Ever since the EPA’s 1985 rulemaking on the Definition of Solid Waste, 50 Fed. Reg. 614 (1985), the question of how one distinguishes legitimate recycling from sham recycling has puzzled both regulators and recyclers. The question is vital because sham recycling is equivalent to illegal disposal and exposes the perpetrator to enforcement and significant penalties. In contrast, legitimate recycling is highly encouraged and satisfies the central purposes of the Resource Conservation and Recovery Act. So telling the two apart is important.

In 1989, Sylvia Lowrance, the then-Director of Solid Waste for EPA, signed a memorandum, entitled, “FOO6 Recycling,” that drew from earlier rulemakings and set forth a summary of the criteria for distinguishing between sham and legitimate recycling. Among these criteria was a comparison between the chemical composition of the purported recyclable material (or “secondary material”) and the analogous raw material or product. Included in her discussion was the question, “Are the toxic constituents actually necessary (or of sufficient use) to the product or are they just “along for the ride?” This “along for the ride” concept has since greatly influenced the question of sham vs. legitimate recycling because it raises the specter that the recycler is actually surreptitiously disposing of hazardous waste under the cover of beneficial recycling. But a lingering question for the last several decades has been how much toxics can actually be “along for the ride” and still be legitimate?

Fast forwarding to 2015, EPA addressed head-on the sham recycling question and set forth four criteria to tell a sham from the real thing. Importantly, the fourth criterion effectively replaced the old “along for the ride” criterion. See 40 C.F.R. 260.43(a)(4); 80 Fed. Reg. at 1725-28. This new criterion requires that the “product of the recycling process must be comparable to a legitimate product or intermediate,” and gives a recycler three options for satisfying it.

Where there is an “analogous” product, the recycled product is comparable if (a) it does not exhibit a hazardous characteristic not exhibited by the “legitimate” product; and (b) the two products have comparable levels of hazardous constituents. Where there is no “analogous” product, the two products are comparable if the product of the recycling process meets “widely recognized commodity standards and specifications[.]” Last, even if the product has high levels of hazardous constituents as compared to the raw material, the recycling can still be legitimate if recycler carries out certain health and environmental studies to show the toxic constituents are not harmful. 40 C.F.R. 260.43(a)(4)(iii).

But Factor 4 is no longer part of EPA’s regulations. In the just-published case of American Petroleum Institute v. EPA, (No. 09-1038), the D.C. Court of Appeals vacated Factor 4, finding that EPA failed to articulate a concrete standard for determining at what contaminant level a recyclable material was “significant in terms of health and environmental risks.” EPA’s “comparable to or lower than” standard, the court said, does not adequately determine when a recycling is a sham: levels can be high and still be part of a legitimate recycling process. Further, the court noted, this standard does not “reasonably focus on items that are part of the waste disposal problem.” It therefore vacated Factor 4 as it applies to all hazardous material recycling.

The court pinpointed the inherent flaw in the “toxics along for the ride” metaphor: at what concentration level does the presence of these toxics signal a sham? The court also criticized EPA for an over-reliance upon recycling horror stories, rather than actual instances of environmental harm. Unfortunately for EPA, it is back to the drawing board on this 30-year old conundrum of defining legitimate recycling. Meanwhile, those seeking to demonstrate the legitimacy of a recycling process (at least as a matter of federal law), will only need to satisfy the remaining three legitimacy criteria: (a)the secondary material must provide a useful contribution to product; (b) the recycling process must produce a valuable product; and (c) the generator and recycler must manage the secondary material as valuable product. In the end, this all might be a good thing, as it may open up opportunities to fulfill the underlying purposes of the Resource Conservation and Recovery Act, rather than become entangled in “labyrinthine maze” that is the definition of solid waste.

For more on this topic, read my article, “Understanding a Sham: When is Recycling, Treatment?,” published in the Boston College Environmental Affairs Law Review here.