A New EPA Rule Could Cost Small Businesses Over $800 Million

The Environmental Protection Agency (EPA) proposed a rule in January of 2021 that would require companies to report their production of chemicals known as PFAS (per- and polyuoroalkyl substances) and the importation of goods made with these chemicals.

The EPA has received criticism for not assembling an advisory committee to better understand the economic impact this rule could have on small businesses. Pushback from the small business community prompted the EPA to convene a small business panel and to ultimately recalculate the rule’s economic impacts.

The EPA originally estimated that the social cost to consumers would be around $10.8 million, but the updated estimate rose steeply to $863.5 million. Experts in chemical management law have said that the agency will need to adjust its conclusions, and possibly regulations, in light of this new figure.

The reason for the high costs for small businesses is that the rule calls for a shift in liability—an adjustment from a “polluter pays” approach to a “community pays” approach.  Advocates of the proposed rule point out that low-income communities and tribal areas have been disproportionately affected by PFAS pollution. Costs aside, those in favor of the rule assert that cleaning up these polluted areas is a process that cannot wait.

PFAS appears in thousands of imported goods, including construction materials, medical devices, clothing, and cookware. The chemicals give these products special qualities like resistance to oil, water, germs, corrosion, and heat. The EPA has ongoing concerns about the lack of data they receive on these products, particularly how many are imported, how the chemicals have been used, and how they are disposed of. If the rule is finalized, manufacturers would have one year to submit this information.