Policymakers attend this week’s hearings on the role of energy efficiency and renewable energy in achieving federal climate change and energy policy objectives should also keep an eye on the other hearing down the hall, the one entitled “Revisiting the Toxic Substances Control Act of 1976.”   Harnessing energy efficiency and renewable energy technologies will require rapid commercialization and deployment of cutting-edge chemicals, materials, and equipment.  Issues advocated in the Toxic Substances Control Act (TSCA) reauthorization process could have significant negative implications for the pace and scale of innovation in the green energy sector.

The Toxic Substances Control Act establishes the Environmental Protection Agency (EPA) as the gatekeeper for substances and materials manufactured or imported into the US market.  At least 90 days before importing or manufacturing a new chemical substance in the US (i.e., one not already listed on EPA’s TSCA inventory of existing chemicals), a company must submit a pre-manufacture notice along with basic information about the identity and physical chemistry of the substance and any risk information in the company’s possession.  EPA can use this information to assess whether further testing or risk mitigation may be needed as a condition of the substances use.  Similarly, EPA can promulgate rules limiting the use or conditions of use for existing chemicals to address unreasonable risks.  EPA’s regulatory authority is not limitless, however.  Courts have taken note of TSCA’s policy that “[a]uthority over chemical substances and mixtures should be exercised in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation while fulfilling the primary purpose of this chapter to assure that such innovation and commerce in such chemical substances and mixtures do not present an unreasonable risk of injury to health or the environment.”

Not all stakeholders agree with the current risk-benefit balance struck under TSCA.  Proponents of TSCA reform, including key policymakers in the House and Senate, argue that TSCA hobbles EPA’s ability to regulate risky chemicals and chemical-containing products.  Senator Frank Lautenberg (D-NJ), Chairman of the Senate subcommittee responsible for TSCA oversight, intends to reintroduce a TSCA-reform bill known as the “Kid-Safe Chemicals Act” (KSCA).  Senator Lautenberg will have powerful supporters.  During previous sessions, other co-sponsors of this bill included:  Barbara Boxer (D-CA), Chairman of the Senate Environment and Public Works Committee; Henry Waxman (D-CA), Chairman of the House Committee on Energy and Commerce; and Hilda Solis (D-CA), Congresswoman and Secretary of Labor-Designate.

After over 30 years without significant change, it may well be time for a careful review of TSCA’s core chemical control provisions, but if promoting innovation in the green energy industries is also a priority, policymakers should look carefully at the potential impact of the KSCA or similar measures.  For example, KSCA would replace TSCA’s flexible “no unreasonable risk” safety standard with a blanket “reasonable certainty of no harm” standard—the same rigid standard applied to pesticides used on food crops—and require that companies demonstrate the substance’s safety based on a battery of scientific data akin to that required to register a new pesticide under the Food Quality Protection Act.  For new chemicals, submitting this data would be a condition of market entry.  Given that the standard wait for an EPA review of a food-use pesticide is two years (not counting the years and dollars required to conduct the supporting studies to begin with), the KSCA new-chemical review requirements could constitute a significant new barrier to innovation.

Why are these chemical control policies important for the energy efficiency and renewable fuels industries?  Both industries are and will continue to be highly reliant on continued innovations in chemical and material technologies, particularly new nanotechnology applications, to increase their efficacy and competitiveness.  Continued innovation, in turn, requires a robust and supportive atmosphere of research and development, with clear paths to commercialization for products and applications that prove worthy.  The challenge for a 21st Century chemical control policy will be to manage risks to human health and the environment from new chemicals and materials without inhibiting socially-beneficial innovations that will support the green energy industry and other public policy priorities.  That is one aspect of TSCA that should remain timeless.

For further information about this topic, please contact Akin Gump.