News & Insights

Energy Law Exchange

February 5, 2021

EPA Issues Compliance Advisory on Renewable Fuels, Additives and Distillates Requirements Under the Toxic Substances Control Act

On December 22, 2020, the U.S. Environmental Protection Agency issued a Compliance Advisory under the Toxic Substances Control Act (“TSCA”) concerning the “Applicability of the Toxic Substances Control Act to Chemicals made from Petroleum and Renewable Sources used as Fuels and Fuel Additives and Distillates.” Proponents of renewable-source fuels projects are the focus of EPA’s attention in this Advisory.

What is the objective of the advisory?

The Advisory responds to stakeholder inquiries seeking guidance on whether products manufactured from renewable sources are subject to TSCA’s requirements.  The Advisory specifically highlights the requirements of Section 5 for “new chemicals” that are not on the TSCA Inventory or are subject to notice requirements for significant new uses. EPA reaffirms in the Advisory that “fuel and fuel additives either made from petroleum or renewable sources are subject to TSCA and have been subject to its requirements since 1976.”

Why is this a concern for products from renewable sources?

TSCA prohibits the manufacture or import of any chemical substance unless it is listed on the TSCA Inventory and in compliance with any “significant new use notice” requirements.  EPA policy under TSCA requires chemicals to be defined as precisely as possible on the TSCA Inventory.  For many substances, a unique molecular identity (such as ethanol or formaldehyde) or structure (such as each isomer of hexane) satisfies the specificity requirement.  However, Unknown or Variable Composition, Complex Reaction Products and Biological Materials” (UVCB) substances cannot be specifically described either by molecular identity or structure. Consequently, UVCBs are routinely described on the Inventory by their method of production or processing or source.

Renewable-sourced products such as fuels and additives raise this Inventory listing issue primarily because they are often UVCB substances. This means that an additive produced from a renewable source may not be able to use an Inventory-listed version of the same additive if the Inventory listing describes a conventional petroleum source or method.  Should the new chemical process result in a significant new use rule, order, or impose other regulatory obligations, such requirements could hamper the functional fungibility of renewable and conventional fuels and additives in the market.

What are the implications for renewable-source products and projects?

Proponents of renewable fuels and additives projects will need to assess their products and determine whether they can rely on existing Inventory listings or must undertake the Section 5 new chemicals approval process.  From a practical standpoint for new projects, it could add other potentially long lead-time item to the project’s critical path. For manufacturers with established operations, an assessment of current compliance and enforcement risk would be a prudent move.