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Recycling" Loophole in the Toxics Release
Inventory: Out of Site, Out of Mind


(This article appeared in the February/March 1991 edition of Working Notes on Community Right-to-Know: A Working Paper on Our Right-to-Know about Toxic Pollution, the newsletter of the Working Group on Community Right-to-Know, for more information about the Working Group, or how to receive Working Notes, contact Paul Orum at orump on RTK NET.)

Report Targets "Recycling" Loophole

On March 7, over 70 local, state and national environmental organizations released a new report, The "Recycling" Loophole in the Toxics-Release Inventory: Out of Site, Out of Mind. The report blasted the Environmental Protection Agency (EPA) for allowing companies to side step federal right-to-know reporting requirements by shipping toxic waste to "recycling" facilities. The report generated widespread publicity and drew a swift response: "We are moving actively and quickly to get that type of information included in our next round of reporting," said EPA's Dave Sarokin.

Nonetheless, EPA still appears reluctant to endorse full right- to-know reporting for off-site shipments to recycling facilities. The Agency may in fact specifically instruct waste generating companies not to identify recycling operations to which wastes are sent. On a more positive note, EPA indicates that it may require shipments sent for burning in cement kilns and other industrial furnaces to be reported as waste treatment rather than "recycling."

The following text is an abridged version of the report. The report was prepared by the Working Group on Community Right-To- Know, the Environmental Defense Fund, the National Toxics Campaign Fund, and Citizens Fund. Copies of the full report, including tables, appendices and endnotes, are available for $8 from the Working Group.

Contents
I.   Background
II.  The "Recycling" Loophole
III. Through the Loophole: Cases, Companies and Chemicals
IV.  Serious Implications for Pollution Prevention
V.   Hazardous Waste Recycling: A Risky Business
VI.  Recommended Actions

Background

Introduction

In 1986 Congress passed a major new law with broad implications for environmental protection in the United States. This legislation is known as the Emergency Planning and Community Right to Know Act (EPCRA). The passage of EPCRA was arguably one of the most significant legislative actions taken by Congress on the environment in the 1980s.

Toxics-release inventory provisions of EPCRA require industrial manufacturers to provide comprehensive public information on environmental releases and transfers of some 330 toxic chemicals in wastes. For the first time, the public gained access to information on toxic industrial discharges to air, water and land, and on off-site shipments to waste management facilities.

A serious administrative loophole is undermining the usefulness of this new law. U.S. Environmental Protection Agency (EPA) regulatory policies are allowing companies to ship millions of pounds of toxic wastes off-site to "recycling" facilities without informing the public. This "recycling loophole" in right-to-know reporting is diminishing the value of one of the nation's only multi-media laws governing toxic pollution.

Toxic wastes passing unreported through the recycling loophole have caused serious harm to public health and the environment. Furthermore, the gap in right-to-know reporting parallels weaknesses in other laws governing hazardous waste management and tends to provide a systematically distorted picture of industry's environmental record.

The Right to Know Act

Congress passed EPCRA on the heels of numerous state and local right-to-know laws and in the aftermath of the December 1984 tragedy in Bhopal, India. At Bhopal, thousands of people were poisoned, many fatally, by the release of methyl isocyanate from a Union Carbide pesticide plant. Portions of EPCRA were hotly debated. Congress included chemicals that cause chronic health effects in EPCRA by only a one-vote margin (212-211). These provisions were included despite opposition from industry and EPA.

EPCRA has three major elements:

  1. Toxics-Release Inventory - requires manufacturing facilities to report routine releases of toxic chemicals to the public and EPA;
  2. Community Right-To-Know - provides citizens with access to information about toxic chemicals used by businesses in the community, and
  3. Emergency Planning and Notification - requires local communities to plan for hazardous materials emergencies.

The Toxics-Release Inventory

EPCRA requires certain manufacturing facilities to file annual reports to EPA on releases and transfers of some 330 toxic chemicals. This multi-media reporting includes information on releases to air, land, surface water and deep-injection wells, as well as transfers to public sewers and to treatment, storage and disposal facilities. EPA must computerize this information into a "toxics-release inventory" (TRI), and make it available to the public. This is the first on-line, publicly-accessible computer data base ever mandated by a federal law.

Total annual releases of right-to-know chemicals must be reported by any facility that meets all of the following criteria. The facility:

The TRI data base is the first chemical-specific, multi-media accounting of toxic releases to the environment. This data collection is crucially important for understanding and predicting environmental effects of industrial contaminants, shaping effective environmental regulations and setting environmental protection priorities.

Impact of the Toxics-Release Inventory TRI has arguably had a major effect on environmental awareness and public policy. Citizen groups have produced scores of environmental advocacy reports using TRI data. Reporters have used TRI information as an additional tool to reveal toxic pollution. Many large companies have developed new corporate policies to address TRI chemicals. A number of state legislatures have passed toxics-use reduction laws. And government regulators have used TRI data to help set environmental priorities.

TRI has also helped spur widespread interest in pollution prevention and has helped focus attention on production facilities, where systematic toxics-use reduction can be most effectively achieved.

The "Recycling" Loophole

The Reporting Loophole

Under EPA regulatory policy, companies are shipping at least 197 million pounds of toxic chemicals off-site for "recycling" or "reuse" without having to report these transfers under the toxics-release inventory (TRI). While all other off-site waste shipments must be reported under TRI, EPA has exempted the reporting of shipments to recycling facilities. These shipments regularly cause serious harm to public health and the environment.

The bulk of these off-site "recycling" shipments are known to be burned in cement kilns, blast furnaces and industrial boilers. Large amounts are also sent off-site to solvents or metals recovery operations.

This reporting loophole undermines the public's right-to-know about shipments of toxic wastes and reduces the usefulness of TRI data for monitoring industrial pollution prevention activities. In addition, despite new hazardous waste regulations, most industrial boilers, to which some of these materials are sent for burning, will remain less stringently regulated than hazardous waste incinerators.

Problems regularly caused by hazardous waste recycling include worker exposure, site contamination, air emissions, transportation accidents, fires, spills, incomplete combustion and other failures and releases. The following examples show the relationship between toxic pollution and shipments passing through the recycling loophole:

These examples are set forth in greater detail under Through the Loophole: Selected Environmental Damage Cases. For general examples of problems associated with hazardous waste recycling see Hazardous Waste Recycling: A Risky Business.

Changing the Rules: Regulatory Sleight-of-Hand Arbitrary administrative changes in EPA's TRI reporting guidelines produced a dramatic decrease in reported off-site recycling transfers under TRI. In 1987, EPA provided for companies to report some of these transfers but discontinued this reporting category in 1988. In both years the available TRI data greatly underestimate the scope of off-site recycling shipments.

Even in 1987 EPA only allowed companies to report off-site "recycling" transfers for "reuse as a fuel." Consequently, most of the data in Figure 1 is for this reporting category. No reporting categories ever existed for off-site metals or solvents recovery. Nonetheless, in the spirit of right-to-know, some companies did disclose these shipments using reporting codes borrowed from other EPA forms and from other parts of the TRI form.

In 1988, EPA withdrew the only off-site recycling reporting category ("reuse as a fuel") and clearly stated in the instructions that no off-site "recycling" transfers should be reported. Figure 1 shows the effect of discontinuing the reporting requirements for off-site recycling between 1987 and 1988. This dramatic 89% decrease does not correspond to any real reduction in the amount of toxic chemicals recycled off-site, and may in fact mislead the public with the appearance of actual reductions.

Figure 1. Reported "Recycling" Transfers in 1987 and 1988

Inconsistent Reporting Requirements EPA's decision to discontinue reporting requirements for off-site recycling transfers results in the following inconsistencies (also see box):

Inconsistent Reporting of On-Site and Off-Site Waste Management

                 Reporting   Destination
                 Required?   Specified?
On-Site 
 Waste Treatment      Yes      Yes
Off-Site 
 Waste Treatment      Yes      Yes
On-Site 
 Recycling/Reuse      Yes      Yes
Off-Site 
 Recycling/Reuse      No       No

These discrepancies in right-to-know reporting diminish the usefulness of the TRI data base by rendering the data inconsistent. Appendix C of the full report lists all off-site and on-site TRI reporting codes.

Completing the Picture: Reporting Off-Site Transfers EPA's original rationale for including off-site waste transfers under TRI was to:

"complete the picture of chemical waste generated from a facility and enhance the public's understanding of the locations of toxic chemicals in their community."1

Unfortunately, the Agency did not uniformly apply this principle to off-site recycling transfers. In the same announcement EPA explained its rationale for excluding off-site recycling, recovery and reuse transfers from TRI reporting:

"...the material being sent is not bound for ultimate disposal, [and] these types of facilities may themselves be covered as manufacturers or processors of the chemical and, thus, would be accounting for any releases to the environment."

However, this statement does not address the following issues:

The public has a right-to-know about all off-site shipments under TRI to truly "complete the picture" of chemical waste generation. In addition, government agencies need this information to set environmental priorities and to design effective environmental protection strategies.

How Big is the Loophole?

The actual amount of TRI chemicals passing unreported through the recycling loophole is unknown. These shipments have not been reported under TRI since 1987, and even then reporting was haphazard and incomplete (see Changing the Rules: Regulatory Sleight of Hand).

Nonetheless, in the spirit of right-to-know, over 1,600 facilities did report shipping 197,877,887 pounds of toxic chemicals off-site to "recycling" facilities in 1987 (see Table 1). Over 90% of this amount was burned in cement kilns, industrial boilers and blast furnaces. State totals for these reported shipments through the recycling loophole are shown in Table 2. Table 2a lists the amounts of recycling transfers sent, by state. Table 2b lists the amounts of recycling transfers received, by state.

Data collected under the Resource Conservation and Recovery Act (RCRA), the nation's principal law governing waste management, also suggest that massive amounts of waste are shipped off-site for "recycling." Using incomplete RCRA survey data, EPA estimated that at least 3.6 billion pounds of RCRA hazardous waste are burned ("recycled") in industrial furnaces (which include cement kilns) and boilers each year.2 This figure does not include shipments to other types of recycling operations such as solvents or metals recovery.

The considerable volume of hazardous waste sent to these "recycling" facilities under RCRA and the incomplete reporting under TRI indicate that the recycling loophole shields significant amounts of toxic waste from regulatory and public scrutiny.

Table 1.  Reported TRI "Recycling" Transfers in 1987 and 1988
(pounds)
                    1987        1988
Reuse as Fuel/
 Fuel Blending   179,973,702  21,867,503
Metals Recovery   10,075,838     211,868
Solvents/Organics
 Recovery          5,419,659      17,793
Other Reuse/
 Recovery          2,408,688      87,845
Total Reuse/
 Recovery        197,877,887  22,185,009

Decreases from 1987 to 1988 largely reflect decreased reporting,
not actual reductions in "recycling" transfers.

Table 2a.  Reported TRI "Recycling" Transfers in 1987
Totals Sent, by State (pounds)

    State

1.  Michigan        22,879,738
2.  Indiana         17,272,939
3.  Ohio            15,505,784
4.  Texas           15,442,217
5.  Kentucky        14,635,209
6.  Illinois        14,354,324
7.  Massachusetts   11,950,086
8.  New Jersey      10,764,483
9.  Pennsylvania    10,241,617
10. California      10,107,397
(Complete data in full report)

Table 2b  Reported TRI "Recycling" Transfers in 1987
Totals Received, by State (pounds)

State
1.  Ohio            20,755,239
2.  Michigan        18,955,699
3.  Indiana         15,622,274
4.  Texas           14,326,183
5.  Alabama         13,180,458
6.  New Jersey      12,411,421
7.  Tennessee       10,574,432
8.  Kentucky         9,929,254
9.  Illinois         9,125,374
10. California       7,795,204

(Complete data in full report)

Through the Loophole: Cases, Companies and Chemicals

Through the Loophole: Selected Environmental Damage Cases Toxic chemicals passing through the recycling loophole have caused serious harm to public health and the environment. Three selected damage cases (also referenced briefly above) provide evidence of toxic pollution caused by chemicals shipped through the recycling loophole. In each case, the loophole eliminates information that can be used to show the relationship between toxic pollution, waste generators and recyclers. These three cases are by no means isolated examples.

  1. 1. Formosa Plastics, Point Comfort, Texas - sender PPG Industries, Lake Charles, Louisiana - receiver
  2. 2. Manufacturers in at least 15 states - senders Marine Shale Processors, Amelia, Louisiana - receiver
  3. 3. American Cyanamid, Bound Brook, New Jersey - sender Thor Chemicals, Natal Province, South Africa - receiver

Example #1

Sender: Formosa Plastics, Point Comfort, Texas Receiver: PPG Industries, Lake Charles, Louisiana Formosa Plastics, a major Texas plastics manufacturer, sends up to 14 million pounds of ethylene dichloride (EDC) distillation bottoms (a production residue) off-site each year3 - but the company reported transferring only 750 pounds off-site under the toxics-release inventory (TRI). The unreported shipments are sent by highway to PPG Industries in Lake Charles, Louisiana where a minimum of 35% is allegedly recycled in a feedstocks remanufacturing process,4 and the remainder is incinerated.

Tests reveal high EDC concentrations in groundwater and storage ponds at the Formosa Plastics site in Texas,5 and in soils and waterways near PPG Industries in Louisiana.6 EDC (or 1,2-dichloroethane) is a highly flammable and toxic chemical that may cause cancer, birth defects and other health problems.

EPA's Air Toxics Exposure and Risk Information System (ATERIS) indicates that EDC air emissions at Formosa Plastics pose a cancer risk to nearby residents. In October 1990, EPA proposed an $8.3 million fine against Formosa Plastics for alleged violations of hazardous waste laws including EDC spills and the emergency dumping of pure EDC into a wastewater treatment system.

PPG Industries in Louisiana reported releasing 500,000 pounds of EDC under TRI in 1988. EDC and other pollutants discharged by PPG and other chemical companies into Louisiana's Calcasieu estuary system have closed fisheries and recreational use areas, threatening a natural-resources-based way of life.

Formosa Plastics has not reported these shipments under TRI, despite the insistence of the Texas Water Commission that the EDC distillation bottoms are not recyclable material.7

Example #2

Senders: Manufacturers in at least 15 states Receiver: Marine Shale Processors, Amelia, Louisiana One nationally notorious case of alleged chemical waste mismanagement involves Marine Shale Processors of Amelia, Louisiana. Marine Shale receives shipments through the recycling loophole from manufacturing facilities in at least 15 states. The recycling loophole allows waste generators to side step right-to-know reporting simply by unilaterally designating Marine Shale as a "recycling" facility. EPA is currently suing the company for fraudulently claiming to be a recycler.

The EPA suit carries potential fines of up to $50 million. The Agency alleges that the company burns hazardous waste without a permit and that the resulting aggregate, which is sold for road bed and other construction fill, is hazardous waste rather than a viable product. An EPA official publicly declared Marine Shale a "sham recycler," adding that "Marine Shale is actually incinerating hazardous wastes for profit without the proper permits.8 In a separate $5.5 million suit, the Louisiana State Department of Environmental Quality has charged that the aggregate produced by Marine Shale contains heavy metals that can leach and contaminate waters and soils.

In July 1989, EPA conducted tests at several sites where Marine Shale's aggregate "product" had been used as fill material. These sites included local family residences, businesses and a community center. The tests revealed elevated levels of lead, cadmium, chromium and other toxic heavy metals that are not destroyed by incineration. Additional on-site testing at the Marine Shale facility found toluene, xylene, benzene and other hazardous waste constituents in soil, water and ash piles.

Example #3

Sender: American Cyanamid, Bound Brook, New Jersey Receiver: Thor Chemicals, Natal Province, South Africa American Cyanamid's Bound Brook, New Jersey facility sends about 10 tons of mercury-contaminated production wastes to South Africa each year for metals recovery at a Thor Chemicals plant. These shipments of a highly toxic TRI chemical - mercury - pass unreported through the recycling loophole.

Recycling operations at the Thor plant in South Africa have caused mercury contamination of waterways below the facility. The downstream waterways are used for drinking water, livestock watering, washing and bathing.9 In April 1990, the South African government temporarily closed the Thor plant as a result of the mercury contamination.

Mercury can destroy the nervous system and cause loss of vital bodily functions. It also interferes with normal development and is a reproductive toxin. Mercury is persistent in the environment and accumulates in the tissues of living organisms.

The case of American Cyanamid/Thor Chemicals illustrates that shipments through the recycling loophole include exports to other countries. Whether exported or shipped domestically, the loophole obscures important information. This in turn limits opportunities for environmental agencies and the public to assess environmental risks as well as progress in preventing waste generation. American Cyanamid's shipments of mercury-contaminated waste to South Africa raise serious social justice and environmental policy issues in an international context.

Through the Loophole: The Companies

The actual number of companies shipping wastes through the recycling loophole is not known because of the incomplete reporting requirements discussed earlier (see Changing the Rules). Nonetheless, over 1,600 facilities did report these shipments in 1987 or 1988. Other facilities did not report the transfers at all.

Table 3a shows the nation's top senders (by parent company) of TRI recycling shipments in 1987. Most of these companies show dramatic decreases in reported "recycling" transfers in 1988, after EPA discontinued reporting requirements. Table 3b shows the top parent companies receiving "recycling" shipments nationally. A state-by-state listing of the top facilities sending and receiving TRI chemicals through the recycling loophole is included in Appendix E of the full report.

Table 3a. Top Senders of TRI "Recycling" Shipments Nationally by Method

Table 3b. Top 25 Receivers of TRI "Recycling" Shipments Nationally

Through the Loophole: The Chemicals

Based on 1987 TRI data, the top five chemicals shipped through the recycling loophole are toluene, xylene, methyl ethyl ketone, acetone and methanol. All five are industrial organic solvents, which are among the chemicals that can be most readily reduced, avoided or eliminated in industrial production processes.

Table 4 gives a breakdown of the top TRI chemicals in each of the three major off-site "recycling" categories: reuse as fuel; solvents recovery, and metals recovery. Health effects information on these chemicals is included in Appendix D of the full report.

Table 4. Top TRI Chemicals Shipped Off-Site for "Recycling" by Method

Table 5 lists totals for chemicals in two categories - metals and acids/bases/salts - which companies reported sending off-site for "reuse as a fuel." These chemicals have no fuel value. In addition, heavy metals are not destroyed by burning but instead result in human and environmental exposure through wastes or products.

Table 5. Metals and Acids/Bases/Salts Shipped Off-Site for "Reuse as Fuel" in 1987 and 1988

Serious Implications for Pollution Prevention

Undermining Pollution Prevention Accounting

For two decades the United States has relied on pollution control strategies that attempt to manage wastes after they have been generated. It is increasingly clear that these strategies are meeting with only limited success. As a result, there is new interest from environmental groups, industry, States and the Federal government in pollution prevention strategies that reduce wastes before they are generated. The toxics-release inventory, as the only multi-media national data base on toxic releases, is arguably playing an important role in spurring this interest.

Pollution prevention techniques reduce, avoid or eliminate the use of toxic chemicals in industrial production processes and are the most reliable and effective means of protecting workers, consumers and the environment from exposures to toxic chemicals in wastes and products. In addition, U.S. industry can realize substantial economic gains by reducing its reliance on toxic chemicals.10

Out-of-process recycling, which includes all shipments through the recycling loophole, is a management strategy for wastes that have already been created, and is not a pollution prevention technique (see box below).

Pollution Prevention includes:

Waste Management includes:

Two keys to the success of any pollution prevention strategy are: 1) accurate accounting of all toxic chemicals used and wastes created, and 2) public disclosure of this information. The recycling loophole undermines both of these key pollution prevention elements.

EPA recently announced national emissions reduction goals for 17 TRI chemicals. This major EPA initiative calls for industries to voluntarily reduce by 50% TRI emissions of these chemicals by 1995. However, the recycling loophole makes it possible for companies to inappropriately claim reductions by euphemistically reclassifying TRI chemical wastes as "products" before shipping them off-site for "recycling." Having disappeared from the TRI reporting system, the wastes will appear not to have been generated. Thus, the recycling loophole serves as a disincentive for companies to achieve genuine pollution prevention and could easily mislead both government and the public about the true extent of pollution prevention progress.

If the measuring stick used to track industrial pollution prevention is faulty, established goals - such as EPA's emissions reduction goals - become meaningless from a pollution prevention perspective. As shown in Table 6, EPA's emissions reduction goals could fail to account for over 100 million pounds of these 17 targeted chemicals. Furthermore, the decrease in reporting between 1987 and 1988 illustrates the potential for companies to use the loophole to present illusory waste reductions.

Table 6. Reported Pounds of EPA-Targeted Chemicals Passing Through the Recycling Loophole in 1987 and 1988.

New Requirements for Pollution Prevention Reporting A landmark law, the Pollution Prevention Act of 1990, makes pollution prevention reporting mandatory as part of TRI. The Act requires each company that reports under TRI to file a "source reduction and recycling report" with its TRI reporting form. The expanded reporting details the amount of pollution prevention progress achieved for each TRI chemical and the methods used, as well as the amount sent to recycling, whether on-site or off-site. Despite the new reporting requirements, however, companies may still be able to inappropriately receive credit for preventing pollution, while at the same time continuing to use the recycling loophole - unless all of the following are completely incorporated under TRI:

From 1987 to 1990 pollution prevention reporting was optional, and only about 10% of the reporting facilities supplied this information.11 Table 7 (omitted here for brevity) lists the top ten facilities that claimed waste reductions under the pollution prevention section by shipping chemicals off-site for "recycling." However, as shown in the table, the majority of these facilities reported the transfers only under the pollution prevention section, while omitting the shipments from their TRI totals. This demonstrates that in order to close the loophole, off-site recycling transfers must be added to TRI totals.

Table 7. Top Ten Facilities Claiming Reductions from Off-Site "Recycling," 1988

Relationship to Pollution Control Laws

The right-to-know is a fundamental principle inherent in democratic political systems. In the case of TRI, the right-to-know principle operates not only to reveal sources and quantities of toxic industrial pollution - it also serves as a mechanism by which citizens hold both government and industry accountable for their actions.

In principle, TRI should provide comprehensive information about toxic chemicals released to air, water and land, and transferred to waste management operations. These releases and transfers have traditionally been regulated under separate control-oriented (non-preventive) environmental laws. However, the recycling loophole deprives the public of critical information needed to assess the effectiveness of these laws, and conceals information needed to assess the effectiveness of recent pollution prevention initiatives.

For example, TRI data revealed that none of the top 25 chemicals passing through the recycling loophole were regulated under the Clean Air Act during its first two decades. Further, 78% of the TRI stack air releases proved to be uncontrolled by any emissions control devices. In other words, the right-to-know revealed that the Clean Air Act was not effectively controlling toxic air releases.

The recycling loophole also mirrors regulatory weaknesses in the Resource Conservation and Recovery Act (RCRA), the nation's main law governing waste management and disposal. Despite new RCRA regulations, 600 smaller industrial boilers will remain exempt from RCRA regulation. Ironically, off-site transfers to incinerators, which must meet RCRA regulations, must be reported under TRI, while transfers to these exempted boilers are not required to be reported.

Hazardous Waste Recycling: A Risky Business

Chronic Releases, Acute Contamination

The public often has the perception that recycling is an environmentally beneficial form of waste management. However, hazardous waste recycling practices invariably involve risk. Environmental problems caused by hazardous waste recycling operations are associated with chronic releases of toxics and acute environmental contamination episodes in community after community across the United States. Therefore, it is of paramount importance that recycling be clearly distinguished from pollution prevention.12

Chronic Environmental Releases

Cement kilns and other furnaces emit significant amounts of toxic organic chemicals and heavy metals even under optimal operating conditions.

Acute Environmental Contamination

Past and present hazardous waste recycling activities have resulted in severe contamination at many sites around the country.

Recycling Contamination Cases

Some illustrative examples of environmental contamination resulting from hazardous waste recycling include:

Recommended Actions (in summary)

1. EPA should use its authority under EPCRA and the Pollution Prevention Act of 1990 to close the "recycling" loophole. Complete and accurate off-site recycling information must be included in each facility's toxics- release inventory totals.

2. Citizens and the press should call upon companies to disclose any previously unreported 1987-1990 off-site shipments to "recycling" facilities.

3. EPA should make sure that its information collection and other regulatory policies do not equate toxic waste recycling with true pollution prevention.

Endnotes

1-24 Available in full report.

Appendices
Available in full report.

A. Superfund Sites Related to Solvent Recycling
B. Damage Incidents From Hazardous Waste Recycling
C. TRI On-Site/Off-Site Reporting codes
D. Health and Environmental Effects Matrix
E. Top Facilities Sending and Receiving Recycling Transfers,
by State

Source: RTK Net, Washington, DC

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