On Jan. 6, 2021 the Environmental Protection Agency (EPA) published a Final Rule that in a mere 60 days would ban the use of Phenol, Isopropylated Phosphate (3:1) (PIP 3:1) under the Toxic Substances Control Act (TSCA). This was of grave concern to our industry because PIP (3:1) is used extensively throughout our supply chain due to its proven reliability and safety record as a fire retardant and plasticizer.

The impossibly short time frame for companies to remove (3:1) from their supply chains was further complicated by the fact that the automotive industry was exempt from the ban. Given that our supply chain is very similar to that of the automotive sector, suppliers would be slow to respond, if ever, to the specific needs of off-road equipment manufacturers.

In response, AEM initiated a host of activities to prevent the Final Rule from negatively affecting our members. The association worked to establish new connections with EPA staff to express our concerns , and they were well received. Additionally, we brought the issue to the attention of other federal agencies that became engaged, such as the Mine Safety and Health Administration (MSHA) given the tremendous value PIP has for worker safety and the Small Business Administration’s (SBA) Office of Advocacy, as this rule would have a disproportionate impact on small businesses.  

AEM also reached out to partner with a variety of national and international trade associations in adjacent industries. The cooperation between AEM and its sister trade associations is intended to build clearer lines of communication across industry sectors, facilitate a greater exchange of information, and coordinate the regulated community’s response to new laws and regulations in the future. The coordinated effort from the business community over the last several months helped AEM signal to EPA the various issues that industry stakeholders had with the PIP (3:1) Final Rule. 

As a result EPA, on March 12, 2021 released; Regulation of Persistent, Bioaccumulative, and Toxic Chemicals Under TSCA Section 6(h); Request for Comments. The EPA’s request delayed the ban for 180 days while the agency gathered additional feedback.  

AEM did not let this opportunity go to waste. We formed a TSCA working group comprised of several subject matter expert volunteers from the association’s member companies. This working group surveyed 575 companies, including 50 AEM member companies to better understand the impact and prevalence that PIP (3:1) has on our industry. The TSCA working group used this information to draft two comment letters to the EPA’s proposed rule.

“The lessons learned from this exercise will help our industry successfully respond to issues that may arise in future rulemakings,” said AEM Director of Global Standards and Compliance Jason Malcore. “AEM will look to build stronger lines of communication with policymakers and other trade associations to educate external shareholders more effectively on the issues that are important to our members.”

Altogether the EPA received 122 comments in response to their proposed rule. In addition to AEM’s comments, 27 industry associations and numerous AEM member companies provided comments to the proposed rule.

Engagement and Education Efforts

Despite the success in coordinating a response to the PIP (3:1) rule AEM learned there is a great deal of work required for effective engagement with policymakers in the future. The association intends to prioritize greater involvement with government officials during the rulemaking process. With more than 1,000 member companies and a sprawling global supply chain, AEM must communicate the interests of these companies, the nuances of their operations, and the interconnectedness between industries to decision-makers as they draft regulations that will impact our members. These efforts will help promote AEM as a responsible, involved, and valuable stakeholder during future rulemakings.

Continued Industry Action

AEM plans to help educate industry stakeholders on the regulatory process, the impact that current and future rules may have on their operations, and the importance of staying engaged. We anticipate that stronger engagement from its member companies will ensure a better understanding between government policymakers and the regulated community.

During the last Regulatory Compliance Steering Committee meeting on June 8 of this year, Joel Wolf from the EPA’s Office of Pollution Prevention and Toxics presented on the TSCA Risk Evaluation process for existing chemicals. This presentation provided a comprehensive overview of the EPA’s chemical review process and allowed the subject matter experts on the committee an opportunity to ask direct questions to EPA officials. AEM intends on building off this initial dialogue and working hard to ensure the industry’s voice is heard by decision-makers in the future.

“These ongoing relationships with government policy makers will help AEM communicate the needs and nuances of our member companies with regards to Federal rulemaking activity,” said AEM Senior Director of Regulatory Affairs Nick Tindall.

With the ban set to take effect in early September, AEM is not taking anything for granted. We are meeting with the Office of Management and Budget to ensure the administration understands the dire economic impact of not exempting off-road equipment manufacturers from the rule or failing to give us adequate time to properly find, test and design alternative products and for our supply chain to gear up to provide these new parts.

AEM will be reaching out to our membership to encourage small business, those with 500 or fewer employees, to contact SBA’s Office of Advocacy to let them know how a rule done wrong will hurt their businesses.

AEM also remains in regular contact with EPA and is seeking opportunities for our member company executives to express the urgent need for the to provide regulatory certainty.

During the next several months, as the EPA works to complete the next steps of the rulemaking process, it is important to understand that the agency cannot communicate on their decision making process as it relates to the rule until that process is complete. AEM staff are monitoring all agency communications regarding this rule and will make sure to let the membership know of any important updates as they occur.

Learn More

For more information,  contact a member of AEM’s Regulatory Affairs Team: Jason Malcore jmalcore@aem.org, Nick Tindal ntindal@aem.org or John Wagner jwagner@aem.org. 

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