Hunton Retail Law Resource

In a move affecting manufacturers, distributors and retailers in the furniture and other wood-based industries, the Environmental Protection Agency (“EPA”) recently issued a series of amendments to its Final Rule implementing the Formaldehyde Standards for Composite Wood Products Act (the “Formaldehyde Final Rule”), which added Title VI to the Toxic Substances Control Act (“TSCA”). The Formaldehyde Final Rule, 40 CFR Part 770, sets formaldehyde emissions standards for composite wood products and includes requirements for the testing, third-party certification, import certification and labeling of covered products by manufacturers of those products. The Final Rule also imposes requirements on downstream fabricators, distributors and retailers to keep records for at least three years demonstrating that covered products they use, distribute and/or sell are TSCA Title VI-compliant.

EPA’s recent Compliance Date Amendment extends the deadline for compliance with most of the provisions in the Formaldehyde Final Rule from December 12, 2017, to December 12, 2018, giving companies an additional year to bring their products and procedures in compliance with the Final Rule’s provisions. However, after EPA removed a provision earlier this summer that would have prohibited companies from complying with the labeling provisions of the Formaldehyde Final Rule before the compliance deadline, companies are now permitted to begin labeling products and complying with the Final Rule as soon as they are able to do so.

Many companies in the industry are already familiar with the California Air Resource Board’s Formaldehyde Emissions Rule, which has been in effect since 2007 and served as the model for EPA’s Formaldehyde Final Rule. But now they will have to comply with the new formaldehyde emissions standards in every state in which they do business—not just California. A brief overview of the Formaldehyde Final Rule’s key provisions is below.

Covered Products

The Formaldehyde Final Rule only regulates “composite wood products.” EPA defines “composite wood products” as:

• Hardwood plywood. A hardwood or decorative panel that is intended for interior use and composed of an assembly of layers or plies of veneer, joined by an adhesive with a lumber core, a particleboard core, a medium-density fiberboard core, a hardboard core, a veneer core or any other special core or special back material.
• Medium-density fiberboard. A panel composed of cellulosic fibers made by dry forming and pressing a resinated fiber mat.
• Particleboard. A panel composed of cellulosic material in the form of discrete particles (as distinguished from fibers, flakes or strands) that are pressed together with resin.
• Finished goods containing these products. Any good or product, other than a panel, that contains hardwood plywood (with a veneer or composite core), particleboard or medium-density fiberboard and that is not a component part or other part used in the assembly of a finished good. The definition of “finished good” does not include site-built buildings or other site-built real property improvements.

If a product does not meet the definition of “composite wood product” as set forth in the Formaldehyde Final Rule, it is not subject to EPA’s formaldehyde emissions standards and there are no testing, certification or mandatory recordkeeping requirements associated with the product. However, companies would be advised to retain records demonstrating that a product does not meet the definition of “composite wood product” for at least three years.

Covered products must comply with the emissions standards specified in the Formaldehyde Final Rule:

Covered Entities

The Formaldehyde Final Rule applies to any entity (regardless of size) that manufactures, imports, sells, supplies or offers for sale hardwood plywood, medium-density fiberboard, particleboard and/or products containing these composite wood materials in the United States. The Formaldehyde Final Rule imposes different obligations on entities depending on where they fall in the supply chain. Covered entities include:

• Panel Producers. Manufacturing plants or other facilities that manufacture composite wood products on the premises. The definition of “panel producers” does not include facilities that solely import products.
• Fabricators. Persons or entities who incorporate composite wood products into component parts or into finished goods. The definition of “fabricators” includes laminated product producers, but does not include persons or entities in the construction trade who renovate or remodel buildings.
• Importers. Persons or entities who import composite wood products, component parts or finished goods into the customs territory of the United States. The definition of “importers” includes agents acting on an entity’s behalf.
• Distributors. Persons or entities to whom a composite wood product, component part or finished good is sold or supplied for the purposes of resale or distribution in commerce.
• Retailers. Persons or entities that sell, offer for sale or supply directly to consumers composite wood products, component parts or finished goods that contain composite wood products. The definition of “retailers” does not include entities in the construction trade who sell, renovate or remodel buildings.

Third-Party Certification Program

The Formaldehyde Final Rule establishes a comprehensive third-party certification program, including procedures and requirements for EPA accreditation of third-party certifiers who will conduct testing to ensure that a composite wood product meets the emissions standards outline above. All panel producers must obtain compliance certification from an EPA-recognized Third-Party Certifier with respect to each panel they produce, within 30 days of production and prior to applying any finishing or topcoat.

Conclusion

While the deadline for compliance is still more than a year away, companies—especially importers and other downstream entities who depend on complex international supply chains and international panel producers who may not be aware of EPA’s new rule—should begin developing procedures now to ensure that they will be able to comply with the Formaldehyde Final Rule’s provisions by the deadline of December 12, 2018.

For more information, read the full final rule.