“Significant” should be defined to mean “the presence of an
appendix VIII constituent, or hazardous waste characteristic, that is
not found in similar non-recycled consumer products or present at a
level more than 25% over what is routinely present in similar product. A
revised MSDS shall accompany any recycled product sent for consumer or
industrial use.” (543)

(2) Commenters also stated that they agreed that the factor's use of the
term “significant” is appropriate and practical because the question
of significance has to apply to a wide range of recycling circumstances
and is best addressed on a case-by-case basis. One commenter just
emphasized that the term significant has to be applied case-by-case.
(89, 98, 102, 149, 178, 199)

(3) One commenter stated that the regulated community should not object
to analytical tests to determine significance due to cost because the
cost is small compared the cost of negative impact on human life or an
environmental receptor should a release occur. This analysis is like
testing under the delisting program, which this exclusion should be at
least as protective as. (119)

<IP_ADDRESS>.3 - Response

(1) In response to the commenters who sought additional clarity,
definition, or bright-line tests for the term “significant” in this
factor, the Agency has incorporated the ideas generated during the
comment process into the preamble to the final rule, as appropriate. We
have decided not to develop a specific bright line definition or test
for significance, but instead have bolstered our preamble discussion on
the meaning of the term and included more explanation and examples in
the final rule preamble. Our decision not to include a specific
bright-line test for the final legitimacy factors reflects the fact that
legitimacy determinations cannot be made using absolute distinctions
because of the breadth and depth of recycling practices and recycled
hazardous secondary materials that are covered by the final exclusions.

The complexities of defining “significant” so that it can be
determined through a bright line test and still be appropriate for such
a wide variety of industries, recycling processes, and recycled
hazardous secondary materials are too great to design a simple and
straightforward test to be used in making such determinations. In fact,
because of the variability of the situations to which the test is
applicable, attempting to do so would essentially result in case-by-case
evaluations. Thus, we believe that legitimacy determinations are best
made on a case-by-case basis, with the facts of a specific situation in
hand. The Agency does not think it is appropriate to respond to specific
requests in the comments for determinations on whether concentrations in
certain commenter examples would be considered “significant.” The
specific facts and circumstances of the recycling process would have to
be taken into account in a case-by-case determination. Such case-by-case
determinations for specific recycling scenarios are outside the scope of
this general rulemaking.

In response to the comment regarding generators being expected to
evaluate significance in the recycling process, EPA believes the
commenter is referring to the requirement to check that recycling is
legitimate as part of reasonable efforts in the conditional exclusion in
the final rule. EPA notes that the requirement for the generator is that
they inquire to the reclaimer about the legitimacy of their process
until they feel confident from the responses they receive that the
materials are recycled legitimately.

(2) EPA thanks the commenters for their support and agrees that the use
of the term “significant” is appropriate and practical and that it
has to be applied case-by-case in a legitimacy determination.

(3) EPA is not mandating in its final rule how a facility makes its
determination of whether there are significant or significantly elevated
concentrations of hazardous constituents in the product of a recycling
process. EPA expects that recyclers will be familiar with the
constituents that make up the materials in their process and their
products. Although analytic tests are not required, EPA agrees with the
commenter that there are certainly situations in which testing would be
the most thorough and accurate way to make a determination that there
are not significant levels or significantly elevated levels of these
constituents and that a product made from recycled materials does not
pose a risk greater than an analogous product made from raw materials.
However, EPA notes also that testing may not always be required to make
this determination, but that a facility must be able to demonstrate that
their recycling is legitimate in all cases.

<IP_ADDRESS>.4 - Factor 4: Evaluate toxics in the secondary material or in
the product

<IP_ADDRESS>.4 - Summary

(1) Comments supported EPA's proposal that the TARs factor should focus
on a comparison of hazardous constituents in the product of the
recycling process to the hazardous constituents in an analogous product
made from virgin raw material rather than comparing the secondary
material going into the process with an analogous raw material. Many
stated they felt it was a more appropriate comparison than the
comparison of secondary materials. (Not all of these commenters support
TARs—some made it clear that that is what they prefer only f the TARs
factor is finalized.) The commenters provided various reasons why this
approach is appropriate for this factor:

it is supported by the Safe Food case where the Court looked at whether
there was any meaningful difference in the products. One commenter added
that the Court looked at the contaminant limits to assure substantial
chemical identity between the recycled product and analogous products
and called this the “identity principle.” (74/486, 93/472, 149, 203,
550)

manufacturing processes are often designed to safely remove any
undesired constituents, so they produce a product with significantly
lower levels of toxics than the hazardous secondary material. (74, 91,
129, 179, 187, 465)

this approach better promotes recycling without compromising the safety
of products or increasing environmental risk. (196)

it is in conformity with the evaluation of environmental impacts using a
life-cycle approach. (159)

if EPA were to apply the TARs factor to the secondary material,
virtually no metal-rich secondary materials generated by precious metals
producers would be deemed legitimately processed. (89)

One commenter noted that a distinction should be made in wastewater or
waste treatment cases where dilution takes place or the activity is
treatment without a permit.

(74/486, 83, 89, 91/ 529, 93/ 472, 97, 102, 107, 122, 129, 149, 159,
162, 179, 196, 199, 203, 215/553, 465, 526, 528, 550)

Commenters also stated that EPA should clarify that when TARs are being
evaluated in the product of a recycling process, it does not necessarily
have to be the finished good or article but could be a product that is
more intermediate and that it is the person recycling who determines
what the product being compared is. (199, 203)

(2) Commenters opposed or expressed concern about the focus for the TARs
factor being placed on the final product rather than the secondary
material because the process could include some elements of waste
management, the end product may be far down the chain of management, or
because the factor creates an opportunity for dilution. One commenter
added that the recycling process could be illegal treatment and disposal
without a permit, especially in the case of something like benzene that
would evaporate and not end up in the residuals. One commenter stated
that they disagree with EPA and think that this shift is substantively
different than EPA's longstanding policy on TARs in legitimacy. (119,
489, 516, 521, 543)

One commenter stated that they believe that this change should not apply
when the materials are excluded under §261.2(e)(1)(i) and (ii) for
use/reuse because these exclusions preclude reclamation, so the
hazardous constituents cannot be removed in the process. It could be
argued that if they are present in the secondary material at higher
levels than the raw material that they would then show up in the product
at higher levels, but if other ingredients naturally contain the same
toxics, those in the secondary material could be masked in the final
product. (182/516)

(3) Commenters stated that they support being able to test their
secondary materials instead of their product for differences in
constituent levels if they prefer. Commenters added that it should be
made more clear that this is allowed. One commenter suggested adding
“or raw material feedstock” to each of its three TARs tests. Some
commenters stated that EPA should focus its evaluation on the secondary
materials only when necessary. (74, 91, 93, 178, 187, 199)

One commenter stated that the alternative application of the factor to
secondary materials when comparison of products is not possible is
impracticable and costly. (506)

(4) Commenter stated that as another alternative, recyclers should be
able to demonstrate that their process achieves substantial removal of
toxic constituents in the feedstock as a way to show they meet this
factor. (91, 128, 178)

<IP_ADDRESS>.4 - Response

(1) EPA thanks commenters for their support of its proposal that in most
cases the TARs factor should focus on a comparison of hazardous
constituents in the product of the recycling process rather than
comparing the hazardous constituents in the secondary material going
into the process. EPA agrees that this approach is appropriate for these
materials, is consistent with the court cases on this subject, and, in
many cases, should be easier to implement. In response to one commenter,
EPA notes that each case must be looked at individually and in the
context of all the factors and, therefore, if hazardous materials pass
TARs only because they are diluted, but the process fails some of the
other factors, the recycling can still be found to not be legitimate.
EPA also notes that any residuals from the recycling process need to be
managed under Subtitle C controls, if appropriate. EPA, however, has
decided not to rely on the market incentives or industry standards that
some comments have argued would prevent exposure to toxics in all cases.
The Agency, as well as commenters, have noted situations in which
significant toxics have found their way into products in spite of these
other incentives or standards—such as contaminants in children's
playground sand. In cases where a product meets an industry
specification that addresses the hazardous constituents of concern from
the hazardous secondary material, that would be an indication that the
process would meet the factor.

EPA also notes and has clarified that if a facility chooses to evaluate
toxics along for the ride in an intermediate product of a process, they
can make that evaluation to fulfill this factor instead of comparing the
final products.

(2) EPA believes that the presence of hazardous materials in the
recyclable secondary materials is less relevant to assessing the
legitimacy of recycling than their presence in the product, primarily
because much recycling, like manufacturing, involves removal or
destruction of some hazardous materials. EPA notes that this could
appear to be a change from some application of the policy established in
the Lowrance Memo, but notes that under the Lowrance Memo, the recycler
addressed question (1) “Is the secondary material similar to an
analogous raw material or product?” and the sub questions included
there as well as the second question under (6), which is “Are the
toxic constituents actually necessary (or of sufficient use) to the
product or are they just “along for the ride”?” Under the
balancing factors in the Lowrance Memo, the recycler was, therefore,
evaluating the secondary material in the context of the final product
and whether the constituents in the final product are doing something or
are “along for the ride.” Therefore, EPA finds that this change is
not a substantive change from the Lowrance Memo.

In addition, the analysis of the product makes more sense from a
practical standpoint when it is considered along with the factors
looking at whether the secondary material is useful to the recycling
process and whether the process results in a valuable product. Even if
some toxic constituents are removed in the process, the recycling could
still be legitimate. Of course, the ultimate determination is whether
the process is dominated by the production process or the waste disposal
process. Manufacture from a raw material could also result in removal of
toxic constituents. Thus, mere removal of constituents in not
dispositive of whether the recycling is legitimate.

EPA notes that because the specific legitimacy provision in this final
rule is applicable only to the exclusions and non-waste determinations
finalized in the rule, the comment about altering this factor for 40 CFR
261.2(e)(i) and (ii) is no longer applicable. Legitimacy determinations
relevant to these provisions should be made as they have been in the
past under the existing legitimacy policy, laid out in the preamble
statements and Lowrance Memo.

 EPA notes also, that the legitimacy determination has to be made after
looking at all four factors and that the analysis of all the factors
indicates whether the recycling as a whole is legitimate. In particular,
if a hazardous secondary material is being put into the recycling
process and the hazardous constituents are destroyed but the other
constituents are not used in the process or the product, that would not
meet the mandatory factor requiring that the secondary material make a
useful contribution to the recycling.

In addition, EPA has made it clear in its preamble to the final rule
that comparing the hazardous secondary material to an analogous raw
material is an option for meeting this factor. If a recycler is unable
to compare products, they are able to compare the secondary material to
the raw material instead.

(3) In response to comments regarding the discussion in the proposed
rule about those making a determination being able to compare the
hazardous secondary material to the raw material instead of comparing
the product of recycling to an analogous product, EPA agrees with the
commenters who stated that this was a useful option for when comparison
of products is not practical or is costly. EPA does not agree with
commenters who state that the alternative itself is not practicable. As
EPA is requiring that this factor be considered, it is appropriate to
provide this alternative. EPA, however, has not changed the regulatory
text for this factor to include the option to look at the secondary
material instead of the product. EPA believes that adding the
alternative to the regulatory text is not necessary because the
comparison of the products should be the primary goal of the factor, but
that if a comparison of the feedstock materials shows that there is not
a significant difference in the hazardous constituents they contain,
then that is an indication that there will not be a significant
difference in the products either. EPA has made it clear in its preamble
to the final rule that comparing the hazardous secondary material to an
analogous raw material is an option for meeting this factor.

(4) EPA does not agree with the commenter who stated that a
demonstration that the process achieves substantial removal of toxic
constituents should be a way to meet this factor. EPA does not believe
that a test of this sort would be sufficient to establish that
significant levels of toxic constituents are not being carried through
to the product. However, EPA does note that in every case-by-case
legitimacy determination, the facts of the specific process and specific
materials should be considered and the nature of the recycling process
may play a role in a determination.

<IP_ADDRESS>.5 - Factor 4: Comments on regulating products of recycling

<IP_ADDRESS>.5 - Summary

(1) Commenters stated that EPA should avoid making regulatory decisions
on the relative risks of products and that RCRA is not a
product-regulating statute so any requirements regarding hazardous
constituents, product-safety, or product-quality are beyond EPA's
authority and jurisdiction under RCRA. One commenter added that RCRA is
not a product-regulating statute even when a baby toy is made from
hazardous waste. Commenters also stated that TARs that are fixed in a
product are not discarded and not part of the waste management problem.
(70, 74, 89, 93, 102/ 506, 104, 122, 123/ 537, 143, 152, 190, 197, 203)

(2) Commenters stated that a hazardous characteristic determination
should not be applied to products, especially since they were developed
to apply to specific waste management scenarios. Even a product that
fails a characteristic may not necessarily pose a significant hazard in
its use. One commenter stated that they have a philosophical problem
with this application of the characteristic. (180/ 524, 481)

(3) One commenter added that it is not common to review products for
Appendix VIII constituents. (506)

(4) Commenters stated that toxics along for the ride are not a realistic
threat because there are redundant mechanisms in place in law to deal
with irresponsible producers and product safety. The redundant
mechanisms and protections mentioned were other agencies such as the
Consumer Products Safety Commission, as well as toxic tort liability;
TSCA; the Consumer Product Safety Act; the Food, Drug and Cosmetics Act;
FIFRA; MSDS sheets that are required to identify constituents; product
quality standards; and disclosure and labeling laws. One commenter added
that scrap, in particular, has product standards and is regulated by
other programs already. (74/486, 83, 89, 93/ 472, 97, 102/ 506, 122,
152, 170, 197, 203, 225)

(5) One commenter stated that, generally, producers won't add something
to their product if it affects the quality or safety of their product.
(152)

(6) One commenter stated that although it is not EPA's responsibility to
enforce product safety standards and that marketing unsafe products
could subject businesses to civil lawsuits and loss of customers, they
recommended that the TARs factor nevertheless be finalized and that any
proposed product made from hazardous secondary materials that has
possible safety issues be referred to the U.S. Consumer Product Safety
Commission or other applicable federal agency for a safety evaluation
and that non-consumer products be referred to OSHA if there is a safety
concern. (543)

<IP_ADDRESS>.5 - Response

As an initial response, EPA wishes to note that, again, the Agency has
received comments that distort the case law. In this case comments make
the spurious claim that EPA may not set contaminant limits in the
products made from recycled secondary materials. The comments,
generally, refer to EPA's lack of authority to regulate products. EPA
wishes to make it very clear that it is not regulating products in this
case. Instead, the Agency is establishing conditions to ensure that
secondary material is not discarded. Cases have held that EPA may
establish contaminant levels in products to ensure that the contaminants
are not discarded and products are not adulterated through sham
recycling. See, e.g., Safe Food 350 F.3d at 1266-72; API II 216 F.3d at
58-59.

(1) EPA does not agree with commenters who state that EPA cannot include
this factor as part of the legitimacy determination because RCRA is not
a product-regulating statute and, therefore, this factor is outside of
its jurisdiction. EPA disagrees because with this factor it is
addressing waste materials that find their way into products. This
factor is designed as part of the definition of what constitutes
legitimate recycling. If the recycler has incorporated hazardous
constituents into the final product where they are not needed to make
that product effective in its purpose, then the recycling process is not
legitimate and those hazardous constituents would be considered
discarded in the final product. EPA has the authority to define what is
legitimate recycling, including looking at the toxics in the process and
product, and therefore has the authority to include this factor. EPA's
intent in this factor is to assure that the recycling process compares
directly to normal industrial production. Because some products made
from raw materials can pose risks, EPA believes that the comparison of
the products made from secondary materials and those made from raw
materials is a relevant test to compare the recycling to normal
industrial production and, therefore, to evaluate the legitimacy of the
recycling.

(2) EPA disagrees with comments that the hazardous characteristics
cannot be applied to products in the manner that EPA is describing in
the TARs factor. The commenters seem particularly concerned with the
toxicity characteristic. Although the characteristic is modeled on
management in a landfill as the commenters describe, it is also true
that it is one indicator of a material's propensity to result in
exposure to hazardous constituents through the pathway of leaching into
groundwater. EPA makes it clear in its preamble to the final rule that
the manner in which a product is used and whether there are exposure
pathways can be considered when deciding whether the TARs factor is
relevant. If the entity performing the determination believes that the
recycling does not meet this factor but is legitimate nonetheless, EPA
suggests that the facility evaluate the nature of the presence of
hazardous constituents in its process and be prepared to demonstrate
both that it considered this factor and the reasons it believes the
factor is not relevant.

(3) In response to the comment that it is not common to review products
for Appendix VIII constituents, EPA responds that it believes that this
kind of examination of products is relevant and appropriate for
determining that recycling is legitimate. EPA believes that it is
critical to consider the presence of hazardous constituents that could
have come through the recycling process and ended up in the product and
that recyclers should be familiar with the makeup of their products,
particularly when hazardous secondary materials are a feedstock. If an
examination of the product for these constituents is not possible, the
recycler can, instead, compare the constituents of the hazardous
secondary material to the constituents in the analogous raw material
instead.

(4) In response to the commenters who listed other authorities, laws,
and agencies that regulate product safety and stated that the TARs
factor would therefore be a redundant mechanism, EPA responds that
although in many cases these other mechanisms may apply, none of them
are designed to evaluate the legitimacy of the recycling process or the
extent to which a recycling process compares to normal industrial
production. This factor is designed to be used with the other factors to
illustrate whether a whole process is legitimate and the authorities
listed by the commenters cannot be asked or relied upon to fill that
role, though a facility or implementing agency may be able to use
information from some of them to help evaluate this factor in some
cases. For example, if a product meets widely accepted industry
standards and specifications that address the hazardous constituent of
concern in a particular case, that would be a good indication that the
recycling process meets this factor. In addition, EPA notes that a
facility's responsibility to comply with these authorities should make
the evaluation of its product for the TARs factor simpler.

(5) In response to the comment that producers will not add something to
their product if it effects the quality or safety of their product, EPA
responds that although this may be the case for many producers, the fact
that there have been many cases of products that are unsafe due to
hazardous constituents proves that this is not always the case. In fact,
it is appropriate to specifically consider the TARs in products because,
by definition, the products in these cases have been produced using
materials that would be hazardous wastes if not recycled. For example,
sand from foundries with high levels of lead made it into children's
play sand despite the obvious compromising of the safety of the product.
If a producer that uses hazardous secondary materials in its process is
already screening its product for quality and safety for their own
purposes, compliance with this factor should not be difficult because
significant levels of hazardous constituents should not be making their
way into the product.

(6) EPA agrees with the commenter that the TARs factor should be
incorporated into the legitimacy determination. Although EPA has not
included any mandatory referrals to the Consumer Product Safety
Commission, OSHA, or other federal agency in its regulation, in the
event of an enforcement action that focuses on this factor, EPA would
leave it to the implementing agency to determine what actions need to be
taken to protect the public from any products presenting a risk to the
consumer that may have been sold and distributed.

<IP_ADDRESS>.6 - Factor 4: Products that exhibit a hazardous characteristic

<IP_ADDRESS>.6 - Summary

(1) Commenters stated that when hazardous secondary material causes a
product to exhibit a hazardous characteristic that products made from
raw materials do not, the recycling should not be legitimate. One
commenter supported the inclusion of the provision that secondary
materials should not exhibit a hazardous waste characteristic not
exhibited by the analogous raw material and that the characteristic test
would be relevant in many cases. One commenter added that it is not
protective of human health and the environment to allow products in
commerce if hazardous secondary materials increase their toxicity and
that high levels of hazardous constituents are a clear danger. (98, 470,
538, 543)

(2) One commenter suggested that to the extent that a recycled material
will not be incorporated into a product (e.g., a solvent used for
degreasing or an acid used for cleaning in the manufacturing process) or
is incorporated only into a product to which a consumer would not be
exposed, then only the third test in the TARs factor should form the
basis for a legitimacy determination. As such, any product of recycling
that will not be subject to consumer contact should be considered
legitimate to the extent that the material meets or exceeds the TCLP
standards and contains no more than 0.5 percent total TAR. If warranted,
EPA could also preclude such products of recycling—to the extent that
they are not acutely toxic—from containing anything other than trace
amounts of those acutely toxic materials identified in 261.33. TARs not
expected in the product could be required to be disclosed on a label.
(124)

(3) Commenters stated that application of hazardous waste
characteristics to products is misplaced. The characteristics test is
meant to simulate waste materials co-disposed in a municipal waste
landfill, which products are not, so a product failing the TCLP would
not be relevant to legitimacy. One commenter stated that they have a
philosophical problem with applying a hazardous characteristic
determination to products. (89, 152/481, 197, 524)

(4) One commenter stated that the only example they could offer of a
group of materials that would be affected by the characteristic test
would be metal-bearing secondary materials that are reclaimed as
substitutes for raw ore. Such materials often contain TCLP metals not
found in the raw ore, thereby possibly violating this factor even if
these TCLP metals are reclaimed or wind up in a residue that is properly
managed. Another commenter described their process where within the
acetic anhydride plant, very expensive and scarce rhodium is used as a
catalyst and the recovery of the catalyst is essential to continuation
of the process. Residue from the unit is sent off-site and managed as
D004. The recovered rhodium contains trace amounts of arsenic because
the methanol coming into the plant in the process is produced by
gasification of coal, which puts arsenic into the methanol. It is
unlikely that there is any analogous acetic anhydride to compare the
acetic anhydride made with recovered rhodium to so the facility would
have to compare the recovered rhodium to virgin rhodium. The commenter
asked whether the trace amounts of arsenic in the recovered rhodium be a
significant amount. One commenter stated that the Used Oil regulations
of 40 CFR part 279 already define on specification used oil destined for
fuel. They stated that if the proposed lead and barium criteria are
applied to used oil fuels, some off-specification and some
on-specification used oil fuels would then be regulated as hazardous
wastes. This is because they could exceed Toxicity Characteristics and
not be eligible for recycling as fuels. The used oil regulations already
provide specific criteria for both on and off specification. The
commenter concluded that deficiencies in this tested regulatory program
do not justify such a change in the Used Oil Management Standards. (98,
102, 215)

<IP_ADDRESS>.6 - Response

(1) EPA has included the third test in the TARs factor for legitimacy
because it believes that there may be cause for concern or further
investigation into a recycling practice if the inclusion of a hazardous
secondary material in a recycling process results in the product of that
process exhibiting a hazardous characteristic that the products made
from virgin raw materials do not. However, EPA does not agree that this
should lead to an automatic finding that the recycling is not legitimate
because it believes that there are some cases in which a recycling
process could not meet this factor but still be legitimate, such as the
situation where the product of the recycling is a material that stays in
an industrial process where there is not an opportunity for exposure.
The determination on whether the results of the evaluation of this
factor are relevant to legitimacy need to be made on a case-by-case
basis.

(2) EPA does not agree with the commenter's suggestion that it vary the
requirements for meeting this legitimacy factor depending on whether the
material will be incorporated into the product or not. Although
hazardous constituents from a hazardous secondary material that is not
incorporated into a product but is used instead as part of the recycling
process may not be very likely to end up in the product, this will
result in it being easy for recyclers to show that their product meets
this factor. EPA does not believe it is appropriate to complicate this
factor by trying to establish situations in which certain parts of the
factor apply and others do not.

(3) EPA disagrees with commenters that the hazardous characteristics
cannot be applied to products in the manner that EPA is describing in
the TARs factor. The commenters seem particularly concerned with the
toxicity characteristic. Although the characteristic is modeled on
management in a landfill as the commenters describe, it is also true
that it is one indicator of a material's propensity to result in
exposure to hazardous constituents through the pathway of leaching into
groundwater.  EPA makes it clear in its preamble to the final rule that
the manner in which a product is used and whether there are exposure
pathways can be considered when deciding whether the TARs factor is
relevant. If the entity performing the determination believes that the
recycling does not meet this factor but is legitimate nonetheless, EPA
suggests that the facility evaluate the nature of the presence of
hazardous constituents in its process and be prepared to demonstrate
both that it considered this factor and the reasons it believes the
factor is not relevant.

(4) EPA received very few examples from commenters of specific recycling
processes that might be affected by this third paragraph in this
legitimacy factor and does not think that it will be applicable in a
great many situations, but is including it because it believes that the
case where a recycled product exhibits a hazardous characteristic that
the analogous product does not exhibit from something other than a toxic
constituent would be an indication of recycling not being legitimate.
EPA does not think that this rulemaking is the appropriate place to make
case-specific legitimacy determinations because a determination must be
made on a case-by-case basis taking into consideration all the factors
as well as the specifics of the facility and the materials. Such
case-by-case determinations for specific recycling scenarios are outside
the scope of this general rulemaking.

<IP_ADDRESS>.7 - Factor 4: Bright line approach

<IP_ADDRESS>.7 - Summary

In the October 2003 proposed rule, EPA took comment on two alternative
approaches to this factor. One of these was an approach that would
establish a specific numerical limit to define “significant” for the
purpose of the factor.

(1) OPPOSE BRIGHT LINE APPROACH

Several commenters opposed EPA's bright line approach alternative to the
proposed TARs factor. (74, 85, 89, 91, 93, 102, 112/ 458, 122, 149, 162,
199, 203)

Commenters had varied reasons for specifically opposing the bright line
approach. Some commenters stated that they believed that a bright line
approach would be unworkable, that setting precise ingredient
specifications would be an endless, expensive, and futile process, and
that it would lead to inflexible but arbitrary results that would be
over-regulation, under-regulation, or both. Commenters stated that they
opposed the bright line approach because it would not be appropriate for
the wide array of secondary materials, processes, toxicity levels of
chemicals, and products that it would have to apply to and because a
one-size-fits-all approach will not work in this situation. One
commenter stated that such an approach might restrict recycling. One
commenter stated that efforts to draw bright lines on trace
concentrations of hundreds of constituents has not been functional for
delineating between wastes and non-wastes to date and results in an
unacceptable degree of uncertainty when the factor has to apply to
billions of pounds of materials routinely recycled as manufacturing
ingredients. One commenter stated that the bright line approach would be
unwarranted because the regulations should not be imposing any set rules
dealing with “significance” or “non-significance.”

(74, 85, 89, 91, 93, 102, 112/458, 122, 138, 149, 162, 199, 203)

One commenter stated that for the TARs factor, the term significant is
subjective but, all-in-all, is better than the bright-line option
because it has to allow for a wide range of recycling circumstances.
(98)

One commenter stated that defining a bright line would be difficult and
argued that EPA should examine TARs in the secondary material instead of
in the product. (119)

(2) SUPPORT BRIGHT LINE APPROACH

Several commenters also supported EPA's bright line alternative to the
2003 proposed TARs factor and had various reasons for doing so.
Commenters supporting the bright line approach stated that it would
provide the recycler and the overseeing agency with a parameter that is
clear, able to be demonstrated, and enforceable, providing ease of
implementation by the recycler and the overseeing agency. They added
that without the bright line, it would be difficult and expensive for a
regulator to refute a claim of no significant concentrations. One
commenter stated that although the bright line would have its own
limitations, having it would substantially reduce the subjectivity that
the factor contains. (92, 95, 104, 153, 177, 543)

Commenters also provided various suggestions on how a bright line
approach might be structured:

It could be based on state or federal soil cleanup target levels for
industrial exposure scenarios or some other risk-based approach. (92)

It could use a 5% or 10% limit relative to virgin products. (95)

The bright line level could be set at one standard deviation above the
highest concentration of each of the hazardous constituents found in
analogous products. The test could have an option for the recycler to
demonstrate no unexpected risk from recycled end products if it does
contain elevated levels. The test could include an evaluation of the
end-uses of the product, route of exposure during use, and the
bioavailability of the hazardous constituents of concern during use. The
methods would need to be established and valid. If the presence of the
constituent poses a risk, the recycler should label the product
regarding its presence. (104)

EPA could describe a range of methods and when they may be appropriate
to use in demonstrating that the relative risk of hazardous constituents
in secondary materials is in line with the analogous raw materials or at
least below a level of concern for human health and the environment.
Methods discussed could include comparison of concentrations of
hazardous constituents, analysis of fate of hazardous constituents, and
risk assessments. (153)

A compromise between the bright line and risk based approach could be to
propose a bright line approach as a primary approach and then give the
generator the option of using the risk-based approach if the application
of the bright line was unacceptable. Then those who can afford the
risk-based approach can take advantage of it. (138)

(3) One commenter stated that they believe the real bright line
delineation for this factor is merely whether the product is made
commercially available. (85)

(4) One commenter stated that a bright line approach would not be needed
if the Agency relied on industry or manufacturer specifications instead.
(97)

(5) One commenter stated that if EPA takes the bright line approach, EPA
must address the issue of organic and inorganic constituents routinely
burned in smelting and other reclamation processes. (186)

<IP_ADDRESS>.7 - Response

(1) EPA thanks the commenters for their thoughts on this issue and
agrees with those who stated that they believed that a bright line
approach to the TARs factor would be unworkable and complex because of
the nature of the legitimacy requirement and its need to apply to
materials in varying recycling processes in many different industry
sectors.

(2) EPA thanks the commenters for their thoughts on the bright line
approach to the TARs factor and for their various suggestions on how
such an approach might be structured. EPA has considered these comments
but has determined that although an absolute line set by a bright line
approach may add clarity to the factor, it would likely do so at the
expense of recycling because the line would have to be at least somewhat
arbitrary. For example, a bright line selected to implicate cases where
very small increases in extremely toxic constituents (e.g., dioxin) are
of concern from a risk perspective would necessarily also implicate many
cases where very small increases of less toxic constituents exist, but
are not of concern from a risk perspective. Alternatively, a less
sensitive bright line might fail to implicate some egregious examples of
dangerous exposure to highly toxic constituents. The nature of the
suggestions EPA received illustrate how a “bright line” would be
arbitrary. EPA believes that the variety of recycling processes and
hazardous secondary materials that are subject to this factor requires a
factor that is flexible and believes that the case-by-case approach for
examining the factors that is described in the final rule is most
appropriate for the legitimacy factors. In addition, because EPA has
determined that this factor is one of the factors that must be
considered as part of a legitimacy determination but does not have to be
met for the recycling to be legitimate, EPA does not see a value in
developing a complex and most-likely arbitrary approach to the TARs
factor. Because failing to meet the factor would not automatically
result in the recycling not being legitimate, EPA believes that it is
more appropriate for the TARs factor to be more applicable to many
situations so that how the facts of those situations relate to toxics
along for the ride can be examined on a case-by-case basis as part of a
legitimacy determination.

(3) EPA disagrees with the commenter who stated that the bright line for
this factor is whether the product is made commercially available.
Products containing hazardous constituents from hazardous secondary
materials that are run through a recycling process in lieu of discard
can be in a product that is made commercially available, which would
result in those constituents being discarded in the guise of recycling.
The mere fact that a product has been put up for sale does not
necessarily mean that there are no significant TARs or result in the
factor being met.

(4) Although EPA has decided not to finalize a bright line approach, we
do want to note in response to this comment about industry and product
specifications that although these specifications can play a role in
helping a recycler or implementing agency make a determination on this
factor, we do not think that reliance on specifications would be an
adequate substitute for the factor because some products and
intermediates do not have product specifications and because many
product specifications do not address the constituents that would be of
concern from the hazardous secondary materials.

(5) EPA notes this comment, but has not adopted the bright line approach
in its final rule.

<IP_ADDRESS>.8 - Factor 4: Risk-based approach

<IP_ADDRESS>.8 - Summary

In the October 2003 proposed rule, EPA took comment on two alternative
approaches to this factor. The second was an approach that would
evaluate this factor based on the risks posed by the hazardous
constituents in each hazardous secondary material in each recycling
process.

(1) OPPOSE A RISK-BASED APPROACH

Several commenters stated that they either opposed the idea of having a
risk-based approach as part of the TARs factor or stated that they
supported having no risk-based approach. Commenters offered various
reasons for their opposition to a risk-based approach. Commenters stated
that a risk-based approach is unworkable since it is too complex—in
defining what is “acceptable risk” in the definition and in
conducting the assessment. Commenters also argued that requiring risk
assessments is impractical and that performing them is expensive and
time consuming. In addition, they argued that even after a risk
assessment, the generator or recycler cannot be sure that EPA would
agree with its methods or its results. Commenters stated that a
risk-based approach would lead to arbitrary results and possible
over-regulation, under-regulation, or both, and that the added burden
would chill the use of recycled products. Some commenters singled out a
risk-based approach as being difficult for small businesses. Commenters
argued that a full risk analysis is not the same as the Court's approach
in the Safe Food case—the Court's approach involved a limited
examination for a significant risk differential. Commenters argued that
having a risk-based approach is beyond EPA's authority because it is not
related to discard and because RCRA does not deal with the risk of
products.

(74, 83, 85, 89, 91, 93, 102, 119, 122, 138, 149, 162, 178, 179, 199,
203, 216)

One commenter stated that using the term significant is subjective but,
all-in-all, better than using the risk-based plan. (98)

One commenter stated that although they do not think a risk-based
approach is necessary, some common sense evaluation of the associated
risks may be appropriate and necessary, but only the constituent that
would have rendered the secondary material hazardous should have to be
evaluated. (162)

One commenter stated that designing a risk-based approach would be
extremely complex and argued that that is why EPA should apply its TARs
test to the secondary material to build in another margin of protection.
(119)

(2) SUPPORT A RISK-BASED APPROACH

Some commenters supported the risk-based approach to the TARs factor.
One commenter supported a risk-based approach since it would reduce the
subjectivity of the factor. Some commenters stated that the TARs factor
should be revised to focus on whether the final product actually
threatens human health and the environment by including statements in
the regulatory text qualifying that hazardous constituents in the
product cause the recycling to fail TARs only if they threaten human
health and the environment. One commenter stated that hazards to the
users should be addressed if toxics in a product are elevated. One
commenter added that risk should be part of the significance
determination and requested clarification on what is an excessive amount
of hazardous constituents in a hazardous secondary material as it
relates to risk to human health and the environment

(48, 52, 162, 177, 185, 509)

Some commenters offered suggestions on how a risk-based approach could
work:

Risk could be able to be considered by the recycler as an option if the
levels of toxics are found to be high. Commenters suggested evaluation
of the uses of the end product, routes of exposure during use, and
bioavailability of the hazardous constituents of concern during use.
(91, 104, 112, 138)

EPA could describe a range of methods that are appropriate for
demonstrating that risk is in line with analogous secondary materials: a
comparison of concentrations of hazardous constituents, an analysis of
the fate of the hazardous constituents, risk assessments. (185)

EPA could provide guidance that could be used to establish a bright line
for determining whether TARs constitute a threat to human health or the
environment, thereby rendering the product unusable and the recyclable
material a waste. (509)

(3) One commenter stated that if EPA used product specifications as a
basis for this factor it would no longer have to examine using a
risk-based approach. (97)

(4) One commenter stated that EPA has always subjected the cement kiln
industry to risk assessments despite their complexity and hopes that
EPA's acknowledgement of the complexity of risk assessments is reflected
in future rulemakings. (172)

<IP_ADDRESS>.8 - Response

(1) EPA thanks the commenters for their thoughts on this issue and
agrees with those who stated that they believed that a risk-based
approach to the TARs factor would be extremely complex to design and to
implement because of the nature of the legitimacy requirement and its
need to apply to materials in varying recycling processes in all
different industry sectors and because of the inherent case-by-case
nature and complexity of risk assessments and in determining after
completion of a risk assessment, what the implications of the findings
are. EPA, however, agrees with the commenter who stated that although a
risk-based approach is not necessary, some evaluation of risk can be
appropriate in making a legitimacy determination.

(2) EPA thanks the commenters for their thoughts on the risk-based
approach to the TARs factor and for their suggestions on how such an
approach might be structured. EPA has considered these comments but has
determined that although using a risk-based approach could possibly
reduce subjectivity in the evaluation of the factor, it would be
extremely complex to design the factor in such a way that it is
applicable to many recycling and product use scenarios and would be
complex for facilities to complete risk assessments for all their
products, especially if EPA were to require full risk assessments. EPA
does not think this approach is workable or appropriate in this case.
Therefore, EPA is not finalizing a risk-based approach for this factor.

Some commenters suggested that if levels of toxics are found to be high,
a recycler can consider risk as a back up. EPA thinks that a showing on
the basis of a risk assessment that levels of toxics in a product that
are higher than in the analogous product made from raw material pose no
risk would be very useful thing for a facility to have if it believes
that its recycling is legitimate despite those elevated levels of
toxics. EPA has stated in its explanation of “significant” in this
factor that things such as how a product is used, by whom, the
availability of the hazardous constituents to the environment, and
possible exposures are relevant in considering whether elevated levels
of toxics are “significant.” A risk assessment addressing these
questions and others would be a way for a facility to show that it has
thoroughly examined these questions in the context of this factor.

(3) Although EPA has decided not to finalize a risk-based approach, we
do want to note in response to this comment about industry and product
specifications that although these specifications can play a role in
helping a recycler or implementing agency make a determination on this
factor, we do not think that reliance on specifications would be an
adequate substitute for the factor because some products and
intermediates do not have product specifications and because many
product specifications do not address the constituents that would be of
concern from the hazardous secondary materials.

(4) EPA notes the commenter's statement regarding the complexity of risk
assessments, but does not think that it is appropriate to discuss other
potential rulemakings in the context of this Response to Comments
Document.

<IP_ADDRESS>.9 - Factor 4: Miscellaneous comments

<IP_ADDRESS>.9 - Summary

(1) One commenter on the 2003 proposal asked what would be considered a
toxic constituent and whether there is a specific regulatory definition
that applies. One commenter stated that the second sentence in proposed
40 CFR 261.2(g)(3)(ii)(C) should be a separate paragraph because it
refers to (A), (B), and (C). (69, 563)

(2) One commenter stated that the language in proposed
§261.2(g)(3)(ii)(B) should be amended to reflect EPA's longtime
recognition that Appendix VIII constituents are not TARs if they
contribute positively to the product and are not used in excess. (516,
558)

(3) One commenter requested that EPA clarify—in the context of the
fencepost example in its 2003 proposal (pg. 61579)—that the product of
the reclamation operation is the reclaimed material, not what the
reclaimed material is used to make. One commenter asked, “If the
recycling process results in the landfill of UTS constituents that would
otherwise be prevented from land disposal, is the process still
considered legitimate?” One commenter suggested that EPA's commonly
referenced example of a materials eligible for legitimate reuse—spent
pickle liquor (K062)—would not pass a strict application of the
proposed legitimacy factors. It has hazardous constituents not present
in virgin ferric chloride, has hazardous constituents that are present
in virgin ferric chloride at significantly higher concentrations and
possesses characteristics of hazardous waste that virgin ferric chloride
does not. In addition, one commenter stated that in the case of shop
towels, the product may contain trace levels of constituents that do not
affect the towels' function. The commenter added that there is no impact
on human health and the environment associated with recycling shop
towels because the contaminants that are washed away are managed under
hazardous waste regulation and, therefore, this factor would have no
regulatory impact on the legitimacy determination for shop towels. (165,
182, 484, 493)

(4) One commenter stated that EPA's focus for TARs should be whether the
material is used or sold to avoid disposal: (1) Does the recycling
product or secondary material contain constituents that one would not
expect to find given the production process from which it was generated?
(2) Are there constituents in the material or product that are unrelated
to any of the original feedstocks or their chemical reaction products?
(3) Do the suspect constituents conflict with the user's relevant
product or process specifications? (93)

(5) One commenter stated that EPA should distinguish between secondary
materials used as ingredients or feedstocks in the manufacture of a
product or an intermediate product from those secondary materials used
as substitutes in waste treatment. A great deal of “beneficial
reuse” and “continued use” is simply waste treatment under a
different name. For example, often the heavy metals in waste acid or
alkaline are simply lost or diluted out in the treatment process.
Nowhere is this more obvious than in the use of spent pickle liquors,
K062, in publicly owned treatment works. By EPA's legitimacy criteria,
this is sham recycling. (159)

(6) One commenter stated that for the US to be more sustainable as an
industrial system, there is a need to accept that some recycled
feedstocks contain hazardous constituents not in virgin products. (48)

<IP_ADDRESS>.9 - Response

(1) EPA thanks the commenters for their comments on the regulatory text
for the TARs factor. In response to comments requesting clarification on
what EPA meant in the 2003 proposed regulatory text by “hazardous
constituents,” EPA has clarified in the regulatory language that to
meet this factor the product of the recycling process cannot include
significant concentrations or significantly elevated concentrations of
hazardous constituents found in Appendix VIII of 40 CFR part 261. In
response to the comment about the second sentence in proposed 40 CFR
261.2(g)(3)(ii)(C), EPA has moved the concept that if the factors to be
considered are not met it might be an indication that the material is
not legitimately recycled to make it clear that this concept applies to
both factors to be considered. In the regulatory text being finalized in
this rulemaking, this concept can be found in 40 CFR 260.43(c)(3).

(2) EPA has not changed the regulatory text in response to the comment
that the usefulness of a hazardous constituent to a product be
considered in the TARs factor, but does agree that if the hazardous
constituent in question is valuable to the product is a relevant
consideration in a legitimacy determination and would distinguish
between legitimate recycling where that ingredient is an important part
of what makes the product valuable and when the hazardous constituent is
simply “along for the ride” and not playing a role in the process.
Considerations such as this one are one of the reasons why EPA has
designed the legitimacy determinations to be made on a case-by-case
basis where all four factors have to be taken into consideration.

(3) In response to the commenters' requests for a clarification on the
legitimacy of a particular process, reclaimed wood preserving solution
made to use fence posts that are placed on the ground, the landfilling
of certain constituents that would not otherwise be landfilled, K061, or
the reuse of shop towels, the Agency stresses that individual legitimacy
determinations have to be made on a case-by-case, site-specific basis
that take into consideration all the facts of a certain situation. It is
not in the scope of this rulemaking to address the legitimacy of
individual site-specific recycling situations.

(4) EPA thanks the commenter for their suggestions on how the TARs
factor could work. EPA agrees that the questions posed by the commenter
would be relevant in making a legitimacy determination and in evaluating
the results from the test it has finalized in the TARs factor to see if
the levels of Appendix VIII hazardous constituents in the product are at
elevated concentrations, but is not adding them to the regulatory text
for this factor. Theses concepts can be considered in making an overall
legitimacy determination.

(5) EPA's codification of the legitimacy factors in this rulemaking is
designed to continue to distinguish between real recycling and waste
treatment under the guise of recycling. The situation the commenter
describes would most likely be covered under the existing legitimacy
policy unless the recyclers took advantage of the new exclusion. Because
legitimacy determinations require a case-by-case analysis of all the
facts, we do not believe that this rulemaking is an appropriate place to
make a determination on a specific recycling scenario.

(6) EPA thanks the commenter for their ideas on how to make the US's
industrial system more sustainable. EPA believes that the choices it has
made for this legitimacy factor under the exclusions and non-waste
determinations in the final rule present the flexibility needed to
encourage and allow legitimate recycling under its rules while
discouraging disposal in the guise of recycling and allowing
implementing agencies to enforce against violators of the legitimacy
requirements.

<IP_ADDRESS>.10 - Implementation concerns regarding Factor 4

<IP_ADDRESS>.10 - Summary

(1) Commenters stated that the TAR factor will result in uncertainty and
expense in implementation since it will require measuring statistical
differences in numerous constituent concentrations in heterogeneous
materials. (70, 74, 93)

One commenter stated that for each product made, it is typical for
manufacturers to conduct reviews of the products in accordance with
established company safety practices, which are directed at safe
handling and use of the product. These evaluations consider knowledge of
the raw materials, the process, chemical analyses, and health and safety
information to decide whether to commercialize a product, how to label
it, and how to ensure it is managed safely in use. The commenters stated
that the consideration of TARs applies a burden of proof on chemical
manufacturing that is likely unachievable and that facilities will incur
additional recordkeeping and analysis costs to demonstrate compliance if
“recycle” applies to any material that has been used and is
subsequently sent back through the manufacturing process. The commenter
continued that they know of no instance in which an EPA or state
inspector has included TARs in onsite recycling audit protocols so
clearly this hasn't been a universally imposed on recycling activities
in the past, that they expect that regulators will ask questions like
“Can't you manage your columns consistently?” and “Why is there
such variability?” when there is variability in product streams,  and
that they cannot afford to review such processes when the environment is
not being endangered. (102/ 506)

(2) Commenters stated that the TARs factor will result in implementation
problems and potentially high costs since generators will have to know
the use their material is being put to at downstream manufacturing
facilities and asked how that is done and how one might determine that a
sample of the final product is made from raw materials rather than
recycled materials. (70, 74, 93, 102/506, 123)

(3) Commenters stated that in some cases there are no products made
completely from virgin material to compare the products of their
recycling processes to and, for that reason, they would have to redesign
their entire processes to even check if it complied with this factor.
Commenters stated that in some cases, levels of hazardous constituents
can make a process sham when it makes no sense, like when levels are
still very low but higher than in products made from virgin materials
and when the product meets vigorous specifications. (89, 102, 152, 168,
178)

(4) One commenter asked that, given the many different places within
these manufacturing divisions where one could sample the acid being
reused, which is the appropriate sampling point? Also, how often should
it be sampled, given the likely variance within the processes. The
commenter also asked how much sampling or proof would ever be enough to
demonstrate that levels are not elevated or that there is no risk.
Wouldn't this depend on the experience of the inspector and the
inspector's ability to make difficult technical decisions as well as how
would a regulator make a determination of significance and would it vary
by regulator? (102/ 506)

(5) Commenters stated that Appendix VIII hazardous constituent analysis
is very expensive and not cost-effective: from $2,000 to $5,000 per
sample. One commenter added that several of these constituents have no
analytic methods associated with them and one stated that evaluation of
lab results for hazardous constituents are subject to tremendous
subjectivity. (156, 165, 215, 506)

One commenter stated that EPA should not allow knowledge of hazardous
secondary materials to be sufficient for meeting the TARs factor.
Laboratory analysis is needed-this is implicit but not stated in the
regulatory language. (527)

(6) Commenters stated that the example shows that in implementation,
TARs could be the determining factor even when all the other factors are
met. (506)

(7) Commenters stated that the current qualitative and subjective
legitimacy factors could be interpreted and applied differently in
different states and EPA Regions and by different personnel within a
state. More specific guidance is needed. (165)

(8) Commenters stated that OSHA does not require a hazardous constituent
on an MSDS until it is 1% by weight of the material-this is a huge
amount for some hazardous constituents and, therefore, not an
appropriate requirement to rely on. (527)

(9) One commenter stated that where hazardous secondary materials are
used for a beneficial purpose in a process, a comprehensive laboratory
analysis should be required of the process residues or treatment sludges
and that EPA has only indirectly considered the significant potential
dilution issues in this rulemaking, whereas dilution and related issues
have been directly considered and addressed in the LDR program with
respect to hazardous wastes. (527)

<IP_ADDRESS>.10 - Response

(1) EPA notes that this final rule codifies the legitimacy provision for
the new exclusions and non-waste determinations and that legitimacy
determinations for existing exclusions should be made under the existing
legitimacy policy. However, EPA believes that because of the design of
the factors and the overall structure of legitimacy, the factors it is
adding to the regulations, including the TARs factor, are consistent
with the factors under the existing legitimacy policy for the reasons
outlined in the 2003 proposal and, therefore, are not more restrictive
than the current policy.

EPA believes that evaluating TARs as a part of the legitimacy
determination is an important step, as distinct from a manufacturer’s
general review of its products. Although very many products made from
recycled hazardous secondary materials are safe for their users, the
Agency is aware of cases where the Toxics Along for the Ride could
threaten human health and the environment, making this analysis relevant
and important when examining a recycling process.

(2) In response to confusion from commenters on how to apply this factor
if the final product is created downstream in a manufacturing process,
EPA has made it clear in its preamble to the final rule that comparing
the hazardous secondary material to an analogous raw material is an
option for meeting this factor. If a recycler is unable to compare
products because the end product they feel is appropriate for the
comparison appears further down the management chain, they are able to
compare the secondary material to the raw material instead.

(3) In response to concerns that there are products in some industries
that are always made from recycled materials, meaning that there are no
analogous products to compare them to, EPA clarifies that it will not be
necessary for facilities to revamp their entire processes to evaluate
this factor. In many cases they should be able to examine the final
product of the reclamation for TARs and evaluate them against product
specifications—where there are applicable specifications—instead of
looking at intermediates from every step of the reclamation, as several
described in their comments. Similarly, EPA understands that in some
cases it would make no sense for a process to be considered sham when
concentrations are elevated because the product meets strict
specifications or the levels are still very low. EPA has made the TARs
factor a factor to be considered instead of a mandatory factor to take
into account exactly those situations where the recycling is legitimate
even in the case that this factor is not met. If a facility considers
the factor and decides that it is not applicable to its process, EPA
suggests that the facility evaluate the nature of the presence of
hazardous constituents in its process and be prepared to demonstrate
both that it considered this factor and the reasons it believes the
factor is not relevant.

(4) EPA recognizes that there are specific questions regarding
implementation of the TARs factor in specific processes. The Agency
stresses that individual legitimacy determinations have to be made on a
case-by-case, site-specific basis taking into consideration all the
facts of a certain situation. It is not in the scope of this rulemaking
to evaluate the legitimacy of individual site-specific recycling
situations as the answers will depend on the facts of the process. As in
the past, the regulated community is welcome to consult its implementing
agency on specific processes for assistance in making a legitimacy
determination.

(5) EPA is not mandating in its final rule the specifics of how a
facility makes its determination of whether there are significant or
significantly elevated concentrations of hazardous constituents in the
product of a recycling process. EPA expects that recyclers will be
familiar with the constituents that make up the materials in their
process and their products. Although analytic tests are not required,
EPA agrees with the commenter that there are certainly situations in
which testing would be the most thorough and accurate way to make a
determination that there are not significant levels or significantly
elevated levels of these constituents and that a product made from
recycled materials does not pose a risk greater than an analogous
product made from raw materials. EPA notes that testing may not always
be required to make this determination, but that a facility must be able
to demonstrate that their recycling is legitimate in all cases.

(6) EPA agrees with the commenter's statement that in some cases not
meeting the TARs factor can make a recycling process not legitimate even
when the other factors are met. EPA believes that this is correct and
appropriate. EPA has maintained the factors to be considered as part of
the factors being codified because those factors are important in the
determination of legitimacy. Although this factor is sometimes not
appropriate to a specific recycling process, EPA does think it is
important enough that in some cases it may indicate that a recycling
process is not legitimate even when the other factors are met. However,
EPA notes that it does not think there are frequent cases of sham
recycling that fail just one of the factors; more often, the process
will fail several or all of the factors.

(7) EPA thanks the commenter for its request for more guidance on the
legitimacy factors. EPA has provided more description of how the
requirements work in the 2007 supplemental proposal and in the final
rule and hopes to be able to issue more guidance in the future to assist
the regulated community and the implementing agencies.

(8) EPA does not expect that those evaluating TARs as part of a
legitimacy determination would rely on OSHA's MSDSs to make this
evaluation in cases where the information on the MSDSs would not be
sufficient or appropriate to adequately show whether the levels of
hazardous constituents are elevated in a product as compared to an
analogous product.

(9) Regarding the comment about the process residues and sludges from a
recycling process, EPA has determined that a requirement to manage
residues properly is not directly related to a legitimacy determination.
However, EPA notes that residuals that are solid waste are subject to
the waste characterization and identification requirements of 40 CFR
part 261 as newly generated waste. In addition, as part of the
transfer-based exclusion in the final rulemaking, EPA is requiring that
any residuals that are generated from the recycling process be managed
in a manner that is protective of human health and the environment.
Dilution of hazardous constituents through “recycling” is one of the
questions that the legitimacy factors as a whole are designed to get at.
An evaluation of whether the hazardous constituents in a secondary
material were simply being diluted in a recycling process would be
addressed in evaluations of the useful contribution factor and the
toxics along for the ride factor.

<IP_ADDRESS>.11 - Factor 4: Scope

<IP_ADDRESS>.11 - Summary

(1) Commenters stated that the TARs factor is not appropriate for mining
and mineral processing industries or for phosphate fertilizers because
the virgin ore that goes into the process has varying levels of
impurities depending on where it originated, making the required
comparison between materials made from virgin raw materials and those
made from secondary materials difficult to make. The commenters making
this statement made several arguments about why the factor is not
appropriate for their industry:

in mining and mineral processing industries, producers and recyclers
could not apply the TARs test without revamping their production
operations at great cost because few products are made from virgin
materials alone;

there is no evidence of environmental harm from the production and sale
of ore deriving in part from hazardous materials;

if they were to be deterred from recycling because of this factor, just
one of our facilities would fail to recover 4,400 ounces of gold—$1.76
million at 2003 prices;

product specifications that products in the primary metals industry must
meet will keep impurities down.

(89, 152/481, 180, 197/526, 465)

Commenters added that the TARs factor has no bearing on whether
recycling is legitimate in the primary metals and minerals industry. A
metals recovery process could produce a high grade metal but also
concentrate the impurities from the ore, which may deem it a “sham”
even if the product meets high grade specifications. As the AMC I
decision states, primary metals production proceeds by the step-wise
concentration of the minute metal values found in natural ores. One
commenter added that this would not be sham because the process was not
undertaken to get rid of impurities, but to recover the metals. (89,
152/481, 180/524, 528)

(2) Commenters stated that the TARs factor should only be applicable to
products produced from secondary materials that are generated and reused
in another industry and that, therefore, contain non-indigenous toxics
not contained in the virgin feedstock. In the same industry, the nature
of hazardous constituents in the secondary material would be the same as
those in the raw material. Another commenter stated that they oppose the
application of this factor to products that are recycled and reused or
reclaimed and sold to a third party as part of the industrial process.
It should only be applicable if the product is made commercially
available. (85, 89, 180/ 524)

(3) One commenter stated that the second aspect of this factor seems to
address just the 40 characteristic constituents and ignore the 480
Appendix VIII hazardous constituents associated with listed waste. All
potential hazardous constituents must be evaluated. (119)

<IP_ADDRESS>.11 - Response

(1) EPA received several comments discussing the application of this
factor to the mining and mineral processing industry that stated that
the factor would not be relevant to the processes in that industry or
would be especially hard to implement or costly for that industry. EPA
notes that unless the recycler was taking advantage of one of the
exclusions or non-waste determinations in the final rule, they would be
covered by the existing legitimacy policy, rather than the legitimacy
provision in this final rule.

In general, however, EPA does not think it is appropriate to exempt the
mining and mineral processing industry or any other industry from the
requirements of the toxics along for the ride factor in its final rule.
EPA finds that the concept of TARs is an important part of the concept
of legitimacy and is thus important to evaluating the legitimacy of all
recycling operations, whether the recycling is occurring under one of
the new recycling exclusions and thus, subject to 40 CFR 260.43 or
whether the recycling is under an existing definition of solid waste
exclusion and thus, continues to fall under the existing legitimacy
policy.

If taking advantage of the provisions of this final rule, however, EPA
does not think it would be necessary for mineral processing facilities
to revamp their processes to evaluate this factor. In many cases they
would be able to examine the final product of the reclamation for TARs
and evaluate them against product specifications where there are
applicable specifications instead of looking at intermediates from every
step of the reclamation, as they described in their comments. In
addition, EPA has made the TARs factor a factor to be considered instead
of a mandatory factor to take into account those situations where the
recycling is legitimate even in the case that this factor is not exactly
met. If a facility considers the factor and decides that it is not
applicable to its process, EPA would suggest that the facility evaluate
the nature of the presence of hazardous constituents in its process and
be prepared to demonstrate both that it considered this factor and the
reasons it believes the factor is not relevant.

(2) EPA does not agree with the comment that the TARs factor should only
be applicable to products produced from secondary materials generated in
a different industry than they are used in or only when made
commercially available. EPA has made this a factor to be considered
instead of a mandatory factor to take into account those situations
where the recycling is legitimate even in the case that this factor is
not met. If a facility considers the factor and decides that it is not
applicable to its process, EPA suggests that the facility evaluate the
nature of the presence of hazardous constituents in its process and be
prepared to demonstrate both that it considered this factor and the
reasons it believes the factor is not relevant.

(3) In response to the comment that it was unclear in EPA's 2003
proposal which hazardous constituents are addressed in this factor, EPA
has clarified in the regulatory language that to meet this factor the
product of the recycling process cannot include significant
concentrations or significantly elevated concentrations of hazardous
constituents found in Appendix VIII of 40 CFR part 261.

<IP_ADDRESS>.12 - Factor 4: Relevance of TARs to legitimacy

<IP_ADDRESS>.12 - Summary

(1) Commenters stated that the TARs factor has no bearing on whether a
recycling process is legitimate. A commenter added that even though EPA
says not every component has to contribute, under this factor a small
amount of hazardous components could make the recycling process sham.
Commenters stated that a better test of legitimacy would be whether the
secondary material in the process is suited for that use and does not
affect product quality. If it has functional value as a raw material and
the secondary material and the product meet the industry specifications,
it should be called legitimate. A commenter added that mining products
in particular have to meet rigid specifications and/or contract
requirements. Other commenters stated that Material Safety Data Sheets,
contracts, and other similar instruments could also play a role in the
TARs factor. One commenter added that many industrial and consumer
products are inherently hazardous and/or toxic and existing regulations
mandate their appropriate management. (70, 74, 93/472, 102, 152/481,
168, 203, 216, 460, 486, 506, 526, 528)

One commenter added that if levels are raised compared to analogous
products, a second evaluation should assess the impact of the
constituents on product effectiveness and the hazard to the user before
a legitimacy determination is made. (162)

One commenter stated that the proposed TAR factor does not get at
whether the hazardous constituents are being intentionally added to
products to avoid disposal costs, while another stated that the TARs
factor is relevant to legitimacy, particularly when evidence supporting
the useful contribution factor is weak and that both factors need to be
looked at together. (83, 104)

(2) Commenters stated that many secondary materials will have different
concentrations of constituents than the virgin material used to make the
product and that many products made both from virgin materials and
secondary materials contain impurities that add or detract little from
the usefulness of the product. Commenters stated specifically that cases
with elevated levels of hazardous constituents can still be legitimate,
like zinc fertilizer. Some commenters stated that increased metallic
impurities would not be an indication of sham recycling because the
refining process concentrates both target and non-target metals from
ores. Therefore, different levels of impurities alone should not impact
the legitimacy determination—they just mean that different inputs or a
different process was used. One commenter added that only in extreme
cases with very high levels of impurities would the toxics along for the
ride pose a problem for the utility or safety of the product. (70, 74,
83, 89, 91, 93/472, 102, 127, 152/ 481, 170, 178, 203, 478, 528)

(3) One commenter suggested that the legitimacy factor be whether the
person making the product has evaluated the threat to human health and
the environment of the hazardous constituents in the product. (83)

(4) Commenters stated that the Courts have taken into consideration the
presence of hazardous constituents, but in those cases it was just one
factor. Specifically, they stated that the Safe Food decision suggested
that a comparison of hazardous constituent concentrations could be used
to determine legitimacy, but that was only in the narrow case of zinc
fertilizers and that there is no reason to think the Court would find
the same way in other circumstances. (89, 152/481, 528)

(5) One commenter stated that the differing uses of products made from
recycled materials and the properties of each individual toxic of
concern need to be considered in an assessment of the TARs factor. (458)

<IP_ADDRESS>.12 - Response

(1) EPA does not agree with commenters who stated that the toxics along
for the ride factor has no bearing on whether or not recycling is
legitimate. EPA believes that this factor is an important way of
determining that a recycling process is actually recycling and not a
“sham.” If concentrations of hazardous constituents in the product
from the recycling process are elevated as compared to products made
from analogous raw materials, it could be because the hazardous
secondary material was simply run through a manufacturing process so
that the person managing that material could claim that it was recycled
instead of discarding it at a higher cost. These materials cannot be
said to be recycled because they are not adding value to the product but
are providing somewhere for the toxics to go that is not proper
disposal. For this reason EPA agrees with the commenters who suggest
that it is valuable to look at this factor in conjunction with the
useful contribution factor. EPA believes that an accurate legitimacy
determination comes from an examination of all the factors together.
Toxics that are illegally disposed of by being incorporated into a
product can also become exposure risks and could harm human health and
the environment.

EPA does not think it is appropriate to rely on product specifications
and other authorities to cover the requirements in this factor. Reliance
on specifications would not be an adequate substitute because some
products and intermediates do not have product specifications and
because many product specifications do not address the constituents of
concern from the hazardous secondary materials. Regarding other
authorities, they are not designed to evaluate the legitimacy of the
recycling process or the extent to which a recycling process compares to
normal industrial production. This factor is designed to be used with
the other factors to illustrate whether a whole process is legitimate
and the authorities listed by the commenters cannot be relied upon to
fill that same role in the legitimacy process, though a facility or
implementing agency may be able to use some of them to help evaluate
this factor in some cases. In addition, in response to the comment that
this factor does not adequately get at whether the materials are
intentionally being added to products to reduce disposal costs, EPA
states that the factor as it is finalized looks more appropriately at
the facts of the recycling case rather than at the intent of the
recycler, but that looked at as a whole, all the legitimacy factors
together are likely to indicate when a recycler is not intending to
actually recycle the secondary materials. EPA also notes that
variability in raw materials and products may and should be taken into
account when making the comparisons in the TARs factor.

(2) Partially in response to comments that express concern that many
secondary materials will have different concentrations of constituents
than the virgin material used to make the product, either because of the
nature of the product and the hazardous secondary materials or because
they come from source materials, such as ore, with different levels of
impurities, EPA has determined that it is appropriate to make this
factor a factor to be considered and not a mandatory factor. If the
facts of the examples referred to by the commenters are examined on a
case-by-case basis and the TARs factor is found to not be relevant to
that case, EPA suggests that the facility be prepared to demonstrate
both that it considered this factor and the reasons it believes the
factor is not relevant.

(3) EPA believes that as part of a legitimacy determination to evaluate
how much a recycling process is like manufacturing and is not disposal,
or “sham recycling,” it is appropriate to compare the product from
the recycling process to a product made from raw material because if the
products have comparable levels of hazardous constituents, that is an
indicator that the recycling process is like the manufacturing process
on this front and because there would be no additional threat to human
health and the environment from the recycling product than from the
product of manufacturing.

(4) EPA believes that it is appropriate to take the presence of
hazardous constituents into account in a legitimacy determination and
that it has the authority to do so in defining what is real recycling.
The Agency's authority to consider hazardous constituents is not just
discussed in the decision to the Safe Food case but also, for example,
in the decision to API II, where the court mentions hazardous
contaminants as a reason recycling could be considered sham.

(5) EPA agrees with the commenter that the application and use of the
product is relevant in an assessment of the TARs factor. In some
situations a recycling process may not meet the factor but still be
legitimate, which is why EPA has included this factor in the rule as a
factor to be considered, not a mandatory factor. EPA makes it clear in
its preamble to the final rule that the manner in which a product is
used and whether there are exposure pathways can be considered when
deciding whether the TARs factor is relevant. If the entity performing
the determination believes that the recycling does not meet this factor
but is legitimate nonetheless, EPA suggests that the facility evaluate
the nature of the presence of hazardous constituents in its process and
be prepared to demonstrate both that it considered this factor and the
reasons it believes the factor is not relevant.

<IP_ADDRESS>.13 - Factor 4: Risk concerns

<IP_ADDRESS>.13 - Summary

(1) One commenter stated that in the TARs factor, risk to human health
and the environment depends on the use of the product made from
hazardous secondary materials. The commenter stated that levels of
hazardous constituents that are inappropriate in a pacifier may be okay
as an input to an industrial process. The commenter argued that,
therefore, parts (i) and (ii) of the factor should only apply to
products intended for consumer use rather than industrial use. (124)

One commenter stated that the actual risk presented by the product may
be more important than the existence of elevated levels of hazardous
constituents-a case-by-case evaluation is therefore needed. (458)

(2) Commenters stated that it is not protective to let products enter
commerce if they have elevated levels of hazardous constituents in them
due to being made from hazardous secondary materials and that high
concentrations of hazardous constituents in a product are a clear danger
to the public, the user, and the environment. Commenters added that when
toxics along for the ride increase the risk of adverse environmental or
health effects, this is an element of discard and recycling should not
be legitimate.  (470, 538, 543)

(3) One commenter stated that when a product made from hazardous
secondary materials has the same risk as the hazardous secondary
materials did, nothing is gained from the recycling process and risk of
exposure is likely increased. (521)

<IP_ADDRESS>.13 - Response

(1) EPA does not agree with the commenter's suggestion that it vary the
requirements for meeting this legitimacy factor depending on whether the
product is intended for commercial or industrial use. EPA does not
believe it is appropriate to complicate this factor by trying to define
situations in which certain parts of the factor apply and others do not.
EPA does however believe that its case-by-case approach for this factor
addresses these concerns. EPA has stated in its explanation of
“significant” in this factor that things such as how a product is
used and by whom and the availability of the hazardous constituents to
the environment are relevant in considering whether elevated levels of
toxics are “significant.”

(2) In response to the comments that it is not protective of human
health and the environment to let products with elevated levels of
hazardous constituents enter commerce and that recycling should not be
legitimate if it increases the risk of adverse environmental or human
health effects, EPA agrees and does not believe that its action in
codifying the legitimacy factors will increase risk of these effects. In
fact, the TARs factor is designed specifically to address these types of
concerns. Cases where this factor may not be met but the recycling is
legitimate include situations where there is no exposure to the product
either because it is an intermediate or remains part of an industrial
process or because it is not available to the environment. In cases
where elevated toxics in a recycled material would pose an increased
risk to the public or the environment over the analogous product, this
would impact the value of the product, covered also in Factor 2, and
would indicate that the toxic constituents are being discarded in the
product in lieu of treatment and, thus, are toxics along for the ride.

(3) This example demonstrates why the comparison in this legitimacy
factor between the product of the recycling process and the analogous
product made from raw material is the most appropriate way to evaluate
toxics in the legitimacy determination. As in this type of case, if use
of hazardous secondary materials increases the risk of exposure to
hazardous constituents from the recycled product as compared to a
product made from raw materials, the recycling process would,
appropriately, likely not meet the TARs factor.

<IP_ADDRESS>.14 - Factor 4: Application of factor on a case-by-case basis

<IP_ADDRESS>.14 - Summary

(1) Commenters stated that they agreed with EPA's preamble statement
that the TARs factor is most appropriately addressed on a case-by-case
basis and not with generic limits that are intended to apply to all
recycling cases. Commenters added that one-size-fits-all will not work
for this factor and that the Courts and EPA have applied this concept on
a case-by-case basis in the past. One commenter added that a TARs
analysis cannot take place in a vacuum. (85, 89, 91, 97, 102, 107,
112/458, 122, 129, 149, 199)

(2) Commenters stated that products with elevated levels of hazardous
constituents should be able to be approved by EPA or the state on a
case-by-case basis or that if the toxic along for the ride in a
particular situation is not a problem or a risk, a simplified
presumptive variance mechanism should be allowed for a Region or state
to exempt that situation by letter on a case-by-case basis. (137, 143)

<IP_ADDRESS>.14 - Response

(1) EPA agrees with commenters that the TARs factor is most
appropriately addressed on a case-by-case basis and has finalized the
legitimacy factor as case-by-case evaluations that can take into
consideration the relevant facts of a recycling activity and use those
facts to make a determination of significance if there are toxics
present that are not in analogous products or if there are elevated
levels of toxics or hazardous characteristics.

(2) EPA has not finalized an approval process or variance mechanism for
cases where the TARs factor is not applicable, but suggests that if a
facility determines that the levels of toxics in their product are
elevated but that the TARs factor is not applicable in the case of their
process and product, they keep records of that determination so they are
prepared to document the legitimacy of their process if asked by the
implementing agency. As in the past, the regulated community is welcome
to consult its implementing agency on specific processes for assistance
in making a legitimacy determination.

9.2.3 - Consideration of economics for legitimate recycling

<IP_ADDRESS> - Preamble discussion about consideration of economics for
legitimacy

<IP_ADDRESS> - Summary

In 2007, EPA offered further guidance and clarification on how economics
may be considered in making legitimacy determinations. We requested
comment on whether to maintain the preamble discussion about
“consideration of economics” as informing overall legitimacy
determinations, as well as how economic consideration is consistent with
prior legitimacy determinations under the Lowrance Memo, and other ways
that economic consideration may support legitimacy determinations.

EPA received only positive comments on the preamble discussion about
consideration of economics in legitimacy. All commenters, who are from
generating industries and associations, reacted favorably to the
discussion and a few offered additional points of consideration or
suggested edits to the language. These commenters preferred that we
maintain the preamble guidance for “consideration of economics” and
opposed the codification of a separate legitimacy factor. Several
commenters stated that they approved of the following statements in the
preamble: prices for hazardous secondary materials may fluctuate over
time; recycling operations using hazardous secondary materials differ
from more traditional manufacturing operations; a recycler may be able
to charge a generator and still be a legitimate recycling operation; and
economic considerations are indicators of whether recycling is
legitimate.

Commenters also stressed that industries must be evaluated on a
long-term basis because market prices will fluctuate over time,
therefore, it may make sense to pay for recycling at times in order to
keep the operations available in the future; economic considerations
vary by industry, size of a generator, and recycled product or
intermediate; transportation cost may be included within the price of
recycling materials even though that cost may not add to the “value”
that hazardous secondary materials contribute to the recycling process;
“[economic consideration] can and should be used to demonstrate that
the recycling process produces a valuable product;” EPA should
“clarify the need for a broad approach to assessing relative economics
of different [recycling] activities and costs” because conditions vary
greatly among recyclers; and any test for legitimacy cannot focus on
which way funds flow for recycling activities because price fluctuations
could make recycling costs exceed the value of materials.

Additional guidance was proposed by a few commenters. One suggested that
EPA clearly state that payment for recyclable materials must be more
than “nominal” for the recycling to be legitimate and offered two
specific examples of prices for materials that are more than nominal.
Another commenter stated that “any economic focus should be on the
reclamation operation's product, not on the… input to the reclamation
process.” One commenter urged EPA to “recognize that even if [a
reclamation process] broke even or lost money, it still can be an act of
corporate social responsibility… [to conserve] raw materials,” and
asked EPA to offer a “safe harbor” for legitimacy if the recycling
process produces a valuable product. Similarly, a commenter stated that
a generator may choose to recycle to “provide needed raw materials for
a vital supply chain” or because it wants a “more environmentally
preferable management option based on ethical or societal
considerations.” However, this commenter also stated that
“legitimate recycling may not occur if the economics do not warrant
it,” which seems to contradict its other statement. A few commenters
also asked that EPA clarify that consideration of economics entails a
flexible and broad approach that allows many recycling scenarios, such
as small-scale recycling of hazardous secondary materials from batch
manufacturing that may not be profitable due to the amount of recycling
that occurs. Finally, a commenter requested that EPA “establish a
rebuttable presumption that [recycling] is legitimate where the recycler
pays for the [hazardous] secondary materials.” Additionally, one
commenter asked that EPA clearly state that the economics of a recycling
activity “are” relevant to legitimate recycling determinations,
rather than use “may be relevant.”

(0452, 0458, 0463, 0471.2, 0472, 0478, 0481, 0484, 0485, 0486, 0491,
0492, 0524, 0529, 0534, 0564)

<IP_ADDRESS> - Response

EPA has maintained in the final rule a preamble discussion very similar
to the March 2007 supplemental proposal of how economics may be
considered in making legitimacy determinations. We believe that
providing guidance on this topic, rather than codifying a separate
factor to be considered, is most appropriate because the economics of
recycling activities vary greatly, as evidenced by commenters'
responses.

We appreciate commenters' suggestions for clarifying the preamble
discussion and believe that the guidance we have provided allows for the
scenarios that commenters put forth. We agree that in general any
payment for hazardous secondary materials should be more than nominal;
however, we recognize that many different recycling scenarios exist and
that a scenario could allow for a small payment by either the recycler
or generator. Likewise, we think the preamble discussion allows for
recycling scenarios that represent acts of corporate social
responsibility and small-scale recycling that may not be profitable due
to the amount processed. For this reason, while we support the premise
that the economic factors influence legitimate recycling, we cannot
agree with the statement that legitimate recycling only occurs if
warranted by economics. We do not agree that the economic focus for
legitimacy interests should be solely on the reclamation operation's
product, and not on the hazardous secondary material inputs to the
recycling process. The recycling activities allowed under this
rulemaking vary too much to make such a conclusion. In addition, we can
envision a scenario where a recycler pays for hazardous secondary
materials that are illegitimately recycled; thus, we cannot support the
“rebuttable presumption” suggested by a commenter. Finally, as
stated in the preamble, consideration of economics has long been a part
of the Agency's concept of legitimacy, as is evident in the Lowrance
Memo and earlier preamble text (50 FR 638, January 4, 1985 and 53 FR
522, January 8, 1988; see also American Petroleum Institute v. EPA
(“API II”), 216 F.3d 50, 57-58 (DC Cir. 2000)). Consequently, we
agree with the comment that the economics of a recycling activity are
relevant to a legitimate recycling determination, insofar as
consideration of economics can clarify whether the hazardous secondary
material inputs provide a useful contribution and whether the product of
recycling is of value.

<IP_ADDRESS> - Regulatory requirement for consideration of economics for
legitimacy

<IP_ADDRESS> - Summary

In 2007, EPA offered further guidance and clarification on how economics
may be considered in making legitimacy determinations. We requested
comment on whether to codify specific regulatory language on economics
or maintain the preamble discussion about “consideration of
economics.”

The majority of commenters did not want a separate factor codified for
consideration of economics. These commenters, who are from generating
industries, generally supported the preamble discussion of economics and
legitimacy, and wanted the consideration to remain a “sub factor taken
into account,” but not required under the regulations. They supported
their views with the following rationales: economic consideration is
already inherent within the proposed legitimacy criteria; codification
is unnecessary: instead EPA should put in place environmental safeguards
and allow the markets to dictate whether recycling occurs; economics is
too variable and imprecise; consideration of economics should only be
used “as a means to clearly demonstrate legitimacy, but not to
demonstrate ‘sham recycling’”; and no specific test is feasible,
since prices for hazardous secondary materials fluctuate long-term and
are cyclical. One commenter representing several states supported the
inclusion of economic consideration within legitimacy factor (2), but
specified that there should be no requirement that “the ‘value’ of
the [recycled] product always equal or exceed the cost of producing
it” since market prices for materials vary and “there are periods of
losses and profits.” (see section <IP_ADDRESS>.3. of this document for more
information about the definition of legitimacy factor (2).)

A few commenters supported codifying a separate factor for economic
consideration and one commenter supported additional regulatory language
for how to consider the economics of recycling, but not necessarily a
separate factor. These commenters included one state and recycling
industry companies. The state commenter suggested developing regulatory
language to make economic consideration an enforceable factor using
existing EPA language that recycling will have a net financial return to
the generator. Another commenter asked that regulatory agencies
routinely review a recycler's economic factors, as materials
availability, demand for recycled products, and other costs fluctuate
over time. One commenter appears to support regulatory language by
stating that without an economic assessment, many hazardous secondary
materials that have no value and “a high potential to negatively
impact human health and the environment” may be inappropriately
excluded from the definition of solid waste as legitimate recycling.

(0452, 0457, 0458, 0463, 0468, 0471.2, 0478, 0481, 0495, 0507, 0518,
0524, 0526, 0528, 0529, 0534, 0543)

<IP_ADDRESS> - Response

EPA agrees with those commenters who argued that economic considerations
are inherent within the legitimacy factors. We believe that one specific
factor cannot encompass all economic scenarios for the universe of
hazardous secondary materials recycling subject to this rulemaking.
Furthermore, we do not believe that codifying a separate enforceable
factor would strengthen the legitimacy requirements, but we do believe
that articulating how economic considerations can influence the
legitimacy factors (such as factor (2)) adds value to the legitimacy
determinations made by state regulators and the regulated community.

Based on the comments we received and historical consideration of
economics via the Lowrance Memo, the Agency is not codifying specific
regulatory language on economic considerations. Instead, the final rule
preamble offers guidance and clarification on how economics may be
considered in making legitimacy determinations, similar to the preamble
discussion in the March 2007 supplemental proposal. We believe that
guidance on consideration of economics is necessary and that markets for
recyclable hazardous secondary materials do not always function well on
their own, as evidenced by the study of environmental problems.

In response to comments that supported a codified factor for economic
consideration, we believe that legitimate recycling activities vary too
much to establish that recycling must always produce a net financial
return to the generator. We agree that a positive financial return to
the generator would support a legitimacy determination; however, we
think that it would be too difficult to establish in regulations what
would define a net financial return for all recycling activities. We
agree that there is value in considering the economics of a recycling
activity over time, as prices of hazardous secondary materials will
change and demand for recycled products may shift. As such, we think
that the current preamble guidance allows adequate flexibility for
considering economics and that a specific requirement to routinely
review the economics of a recycling activity is unnecessary. Lastly, we
believe that the existing legitimacy policy, specifically factor (1)
(managed as a valuable commodity), preclude hazardous secondary
materials without value from being recycled. Therefore, we think that
the commenter's interest in defining legitimacy through a hazardous
secondary material's value is best addressed through the legitimacy
provision codified in the final rule, as well as the preamble guidance.

9.2.4 - Additional legitimacy criteria/factors that should be considered

9.2.4 - Summary

One commenter would like to see speculative accumulation (currently
found at 40 CFR 261.1(c)(8)) added to the list of criteria to be
considered when determining the legitimacy of a recycling activity. This
commenter also noted that they would like speculative accumulation to be
used as one factor to be considered in evaluating whether abandonment
had occurred, rather than as a “trump” card (203).

Another commenter noted that they believed EPA had overlooked an
important criterion from the 1989 guidance memo: what degree of
processing is required to produce a finished product. This commenter
felt that this is an important criterion because it provides for
evaluating intermediate reclamation steps that may be really waste
treatment (119).

One state commenter offered the following as useful information in
determining whether legitimate recycling is occurring: the percentage of
material that will be a useful component or that will aid in the
recycling process, the degree to which processing is required, the
market value of the material in its processed and unprocessed states,
and the storage timeframes prior to and after recycling (509). Another
state commenter recognized that all criteria regarding legitimate
recycling cannot be addressed in a single regulatory requirement and
noted that there may be other criteria that need to be considered on a
case-by-case basis in making a legitimate recycling determination (539).

One industry commenter recommended an additional listing of “other
relevant factors,” which would allow both regulators and the regulated
community latitude to consider and give weight to circumstances and
factors not captured by the codified language. This commenter stressed
that this is particularly important to encourage new and innovative
recycling (222).

9.2.4 - Response

In this final rulemaking, the Agency is not changing the current
speculative accumulation provisions that apply to all hazardous
secondary materials that are not solid wastes and has not reopened the
speculative accumulation requirements that have been part of the
Agency's regulations since 1985 and have been upheld by the D.C.
Circuit. The existing speculative accumulation provision directly ties
to whether a material is being discarded by virtue of being abandoned
(or generally no longer being used as a product) and is not necessarily
related to whether discard occurs at the actual recycling stage because
the recycling is a sham, i.e. not legitimate. The Agency does recognize
that issues with these two provisions can arise in the same recycling
scenario: that is, a material that is being sham recycled can sometimes
also be accumulated speculatively. However, we believe the two
provisions should be independent and thus, we are codifying the
legitimacy provision in 40 CFR 260.43 for the recycling exclusions and
non-waste determinations and are not changing the speculative
accumulation provisions of 40 CFR 261.1(c)(8).

In addition, the Agency is not including a specific criterion or factor
that addresses the degree of processing in recycling. In the October
2003 proposal, the Agency noted that the original 1989 guidance included
the question: “What degree of processing is required to produce a
finished product?” and the Agency explained in the 2003 proposal that
this question was aimed at distinguishing recycling operations that
involve direct use or reuse of hazardous secondary materials from
recycling operations that involve reclamation rather than determining if
the recycling is legitimate. Since recycling can be considered a form of
waste treatment, the Agency does not believe the degree of processing is
particularly relevant to whether the recycling is legitimate or sham and
we determined that this concept did not need to be captured in the
legitimacy factors. No other commenters objected to dropping the degree
of processing as a legitimacy criterion or factor and we are thus
finalizing the legitimacy provision without that concept as a factor.

In response to the comments that indicated other useful information
could be used in legitimacy determinations or requested to list other
criteria, the Agency agrees that the information provided in the
comments could be useful in making an overall legitimacy determination
using the codified legitimacy factors and does not believe the codified
legitimacy language precludes these other considerations from being
taken into account within the legitimacy factors. In fact, we encourage
the regulated community and implementing agencies to use any and all
information about the recycling process that fit within the legitimacy
factors to come to an informed decision on the legitimacy of a specific
hazardous secondary material recycling operation. However, no other
specific legitimacy factors were identified and we believe the four
factors codified in the final rule include the critical principles of
legitimate recycling.

9.3 - Purpose and intent of legitimacy factors

9.3 - Summary

(1) Commenters supported the concerns that hazardous wastes should be
legitimately recycled and agreed that boundaries need to be set to
create a standard for making recycling determinations. The commenters
gave various reasons for their support of legitimacy. Commenters stated
that these factors are sensible and consistent with the objectives of
the proposal, can be intelligently and effectively applied, and, if
applied as described in the 2003 preamble, will ensure the correct
balance of promoting recycling and protecting human health and the
environment and will better promote legitimate recycling activities. One
commenter stated that the legitimacy factors are valuable for
demonstrating that some forms of recycling are not akin to discard and
for distinguishing sham recycling from legitimate recycling. One
commenter stated that they think codified legitimacy will lead to less
ambiguity for the regulated community, even though there will be some
ambiguity in making determinations. One commenter stated that the
legitimacy factors are needed to assure the public that proper materials
management is occurring. One commenter stated that use of the legitimacy
factors will reveal that many materials that regulators think are
regulated may actually be being managed as unregulated materials at the
current time. One commenter stated that the legitimacy requirements
address the Agency's concern of product stewardship.

(43, 62, 85, 91, 110, 168, 172, 196, 211, 536, 555)

Several commenters supported the intent of legitimacy with some
conditions. One commenter stated the specific implementation questions
about the factors should be answered or the exclusions run the risk of
overzealous interpretations (to either extreme), while others stated
that the factors should not be codified. One commenter stated the
legitimacy should hinge on whether the material's value is greater or
less than the cost of management.  (222, 484)

(2) Several commenters had suggestions on how legitimacy should be
applied. Commenters stated that future legitimacy determinations should
follow the pathway established by the existing exclusions or that EPA
should preserve previous determinations on legitimacy. One commenter
stated that EPA should make it clear whether enforcement agencies only,
industry or anyone can make a determination of legitimacy and stated
that if anyone is entitled to make a legitimacy determination, it may
lead to disputes. Similarly, one commenter stated that there should be a
reasonable and efficient process to enable a facility to work with the
Agency to confirm a secondary material's contribution to the recycling.
(62, 98, 172, 524)

(3) Commenters stated that the regulatory language should clarify that
factors are guidelines, not rigid tests. Commenters stated that the
factors should be used in a case-by-case determination system with
subjective evaluation and balancing, as a one-size-fits-all approach is
not workable and that this point should be made in the regulatory text.
One commenter stated that the factors must be applied differently to
different types of recycling. One commenter added that the 2003 proposal
required a consideration of each of the factors with an implication that
they all must be met. (60, 62, 83, 89, 91, 93, 157, 172, 199, 222, 225)

(4) Commenters had various opinions on the appropriate scope of the
legitimacy factors being promulgated.

One commenter stated that EPA should clarify whether the legitimacy
requirements apply to all hazardous wastes being recycled or just this
exclusion. One commenter asked which recycling provisions the legitimacy
factors apply to. That is, do they apply to 261.2 Table 1; 261.2(e);
261.4(a) and (b); 261.6(a)(3); 266; 273; 279? (98, 442)

Commenters stated that the legitimacy factors should be applied to all
recycling. To have factors apply in some cases and not in others would
be confusing. (138, 172)

Commenters stated that the legitimacy factors should not be imposed on
existing exclusions, just to those that are new in this final rule. One
commenter added that these exclusions were not subject to them
previously and one commenter stated that EPA has not explained the need
to apply these factors to existing exclusions. One commenter added that
exclusions already have long-standing criteria as part of them, that it
is not justified to add new requirements and that EPA could be
overstating its case for precaution based on damage cases because some
of the facilities described in the cases were in operation as long as 50
or 100 years ago before the powerful incentives came into play in 1982.
One commenter stated that they assume that compliance with specific
requirements under pre-existing recycling provisions, such as 40 CFR
part 279 for used oil, will meet the legitimacy criteria. Otherwise,
this is a new provision for all recycling exclusions. (70, 93/472, 179,
199, 473, 486, 528, 534)

In addition, one commenter stated that the Agency should retain existing
exclusions, such as the closed loop exclusion and one commenter asked
whether facilities currently operating under 40 CFR 261.6 and 40 CFR
part 266 need to demonstrate legitimacy when a determination has been
previously made and there is no evidence of problems. (60, 518)

One commenter stated that re-refining distillation bottoms, excluded at
279.10(e)(4) should be made specifically subject to the legitimacy
factors. EPA should already have in its possession sufficient laboratory
data demonstrating that they would come nowhere close to meeting three
of the factors. (156)

Commenters stated that the broad application of the legitimacy factors
to all recycling is contrary to the intent of the rule to be
deregulatory and will impose a burden. One commenter added that this is
particularly true when a system already qualifies for the closed loop
exclusion. One commenter added that the fact that the rule was more
restrictive should have been addressed in the State Authorization
section of the preamble. One commenter stated that these are new
requirements and asked if EPA intends no changes to the universe of
materials excluded from RCRA regulation, why apply legitimacy to
existing exclusions? (60, 74/486, 102, 442, 472, 486, 528)

Commenters also stated that there is a difference between the legitimacy
regulation and the sham recycling policy. They stated that the factors
presume recycling to be illegitimate by defining what is legitimate
instead of what is sham and that the regulatory language on legitimacy
indicates that the Agency will view all recycling with suspicion. One
commenter stated that this presumption is not supported by the facts
because the vast majority of recycling is legitimate and that this
presumption creates obstacles to resource conservation and recovery. One
commenter added that the Agency is implying that recycling practices
that do not meet the factors must be sham and, therefore, tightly
regulated. One commenter added that EPA should make it clear that there
is a presumption that recycling is legitimate and are concerned that the
factors and the requirement to demonstrate indicate the opposite. (129,
152/481, 173, 225, 537)

(5) One commenter stated that it is troubling that EPA suggested that
the legitimacy of a recycling process relates more directly to how it
compares to industrial production than to the risks posed by recycled
products because many industries have actually changed their processes
to accommodate recycling. (127)

(6) One commenter stated that the legitimacy factors should be revised
to reflect a broader inclusion of activities that can occur without
being deemed disposal. (137)

(7) One commenter stated that EPA is incorrect in its expectation that
more explicit legitimacy factors will encourage recycling. That will
only happen if their meaning is clear and their application to a
particular material can be conclusively determined before the material
is recycled. (190)

(8) One commenter asked what “demonstrate legitimate recycling”
means. (518)

(9) One commenter asked whether the consideration of economics in
legitimacy applies when determining when economically significant
quantities of precious metals are present—a precondition of 40 CFR
part 266 subpart F, or if EPA would require that there be a net positive
return for precious metals to qualify. (516)

(10) One commenter stated that EPA fails to provide the regulated
community with sufficient explanation regarding the imposition of the
contemplated “legitimate recycling” factors to provide meaningful
comment, in violation of the Administrative Procedure Act (APA) and that
under the APA, an administrative agency engaged in a rulemaking must
provide the regulated community with, among other things, the “terms
or substance of the proposed rule or a description of the subjects and
issues involved.” EPA's proposed regulatory language states that
“persons who recycle hazardous secondary materials must be able to
demonstrate that the recycling is legitimate.” The commenter continued
by stating that there is no discussion in the 2007 supplemental proposal
of how EPA proposes to apply the criteria to existing regulatory
determinations and to existing regulatory exclusions. The commenter
stated that, in effect, by a single sentence in its 2007 supplemental
proposal, EPA has called into question every existing regulatory
determination by EPA or an authorized state and every RCRA regulatory
exclusion found in Title 40 parts 260–299 of the CFR without providing
a rationale for doing so and without adequately considering the costs of
doing so. The commenter added that any attempt by EPA to apply the
legitimate recycling factors to prior waste determinations would violate
the due process clause. The due process clause requires that regulated
entities receive fair notice of the conduct that a government agency
expects them to adhere to prior to imposing penalties. As noted by the
D.C. Circuit, the Due Process Clause prevent deference from validating
the application of a regulation that fails to give fair warning of the
conduct it prohibits or requires. We find EPA's statement that it
“generally do[es] not see the need for the regulated community or
overseeing agencies to revisit prior waste determinations and expect any
written determinations from those agencies to, in effect, be
grandfathered” to be confusing. The use of the term “waste
determination” instead of “legitimacy determination” is confusing
because it brings into question determinations of “solid waste” vs.
“hazardous waste.” In addition, why does EPA use the word
“generally”? Does EPA believe that in some cases prior
determinations will require revisiting? (528)

9.3 - Response

(1) EPA thanks the commenters for their comments on the value of
codifying legitimacy generally. After considering comments EPA has
decided not to codify the legitimacy factors for existing exclusions in
this final rule. EPA’s longstanding position that any definition of
solid waste exclusion that is based on the hazardous secondary material
being recycled applies only to materials being legitimately recycled is
unchanged, however. One reason EPA is not codifying the legitimacy
factors for existing exclusions is to address comments on how this
action would effect existing exclusions and confusion about the status
of those exclusions.

Regarding proper materials management, EPA agrees that the question of
whether the cost of management outweighs the value of the material is a
valid question, but does not think that the entire determination should
hinge on that fact. Instead, all the factors must be looked at together
and the economics of the recycling process can inform how the factors
are evaluated with questions such as this one.

(2) EPA thanks the commenters for their suggestions on how the
legitimacy factors should be implemented. Regarding the question of who
can make a legitimacy determination, EPA expects that these
determinations will be made by a facility about their own process to
ensure that recycling is legitimate and by agencies implementing the
RCRA program in the course of their implementing duties. Generators
sending materials to recyclers operating under recycling exclusions may
make inquiries regarding the legitimacy of their process, but would not
be expected to make their own determinations. EPA has not codified a
process for facilities to work with their implementing agency on making
a determination, but, as in the past, the regulated community is welcome
to consult its implementing agency on specific processes for assistance
in making a legitimacy determination.

(3) EPA agrees with commenters that the legitimacy factors are most
appropriately addressed on a case-by-case basis and has finalized the
legitimacy factors to be case-by-case evaluations that can take into
consideration the relevant facts of a recycling activity and use those
facts to make determinations of legitimacy. EPA has designed the
structure of legitimacy and the individual factors to be flexible enough
to be applicable to various recycling processes and types of secondary
materials.

(4) Regarding the scope of legitimacy in the final rule, to avoid
confusion among the regulated community and state and other implementing
regulatory agencies about the status of recycling under the existing
exclusions, the Agency has decided not to codify the legitimacy factors
for existing exclusions. We expect that states and other implementing
agencies will continue to use the existing legitimacy concept for all
recycling as they have in the past in order to ensure that recycling is
real and not sham.

EPA also maintains that the legitimacy provision being finalized as part
of the recycling exclusions and non-waste determinations is
substantively the same as the existing policy because we developed the
legitimacy factors in 40 CFR 260.43 by closely examining the questions
and sub-questions in the OSWER directive 9441.1989(19) (April 26, 1989)
(a.k.a. the “Lowrance Memo”) and in the various Federal Register
preambles that address legitimate recycling and converting them into
four more direct questions. The analysis showing how the four factors
are derived from the Lowrance memo and other existing policy statements
is documented in the preamble to the final rule. This analysis shows why
EPA believes that the legitimacy factors in 40 CFR 260.43 are equivalent
to the existing legitimacy policy that applies to all hazardous
secondary material recycling.

One reason the Agency chose not to codify the legitimacy factors for
existing exclusions in this rule is to avoid any implication that the
regulated community or implementing agencies would be expected to
revisit and reevaluate past legitimacy determinations, which was a
concern expressed by commenters.  Nevertheless, although we have not
codified the legitimacy factors for existing exclusions in this rule, it
is especially important that the regulated community and implementing
agencies clearly understand that the concept of legitimate recycling,
which is obviously inherent in the existing recycling regulations, is
unchanged and remains applicable and relevant to all hazardous secondary
material recycling, including any recycling excluded under RCRA Subtitle
C. Because the concept of legitimacy (both in existing explanations and
in the codified legitimacy factors) appropriately explains the very
heart of what real recycling is, it is obvious that existing recycling
exclusions only apply to legitimate recycling.

We are not expecting the regulated community that has been operating
under an existing exclusion to make additional efforts to prove that the
recycling is legitimate but reiterate that all recycling must be
legitimate, whether that recycling is done under an existing exclusion
or under one of the newly promulgated recycling exclusions of this
rulemaking. To be clear that the codified legitimacy provision of the
final rule will not affect how the current legitimacy policy applies to
recycling under existing exclusions, the Agency explicitly designates
the 260.43 legitimacy provision as applying only to the exclusions and
non-waste determinations being finalized in the rule.

(5) EPA has designed the legitimacy factors to identify legitimate
recycling, which is when the recycling process more closely resembles
normal industrial manufacturing rather than waste management. This does
not mean that the recycling process has to be identical to a
manufacturing process to make the same product, as the chemistry and
physical form of the feedstock may be different if recycled materials
are in use. However, the process examined as a whole, with the help of
the legitimacy factors, should resemble and be operated like a
manufacturing process rather than a waste management process.

(6) EPA is not clear on exactly what revisions the commenter is
requesting, but believes that the final legitimacy factors are broad
enough and flexible enough to be applicable to all recycling processes
and all secondary materials that will be covered under the provisions of
this final rule.

(7) In response to comments asking for more clarity in the terms it uses
in the legitimacy factors, EPA has bolstered its preamble discussion on
the meaning of these terms and has included more examples than were in
the 2003 proposal and the 2007 supplemental proposal to this rulemaking.
EPA has decided that specific tests for each term in each factor are not
appropriate for legitimacy determinations because of the variety of
recycling processes the factors must apply to.

(8) By “be able to demonstrate legitimate recycling,” EPA means that
in the event of an enforcement action to implement Subtitle C of RCRA,
the persons claiming that their recycling activity is legitimate would
have the burden to provide documentation showing how the hazardous
secondary materials provide a useful contribution to the recycling
process and how the product of the recycling activity—whether it is a
consumer product or process intermediate—is valuable. In addition, the
documentation would have to show that the hazardous secondary material
generator or recycler considered the other two factors and determined
for each of them either that the activity meets the factor or that the
factor does not apply to this recycling activity and why it is not
relevant or appropriate to consider. This is consistent with a
person’s responsibilities under existing 40 CFR 261.2(f).

(9) Subpart F of 40 CFR part 266 details the applicable requirements for
precious metals recycling. The scope of the universe of materials to
which Subpart F applies is defined, in part, by the standard that
economically significant quantities of precious metals are recovered.
This standard is an independent standard not discussed or proposed to be
changed in either the 2003 or 2007 proposals. This is outside the scope
of this rulemaking. Recycling must be legitimate to take advantage of
the reduced requirements of subpart F of part 266, but this is a
separate and different evaluation than the standard of whether
economically significant quantities of precious metals are recovered.

(10) As explained above and in section 9.1.2. of this chapter of the
Response to Comments document, EPA has not codified the legitimacy
factors for all recycling in this final rule.

9.3.1 - How legitimacy factors compare to the guidance on legitimacy

9.3.1 - Summary

(1) Commenters stated that these factors would be a departure from how