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New TSCA Regulation: Benefit and Burden for the Chemical Industry

Posted on July 7th, 2016 by in Chemical R&D


For the first time in 20 years, Congress has made major revisions to the primary U.S. statute regulating chemicals. The new legislation will have a profound impact on the chemical industry worldwide.

On June 22, 2016, President Obama signed the Frank R. Lautenberg Chemical Safety for the 21st Century Act. It significantly strengthens and modernizes the Toxic Substances Control Act (TSCA). The new act requires the EPA to evaluate chemicals on a specific schedule. When assessing a chemical, the EPA must now consider its benefits, the health risks it poses, the effects of chemical exposure, the economic consequences of an agency ruling, and the costs and benefits of bans, phase-outs and other regulatory actions.

As EPA Administrator Gina McCarthy notes, “Forty years after TSCA was enacted, there are still tens of thousands of chemicals on the market that have never been evaluated for safety, because TSCA didn’t require it. The original law set analytical requirements that were nearly impossible to meet, leaving EPA’s hands tied — even when the science demanded action on certain chemicals. In the law’s 40-year history, only a handful of chemicals have ever been reviewed for health impacts, and only five have ever been banned.”

The act creates a substantially different regulatory landscape for the chemical industry, introducing both benefits and burdens.

The American Chemistry Council and many other industry leaders supported revising TSCA. The new legislation prevents states from enacting additional protections once the EPA has issued a final regulation. With new regulations in place, chemical companies will be able operate in a market that has regulatory certainty.

Companies will be able to test existing products for compliance and develop and launch new products with greater compliance assurance. The new regulations also provide increased protections for confidential business information. Although the new rules gives the EPA broad authority to regulate chemicals, it requires the agency to consider alternatives to phase-outs and bans.

Lawmakers drafted the new TSCA regulations in part to help restore consumer confidence in chemicals and chemical products. Industry leaders believe that the new regulations will result in increased chemical sales in the U.S. and spur R&D investments in the chemical industry worldwide.

The new regulatory scheme does present some burdens for the chemical industry. Mandated EPA testing will result in higher compliance costs, because a product’s owner must pay a portion of the EPA’s assessment costs. EPA reviews using the new standards will result in more substances being phased out or banned in the U.S. Both domestic and foreign chemical companies will likely reassess the commercial viability of certain chemicals and products in their portfolios. The modernization of TSCA regulations may also encourage other countries to update their laws or to follow the EPA’s lead in banning or phasing out specific chemicals and products.

But the chemical industry’s public reaction to the TSCA amendments has been positive. The American Chemistry Council remarked that under the new law “chemical evaluation and regulation will meet new 21st century standards, improve the lives of American families, support American manufacturing, and bolster U.S. economic growth.” Dow’s chairman and CEO Andrew N. Liveris commented, “This landmark legislation will fundamentally reform our nation’s chemical regulatory program, restore confidence in the safety of chemicals, and provide companies like Dow with the regulatory certainty necessary to drive investment. [It] allows US manufacturers to continue to provide innovative solutions made possible today through advanced chemistry.”

To adapt successfully to these statutory changes, U.S. and foreign chemical companies must review the new regulations and plan their next steps to address the new TSCA regulatory system and take advantage of new R&D and marketing opportunities.

All opinions shared in this post are the author’s own.

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