute for a commercial product. The preamble to the October 2003 proposed rule gave full descriptions of these five situa tions (68 FR 61585), but the Agency has also included them in the regulatory text to clarif y this factor for the regulated community. [73 FR 64702]

The Agency also wants to restate for clarif ication that for hazardous secondary materials to meet the useful contribution factor, not every constituent or component of the hazardous secondary material has to make a contribution to the recycling activity. For example, a legitimate recycling operation i nvolving precious metals might not recover all of the components of the hazardous secondary material, but would recover precious

metals with sufficient value to consider the recycling process legitimate. In addition, the recycling activity does not have to involve the hazardous component of the hazardous secondary materials if the value of the contribution of the non-hazardous component justifies the recycling activity. One example of this factor from an existing exemption is where hazardous secondary materials contai ning large amounts of zinc, a non-hazardous component, are recycled into zinc micronutrien t fertilizers. In cases where the hazardous component is not being used or recycled, the Agency stresses that the recycler is responsible for the management of any hazardous residuals of the recycling process. [73 FR 64702]

In a situation where more than one hazardous secondary material is used in a single recycling process and the hazardous secondary materials are mixed or blended as a part of the process, each hazardous secondary ma terial would need to satisfy the useful contribution factor. This requi rement prevents situations where a worthless hazardous secondary material could be mixed with valuable and useful hazardous secondary materials in an attempt to disguise and dis pose of it. In addition, a situation in which hazardous secondary materials that can be useful to a process are added to that process in much greater amounts than are needed to make the end-product or to otherwise provide

its useful contribution would also be sham recycling. [73 FR 64702]

Another way the usefulness of the hazardous se condary material’s contribution could be demonstrated is by looking at the efficiency of the material’s use in the recycling process—that is, how much of the constitu ent in a hazardous secondary material is actually being used. As an example, if there is a constituent in th e hazardous secondary

material that could add value to the recycling process, but, due to process design, most ofRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 5 it is not being recovered but is being disposed of in the residuals, this would be a possible indicator of sham recycling. However, there are certainly recycling scenarios where a low recovery rate could still be legitimate. For example, under an existing exclusion, if the

concentration in a metal-bear ing hazardous secondary material is low (2%–4%) and a recycling process was able to recover a large pe rcentage of the target metal, this factor could be met and the recycling may be legitimate (depending on the outcome of the analysis of the other legi timacy factors). [73 FR 64702]

One way to use the efficiency of the recyc ling process to evaluate legitimacy is to compare the process to typical industry recovery rates from ra w materials to determine if the recycling process is reas onably efficient. This method should involve an examination of the overall process, not just a single step of the process. Fo r example, if one step in the process recovers a small percentage of the c onstituent, but the overa ll process recovers a much larger percentage, the Agency would consider the overall efficiency of the recycling process in determining whether ha zardous secondary mate rials are providing a useful contribution. [73 FR 64702]

There are various ways in which hazardous secondary materials can be useful to a recycling process and various ways are laid out in this discussion of how a facility might demonstrate conformity with this factor. In addition, we provided a number of different ways a material could contribute to the pro cess in the regulatory text describing this factor. Any one of these would be sufficient to demonstrate that the hazardous secondary material provides a useful contribution. Overall, the Agency considers this factor to be a critical element in determining legitimacy and any recycling process that does not meet

this factor cannot be considered legitimate recycling. [73 FR 64702]



### Factor 2—Valuable Product or Intermediate

‘‘The recycling process must produce a valuable product or intermediate * * * The product or intermediate is valuable if it is (i ) sold to a third party or (ii) used by the recycler or the generator as an effective s ubstitute for a commercial product or as an ingredient or intermediate in an industrial process’’ (40 CFR 260.43 (b)(2)). [73 FR 64702]

This factor, one of the two core legitimacy factors, expresses the principle that the product or intermediate of the recycling process should be a material of value, either to a third party who buys it from the recycler, or to the generator or recy cler itself, who can

use it as a substitute for another material that it would otherwise have to buy or obtain for its industrial process. This fact or is also an essential elemen t of the concept of legitimate recycling because recycling cannot be occurr ing if the product or intermediate of the recycling process is not of use to anyone and, therefore, is not a real product. This factor is intended to prevent the practice of runni ng a hazardous secondary material through an industrial process to make something just for the purpose of avoiding the costs of hazardous waste management, rather than for the purpose of using the product orRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 6 Definition of “valuable” [A] recyclable product may be

considered “valuable” if it can be

shown to have either economic

value or a more intrinsic value to the end user. [73 FR 64702] intermediate of the recycli ng activity. Such a practice woul d be sham recycling. [73 FR 64702]

Most commenters on the proposed rule for this f actor stated that this is a useful way of gauging whether recycling is actually taking pl ace, but requested that the Agency clarify the meaning of the term valuable, as it is us ed in the regulatory text. [For] the purpose of this factor, a recyclable product may be

considered “valuable” if it can be shown to have

either economic value or a more intrinsic value to

the end user. Evaluations of “valuable” for thepurpose of this factor should be done on a caseby-case basis, but one way to demonstrate that the recycling process yields a valuable product would be the documented sale of a product of the recycling process to a third party. Such documentation could be in the form of receipts or contracts and agreements that establish

the terms of the sale or transaction. This transaction could include money changing hands or, in other circumstances, may involve trad e or barter. A recycl er that has not yet arranged for the sale of its product to a third party could es tablish value by demonstrating that it can replace another product or intermediate that is av ailable in the marketplace. A product of the recycling process may be sold at a loss in some circumstances, but the recycler would have to be pr epared to show how the product is clearly valuable to the purchaser. [73 FR 64702

– 64703]

However, many recycling processes produce out puts that are not sold to another party, but are instead used by the generator or recy cler. A product of the recycling process may

be used as a feedstock in a manufacturing process, but ha ve no established monetary value in the marketplace. Such recycled products or intermediates would be considered to have intrinsic value, though demonstrating intrinsic value may be less straightforward than demonstrating value for products that are sold in the marketpla ce. Demonstrations of intrinsic value could involve showing that the product of the r ecycling process or intermediate replaces an alte rnative product that would otherw ise have to be purchased or could involve a showing that th e product of the recycling pr ocess or intermediate meets specific product specifications or specific industry standards. Another approach could be to compare the products or intermediates physic al and chemical properties or efficacy for certain uses with those of comparable products or intermediates made from raw materials. [73 FR 64703]

Some recycling processes may consist of multiple steps that may occur at separate facilities. In some cases, each processing step will yield a valuable product or intermediate, such as when a metal-bearing hazardous secondary material is processed to reclaim a precious metal and is then put th rough another process to reclaim a different mineral. When each step in the process yields a valuable product or intermediate that is salable or usable in that form, the recycling activity would conform to this factor. [73 FR 64703]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 7 Definition of “analogous raw material” An “analogous raw material” is a material for which a hazardous secondary material substitutes and which serves the same function and has similar physical and chemical properties as the hazardous secondary material. A raw material that has significantly different physical or chemical properties would not be considered analogous even if it serves the same function. For example, a metal-bearing ore might serve the same function as a metal-bearing air pollution control dust, but because the physical properties of the dust would make it more susceptible to wind dispersal, the two would not be considered analogous. Similarly, hazardous secondary materials with high levels of toxic volatile chemicals would not be considered analogous to a raw material that does not have these volatile chemicals or that has only

minimal levels of volatile chemicals. [73 FR 64691] Like the other factors, this factor should be examined and evaluated on a case-by-case basis looking at the specific facts of a recycling activity. If, for instance, a recycling activity produces a product or intermediate that is used by the recycl er itself, but does not serve any purpose and is just being used so that the product or intermediate appears valuable, that would be an indicator of sham recycling. An example of this would be a recycler that reclaims a hazardous secondary mate rial and then uses that material to make blocks or building materials for which it ha s no market and then “uses” those building

materials to make a warehouse in which it stor es the remainder of the building materials that it is unable to sell. [73 FR 64703]



### Factor 3—Managed as a Valuable Commodity

‘‘The generator and the recycler should mana ge the hazardous secondary material as a valuable commodity. Where there is an an alogous raw material, the hazardous secondary material should be managed, at a minimum, in a manner consistent with the management

of the raw material. Where there is no an alogous raw material, th e hazardous secondary

material should be contained. Hazardous sec ondary materials that are released to the

environment and are not recovered immediately ar e discarded’’ (40 CFR 260.43 (c)(1)). [73 FR 64703]

The first of the additional fact ors that must be considered expresses the principle that hazardous secondary materials being recycled should be managed in the same manner as

other valuable materials. This factor requires those making a legitimacy determination to look at how the hazardous secondary material is managed before it enters the recycling process. In EPA’s view, a r ecycler will value hazardous secondary materials that provide an important contribution to its process or product and, therefore, will manage those hazardous secondary materials in a manner consistent with how it manages a valuable feedstock. If, on the other hand, the recycler does not manage the hazardous secondary materials as it would a valuable feedstock, that behavior may indicate that the hazardous secondary materials may not be recycled, but rather

released into the environment and discarded. [73 FR 64703]

This factor may be particularly appropriate in the case where a recycler has been paid by a generator to take its materials as a

result of the economic incentives in the hazardous secondary materials market. By looking at the management of the hazardousRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 8 secondary material before it enters the r ecycler’s process, the entity making the legitimacy determination can tell that a ma terial being managed like an analogous raw material is, in fact, valued by the recycler . If the hazardous seconda ry material is not being managed like a valuable raw material because it is uncontrolled or is being released, that indicates that the fee the recycler obta ins for taking the hazardous secondary material may be its only value to that recycler. If the fee received were the only value to the recycler, it would mean th at discard was taking place. [73 FR 64703]

This factor addresses the management of h azardous secondary materials in two distinct

situations. The first situation is when a h azardous secondary material is analogous to a raw material which it is replacing in the pr ocess. In this case, the hazardous secondary material should be managed prior to recy cling similarly to the way the analogous raw materials are managed in the course of normal manufacturing. EPA expects that all parties handling hazardous secondary materi als destined for r ecycling—generators, transporters, intermediate facilities and reclamation facilities—will handle them in generally the same manner in which they w ould handle the valuable raw materials they might otherwise be using in their process. [73 FR 64703]

The second situation the factor addresses is the case wh ere there is no analogous raw material that the hazardous secondary material is replacing. This could be either because the process is designed around a particular hazardous secondary material—that is, the hazardous secondary material is not repl acing anything—or it could be because of physical or chemical differences between th e hazardous secondary material and the raw material that are too signif icant for them to be consid ered “analogous.” [73 FR 64703]

Hazardous secondary materials that have sign ificantly different physical or chemical properties when compared to the raw material would not be considered analogous even if they serve the same function because it may not be appropriate to manage them in the same way. In this situation, the hazardous seco ndary material would have to be contained for this factor to be met. A hazardous secondary material is “contained” if it is placed in a

unit that controls the movement of that mate rial out of the unit. This requirement is

consistent with the idea that normal manufact uring processes are designed to use valuable material inputs efficiently rather to than allow them to be released into the environment. [73 FR 64703]

For example, if a manufacturer has an ingred ient that is a dry ra w material managed in supersacks, the Agency would expect that a h azardous secondary material that is a similar dry material also would be managed in s upersacks or in a manner that would provide equivalent protection. If, on the other hand, th e hazardous secondary material was instead managed in an outdoor pile without appropriate controls in place to address releases to the environment, it may indicate that it was not being handled as a valuable commodity. If, however, the manufacturer decided to replace the dry raw material in its process with a liquid having the same constituents, it would not be sufficient, nor would it make sense, for the liquid to be managed in supersack s. Instead, the liquid would have to be “contained” (for example in a tank or surface impoundment). [73 FR 64703

– 64704]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 9 An important part of this fact or is the statement in the regulatory text clarifying that hazardous secondary materials that are releas ed to the environment and not recovered immediately are discarded. Valuable products sh ould not be allowed to escape into the environment through poor management and this factor clarifies that those hazardous secondary materials that do escape (and ar e not immediately rec overed) are clearly discarded. Either a large release or ongoing releases of smaller amounts could indicate that, in general, the hazardous secondary ma terial is not being managed as a valuable product, which could potentially lead to th e recycling process be ing found not to be legitimate. Hazardous secondary materials that are immediately recovered before they disperse into the environment—air, soil, or water—and are reintroduced in the recycling process are not discarded. This determina tion must be made on a case-by-case basis, however. [73 FR 64704]

In summary, given the nature of the legitimacy factors and their need to apply to all the practices covered by the ex clusions in this final rule, it is not appropriate or practicable for EPA to develop a specific management standard. In the absence of such a management standard, EPA is using this fact or: materials must be managed as analogous raw materials or, if there are no analogous raw materials, the materials must be contained.

EPA’s intent with this factor is that h azardous secondary materials are managed in the same manner as materials that have been purch ased or obtained at some cost, just as raw materials are. Just as it is good business prac tice to ensure that ra w materials enter the manufacturing process rather th an being spilled or release d, we would expect hazardous secondary materials to be managed effectively and efficiently in orde r that their full value to the manufacturing process woul d be realized. [73 FR 64704]



### Factor 4—Comparison of Toxics in the Product

‘‘The product of the recycling process does not (i) contain significant concentrations of any hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) cont ain concentrations of any h azardous constituents found in

Example where Factor 3 is not met, but recycling may be legitimate EPA has determined that it is appropriate that this factor is one of the two that must be

considered rather than a factor that must be met because there are situations in which this factor is not met, but recycling appears to be le gitimate. An example of this kind of situation is described in the March 2007 supplemental pr oposal (72 FR 14199). In the example, a hazardous secondary material that is a powder-lik e material is shipped in a woven super sack and stored in an indoor containment area, wh ereas the analogous raw material is shipped and stored in drums. A strict reading of this factor may determine that the hazardous secondary material is not being managed in a manner c onsistent with the raw material even if the differences in management are not actually impac ting the likelihood of a release. By designing the legitimacy factors so that this one has to be considered, but not necessarily met, the

individual facts of situations like the one d escribed here can be evaluated on a case-by-case basis to determine if they affect the legiti macy of the recycling activity. [73 FR 64704]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 10 Appendix VIII of part 261 at levels that ar e significantly elevated from those found in analogous products; or (iii) exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous pr oducts do not exhibit’’ (40 CFR 260.43 (c)(2)). [73 FR 64704]

The second of the additional f actors that must be consid ered requires those making a legitimacy determination to look at the c oncentrations of the hazardous constituents found in the product made from hazardous secondary materials and compare them to the

concentrations of hazardous constituents in analogous products. Any of the following

three situations could be an indicator of sham recycling: a product that contains significant levels of hazardous constituents that are not found in the analogous products; a product with hazardous constituents that we re in the analogous products, but contains them at significantly higher concentrations ; or a product that exhibits a hazardous characteristic that analogous products do not exhibit. Any of these situations could indicate that sham recycling is occurring because in lieu of proper hazardous waste disposal, the recycler could have incorpor ated hazardous constituents into the final product when they are not needed to make th at product effective in its purpose. This factor, therefore, is designed to determine wh en toxics that are “a long for the ride” are discarded in a final product a nd, therefore, the hazardous seco ndary material is not being legitimately recycled. [73 FR 64704]

To evaluate this factor, a r ecycler will ordinarily compar e the product of the recycling process to an analogous product made of raw materials. For example, if a recycling process produced paint, the levels of hazardous constituents in the pa int will be compared

with the levels of the same constituents f ound in similar paint made from virgin raw materials. [73 FR 64704]

A recycler is also allowed to perform this evaluation by co mparing the hazardous

constituents in the hazardous secondary material feedstock with those in an analogous raw material feedstock. If the hazardous secondary material feedstock does not contain significantly higher concentrations of hazar dous constituents than the raw material feedstock, then the end product of the r ecycling process would not contain excess hazardous constituents “along for the ride” either . EPA is clarifying here that this method of showing that the product doe s not have “toxics along for th e ride” is acceptable. There may be cases in which it is easier to compar e feedstocks than it is to compare products because the recycler knows that the hazardous secondary material is very similar in profile to the raw material. A comparison of f eedstocks may also be easier in cases where the recycler creates an intermediate which is later processed again and may end up in two or more products, when there is no analogous product, or when production of the product of the recycling process ha s not yet begun. [73 FR 64704]

This factor identifies three ways to eval uate whether or not unacceptable amounts of hazardous constituents are passed through to th e products of the recycling process. (As explained above, these methods also could be used to compare the hazardous secondary

material feedstock to a raw ma terial feedstock, if the recycl er prefers.) The first methodRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 11 specifies that when analogous products made from raw materials do not contain hazardous constituents, the product of the recycl ing process should not contain significant amounts of hazardous constituents. For example, if paint made from reclaimed solvent contains significant amounts of cadmium, but the same type of paint made from virgin raw materials does not contain cadmium, it c ould indicate that the cadmium serves no useful purpose and is bei ng passed though the recycling process and discarded in the product. [73 FR 64704

– 64705]

The second method addresses analogous products that do contain hazardous constituents

and asks whether the concentr ations of those hazardous c onstituents are significantly higher in the product of the recycling pro cess than in the product made from raw

materials. Concentrations of hazardous c onstituents in the pr oduct of the recycling process that are significantly higher than in the product made from virgin raw materials could again be an indicator of sham recycl ing. For example, if a lead-bearing hazardous secondary material was reclaimed and then that material was used as an ingredient in making ceramic tiles and the amount of lead in the tiles was significantly higher than the

amount of lead found in similar tiles made from virgin raw materials, the recycler should look more closely at the factors to determine the overall legitimacy of the process. [73 FR 64705]

The third method under this factor is whet her the product of the recycling process

exhibits a hazardous character istic that analogous products do not exhibit. Requiring an

evaluation of hazardous characteristics ensure s that products of th e recycling process do

not exhibit the characteristics of toxicity, ignitability, corrosi vity, or reactivity when the analogous products do not. The Agency believes that most issues associated with “toxics along for the ride” will involve the presence of toxic constituents, which are addressed under the first two parts of the f actor. That is, we believe that it is likely that there are few instances where hazardous secondary material s are used in the process and hazardous constituents are not present at significantly higher levels, but the product made from the hazardous secondary material nevertheless e xhibits the hazardous characteristic of toxicity when the analogous product does not . It is possible, though, that the use of hazardous secondary materials as an ingred ient could cause a product to exhibit a hazardous characteristic, such as corrosivity, that is not exhibited by analogous products. [73 FR 64705]

The Agency has determined that it is appropria te for this factor to be considered in legitimacy determinations under the final excl usions and in the non-waste determinations in this action, but thinks that there may be situ ations in which the factor is not met but the recycling would still be considered legitimate . An example of this kind of situation that has been addressed by the Agency under the cu rrent regulatory sche me would be in the use and reuse of foundry sands for mold ma king in a facility’s sand loop. Because of repeated exposure to metals in a foundry’s process, the sands used to make the molds may have significantly higher concentrations of hazardous constituents than virgin sand. However, because the sand is part of an indus trial process where ther e is little chance of the hazardous constituents being released in to the environment or causing damage toRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 12 human health and the environment when it is kept inside, because there is lead throughout the foundry’s process, and because th ere is a clear value to reusing the sand, this would be an example of a situation where th is factor is not met, but it does not affect the legitimacy of the recycling process. [73 FR 64705]

In fact, EPA has concluded as a general ma tter that foundries enga ged in the reuse of lead-containing foundry sands ar e recycling those sands legi timately and these sands would not be regulated under RCRA Subtitle C (under the circumstances described in EPA’s March 2001 memorandum on this subject). 1 Thus, while the used sands in the sand loop arguably have toxics-a long-for-the ride, EPA did not raise questions about the legitimacy of the recycling, give n the overall nature of the op erations. If the used foundry sand were being recycled into a different pr oduct, such as a material used on the ground or in children’s play sand, the legitimacy determination would be very different and significant levels of metals would likely re nder the recycling illegitimate. The same

conclusions would be reached a pplying the factors codified in 260.43 . [73 FR 64705]

As discussed in more detail in the comment s section of [the final rule] (section XVIII) and in the response to comments document in the docket, commenters on this factor requested clarification concer ning what EPA meant by the terms used in this factor. In response to some of these comments, EPA has made two clarifications in the regulatory text by (1) specifying that the hazardous constituents referred to in the regulation are

those that are found in Appendix VIII to 40 CFR part 261 and (2) clarifying that the

hazardous characteristics to which EPA is referring to are those in 40 CFR part 261 subpart C . [73 FR 64705]

1 Letter. Elizabeth Cotsworth, Director Office of So lid Waste, to Amy Blankenbiller, American Foundry Society, March 28, 2001.
http://yosemite.epa.gov/osw/rcra.nsf/0c 994248c239947 e85256d090071175f/4C 9A2EEE6E5F859B85256AC50 04FC1C2/$file/14534.pdf

Additional examples where Factor 4 is no t met, but recycling may be legitimate Another example of recycling that may be leg itimate although this factor has not been met

could be when the material has concentrations of toxics that could be considered “significantly higher” than the analogous product, but meets industry specifications for the product that include specific specifications for the hazardous constituent of concern. Meeting accepted industry standards would be a strong indication that this material is being legitimately recycled. A third example could be in the mining and mineral processing industry. In many mineral processing operations, the very natu re of an operation results in hazardous constituents concentrating in the product as it proceeds through the various steps of the process. In many cases, there is not an anal ogous product to compare the products of these processes so this factor may not be relevant b ecause of the nature of the operations. As with the above example, if a facility considers a factor and decides that it is not applicable to its process, the Agency suggests that the facility evaluate the presence of hazardous constituents in its product and be prepared to demonstrate bot h that it considered this factor and the reasons it believes the factor is not relevant. [73 FR 64705]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 13 The Agency also received much comment on the term “significant” and what the Agency intended by this term. EPA has decided to keep the term in the final rule. The alternative to using “significant” or a similarly flexib le term to determine when there may be hazardous constituents in the product made fr om recycled hazardous secondary materials that are not in the analogous products made from raw materials would be to set an absolute standard. In its discussion of legitimacy in the October 2003 proposed rule, EPA discussed possible “brigh t line” or risk-based approaches as a way to set absolute lines to define “significant” based on either a nu merical limit or a risk level (68 FR 61587

– 61588). EPA recognizes that the “bright line” or the risk-b ased approach may provide greater clarity and predictability to the regul ated community, but that in both cases the Agency would have to establish a line for wh at is acceptable and the line may either be somewhat arbitrary or it may exclude recycling practices th at, if carefully considered, should be considered legitimate. Based on the comments received on those approaches, we are convinced that they would not be workable. [73 FR 64705]

On the other hand, a case-by-case analysis of a recycling process can take into

consideration the releva nt principles and facts for that activity, leading to a determination of significance based on the facts of the activ ity. Because this factor must apply to various different recycling ac tivities, we believe the case- by-case approach is most appropriate. [73 FR 64705

– 64706]

EPA, therefore, is finalizing its proposed option of using the term “significant” in 40 CFR

260.43 (c)(2)(i) and (ii). Evaluating the significance of levels of hazardous constituents in products of the recycling process may involve taking into considerati on several variables, such as the type of product, how it is used and by whom, whether or not the elevated levels of hazardous constituents compromise the efficacy of the product, the availability

of the hazardous constituents to the environm ent, and others. For example, if a hazardous secondary material has been reclaimed and ma de into a product that will be used by children, and that product contains hazardous constituents that are not in analogous products, that product will likely need to be closely scrutinized. On the other hand, low levels of a hazardous constituent in a product fro m that same reclamation operation that is used as an ingredient in an industrial proce ss or for another industrial application may not be significant and must be evaluated in the context of the product’s use. [73 FR 64706]

EPA provided several additional examples in implementing this factor in the October 2003 proposed rule which will be repeated he re. If zinc galvanizing metal made from hazardous secondary materials that were reclaimed contains 500 parts per million (ppm) of lead, while the same zinc product made from raw materials typically contains 475 ppm, this difference in concentration would lik ely not be considered “significant” in the evaluation of this factor. If, on the other hand, the lead leve ls in the zinc product made from reclaimed hazardous secondary material s were 1,000 ppm, it may indicate that the product was being used to illegal ly dispose of lead and that the activity is sham recycling,

unless other factors would demons trate otherwise. [73 FR 64706]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 14 In another example, if a “virgin” solvent c ontains no detectable amounts of barium, while spent solvent that has been reclaimed contai ns a minimal amount of barium (e.g., 1 ppm), this difference might not be considered si gnificant. If, however, the barium in the reclaimed solvent were at much higher levels (such as 50 ppm), it may indicate discard of the barium and sham recycling. [73 FR 64706]

Unfortunately, because of the variety of possi ble recycling scenarios under the exclusions

and in the non-waste determinations cove red by this final rule , we cannot provide examples for how this factor might work for all possible recycling situations. The Agency stresses that the determination of legitimacy for this factor should consider both the use and the users of the product in addition to th e concentration of the hazardous constituents or the presence of a hazardous characteristic , as well as other relevant information. In addition, in some cases, the implementing ag ency may accept a risk argument from a recycler to show that the recycling activity m eets this factor. If the recycler can show that despite elevated concentrations of hazardous co nstituents, such constituents pose little or no risk to human health or the environment, the implementing agency may consider that

as evidence that the elevat ed concentrations are not significant. [73 FR 64706]



## Economics

Consideration of economics has long been a pa rt of the Agency's concept of legitimacy,

as is evident in the Lowrance Memo and earlier preamble text (50 FR 638 and 53 FR 522; see also American Petroleum Institute v. EPA (“ API II” ), 216 F.3d 50, 57-58 (DC Cir. 2000)). [The] final rule does not codify specific regulatory language on economics as part of the legitimacy provision, but EPA offe rs further guidance and clarification on how economics may be considered in making legitimacy determinations, which is similar to the preamble discussion in the Marc h 2007 supplemental proposal. [73 FR 64706]

Specifically, EPA believes that consideration of the economics of a recycling activity can be used to inform and help determine whet her the recycling operation is legitimate. Positive economic factors would be a strong in dication of legitimate recycling, whereas negative economic factors would be an indication that furthe r evaluation of the recycling operation may be warranted in assessing the legitimacy factor s. [73 FR 64706]

Considering the economics of a recycling activ ity can also inform whether the hazardous secondary material inputs provide a useful contribution and whether the product of recycling is of value. Economic information that may be useful could include (1) the amount paid or revenue generated by the recycler for recycling hazardous secondary materials; (2) the revenue genera ted from the sale of recycled products; (3) the future cost of processing existing inventories of hazardous secondary materials; and (4) other costs and revenues associated with the recycli ng operation. The economics of the recycling transaction may be more of an issue when hazardous secondary materials are sent to a third-party recycler, but even when the hazar dous secondary materials are recycled under the control of the generator, the generator mu st still show that the hazardous secondaryRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 15 materials are, at a minimum, providing a us eful contribution and producing a valuable product. [73 FR 64706]

Useful economic information:

(1) The amount paid or revenue generated by the recycler for recycling hazardous secondary materials is one example of how economic information can help support a legitimacy determination. We have three primar y illustrations to exemplify this. First, the basic economic flows can suggest whether th e recycling operation will process inputs, including hazardous secondary materials, and produce products over a reasonable period of time, recognizing that ther e will be lean and slow times. A general accounting of the major costs, revenues, and economic flows for a recycling operation over a reasonable period of time can provide information for considering whether re cycling is likely to continue at a reasonable rate, compared to the rate at which inputs are received, or whether it is likely that significant amounts of hazardous secondary materials would be accumulated and then abandoned when the facility closes. Any bona fide sources of

revenues would be included in this consider ation, such as payments by generators to recyclers for accepting hazardous secondary mate rials and subsidies supporting recycling. However, in order to have some level of conf idence that beneficial products are or will be produced over a reasonable time frame, we believe that at least some portion of the revenues should be from product sales (or savings due to avoided purchases of products if the hazardous secondary materials are used dire ctly by the recycler). This is consistent with the factor requiring that the hazardous secondary material must be recycled to make a valuable product or intermediate. [73 FR 64706]

Second, when the economics of a recycling operation that uses hazardous secondary materials to produce and sell final products are similar to a manufacturing operation using raw materials to produce and sell final pr oducts, we believe th at such an operation is likely to be legitimate. For instance, if the recycler pays for hazardous secondary materials as a manufacturer would pay for ra w materials, the recycl er sells products from the recycling process as a ma nufacturer would sell products from manufacturing, and the revenues generated equal or exceed costs, th en the hazardous secondary materials appear to be valuable (i.e., the recycl er is willing to pay for them) and appear to make a useful contribution to a valuable recycled product. [73 FR 64707]

However, we also recognize that the econom ics of many legitimate recycling operations that utilize hazardous secondary materials diffe r from the economics of more traditional manufacturing operations. For example, many recyclers are paid by generators to accept hazardous secondary materials. Generators may be willing to pay recyclers because generators can save money if the recycling is less expensive than disposing of the hazardous secondary materials in landfills or incinerators. Also, some recyclers receive subsidies that may be designed to develop re cycling infrastructure and markets or to achieve other benefits of recy cling. For instance, the recyclin g of electronic materials can be legitimate even when the recycler is s ubsidized for processing the material. [73 FR 64707]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 16 Third, any analysis of the economics of a recycling operation should recognize that a recycler may be able to charge generators and still be a legitimate recycling operation. Because these hazardous secondary material s are hazardous wastes if disposed of, typically the generators' other alternative mana gement option already carries a cost that is based on the existing market for hazardous wast e transportation, treatment, and disposal. Hence, unless there is strong competition in recycling markets or the hazardous secondary materials are extremely valuable, a r ecycler may be able to charge generators simply because alternative disposal options cost more. [73 FR 64707]

Recognizing that such a dynamic exists can assist those making legitimacy determinations in evaluating recycling operations . For example, if a recycler is charging generators fees (or receiving subsidies from elsewhere) for taking hazardous secondary materials and receives a far greater proportion of its revenue from acceptance of the fees than from the sale of its products, both the useful contribution and the valuable product factors may warrant further review, unless ot her information would indicate that such recycling is legitimate. Fees and subsidie s may indicate that the economic situation allows the recycler to charge high fees, re gardless of the contribution provided by the inputs, including hazardous secondary material s. In this situation, recyclers may also

have an increased economic incentive to over-accumulate or overuse hazardous secondary materials or to manage them le ss carefully than one might manage more valuable inputs. Additionally, if there is lit tle competition in the recycling market, and/or if acceptance fees seem to be set largely to compete with th e relative costs of alternative disposal options rather than to reflect th e quality or usefulness of the input to the recycling operation, this may also suggest a closer look at the useful contribution factor. [73 FR 64707]

(2) A comparison of revenue from sales of recycled products to payments by
generators is another example of how economic information can help support an evaluation of “valuable product. ” It is possible that produc t sales revenues could be dwarfed by the acceptance of fees because ma rkets for particular products are highly competitive or because high alternative disposal costs allow for high acceptance fees. However, relatively low sales re venues could also require a re view of other factors, such as whether product sales prices are lower th an other comparable products, products are being stockpiled rather than sold, or very litt le product is being produced relative to the amount of inputs to the recycling operation. These indicators may suggest that the product of the recycling process is not va luable and, thus, sham recycling may be occurring. [73 FR 64707]

(3) A consideration of the future cost of pr ocessing or alternatively managing existing inventories of hazard ous secondary material inputs is another example of

how economic information can inform a legitimacy determination. When hazardous secondary materials make a significant useful contribution to the recycling process, a recycler will have an economic incentive to process the input materials relatively quickly and efficiently, rather than to maintain larg e inventories. While recyclers often need toRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 17 acquire sufficient amounts of hazardous s econdary materials to make it economically feasible to recycle them, there should be little economic incen tive to over-accumulate

such materials that make a useful contri bution. Overly large accumulations of input materials may indicate that the hazardous sec ondary materials are not providing a useful contribution or that the recycler is increasi ng its future costs of either processing or disposing of the material, and may be faced with an unsound recycling operation in the future. However, it is important to keep in mind that possible explanations for this may exist. For example, the recycler may have acquired a large stock of hazardous secondary materials because the price was unusually low or perhaps the hazardous secondary materials are generated epis odically and the recycler ha s few opportunities to acquire them. [73 FR 64707]

(4) An analysis of costs and revenue s specific to on-site recycling is an additional, albeit specific, example of economic info rmation to consider. When recycling is conducted under the control of the generator, the recycler may not account formally for some of the costs and savings of the opera tion. Still, when deciding whether to undertake or continue the recycling operation or to uti lize alternative outside recycling or disposal options, the on-site recycler ( under the control of the genera tor) will evaluate the basic economic factors as a part of doing business. One such factor could be an accounting of the costs of virgin materials avoided by usi ng hazardous secondary materials. Similarly, sales of recycled produ cts under the control of the generato r that are sold to an external market may support the valuable product criterio n. [73 FR 64707]



## Demonstration and Enforcement of Legitimacy

Under the first paragraph of 40 CFR 260.43 , hazardous secondary materials that are not legitimately recycled are discarded material s and, therefore, are solid wastes. This paragraph also states that a nyone claiming an exclusion at § 261.2 (a)(2)(ii), § 261.4 (a)(23), § 261.4 (a)(24), or § 261.4 (a)(25) or using a non-wa ste determination at § 260.30 (d) or (e) must be able to demonstrate that its recycling activity is legitimate. The Agency has included the language “In determining if thei r recycling is legitimate, persons must address the requirements of § 260.43 (b) and must consider the requirements of § 260.43 (c)” to make it clear that the factors in paragraph (b) must be met, while the factors in paragraph (c) must be considered and evaluated in determining whether the recycling activity overall is legitimate. [73 FR 64701]

Although there is no specific re cordkeeping requirement that goes with the ability to demonstrate legitimacy, EPA would expect that in the event of an inspection or an enforcement action by an implementing agency, the recycler would be able to show how it made the overall legitimacy determination per § 261.2 (f). In the event that the process

does not conform to one of the two factors under § 260.43 (c), the facility should be able to

show that it considered that factor an d why the recycling activity overall remains legitimate. For example, under existing exclus ions from the definition of solid waste, reuse of lead contaminated foundry sands ma y or may not be legitimate, depending onRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

The Legitimate Recycling Standard 18 the use. The use and reuse of foundry sands for mold making in a facility’s sand loop under normal industry practices has been found to be legitimate because the sand is part of an industrial process where there is little chan ce of the hazardous constituents being released into the environment or causing da mage to human health and the environment when it is kept inside, because there is lead throughout the foundry’s process, and

because there is a clear value to reusing the sand. However, in the case of lead contaminated foundry sand used as children’s play sand, the same high levels of lead would disqualify this use from being considered legitimate recycling. The same result would be reached when applying Factor 4. [73 FR 64701]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

CFR Language 19 

# CFR LANGUAGE

260.34 Standards and criteria for non-waste determinations.

[ CFR text not included ]

§ 260.34 (b): The Administrator may grant a non-waste determination for hazardous secondary material which is reclaimed in a continuous industrial pro cess if the applicant demonstrates that the hazardous secondary ma terial is a part of the production process

and is not discarded. The determination will be based on whether the hazardous secondary material is legitimately recycled as specified in §260.43 and on the following

criteria:

(1) The extent that the management of the hazardous secondary material is part of the continuous primary production pr ocess and is not waste treatment;

(2) Whether the capacity of the produc tion process would use the hazardous secondary material in a reasonable time frame and ensure that the hazardous secondary material will not be abandoned (for example, based on past practices, market factors, the nature of the hazar dous secondary material, or any contractual arrangements);

(3) Whether the hazardous constituents in the hazardous secondary material are

reclaimed rather than releas ed to the air, water or land at significantly higher

levels from either a statistic al or from a health and e nvironmental risk perspective

than would otherwise be releas ed by the production process; and

(4) Other relevant factors that demonstr ate the hazardous secondary material is

not discarded.

[ CFR text not included ]

260.43 Legitimate Recycling of Haza rdous Secondary Materials Regulated under §260.34, §261.2(a)(2)(ii), a nd §261.4(a)(23), (24), or (25).

§ 260.43 (a) Persons regulated under §260.34 or clai ming to be excluded from hazardous waste regulation under §261.2(a )(2)(ii), §261.4(a)(23), (24), or (25) because they are engaged in reclamation must be able to de monstrate that the recycling is legitimate. Hazardous secondary material that is not legiti mately recycled is di scarded material and is a solid waste. In determining if their recy cling is legitimate, persons must address the requirements of §260.43(b) and must consid er the requirements of §260.43(c) below.

(b) Legitimate recycling must involve a haza rdous secondary material that provides a useful contribution to the recycling proce ss or to a product or intermediate of theRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

CFR Language 20 recycling process, and the recycling pro cess must produce a valuable product or

intermediate.

(1) The hazardous secondary material pr ovides a useful contribution if it

(i) Contributes valuable ingredient s to a product or intermediate; or

(ii) Replaces a catalyst or carrier in the recycling process; or

(iii) Is the source of a valuable c onstituent recovered in the recycling

process; or

(iv) Is recovered or regenerate d by the recycling process; or

(v) Is used as an effective substitute for a commercial product.

(2) The product or intermediate is valuable if it is

(i) Sold to a third party; or

(ii) Used by the recycler or the genera tor as an effective substitute for a commercial product or as an ingredient or intermediate in an industrial

process.

(c) The following factors must be considered in making a determina tion as to the overall legitimacy of a specific recycling activity.

(1) The generator and the recycler should manage the hazardous secondary material as a valuable commodity. Where there is an analogou s raw material, the hazardous secondary material should be managed, at a minimum, in a manner consistent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary ma terial should be contained. Hazardous secondary materials that are released to the environment and are not recovered immediately are discarded.

(2) The product of the re cycling process does not

(i) Contain significant concentrations of any hazardous constituents found in Appendix VIII of part 261 that ar e not found in analogous products; or

(ii) Contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels th at are significantly elevated from those found in analogous products; or (iii) Exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit.Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

CFR Language 21 (3) In making a determination that a hazar dous secondary material is legitimately recycled, persons must evaluate all factors and consider legitimacy as a whole. If,

after careful evaluation of these other considerations, one or both of the factors are not met, then this fact may be an indi cation that the material is not legitimately recycled.

However, the factors in this paragraph do not have to be met for the recycling to be considered legitimate. In evaluating th e extent to which these factors are met and in determining whether a process that does not meet one or both of these factors is still legitimate, persons can c onsider the protectiveness of the storage methods, exposure from toxics in the product, the bioavailability of the toxics in the product, and other re levant considerations.

261.2(a)(2)(ii) Exclusion for Haza rdous Secondary Materials That Are Legitimately Reclaimed Under the C ontrol of the Generator in Non-LandBased Units.

§ 261.2 (a)(2)(ii):A hazardous second ary material is not discar ded if it is generated and reclaimed under the control of the generator as defined in §260.10, it is not speculatively accumulated as defined in §261.1(c)(8), it is ha ndled only in non-land-based units and is contained in such units, it is generated a nd reclaimed within the United States and its territories, it is not otherwise subject to material-specific management conditions under §261.4(a) when reclaimed, it is not a spen t lead acid battery (see §266.80 and §273.2), it does not meet the listing description for K 171 or K172 in §261.32, and the reclamation of the material is legitimate, as specifi ed under §260.43. (See also the notification requirements of §260.42). (For hazardous sec ondary materials managed in land-based units, see §261.4(a)(23)).

261.4(a)(23) Exclusion for Hazar dous Secondary Materials That Are Legitimately Reclaimed Under the Cont rol of the Generator in Land-Based
Units.

§ 261.4 (a)(23): Hazardous secondary material ge nerated and reclaimed within the United States or its territories and managed in la nd-based units as defined in §260.10 of this chapter is not a solid waste provided that:

[ CFR text not included ]

(v) The reclamation of the material is legitimate, as specified under §260.43 of this chapter; and

[ CFR text not included ]Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

CFR Language 22 261.4(a)(24) Exclusion for Hazar dous Secondary Materials That Are Transferred for the Purpose of Legitimate Reclamation.

§ 261.4 (a)(24): Hazardous secondary material that is generated and then transferred to another person for the purpose of reclamati on is not a solid waste, provided that:

[ CFR text not included ]

(iv) The reclamation of the material is legitimate, as specified under §260.43 of this chapter;

[ CFR text not included ]

261.4(a)(25) Exclusion for Hazardous Secondary Materials Exported for

Reclamation.

§ 261.4 (a)(25): Hazardous secondary material that is exported from the United States and reclaimed at a reclamation facility located in a foreign country is not a solid waste, provided that the hazardous secondary materi al generator complies with the applicable requirements of paragraph (a)(24)(i)–(v) of th is section (excepting paragraph (a)(v)(B)(2) of this section for foreign reclaimers a nd foreign intermediate facilities)[....]

[ CFR text not included ]

261.2 Definition of Solid Waste.

[ CFR text not included ]

§ 261.2 (f): Documentation of claims that mate rials are not solid wastes or are conditionally exempt from regulation. Respondents in actions to enforce regulations implementing subtitle C of RCRA who raise a claim that a cert ain material is not a solid waste, or is conditionally exem pt from regulation, must demo nstrate that there is a known market or disposition for the material, and th at they meet the term s of the exclusion or exemption. In doing so, they must provide a ppropriate documentation (such as contracts showing that a second person uses the material as an ingredient in a production process)

to demonstrate that the material is not a wast e, or is exempt from regulation. In addition, owners or operators of facilities claiming th at they actually are recycling materials must show that they have the n ecessary equipment to do so.Revisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

Acronyms 23 

# ACRONYMS

CFR Code of Federal Regulations

DSW definition of solid waste

e-CFR electronic Code of Fe deral Regulations

EPA U.S. Environmental Protection Agency

FR Federal Register

RCRA Resource Conservation and Recovery ActRevisions to the Definition of Solid Waste Final Rule Compilations: The Legitimate Recycling Standard

Index 24 

# INDEX

analogous product ..................................................................................... 10, 11, 13, 20, 21 analogous raw material ....................................................................................... 8, 9, 10, 20 case-by-case .......................................................................................................... 6, 7, 9, 13 contained......................................................................................................i, ii, 8, 9, 20, 21 demonstrate legitimacy ..................................................................................................... 17

discard........................................................................................................................ ... 8, 14 efficiency..................................................................................................................... .... 4, 5

enforcement..................................................................................................................ii i, 17

fees ........................................................................................................................... ......... 16 hazardous characteristic............................................................................ 10, 11, 12, 14, 21 industry standards ............................................................................................................. .. 6

intrinsic value................................................................................................................ ...... 6

inventories................................................................................................................... 1 4, 16 Lowrance Memo ......................................................................................................iii, 2, 14 non-waste determination.................................................................... iii, 1, 2, 11, 14, 17, 19 product specifications ......................................................................................................... 6 reclaim, reclamation........................................................................................................... .. i recordkeeping.................................................................................................................. .. 17

release ........................................................................................................................ ..... 8, 9

residuals ...................................................................................................................... .... 4, 5 revenues .......................................................................................................... 14, 15, 16, 1 7 risk-based approach .......................................................................................................... 13 secondary material feedstock............................................................................................ 10 sham recycling .............................................................. 1, 2, 3, 4, 5, 6, 7, 10, 11, 13, 14, 16 Toxics Along for the Ride (TARs) ............................................................................. 10, 11

transfer ....................................................................................................................... .......... i useful contribution .............................................................................. 3, 4, 5, 14, 15, 16, 20 valuable commodity...................................................................................................... 8, 20 valuable product/intermediate................................................................. 6, 9, 15, 16, 17, 20