Source: https://www.bdlaw.com/publications/get-ready-for-compliance-recent-updates-on-epas-formaldehyde-emission-standards-for-composite-wood-products/
Timestamp: 2019-01-20 19:14:55
Document Index: 173389724

Matched Legal Cases: ['§ 601', '§ 2697', '§ 601', '§ 770', '§ 770', '§ 770', '§ 770', '§ 770']

The composite wood product industry may face an earlier compliance deadline under EPA’s Formaldehyde Emission Standards for Composite Wood Products (Standards) than the deadline currently set by EPA.1 On February 16, 2018, a federal district court vacated a September 2017 EPA rulemaking that extended the compliance deadline for most obligations under the Standards to December 12, 2018.2 The compliance date in dispute applies to emission limit compliance, recordkeeping, labeling, and sell-through. Under the court’s order, the parties in the lawsuit must propose a new compliance timeframe by March 9, 2018, or else the court will set one itself.
After the California Air Resources Board (CARB) adopted its Airborne Toxic Control Measures to Reduce Formaldehyde from Composite Wood Products (ATCM) in 2007, Congress enacted the Formaldehyde Emission Standards for Composite Wood Products Act as Title VI to TSCA in 2010.3 Title VI directed EPA to promulgate a federal regulation on formaldehyde emissions from composite wood products, using the CARB ATCM emissions limits.4
Following some rulemaking delays, EPA proposed the Standards in 2013 and finalized them on December 12, 2016.5 In summary, the Standards impose emission limits for composite wood products in the form of panels or incorporated into component parts or finished goods. Along with the emission limits are a suite of supply chain obligations, including testing, certification, recordkeeping, reporting, labeling, non-complying lot notification and disposition, and others. Panel producers, importers, fabricators of component parts and finished goods, laminators, distributors, and retailers are all subject to the Standards. Separately, to facilitate the emission limit control, the Standards include accreditation and certification rules that apply to third-party certifiers (TPCs) and accreditation bodies (ABs), which certify the formaldehyde emissions from the products and accredit TPCs, respectively.
EPA delayed the effective date of the Standards after the presidential inauguration,6 which eventually took effect on May 22, 2017. Accreditation and certification services have been permitted since then.7 However, other regulated entities are not yet subject to the Standards until certain future compliance dates.
The recent case, Sierra Club v. Pruitt, challenged EPA’s extension of the initial compliance date under the Standards. The 2016 final Standards originally designated three compliance dates, on the first, second, and seventh anniversaries of the publication date of the Standards in the Federal Register.8 The Standards also crafted a two-year transition period for EPA’s recognition of certification by TPCs approved by CARB.
Asserting that regulated entities would need adequate time “to proceed with establishing business relationships with TPCs in order to certify composite wood products for use by downstream entities,” EPA proposed to extend the compliance dates and the end-date of CARB certification transition period with a proposed rule and direct final rule on May 24, 2017 to “prevent substantial disruption to the supply chain.”9 EPA later received adverse comments on the action. It therefore withdrew the direct final rule on July 6, 2017 and finalized a revised compliance date extension timeframe on September 25, 2017:
Items Under the December 2016 Standards Under the September 2017 Extension
12/12/2017 12/12/201810
Import certification 12/12/2018 03/22/2019
12/12/2023 03/22/2024
End of date of transition periods for CARB TPC certification of composite wood products under TSCA Title VI 12/12/2018 03/22/2019
On October 31, 2017, two environmental organizations sued EPA in the federal district court for the Northern District of California, challenging EPA’s year-long extension of the primary compliance date to December 12, 2018.11
Labeling relief. The original version for the Standards included a section 770.45(f) that prohibited labeling of composite wood products as TSCA Title VI compliant prior to the manufactured-by date (originally, December 12, 2017): “Composite wood products and finished goods made entirely of composite wood products manufactured before the manufactured-by date must not be labeled as TSCA Title VI compliant.” This provision prohibited voluntary labeling of products before the manufactured-by date. Such prohibition would have created compliance problems because products had to be labeled beginning on the manufactured-by date.12
EPA issued a proposed rule and direct final rule on July 11, 2017 to delete section 770.45(f). It contended that “the risk of unintentional supply chain disruption is substantial” around the manufactured-by date, but such risk would be, “through prompt regulatory action, avoidable.”13 EPA received no adverse comments on the action. The direct final rule went into effect on August 25, 2017, and voluntary labeling is currently permissible.
Non-complying lot obligations. Section 770.22 governs the obligations of regulated entities with respect to the lots of composite wood products that are shown by test to be non-compliant with the emission standards. Under the Standards, panels are permitted to be shipped downstream before the test results are available.14 Then panel producers and the downstream entities must meet their notification obligations if the composite wood products are later found to belong to a non-complying lot but have already entered into the commerce.15 Panel producers in addition have to take actions to properly dispose of or retest the panels in order to prevent further distribution of such products.16
To address these concerns, EPA updated its frequently asked questions for regulated entities (FAQs) on June 7, 2017.17 A new FAQ explains that 770.22(f) notifications are only required while composite wood products are in the form of panels. Once panels are incorporated into component parts or finished goods, notification will not be required even if the fabricator later learns that the panels failed an emissions test.18
Regulated entities whose products are distributed in California may also be interested in a notice on September 29, 2017 from CARB on its Composite Wood Products ATCM webpage.19 The notice states that:
Beveridge & Diamond’s Chemicals, Products & Nanotechnology Practice Group provides strategic, business-focused advice to the global chemicals industry. We work with large and small chemical companies from industries including basic and specialty chemicals, pharmaceuticals, electronics, crop protection, food contact materials and additives, wood products, and consumer products, and have substantial experience representing clients whose products and activities are subject to EPA’s broad chemical regulatory authority under TSCA and state chemical restrictions. For more information, please contact Mark Duvall.
1 40 C.F.R. pt. 770.
2 Order Re Cross-Motions for Summary Judgment, Sierra Club v. Pruitt, 3:17-cv-06293 (N.D. Cal. Feb. 16, 2018).
3 TSCA § 601, Pub. L. 111-199 (July 7, 2010), 15 U.S.C. § 2697.
4 TSCA § 601(d).
5 For more information on the Standards, see an earlier B&D alert.
6 The Standards were initially scheduled to take effect on February 10, 2017. EPA postponed twice the effective date of the Standards on January 26, 2017 and March 20, 2017.
7 40 C.F.R. § 770.2(b), (c).
8 The first deadline applies to most obligations under the Standards. The second applies to import certification. By the third deadline, non-exempt laminators must comply with the obligations applicable to ordinary composite wood product producers (in addition to the requirements for fabricators of component parts or finished goods, which laminators will be subject to after the first deadline).
9 82 Fed. Reg. 23735, 23736 (May 24, 2017) (compliance date extension direct final rule).
10 In the direct final rule and proposed rule published in May 2017, this date was set on March 22, 2018. EPA changed the date to December 12, 2018 in the September final rule.
11 See Complaint, Sierra Club v. Pruitt, 3:17-cv-06293 (N.D. Cal. Oct. 31, 2017).
12 40 C.F.R. § 770.2(e).
13 82 Fed. Reg. 31922, 31923 (July 11, 2017) (labeling relief direct final rule).
14 40 C.F.R. § 770.20(a).
15 40 C.F.R. § 770.22(d).
16 40 C.F.R. § 770.22(d)(2).
17 EPA, Regulated Stakeholder Frequently Asked Questions to Implement the Formaldehyde Standards for Composite Wood Products Act.
18 FAQ 18.
19 See CARB, Status of U.S. EPA Formaldehyde Regulation, (last updated Sept. 29, 2017).