1993(02)
RCRA/Superfund/OUST Hotline Monthly Report Question
February 1993
2. Closed-Loop Recycling Exclusion
Under the closed-loop recycling exclusion in 40 CFR 261.4(a)(8),
secondary materials that are reclaimed and returned to the original
process or processes in which they were generated are excluded
from Subtitle C of RCRA, provided they are reused in the production
process and the criteria in 40 CFR 261.4(a)(8) are met. Would
secondary materials managed in a system that includes storage
in open-top tanks fall within the exclusion in 261.4(a)(8)?
Secondary materials managed in a system that includes storage
in open-top tanks may qualify for the closed-loop recycling exclusion
as long as the system meets the four requirements in 261.4(a)(8).
EPA views closed-loop recycling operations as an integral part
of production processes, not as distinct waste management operations
(51 FR 25443; July 14, 1986). Typically, owners or operators of
such closed-loop recycling operations handle the secondary materials
as commodities; i.e., in a manner designed to avoid loss or release.
Although EPA does not preclude owners or operators from storing
secondary materials in open-top tanks under the closed-loop recycling
exclusion, there are other factors that prevent most materials,
especially volatiles, from being stored in them. These factors
include possible contamination from rain or dust and the threat
of explosive conditions. Owners or operators of open-top tanks
should therefore ensure secondary materials are managed as valuable
materials prior to reclamation in order for the tank to be considered
a part of a closed-loop recycling system and excluded under 261.4(a)(8).
Determinations regarding the closed-loop recycling exclusion are
usually case-specific. Thus, if EPA discovers a situation where
highly volatile materials are stored in an open-top tank and large
volumes of the materials are lost prior to reclamation, the exclusion
may not apply because the secondary materials are not being managed
to prevent loss or release prior to reclamation, causing the material
to become regulated as a waste under Subtitle C of RCRA (51 FR
25443; July 14, 1986).