Metal recyclers in the greater San Fernando Valley region are concerned that new state regulations may drive them out of business.
So much so, in fact, that two, Express Metals Recycling in Sun Valley and Pacific Auto Recycling Center in Lancaster, have joined up with one of the largest private recycling firms in the Central Valley to petition the U.S. Environmental Protection Agency to rescind the state’s ability to enforce the federal Resource Conservation and Recovery Act, or RCRA, and assume responsibility for implementing RCRA and the federal hazardous waste program in California.
Under current regulations, recyclers can shred metal and remove it from products such as cars and appliances and not have to worry about additional oversight by the state Department of Toxic Substance Control. Under the proposed regulations, the shredded metal would be considered a hazardous waste, making it subject to additional scrutiny by the department.
At stake for the recyclers is an increased cost in doing business; new permits will have to be obtained that could run into thousands of dollars and there could be land assessments done as well as increased operating costs in the event of training.
The substance control department filed with the state Office of Administrative Law on Oct. 15 emergency requirements reclassifying metal shredder aggregate as a hazardous waste.
Maureen Gorsen, an attorney in the Los Angeles office of law firm Sidley Austin, said that the department was “off the reservation” with its proposed regulations.
“They are doing things that are completely contradictory to RCRA and we would like (the EPA) to revoke their authority to review it,” Gorsen said.
Gorsen, a former director of the substance control department, represents the three metal recyclers with their petition.
Mitchell Kramar, owner of Kramar’s Iron & Metal Inc. in the east San Fernando Valley, said the proposed regulations would be very costly to recyclers like himself as they are basically redefining scrap metal.
“The overall regulations hurt the industry and will have an impact on the economy and will hurt the environment if companies like mine cannot shred anymore,” Kramar said.
With respect to the increased costs, Kramar said “I do not even know the full extent because it is still in the early stages of what they want to do.”
But in an email to the Business Journal, a department spokesman said that it is only aware of nine facilities in the state that conduct metal shredding activities.
“The revised emergency regulations are specific to, and will affect only, these facilities,” the spokesman wrote in the email. “Scrap metal recycling facilities that do not conduct metal shredding activities will not subject to any new regulatory requirements under this proposal.”
Both Gorsen and Kramar disagreed with the department.
“There are a lot more than nine facilities,” Kramar said in an email. “They just don’t know about them yet.”
“I don’t know that there are only nine metal shredders in operation in the state,” Gorsen added in an email of her own. “I don’t know where they get that number.”
The department spokesman’s response to Gorsen and Kramar’s remarks was to refer to the final report the department prepared and released in August on the metal shredding industry.
Pollution and mitigation
The recycling industry is a lot bigger than most consumers realize.
According to the Institute of Scrap Recycling Industries Inc., a Washington, D.C. trade organization, in 2019, U.S. recycling companies processed 130 million metric tons of scrap, metal, paper, plastics, electronics, textiles, glass and rubber.
The total financial contribution to the economy was $55.5 billion, which employed that year more than 270,000 workers in both industry jobs and with suppliers.
“Eighty percent of the metal objects in our lives are made from scrap metal. It is something that we use every day and there is no shelf life,” Kramar said. “You use it over and over.”
Gorsen, the attorney, added that the people who collect scrap metal for a living are often at the margins of society, yet they perform a valuable service.
“They don’t speak much English, they are not very educated, and they can make a very good living providing a very valuable function for the environment and the economy,” she said.
The substance control department recognizes that metal shredders play an important role in the recycling of scrap metal such as discard autos and appliances, and that their continued operation is vital, the spokesman said in his email.
“However, their operations need to meet protective standards to ensure the safety of the communities surrounding them and ensure any contamination caused by their operation is prevented and addressed,” the spokesman added.
In August, the department released a final report on the metal recycling industry that was started in 2018. It focused on just six metal shredding companies that have an “f letter,” or the department’s approval to manage as a nonhazardous waste that would otherwise be considered a non-RCRA hazardous waste.
A non-RCRA hazardous waste is one that exceeds California’s regulatory thresholds for toxicity, according to the final report.
Not included in the final report was an evaluation of three additional metal shredding facilities, including Kramar’s Iron & Metal and Pacific Auto Recycling. They were not evaluated because they do not have an “f letter,” the final report said.
“The study identifies repeated examples of improper hazardous waste storage, soil contamination and releases of hazardous waste into surrounding communities, including many that are already burdened by multiple sources of pollution,” the department’s spokesman said.
But Kramar said that the department was being very general with that statement and did not take into consideration what facilities such as his own do to mitigate any potential problems.
“Speaking for my facility, everything is on concrete, and we have a permitted baghouse system to remove dust and fugitive emissions from our operations and prevent particulate matter from entering the atmosphere,” Kramar said in an email. “We also have an extensive housekeeping system in place to prevent anything from leaving our facility.”
He added: “Their statement is like saying they inspected one fast food restaurant and found numerous health violations, so they assume all fast-food operations operate the same and are going to punish the whole fast-food industry for one issue.”
Also taking aim at the department is a lawsuit filed in November 2019 by the West Coast chapter of the Institute of Scrap Recycling Industries and five recycling companies, including some with Valley area operations. SA Recycling, for example, has two facilities in Sun Valley and one in Lancaster. SA is a joint venture partner of Sims Metal Management Ltd., another plaintiff in the lawsuit.
The legal challenge is still ongoing, said Roger Salazar, a spokesman for the California Metal Recyclers Coalition.
“For the first time in over 35 years, defendant has embarked on a plan to regulate metal processing operations as ‘treatment’ of ‘hazardous waste’ contrary to applicable laws, regulations and long-standing DTSC policy and practice,” the 28-page complaint reads. “If defendant’s plan is allowed to come to fruition, it will result in the loss of significant scrap metal recycling capacity in the state, causing enormous disruption in an industry that provides critical infrastructural services to Californians and unlawfully interfering with and impairing plaintiffs’ legitimate business operations.”
The lawsuit seeks a ruling that the department does not have the authority to require the plaintiffs to obtain hazardous waste treatment permits to conduct metal processing operations or to otherwise regulate those operations as hazardous waste management activity.
“Metal processing operations are conducted for the purpose of separating and removing valuable ferrous and nonferrous metals from exempt scrap metal and do not involve any form of waste management,” the suit said.
As for the petition to the EPA, Gorsen said the agency is reviewing it. There is no deadline for when the EPA will decide to accept or reject the petition, she added.
The EPA will make sure that the state is compliant with RCRA and that it has the authorization to enforce it as originally granted in 1986, Gorsen continued.
She added that if the EPA were to accept the petition, there would be an agreement reached between it and the state, through either a memorandum of understanding or an RCRA authorization.
“I imagine it would be negotiated and relatively amicable,” Gorsen said.
The department’s spokesman would not comment on the petition specifically.
But he did say that the department does, “as a representative of an authorized state, work closely with U.S. EPA to ensure the RCRA program that is being implemented in California is no less stringent than the federal program.”