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The EPA is developing a final rule under the Formaldehyde Standards for Composite Wood Products Act that was enacted in 2010 as title VI of Toxic Substances Control Act (TSCA), 15 U.S.C. 2697, and requires that the EPA promulgate implementing regulations to establish specific formaldehyde emission limits for hardwood plywood, particleboard, and medium-density fiberboard, which limits are identical to the California emission limits for these products. In 2013, the EPA proposed regulations to implement emissions standards established by TSCA title VI for composite wood products sold, supplied, offered for sale, or manufactured in the United States. Pursuant to TSCA section 3(7), the definition of "manufacture" includes import. As required by title VI, these regulations apply to hardwood plywood, medium-density fiberboard, and particleboard. TSCA title VI also directs EPA to promulgate supplementary provisions to ensure compliance with the emissions standards, including provisions related to labeling; chain of custody requirements; sell-through provisions; ULEF resins; no-added formaldehyde-based resins; finished goods; third-party testing and certification; auditing and reporting of third-party certifiers; recordkeeping; enforcement; laminated products; and exceptions from the requirements of regulations promulgated pursuant to this subsection for products and components containing de minimis amounts of composite wood products. A separate Regulatory Agenda entry (RIN 2070-AJ44) addresses requirements for accrediting bodies and third-party certifiers.  EPA may decide to issue a single final rule to promulgate the final requirements related to both proposed rules.

Statement of Need:

TSCA title VI directs the EPA to promulgate regulations to implement the statutory formaldehyde emission standards and emissions testing requirements for composite wood products (hardwood plywood, particleboard, and medium-density fiberboard).

Summary of the Legal Basis:

The EPA is issuing this rule under title VI of the Toxic Substances Control Act (TSCA), 15 U.S.C. 2697, enacted in the Formaldehyde Standards for Composite Wood Products Act of 2010, which directs EPA to promulgate regulations to implement the formaldehyde emission standards and emissions testing requirements established by the Act. Congress directed the EPA to consider a number of elements for inclusion in the implementing regulations, many of which are aspects of the California Air Resources Board (CARB) program. These elements include: (a) labeling, (b) chain of custody requirements, (c) sell-through provisions, (d) ultra low-emitting formaldehyde resins, (e) no-added formaldehyde-based resins, (f) finished goods, (g) third-party testing and certification, (h) auditing and reporting of TPCs, (i) recordkeeping, (j) enforcement, (k) laminated products, and (l) exceptions from the requirements of regulations promulgated for products and components containing de minimis amounts of composite wood products.

Alternatives:

TSCA Title VI establishes national formaldehyde emission standards for composite wood products and the EPA has not been given the authority to change those standards. EPA considered various alternatives to other proposed requirements. With respect to a definition of hardwood plywood, EPA considered exempting all laminated products from the definition, exempting all laminated products except architectural panels and custom plywood, exempting laminated products made using no-added formaldehyde (NAF) resins to attach veneer to platforms certified as NAF, and exempting laminated products made using NAF resins to attach veneer to compliant and certified platforms. EPA also considered allowing certifications for ultra-low emitting formaldehyde. Furthermore, EPA considered reduced recordkeeping requirements for firms that do not qualify as manufacturers under TSCA, not requiring notification to suppliers that the products supplied must comply with TSCA Title VI, and allowing to tested lots to be shipped before test results are available. EPA is evaluating implementation alternatives in this rulemaking and public comments.

Anticipated Costs and Benefits:

Issued with the proposed rule, the Economic Analysis provides the EPA's analysis of the potential costs and benefits associated with this rulemaking. As proposed, this rulemaking will reduce exposures to formaldehyde, resulting in benefits from avoided adverse health effects. For the subset of health effects where the results were quantified, the estimated annualized benefits (due to avoided incidence of eye irritation and nasopharyngeal cancer) are $20 million to $48 million per year using a 3% discount rate, and $9 million to $23 million per year using a 7% discount rate. There are additional unquantified benefits due to other avoided health effects. The annualized costs are estimated at $72 million to $81 million per year using a 3% discount rate, and $80 million to $89 million per year using a 7% discount rate. Government entities are not expected to be subject to the rule's requirements, which apply to entities that manufacture (including import), fabricate, distribute, or sell composite wood products. EPA also estimated that the rulemaking would impact nearly 879,000 small businesses: Over 851,000 have costs impacts less than 1% of revenues, over 23,000 firms have impacts between 1% and 3%, and over 4,000 firms have impacts greater than 3% of revenues. Most firms with impacts over 1% have annualized costs of less than $250 per year. This rule increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population or children. The estimated costs of the proposed rule exceed the quantified benefits. There are additional unquantified benefits due to other avoided health effects. After assessing both the costs and the benefits of the proposal, including the unquantified benefits, EPA has made a reasoned determination that the benefits of the proposal justify its costs.

Risks:

At room temperature, formaldehyde is a colorless, flammable gas that has a distinct, pungent smell. Small amounts of formaldehyde are naturally produced by plants, animals and humans. Formaldehyde is used widely by industry to manufacture a range of building materials and numerous household products. It is in resins used to manufacture some composite wood products (e.g., hardwood plywood, particleboard and medium-density fiberboard). Everyone is exposed to small amounts of formaldehyde in the air, some foods, and products, including composite wood products. The primary way you can be exposed to formaldehyde is by breathing air containing it. Formaldehyde can cause irritation of the skin, eyes, nose, and throat. High levels of exposure may cause some types of cancers.