The Pollution Prevention Act of 1990: Emergence of a New Environmental Policy

E. Lynn Grayson

Editors' Summary: EPA's toxics release inventory (TRI), compiled under § 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), is the most comprehensive national database on toxic chemical emissions. TRI data have helped direct national, state, and local efforts to evaluate patterns in industrial toxic pollution, and have been instrumental in attempts to encourage industrial source reduction, such as EPA's 33/50 initiative, which aims for a 33 percent voluntary reduction of releases and transfers of 17 high-priority TRI chemicals by 1992 and 50 percent by 1995. EPA estimates that in 1989, manufacturing facilities required to report under EPCRA § 313 released into the environment or transferred off site 5.7 billion pounds of chemicals. EPA derived these 1989 estimates from data in 81,891 forms that 22,569 facilities submitted to comply with EPCRA § 313. Although the TRI fills an information gap on industrial chemical pollution, it covers only the tip of the toxic iceberg. More than 95 percent of all chemical emissions — about 400 billion pounds — goes unreported each year. The TRI's role in promoting and assessing pollution prevention efforts has been accordingly limited.

The Pollutio Prevention Act of 1990 broadens the TRI's role in reducing chemical source pollution. The Act makes pollution prevention reporting mandatory by requiring each TRI-regulated facility to file, beginning July 1, 1992, a source reduction and recycling report with its TRI reporting form. This source reduction and recycling report will detail the amount of source reduction achieved for each TRI chemical, as well as the pollution prevention methods employed. This Article examines the Act's new reporting obligations for TRI-regulated industries. The author discusses the reasons behind industry's cautious response to the Act, ranging from implementation costs to mandated process changes and potential enforcement ramifications. Observing that the Act imposes costly, increased reporting burdens on the very businesses from whom EPA hopes to receive support for its pollution prevention objectives, the author concludes that industry's cooperation with the Pollution Prevention Act may depend on obtaining assurances that prevention costs expended today will not result in higher costs from new regulatory mandates tomorrow.

Ms. Grayson is a member of the environmental practice group of the Chicago law firm of Coffield Ungaretti & Harris. Ms. Grayson is the former Chief Legal Counsel for the Illinois Emergency Services and Disaster Agency, and in the past served as an Assistant Attorney General for the state of Illinois in the Environmental Control Division. The author gratefully acknowledges the editorial assistance of colleague Elizabeth S. Kucera.

[22 ELR 10392]

A new environmental policy aimed at preventing toxic chemical pollution was initiated by the Pollution Prevention Act of 1990 (the Act). ¹ The new Act's goal is Act of 1990 (the Act).¹ The new Act's goal is pollution prevention, or in more practical terms, pollution source reduction. Traditional waste management methods are cast aside in favor of a more proactive recycling and waste generation avoidace strategy. waste generation avoidance strategy.

The new law, in theory, addresses an admirable goal: Pollution should be prevented or reduced at the source. Any pollution that cannot be prevented should be recycled in an environmentally safe manner. Disposal or release of waste into the environment is a last resort that should also be conducted in a safe manner.

The reality of complying with the new policy calls into question the prudency of the Act. The new law imposes costly, increased reporting responsibilities on the very businesses from whom the U.S. Environmental Protection Agency (EPA) hopes to receive support for the accomplishment of its pollution prevention objectives. Specifically, the Act requires that regulated entities provide source reduction and recycling information for every toxic chemical reported on the annual toxic chemical release form. ² EPA's economic on the annual toxic chemical release form.² EPA's economic analysis estimates that a maximum of 28,000 facilities are expected to submit a maximum of 112,000 reports on toxic chemical releases in 1992. ³ This new compliance cost to chemical releases in 1992.³ This new compliance cost to industry of reporting pollution prevention information is estimated to be $ 49.5 million the first year and more than estimated to be $49.5 million the first year and more than $36 million in all subsequent years.⁴

This Article examines the Act and explains pollution prevention through source reduction. It further discusses and evaluates the new reporting obligations for businesses. [22 ELR 10393] It also analyzes the possible negative impacts on industry that may not relate to pollution prevention objectives.

Source Reductions and Other Act Mandates

The single most important goal of the EPA pollution prevention program is source reduction.⁵ As such, EPA joins industry and environmental leaders in advocating that pollution-related problems be addressed by preventing pollution at its source, whether through changes in production or by reducing reliance on environmentally harmful materials. EPA supports studies that show pollution prevention can be the most effective way to reduce risks by reducing or eliminating pollution at its source; it also is often the most cost-effective option because it reduces raw material losses and the need for expensive "end-of-pipe" technologies, and in some instances may mitigate long-term liabilities. EPA envisions that pollution prevention offers the unique advantage of harmonizing environmental protection with economic efficiency.⁶

Central to the Act is its definition of the term "source reduction," which demonstrates what EPA's enforcement approach will be. Source reduction means any practice that

(i) reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal; and

(ii) reduces the hazards to public health and the environment associated with the release of such substances, pollutants, or contaminants.

The term includes equipment or technology modifications, process or procedure modifications, reformulation or redesign of products, substitution of raw materials, and improvements in housekeeping, maintenance, training, or inventory control.⁷

Source reduction does not include any practice that alters the physical, chemical, or biological characteristics, or the volume of a hazardous substance, pollutant, or contaminant through a process or activity that is not integral to producing a product or providing a service.⁸ The definition of source reduction makes clear that the Act's focus is on changing and altering industrial activities regarding hazardous substances before recycling, treatment, or disposal.

Source reduction is fundamentally different from traditionally accepted concepts of waste management and pollution control. Source reduction requires that industry evaluate its manufacturing and operational practices at the outset, as opposed to controlling possible pollution sources during the process, or managing wastes produced as an end product.

To promote source reduction, the Act mandates that EPA make affirmative attempts to encourage a multimedia approach to source reduction.⁹ The Act directs EPA to establish a special office to oversee the implementation of source reduction activities on behalf of the Agency.¹⁰ In addition, grants are available to states for technical assistance programs to advance the use of source reduction technologies by businesses.¹¹ The Act requires that states match federal monies in order to develop these special programs.

The critical aspect of the Act concerns data compilation regarding source reduction. As part of this effort, the Act requires the EPA to establish a Source Reduction Clearinghouse to compile information, including a computer database that contains information on management, technical, and operational approaches to source reduction.¹² One of the greatest sources of such data will be the new reporting obligations incorporated into the annual toxic chemical release form under § 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA).¹³ The new information will cover data relating to source reduction and recycling and must be reported for the first time for the calendar year 1991, or by July 1, 1992.¹⁴

Reporting Changes Effective July 1, 1992

Pursuant to EPCRA § 313, certain facilities are required to submit reports each year on the amounts of listed toxic chemicals released into the environment.¹⁵ The toxic chemicals regulated include more than 300 chemicals and 20 separate chemical categories. At present, facilities must file an annual report known as a toxic chemical release inventory reporting form (Form R) if their operations manufacture, import, or process at least 25,000 pounds of the chemical during the calendar year or otherwise use at least 10,000 pounds of the chemical during the calendar year.¹⁶ The reports must be filed by July 1 of each year and cover releases and transfers that occurred during the previous calendar year.¹⁷

The Pollution Prevention Act requirements are specifically intended to augment the information collection obligations of EPCRA § 313. It also is intended that the public be provided with information on industry efforts to prevent the generation of waste at the source, as well as to reduce direct releases to the environment through other methods. To implement the new data collection, EPA proposes to modify Sections 6, 7, and 8 of the current Form R.¹⁸ Section 6, entitled "Transfers of the Chemical in Waste to Off-Site Locations," and Section 7, entitled "Waste Treatment Methods and Efficiency," would be modified to include off-site and on-site recycling activities. Section 8, currently entitled "Pollution Prevention: Optional Information or Waste Minimization," would be revised to incorporate the majority of the new additional reporting elements, and its optional format would become mandatory. EPA proposes to phase in the reporting requirements throughout both 1991 and 1992 reporting years. The Act's mandates will be satisfied for the 1991 reporting year through the modification [22 ELR 10394] of Sections 6 and 8, but a greater level of detail would be implemented for the 1992 reporting year with the modification of Section 7.¹⁹

Additional information the Act requires to be incorporated into the Form R will constitute the toxic chemical source reduction and recycling report.²⁰ On a facility-by-facility basis, the toxic chemical source reduction and recycling report must include the following source reduction-related information for each reportable calendar year:

* quantity of chemical entering any waste stream, or otherwise released, prior to recycling, treatment or disposal;

* amount of chemical from the facility that is recycled either on site or off site;

* techniques used to identify source reduction opportunities; and

* amount of chemical that is treated either on site or off site.

In addition to the factual data required, the toxic chemical source reduction and recycling report requires the calculation of a percentage change over the previous year for much of the data collected. Production statistics and certain other release documentation also must be included.

Pollution Prevention Strategy

On February 26, 1991, EPA published its Pollution Prevention Strategy as the first step toward achieving the requirements imposed by the Act.²¹ According to EPA, this document presents the Agency's blueprint for a comprehensive national pollution prevention strategy. Specifically, it is designed to fulfill two purposes: (1) to provide guidance and direction for efforts to incorporate pollution prevention with EPA's existing regulatory and nonregulatory programs; and (2) to set forth a program that will achieve specific objectives in pollution prevention within a reasonable time frame.²²

The first objective reflects EPA's belief that for pollution prevention to succeed, it must be a central part of the Agency's primary mission of protecting human health and the environment. To address the second objective, the strategy includes a plan for targeting 15 to 20 high-risk chemicals that offer opportunities for prevention, and sets a voluntary goal of reducing environmental releases of these chemicals by 33 percent by the end of 1992, and at least 50 percent by the end of 1995.²³ This program has become known as the Industrial Toxic Project or the "33/50" Initiative. By establishing this program, EPA redefines its relationship with industry by allowing companies to voluntarily select which chemical releases to reduce and at which facilities.

Based on these two pursuits, EPA will conduct the following activities:

* identifying and overcoming obstacles to prevention;

* expanding public participation and choice;

* encouraging partnerships with federal agencies;

* investing in the states through its pollution prevention incentives for states grant programs;

* conducting outreach and training programs;

* evaluating current regulations and permits to strengthen the regulatory framework to provide further incentives for prevention;

* encouraging pollution prevention conditions in enforcement settlements;

* developing both short-term and long-term prevention research goals; and

* identifying new products and technologies.

In its new strategy, EPA targets three broad industrial sectors for special attention and priority status: manufacturing and chemical use, agriculture, and energy and transportation. EPA determined these three sectors to be a priority as a result of the 1988 toxic release inventory data concerning releases of toxic chemicals. The data for fiscal year 1989 revealed the following statistics relating to releases of toxic chemicals:

* a total of 5.7 billion pounds were released into the environment;

* 2.4 billion pounds were emitted into the air;

* 1.2 billion pounds were injected into underground wells;

* 913.1 million pounds were transferred off site;

* 551 million pounds were transferred to public sewage;

* 444.7 million pounds were on-site land releases; and

* 189 million pounds were released into surface waters.²⁴

Source reduction may best be understood by considering what it means to the EPA-designated priority sectors in terms of operational changes and business practice modifications. EPA suggests that pollution may be prevented by adopting new approaches, which include consideration of the following possible changes within the priority sectors:

Manufacturing and Chemical Use

* changing inputs/reducing reliance on toxic or hazardous raw materials

* processing changes/increasing efficiency/improved maintenance practices

* changing outputs/reducing reliance on toxic or hazardous products

Agriculture

* development and adoption of low-input sustainable agriculture practices

* improved soil conservation and land management practices

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Energy and Transportation

* increasing energy efficiency to reduce the generation of pollutants

* increasing reliance on clean renewable energy sources.²⁵

If implemented, these changes are anticipated to reduce releases.

Analysis of Act Impact and Implications

The goals of the Pollution Prevention Act are admirable, but pollution prevention in this day and age does not mean that industry will be able to eliminate all wastes from all production processes. Pollution prevention, however, may be a cost-effective means of minimizing waste generation. According to the new strategy, it is the first step in a hierarchy of options for reducing the risks to human health and the environment from pollution. The second logical step in the hierarchy is responsible recycling of any wastes that cannot be eliminated at the source. Recycling also shares many of the positive aspects of prevention, including the conservation of energy and other resources, and the reduction both of reliance on raw materials and of the need for end-of-pipe treatment or containment of wastes. If recycling alternatives are impractical for certain wastes, these wastes should be treated in accord with environmental standards that are designed to reduce both the hazard and volume of waste streams. Finally, any residues remaining from the treatment of wastes should be disposed of safely, to minimize their potential for release into the environment.²⁶

Certainly, the Act promotes a more cooperative relationship between industry and EPA by encouraging companies to participate in EPA's efforts to achieve pollution prevention objectives. The possibility for an improved relationship between industry and EPA is furthered by the Act's establishing a set of presumptions instead of ironclad rules. EPA can rely on industry to support, and to the extent feasible, to advance the cause of pollution prevention as it has done for several years. Industry will continue to evaluate prevention opportunities, depending on the balance of associated costs and benefits. This evaluation process may take into account such factors as the savings in raw material and operating expenditures, pollution prevention costs, reduced liabilities, and improved relationships with local communities and governmental entities.

Industry representatives, however, are cautiously monitoring EPA's pollution prevention efforts. While industry supports the popularized concept of pollution prevention, it fears that the data collection activities underway may be a prelude to negative implications, such as mandated process changes, which industry vehemently opposes. In addition, industry fears the potential enforcement ramifications of the increased reporting requirements. The ultimate implementation costs associated with the Act also are a concern for industry.

Mandated Process Changes

EPA says it is committed to promoting pollution prevention as a means of protecting the environment without imposing strict, and often expensive, command and control measures on industry. EPA encourages voluntary action by industry, which it believes minimizes the need for intensive federal regulation. For industry, however, EPA's hand-in-hand approach may signal trouble.

Given the new detailed information concerning production totals and manufacturing processes the Act requires to be reported on the Form R, industry contemplates that such information may be used not only to advance pollution prevention goals, but also to form the technical basis to institute mandated manufacturing process changes.

Once EPA is in possession of sufficient data to demonstrate the viability of prevention-related technologies, it is possible that such options will be transformed into mandatory obligations imposed by regulation. Since prevention-related technologies are often site-specific, this scenario creates an enormous disincentive for industry compliance.

Even the potential for mandated process changes is sufficient risk to cause industry to reevaluate its interest in pollution prevention. In a program where success depends on the willingness of companies to participate, EPA should carefully consider taking any actions along the lines of process changes. EPA already has informed industry that it will not turn voluntary commitments into enforceable permit conditions without an individual company's consent, to the extent that those commitments go beyond a company's obligations under the law.²⁷ Armed with the power of prevention-related data, EPA may be in a position to amend the law to reflect this promise.

Increased Enforcement Possibilities

Measuring the progress of pollution prevention initiatives is probably the most visible function of the new data EPA will collect. It is unclear to industry, however, to what extent new data may be used for enforcement-related purposes. It is clear that EPA intends to use the prevention-related information to determine whether pollution prevention can succeed on a voluntary basis, or whether a more enforcement-oriented approach will be used to reduce toxic chemicals at the source.²⁸

Industry has reason for concern over EPA's past enforcement-related activities connected with the submission of toxic chemical release data. Since it first appeared in 1988, toxic release inventory data has been the sole basis, and often the supporting evidence, in numerous enforcement actions. Given past practices, industry should restrict its reporting to data strictly required. Even this may prove detrimental.

EPA contends that vigorous enforcement remains a primary tool for creating an incentive to reduce industrial pollution. Generally, EPA observes that enforcement creates an environment in which permanent solutions such as eliminating some pollutants entirely may be preferred to less reliable approaches to compliance.²⁹ If EPA persists in emphasizing enforcement tactics to achieve solutions, the continued success of the voluntary pollution prevention program is doomed.

[22 ELR 10396]

Cost Burdens

EPA's economic analysis estimates that a maximum of 28,000 facilities are expected to submit a maximum of 112,000 reports on releases of toxic chemicals in 1992. The total cost to industry of reporting pollution prevention information is estimated to be $49.5 million the first year, $37.7 million the second year, and $36.4 million in all subsequent years.³⁰

This new compliance cost increases the total annual burden for reporting under EPCRA § 313 from a current $146.7 million to $196.2 million in the first year of reporting. In the second and subsequent years, the total annual burden would be $184.4 million and $183.3 million, respectively.³¹ In 1992, assuming four reports will be submitted per facility, the total first year cost of reporting pollution prevention information will be an estimated $1,768 per facility. In the second and subsequent years, costs per facility are estimated at $1,334 and $1,298, respectively.³²

It is evident that industry is making a substantial financial investment to support pollution prevention. These economic figures relate solely to the increased costs associated with the completion and filing of the revised Form R, and do not account for further financial investments industry may commit to undertake prevention-related research and to institute new prevention technologies. In difficult economic times, however, industry may require assurances from EPA that prevention costs expended now will not result in higher costs tomorrow from new regulations or other mandates.

Conclusion

The July 1, 1992, compliance deadline will challenge businesses to provide highly complex data in a timely manner and in an accurate format so that EPA may measure the progress of source reduction and related efforts to prevent pollution in the environment. In the months and years to come, the success of this new environmental policy may be measured in quantitative terms concerning the actual amount of pollution eliminated from the environment. The more appropriate measure of success, however, will be qualitative in nature, concerning the new relationship formed between industry and government to achieve environmental protection objectives.

1. Pub. L. No. 101-508, §§ 6601-6610, 104 Stat. 1388, 1388-321 to 1388-327 (codified at 42 U.S.C.A. §§ 13101-13109 (WestSupp. 1991)).

2. 42 U.S.C.A. § 13106. See also Emergency Planning and Community Right-to-Know Act (EPCRA) § 313, 42 U.S.C. § 11023, ELR STAT. EPCRA 006 (toxic chemical release inventory reporting requirements).

3. 56 Fed. Reg. 48475, 48500 (1991).

4. Id.

5. See 42 U.S.C.A. § 13101(b).

6. 56 Fed. Reg. 7849 (1991) (pollution prevention strategy).

7. 42 U.S.C.A. § 13102(5)(A).

8. Id. § 13102(5)(B).

9. Id. § 13101(a).

10. Id. § 13101(b).

11. Id. § 13104.

12. Id. § 13105.

13. EPCRA § 313, 42 U.S.C. § 11023, ELR STAT. EPCRA 006.

14. 42 U.S.C.A. § 13106(a).

15. 42 U.S.C. § 11023, ELR STAT. EPCRA 006; 40 C.F.R. pt. 372 (1991).

16. EPCRA § 313(f), 42 U.S.C. § 11023(f), ELR STAT. EPCRA 007; 40 C.F.R. § 372.25.

17. EPCRA § 313(a), 42 U.S.C. § 11023(a), ELR STAT. EPCRA 006; 40 C.F.R. §§ 372.30, 372.85.

18. 56 Fed. Reg. 48477 (1991) (proposed changes to toxic chemical release reporting).

19. Id.

20. 42 U.S.C. § 13106(a), (b).

21. 56 Fed. Reg. at 7849 (pollution prevention strategy).

22. Id.

23. Id. at 7850.

24. EPA, OFFICE OF TOXIC SUBSTANCES, NO. EPA 560/4-91-014, TOXICS IN THE COMMUNITY, NATIONAL AND LOCAL PERSPECTIVES, 1989 TOXICS RELEASE INVENTORY NATIONAL REPORT 56 (Sept. 1991).

25. 56 Fed. Reg. at 7853-54.

26. Id. at 7855.

27. Id. at 7861.

28. Id. at 48499.

29. Id. at 7859.

30. Id. at 48500.

31. Id.

32. Id.