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Increased TSCA Fees Jeopardize American Supply Chains

For over a year, chemical distributors that import ingredients from foreign countries have been dealing with severe supply chain disruptions that threaten the viability of their businesses. Yet, while President Biden has taken actions to address these problems along our supply chain, his United States Environmental Protection Agency (EPA) is proposing a rule that could undercut that progress.

In fact, President Biden’s EPA is proposing increasing risk evaluation fees for chemicals covered under the Toxic Substances Control Act (TSCA) by 89 percent from 2018 standards. At a time when American-based chemical distributors, manufacturers, and importers are under immense stress, a rule like this would add even more pressure to America’s supply chain providers, including NACD members, potentially driving many out of business.

While the rule entitles small businesses up to an 80percent discount and sets the maximum fee to $512,000 per chemical, if a business imports more than a single so-called high-priority chemical, that company could be subject to more than $1 million in fees. Furthermore, the EPA’s chemical prioritization process locks businesses into paying risk evaluation fees with little ability to predict and, therefore, plan fiscally with any certainty to pay risk evaluation fees.

The majority of NACD members import chemicals, many of which are essential to

American manufacturing but are no longer produced in the United States. TSCA defines chemical manufacturers to include chemical importers and subjects these companies to the same obligations as domestic chemical manufacturers even though they have drastically different business models. Importers tend to be smaller organizations than manufacturers, and it is troubling that EPA would be subjecting them to the same fee structure.

EPA is within its authority to regularly assess and adjust fees. Under TSCA, EPA is also allowed to recoup 25 percent of its costs to operate its new and existing chemicals programs. However, what’s troubling is that the agency did not provide adequate justification for the amount of the proposed increase or a transparent accounting of how the additional funds would be used.

All businesses, including chemical distributors, need certainty to operate in these trying times. The last thing EPA should be doing is saddling chemical distributors, which are integral to the U.S. supply chain, with unnecessary costs when they can least afford them. It is critical that EPA reevaluates and amends this proposed rule immediately to avoid placing excessive burdens on our industry.

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