Hazardous Waste Management Pitfalls for Vapor and E-Liquid Product Manufacturers and Retailers
Compliance with the waste management regulations can be confusing because their scope and extent will vary by the amount of waste nicotine produced at a manufacturing facility or the amount of nicotine-containing products collected for disposal by a retailer. Further complicating the issue, even if exempted from the RCRA regulations, certain nicotine-containing products may be subject to state regulation of nicotine as a dangerous or industrial waste. Although there have been few enforcement actions brought against vapor or e-liquid manufacturers or retailers, regulators have noted the industry's growth and potential for noncompliance. Going forward, we expect regulators to focus less on educating the industry about waste management obligations and follow a more active enforcement approach.
The federal RCRA regulations and state analogues establish a comprehensive system for managing hazardous waste from "cradle to grave," that is from the point the waste is generated until its ultimate disposal. Broadly speaking, the regulations prescribe how to determine if and when a material is regulated as a hazardous waste, and how to manage the waste once the determination is made. Critically, RCRA only applies when the material becomes solid waste, meaning that it has been discarded by being abandoned, recycled, or treated as "inherently-waste like," or the decision to discard has been made.[1]
RCRA Requirements Depend on Quantity
Hazardous waste compliance requirements vary significantly under RCRA depending on the amount of hazardous waste a facility generates each month. Thus, the generator category of a company and commensurate requirements, including storage and accumulation, recordkeeping and reporting, and training requirements could change from month to month.[8] Keeping up with these changes and ensuring a facility complies can be particularly burdensome for small businesses, such as those that constitute a large portion of the vapor industry.
Nicotine's status as an acute hazardous waste is likely the primary driver for determining the "generator" category for an e-liquid or vapor product manufacturer. Businesses that generate acute hazardous waste ("generators") are categorized as very small quantity generators (VSQGs) when generating up to 2.2 pounds (1 kilogram) per month, and large quantity generators (LQGs) when generating more than 2.2 pounds per month.[9] Regulatory requirements are significantly greater for LQGs, as is clear from a guidance chart developed by EPA.[10] Thus, e-liquid manufacturers have a strong incentive to operate as VSQGs or small quantity generators (SQGs).
Compliance with RCRA requirements by vapor product and e-liquid manufacturers is an increasing area of emphasis for both the states and EPA. Thus far, states have focused on outreach to the industry regarding compliance measures.[14] Such outreach typically lasts from six months to a year to provide a chance for the industry to come into compliance before the agencies transition to enforcement. Given that the e-cigarette and vaping industries have been growing for several years, and that the past two years have seen an increase in state proposals and communications concerning this issue, industry members need to consider whether regulators will pursue a more aggressive enforcement agenda in the new year and going forward. Accordingly, e-cigarette and e-liquid manufacturers should evaluate their processes and potential impact on generator status to determine whether their facilities are complying with RCRA or state analogues.
For more information on our Tobacco and E-Vapor Practice, visit www.khlaw.com/evapor. For more information on our Environmental Practice, visit www.khlaw.com/Environmental. Follow Keller and Heckman Tobacco and E-Vapor Partner Azim Chowdhury on Twitter.
[2] 40 C.F.R. §§ 261.20-261.24.
[3] See 40 C.F.R. § 261.33.
[4] 40 C.F.R. § 261.33. See also EPA Letter to Merck Sharp & Dohme, FaxBack #11012, May 13, 1981.
[5] 40 C.F.R. § 261.33(b)
[6] Letter from Barnes Johnson, EPA, to Daniel K. DeWitt, Warner, Norcross & Judd LLP (May 8, 2015), RCRA Online #14850.
[7] Id.
[8] Recent revisions to the regulations do provide some relief to companies that consistently qualify under one category but experience an episodic event that shifts them to a more burdensome one. The rules generally limit the facility to one episodic event, however. See Hazardous Waste Generator Improvements Rule, 81 Fed. Reg. 85,732 (November 28, 2016).
[9] 40 C.F.R. § 262.13.
[10] U.S. EPA, "Hazardous Waste Generator Regulatory Summary," available at:https://www.epa.gov/hwgenerators/hazardous-waste-generator-regulatory-summary.
[11] 40 C.F.R. § 262.13.
[12] See 40 C.F.R. § 262.13.
[13] Four factors are used to determine whether recycling is "legitimate." 40 C.F.R. § 260.43(g). First, recycling must involve a hazardous secondary material that provides a useful contribution to the recycling process or to a product or intermediate of the recycling process. For example, the nicotine-containing materials may be the source of a valuable constituent (i.e., nicotine) recovered in the recycling process. Second, the recycling process must produce a valuable product or intermediate, which can be demonstrated by sale of the recycled product to a third party, by its use as an effective substitute for a commercial product, or by its use as ingredient in a process. Third, the generator and the recycler must manage the hazardous secondary material as a valuable commodity when it is under their control. This would entail management of nicotine-containing materials consistent with how raw nicotine is managed. Fourth, the product of the recycling process must be comparable to a legitimate product or intermediate. For example, the recycled product should meet widely recognized specifications for the raw material and not contain hazardous constituents in greater levels than a non-recycled analogue. See Letter from Barnes Johnson, EPA, to Scott DeMuth, g2revolution LLP (May 8, 2015), RCRA Online #14851.
[14] See, e.g., New Jersey Department of Environmental Protection, "Compliance Advisory Update - Compliance Assistance Available for Vape Shops and Manufacturers" (June 20, 2017), available at: http://www.nj.gov/dep/enforcement/advisories/2017-03.pdf.