On May 24, 2023, the U.S. Environmental Protection Agency (EPA or the Agency) issued guidance on the potential applicability of the nation's hazardous waste regulatory program under the Resource Conservation and Recovery Act (RCRA) to the collection and recycling of lithium-ion batteries. The new guidance document may be useful to persons generating or handling used lithium-ion batteries or devices containing such batteries, inasmuch as it summarizes, consolidates, and clarifies some of the complex rules and guidance in this area. However, the document breaks little new ground, and it fails to address, much less answer, major outstanding questions – or to map out any new initiatives to facilitate the development of a circular economy for the critical minerals that comprise the batteries. In this way, the guidance falls short of the Agency's stated goal of "clarifying how battery recycling is regulated [and] remov[ing] uncertainties ... about the regulatory status of these materials and processes."
Key topics covered in the new guidance document are summarized below, together with some of the main shortcomings in the EPA discussion of each.
When are lithium-ion batteries "wastes"?
EPA states that used lithium-ion batteries are generally wastes when destined for reclamation (e.g., recovery of metals), but not if they are legitimately being reused, repaired for reuse, or evaluated for reuse (as long as there is a "reasonable expectation of reuse").
The Agency also notes that the used batteries may not qualify as solid wastes if managed pursuant to the 2018 "transfer-based" exclusion from the definition of solid waste (or its predecessor, the 2015 "verified-recycler" exclusion). However, it asserts that this is an option only if both the state in which the batteries are generated and the state in which the batteries are recycled have adopted the exclusion, even though it appears on the face of the regulations that there might be a path for generators in non-exclusion states to send the batteries to recyclers in exclusion states. EPA also points to a separate guidance document on how the exclusion works when the states involved have adopted different versions (i.e., the 2015 or 2018 versions), but that other document does not address the unique situation of universal wastes such as batteries or the federal preemption provision for batteries under the 1996 Rechargeable Battery Recycling Act (Battery Act). The Agency also claims that if the batteries are transported through a state without the exclusion, that state's hazardous waste rules "could apply" within that state, ignoring the preemption provisions in the Battery Act and in the Hazardous Materials Transportation Act.
The EPA guidance document is silent on the status of unused off-specification batteries or battery manufacturing scrap, even though these materials represent a significant part of the battery materials currently being managed, while the first generation of electric vehicle batteries is just starting to be retired. While the status of these materials may be relatively straightforward, issues may arise if any derivatives from processing these materials are burned for energy recovery or used to make land-applied products. Also not discussed is the potential application of the "generator-control" exclusion from the definition of solid waste to used batteries.
Are waste lithium-ion batteries "hazardous"?
EPA asserts that "most lithium-ion batteries on the market today are likely to be hazardous waste when they are disposed of due to the ignitability (D001) and reactivity (D003) characteristics." The statement about ignitability is not new; for example, the Agency stated in a 2021 report that lithium-ion batteries are "commonly" ignitable due to the low flash point of the organic electrolytes that they contain. In that report, however, EPA stated only that "some" lithium-ion batteries are reactive (without elaborating). The change to saying that reactivity is "likely" may have important implications under the RCRA land disposal restrictions (LDR) program (discussed below). However, the new EPA guidance clouds the issue by saying that damaged batteries are "more likely" to be reactive, and suggesting that discharging the electric charge in the batteries may render the batteries non-reactive or less reactive.
The Agency notes that "the most common metals used in lithium batteries do not appear on the list of contaminants that can make a waste exhibit the toxicity characteristic." However, it fails to mention that some of the regulated metals may appear in circuit boards or solders that may be present in some battery packs. Perhaps more importantly, EPA is silent on the potential implications of its statements about ignitability and reactivity for electronic devices that contain batteries. In particular, if lithium-ion batteries are ignitable because they contain organic electrolytes, does that mean that a device containing a battery – which necessarily also contains the same organic electrolytes – is also ignitable?
Are lithium-ion batteries eligible for management under the streamlined requirements for universal wastes?
The EPA guidance document reiterates that lithium-ion batteries generally may be transported and collected under the reduced requirements for universal waste batteries. However, they remain subject to full RCRA requirements at the ultimate "destination facility" (i.e., recycling or disposal facility), and the universal waste rules do not apply if there has been a "breach in an individual cell casing." The Agency also notes that batteries are not subject to federal RCRA regulation if they qualify as household wastes or Very Small Quantity Generator (VSQG) wastes handled in accordance with certain limited requirements for such VSQG wastes.
EPA says that state requirements for household or VSQG batteries "may be more stringent than those in the federal program," but that seems questionable in light of the preemption provisions of the Battery Act, which the Agency does not mention. EPA also does not address the language in the Battery Act that says that "[t]he collection, storage, or transportation of ... consumer products containing rechargeable batteries that are not easily removable ... shall, notwithstanding any law of a State ... be regulated under applicable provisions of the [universal waste rule]." Indeed, to our knowledge, the Agency has never provided guidance on the extent to which this language may enable electronic devices containing lithium-ion batteries to be managed as universal wastes (even in states that have not separately acted to designate such devices as universal wastes).
What requirements apply to handlers (i.e., generators and collectors) of universal waste lithium-ion batteries?
The guidance document briefly summarizes the requirements for small and large quantity handlers of universal waste batteries, such as the fact that they do not have to ship the batteries using a hazardous waste transporter or hazardous waste manifest, although transport must follow applicable U.S. Department of Transportation (DOT) requirements and the batteries must ultimately be delivered to a hazardous waste recycler or permitted hazardous waste disposal facility. EPA notes that under the universal waste rule, handlers can perform certain activities in addition to storage (e.g., removing batteries from products, disassembling battery packs, sorting batteries, mixing batteries in a container, or discharging batteries to remove the electric charge) without triggering the more stringent requirements for destination facilities, provided that the cells remain closed and intact.
EPA also highlights its ongoing efforts, pursuant to the Bipartisan Infrastructure Law of 2021, to develop best management practices for lithium-ion batteries that go beyond the regulations (e.g., various measures to minimize the potential for fires). The Agency issued a Request for Information (RFI) last June on potential practices that might be appropriate, and it has since held a series of related meetings. Notably, the RFI sought input not only on "standalone batteries" but also on "batteries embedded in devices," suggesting that the forthcoming best management practices may cover both categories of products. The current guidance also includes a cryptic statement that "EPA is evaluating the universal waste battery management standards," but it does not provide any detail on whether or not the Agency is considering any changes or when the Agency might announce more specifics.
What requirements apply to recyclers of lithium-ion batteries?
EPA notes that recyclers that store waste lithium-ion batteries before recycling must obtain a RCRA hazardous waste storage permit, although states may specify a "holding time" before storage begins (and, thus, before the permit requirement is triggered). The Agency also points out that the recycling units themselves are generally exempt from regulation, provided that the facilities obtain an EPA identification number, follow applicable manifest requirements (which would presumably not be relevant for universal waste batteries), and – if the facility is subject to RCRA permitting for storage or other activities – ensure that the recycling units comply with certain RCRA air emission requirements. As noted above, generators and collectors of batteries may also perform limited activities (e.g., discharging batteries or disassembling battery packs) without triggering any of these requirements.
The guidance highlights that furnaces processing lithium-ion batteries may be subject to the RCRA requirements for boilers and industrial furnaces (BIFs), but may qualify for an exemption from such requirements if they are "smelting, melting, or refining furnaces" (SMRFs), process the batteries solely for purposes of recovering metals, and meet various other requirements. Unfortunately, EPA fails to note that the Agency previously reduced the requirements of the SMRF exemption to facilitate the recycling of other battery chemistries (e.g., lead-acid batteries and nickel-cadmium batteries), and it passes on the opportunity to provide similar relief for lithium-ion batteries.
What is the regulatory status of "black mass" (the initial product of most lithium-ion battery recycling processes)?
EPA states that "[m]aterials derived from recycling lithium batteries, such as black mass and other intermediates, are no longer wastes when they do not need to be reclaimed further before being used as an ingredient in a process to make a new product" (emphasis added). The Agency also says that "[b]lack mass is frequently ... sent to another facility for metals recovery," which is a form of reclamation. Thus, it appears that EPA believes that black mass generally qualifies as solid waste (and potentially hazardous waste, as discussed below).
The guidance does not mention the possibility that black mass might be excluded from the definition of solid waste if managed under the transfer-based, verified-recycler, or generator-control exclusions discussed above. It is also silent on the potential to apply for and obtain a "partially reclaimed material" variance from the definition of solid waste for black mass – even though EPA previously issued detailed guidance on how recyclers of lead-acid batteries could obtain such variances for the intermediate materials that they produce.
EPA does note that black mass would not qualify as hazardous waste if it does not exhibit a characteristic of hazardous waste. However, even though the main metals used in lithium-ion batteries would generally not trigger a hazardous waste classification, the Agency cautions that failure to carefully exclude other battery chemistries (e.g., lead-acid or nickel-cadmium) from the batteries processed to produce the black mass may cause the black mass to exhibit the toxicity characteristic. EPA also notes that even non-hazardous black mass may be subject to certain requirements (as discussed below).
Finally, it is worth noting that the guidance does not discuss the regulatory status of other outputs of recycling lithium-ion batteries, such as plastics or metals separately collected during the battery shredding process or residues from processing black mass to produce metals or other products. While a full discussion might not have been possible, given the various recycling processes currently being developed or deployed, some general discussion might have been useful.
How do the RCRA land disposal restrictions apply to lithium-ion batteries, black mass, and related materials?
The guidance mentions the LDR program only in passing, noting that "wastes that exhibit a characteristic at the point of generation may still be subject to the RCRA land disposal restrictions ... even if they no longer exhibit a characteristic at the point of land disposal." However, EPA fails to elaborate on the applicable LDR requirements, which may have major implications for recycling lithium-ion batteries.
Given EPA's position that lithium-ion batteries are both ignitable and reactive (as discussed above), the LDR treatment standards for both characteristics presumably attach to the battery wastes (unless they are excluded from the definition of solid waste, as also discussed above). Under such treatment standards, before any hazardous or non-hazardous derivatives of the batteries are placed on the land – for storage, disposal, or beneficial use – they generally must be processed to remove the characteristics and to meet Universal Treatment Standards (UTSs), including stringent standards for nickel (a major component of lithium-ion batteries) and other constituents. Moreover, if the batteries contain more than 10% Total Organic Carbon (TOC), such as in the electrolytes and perhaps other components, they may be required to be processed by combustion, recovery of organics, or polymerization. These requirements may apply to black mass, other outputs of the battery shredding process, and residues (and possibly even some products) of the processing of black mass.
EPA's silence on the LDR issues leaves a large gap in the guidance. The Agency also does not appear to have considered the possible need for LDR treatment standards better tailored to lithium-ion batteries and its derivatives. EPA previously developed and issued special LDR treatment standards for other battery chemistries, such as lead-acid and nickel-cadmium batteries. Its failure to do the same here – or even to discuss the option of LDR "treatability variances" for establishing alternative treatment standards on a case-specific basis – may serve as an obstacle to the circular economy for lithium-ion batteries that EPA is trying to promote.
Clearly, there are a variety of strategic options for generators, reverse logistics providers, and recyclers of lithium-ion batteries and battery-containing products. Notwithstanding EPA's new guidance document, several ambiguities remain on fundamental issues of how the nation's hazardous waste regulations apply to these materials and processes. Those involved in this area should carefully consider the applicable rules, the latest guidance, and the outstanding uncertainties, as they develop and implement their battery management programs. They may also want to consider opportunities for advocating for further guidance, variances, or rule changes, as may be warranted.
Inside EPA featured Aaron's observations in its June 9, 2023, article, "Lawyer Fears 'Major Outstanding Questions' In EPA's New Battery Guide."
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