American Petroleum Institute v. Environmental Protection Agency

Opinion dissenting in part filed by Circuit Judge TATEL.

This case arises from the Environmental Protection Agency’s latest effort to define the term “solid waste” under the Resource Conservation and Recovery Act. In 2015, EPA promulgated a final rule governing when certain hazardous materials qualify as “discarded” and hence are subject to the agency’s regulatory authority. Environmental and Industry Petitioners have each petitioned for review of that rule, arguing that numerous aspects of it are unlawful and arbitrary and capricious. For the reasons explained, we grant the Industry petition for review with respect to Factor 4 of the legitimacy test and to the Verified Recycler Exclusion and we dismiss the Environmental petition for review.

I. Introduction

The Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. §§ 6901-6992k, empowers EPA to manage solid and hazardous waste. The statute defines solid waste as “garbage, refuse, sludge ... and other discarded material.” 42 U.S.C. § 6903(27). Hazardous waste is a subset of solid waste that may pose a substantial threat to human health or the environment when improperly managed. § 6903(5)(B). If a material qualifies as hazardous waste, it is subject to regulation under RCRA Subtitle C, §§ 6921-6939g, which imposes comprehensive reporting and operating requirements. Material that is not solid waste, and therefore not hazardous waste, is exempt from Subtitle C.

Pursuant to its RCRA authority, EPA has promulgated a rule defining solid waste as “discarded material” not otherwise excluded from the agency’s regulations. 40 C.F.R. § 261.2(a)(1). A separate regulation lists materials that fall outside the definition of solid waste. § 261.4. Central to the issues before us, EPA considers certain materials that are destined for recycling to be discarded and hence solid waste subject to RCRA regulation. Definition of Solid Waste, 80 Fed. Reg. 1,694, 1,738/3 (Jan. 13, 2015) (the “Final Rule”).

For our purposes, the relevant history begins in 2007, when EPA proposed a rule deregulating many hazardous secondary materials. See American Petroleum Institute v. EPA, 683 F.3d 382, 385 (D.C. Cir. 2012) (“API II”). Secondary materials are substances generated as the remainder of industrial processes; they include spent materials, byproducts, and sludges. See 40 C.F.R. § 260.10. EPA’s proposed rule— which became a final rule in October 2008 — excluded hazardous secondary materials from the definition of solid waste in two circumstances: first, if the company that generated the materials controlled the recycling of those materials; and second, if the generator transferred the materials to an off-site recycler it had audited to ensure compliance with proper recycling practices. Revisions to the Definition of Solid Waste, 73 Fed. Reg. 64,668, 64,669/3-70/1-2 (Oct. 30, 2008) (the “2008 Rule”). These two exemptions were known, respectively, as the “Generator-Controlled Exclusion” and the “Transfer-Based Exclusion.” Id. at 64,670/1, 64,675/2 (capitalization added). To qualify for either, secondary materials had to be recycled “legitimately,” a term EPA defined by reference to certain “legitimacy factors.” Id. at 64,675/2-3. EPA adopted this legitimacy requirement to distinguish “true” recycling from “sham” recycling in which companies claim to reuse materials they in fact discard. Id. at 64,700/2.

*56Several organizations challenged the 2008 Rule. One, the American Petroleum Institute, argued that the rule unlawfully regulated materials called spent petroleum refinery catalysts, which are byproducts of the oil refining process. API II, 683 F.3d at 387. Another group, the Sierra Club, asserted that the rule “was not sufficiently protective of human health and the environment,” in violation of RCRA. Id. at 389. A third entity, Gulf. Chemical and Metallurgical Corporation (“Gulf’), moved to intervene to defend the rule’s treatment of spent catalysts.

Before this court heard oral argument, EPA entered a settlement agreement with the Sierra Club. Id. Pursuant to that agreement, the Sierra Club withdrew its petition, and EPA agreed to propose a new solid waste rule. Id. As promised, EPA published a notice of proposed rulemaking in July 2011. Definition of Solid Waste, 76 Fed. Reg. 44,094 (July 22, 2011) (the “Proposed Rule”). A year later, we held that API’s challenge to the 2008 rule was unripe given the forthcoming final rule. API II, 683 F.3d at 384. We deferred any action on Gulfs motion to intervene, which is dealt with in a separate order published today.

EPA promulgated the Final Rule on solid waste — the one before us now — in January 2015. 80 Fed. Reg. at 1,694/1. The 2015 Final Rule differs from the 2008 Rule in several ways, four of which are relevant here. First, the Final Rule revises the definition of “legitimate” recycling and expands the scope of the legitimacy factors to cover all recycling. Id. at 1,719/3-20/1. Second, it establishes that spent catalysts — which were ineligible for exclusions under the 2008 Rule — could qualify for the exemptions in the 2015 regulation. Id. at 1,738/1. Third, the rule defers a decision on whether to add conditions to 32 previously promulgated exclusions from the definition of solid waste, which EPA calls the “pre-2008” exclusions. Id. at 1,741/2. Fourth and finally, the rule replaces the transfer-based exclusion with the “Verified Recycler Exclusion,” a new standard governing when transferred materials qualify as solid waste. Id. at 1,695/2. We provide additional detail on each of these provisions later in this opinion.

Multiple organizations petitioned for review of the 2015 rule. Their petitions, which are consolidated in this case, challenge the regulation on multiple fronts. Industry Petitioners argue that both the legitimacy test and the Verified Recycler Exclusion exceed EPA’s RCRA authority. Industry Petitioners also challenge EPA’s treatment of two specific materials: spent catalysts and off-specification commercial chemical products. Environmental Petitioners argue that the Verified Recycler Exclusion is too permissive and that EPA should have added containment and notification conditions to the 32 pre-2008 exclusions. We consider these challenges in turn.

II. Legitimacy Factors

Industry Petitioners first attack EPA’s new legitimacy test. Before EPA can regulate a hazardous secondary material as hazardous waste, it must determine that the material has been “discarded” under 42 U.S.C. § 6903(27). Items recycled through “immediate reuse in” an “industry’s ongoing production process,” are not discarded within the meaning of that section and are outside EPA’s hazardous waste regulations. See American Mining Congress v. EPA, 824 F.2d 1177, 1183-85 (D.C. Cir. 1987) (“AMC”); see also Ass’n of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047, 1052-53 (D.C. Cir. 2000) (explaining that “immediate” in AMC means “direct,” not instantaneous). But because EPA’s waste disposal regulations are aeknowl-*57edged to be very costly to meet, “there is an incentive for some handlers to claim they are recycling when, in fact, they are conducting ... disposal.” Final Rule, 80 Fed. Reg. at 1,719/3. To prevent such evasion, EPA polices the line “between ‘legitimate’ (i.e., true) recycling and ‘sham’ (i.e., fake) recycling.” Id. at 1,720/1.

Until recently, EPA’s policy on sham recycling existed chiefly in uncodified guidance, notably a memo issued in 1989 by Sylvia K. Lowrance, Director, EPA Office of Solid Waste (Apr. 26, 1989) (the “Lowrance Memo”). The memo discussed over a dozen factors for evaluating recycling, all aimed at determining “whether the secondary material is ‘commodity-like,’ ” i.e., is it being handled like a valuable industrial input or like a worthless industrial byproduct. See id. at 2 & attachment.

The Final Rule updates and codifies this effort to draw the distinction between legitimate and sham recycling. It requires that all recycling of hazardous secondary materials meet a legitimacy test set forth in 40 C.F.R. § 260.43(a) or else be labeled “sham” and subjected to full RCRA regulation. 40 C.F.R. § 261.2(g). Like the Low-rance Memo, the rule is rooted in the assumption that legitimate recycling should involve some “recognizable benefit,” Final Rule, 80 Fed. Reg. at 1,722/1, independent of merely “avoidfing] the requirements of’ RCRA regulation, id. at 1,719/3.

To satisfy the legitimacy test for recycling of a particular material, firms must prevail on all of four factors, § 260.43(a)(l)-(4), which are in addition to whatever elements a specific exclusion might require, see Final Rule, 80 Fed. Reg. at 1,720/2. First, the hazardous secondary material must “provide[ ] a useful contribution to the recycling process.” § 260.43(a)(1). Second, “[t]he recycling process must produce a valuable product or intermediate.” § 260.43(a)(2). Third, the persons controlling the secondary material must “manage the hazardous secondary material as a valuable commodity.” § 260.43(a)(3). Fourth, “[t]he product of the recycling process must be comparable to a legitimate product or intermediate.” § 260.43(a)(4). Factors 1 and 3 address the process, Factors 2 and 4 the product.

Industry Petitioners do not attack EPA’s authority to formulate and apply a legitimacy test, nor do they fault EPA’s premise that legitimate recycling involves “valuable” materials being used for a “recognizable benefit.” Final Rule, 80 Fed. Reg. at 1,697/3, 1,722/1. At that level of generality, EPA’s policy seems to be a reasonable method for identifying materials that are “part of the waste disposal problem” and thus subject to EPA’s RCRA authority over discarded materials. Safe Food & Fertilizer v. EPA, 350 F.3d 1263, 1268 (D.C. Cir. 2003). Industry Petitioners instead attack EPA’s planned means to implement that policy. They complain that mandating Factors 3 and 4 across all recycling results in EPA’s “unlawfully regulating] non-discarded materials.” Industry Pet’rs’ Br. 16 (capitalization omitted).

A. Factor 3

We begin with Factor 3, which requires secondary materials to be handled as “valuable commodities].” 40 C.F.R. § 260.43(a)(3). Where there is an analogous raw material, the firm can meet this standard by handling the secondary material “in an equally protective manner.” Id. If there is no raw analogue for comparison, EPA requires that the secondary material be “contained.” Id. “Contained” means “held in a unit (including a land-based unit ...) that meets” multiple enumerated criteria, including that the unit be “labeled or otherwise hafye] a system (such as a log) to immediately identify the hazardous sec*58ondary materials” therein. 40 C.F.R. § 260.10 (entry for “Contained”). “[L]and-based unit[s],” id., encompass, at least for some materials such as scrap metal, simply lying on the ground, see Final Rule, 80 Fed. Reg. at 1,721/3, 1,736/2.

EPA previously claimed that any “interdiction in time” during a secondary material’s trajectory from initial output to recycling, e.g., for storage, could be considered discard and thus trip the material into EPA’s RCRA authority. Battery Recyclers, 208 F.3d at 1052 (internal quotation marks omitted). We rejected that rule. “To say that when something is saved it is thrown away is an extraordinary distortion of the English language.” Id. at 1053. Industry Petitioners read that holding to bar EPA from ever regulating how recycled materials are contained. Their reading goes too far. EPA can impose a containment requirement so long as it is such that an inference of “sham” or illegitimacy would logically flow from a firm’s non-compliance. And given EPA’s explanation that a material may be “contained” if it is simply piled on the ground, Final Rule, 80 Fed. Reg. at 1,721/3, 1,736/2, and meets specific requirements that petitioners do not challenge as unreasonable (with one exception, the “labelling” requirement discussed below), the standard does not on its face appear to ask for anything beyond what could be expected of firms engaged in legitimate recycling.

Industry Petitioners express concern about having to label or log unwieldy molten metals and acidic sludges to satisfy EPA’s insistence on material being “contained.” But EPA offers an alternative to labelling in the conventional sense — provision of “a system (such as a log) to immediately identify the hazardous secondary materials in the unit.” § 260.10. Thus, in substance, the requirement is not precisely one of labeling or logging, but only of assuring that it somehow be possible for the material to be “immediately identifiable].” Id. While doubtless EPA’s language could be interpreted unreasonably, we cannot see that the requirement itself is unreasonable.

B. Factor 4

Factor 4 presents more difficulty. EPA explains this factor as an effort to prevent recyclers from loading products with hazardous secondary materials that “provide[ ] no recognizable benefit to the product,” Final Rule, 80 Fed. Reg. at 1,722/1, and are simply “along for the ride,” id. at 1,726/2. Although EPA does not require a material’s “hazardous component[s]” themselves to provide a “useful contribution” to the product, see id. at 1,723/3 (discussing Factor 1), the agency is concerned that a purported recycler might “incorporate[ ] hazardous constituents into the final product when they were not needed to make that product effective as a way to avoid proper disposal of that material, which would be sham recycling,” id. at 1,726/1-2.

The factor sets up two tracks, 40 C.F.R. § 260.43(a)(4)(i)-(ii), one covering products for which there is an analogue of undoubted legitimacy, the other addressing products with no such analogue. EPA refers to these together as the “technical provisions.” Final Rule, 80 Fed. Reg. at 1,729/1. But as EPA recognizes that the criteria set forth under these two tracks don’t draw a satisfactory line between genuine and sham, it also offers a rather complicated exception — aimed at preventing products from being labelled a sham when they in fact pose no “significant human health or environmental risk.” § 260.43(a)(4)(iii). But Factor 4’s complex provisions fall short of the aim. As we shall see, Factor 4 imposes tasks tangential to disposal vel non (and thus tangential to EPA’s authori*59ty), even when EPA has offered little reason to doubt a product’s legitimacy.

The second track is the more reasonable of the two. When there is no analogue, the recycled product will pass if it was created by looping secondary materials back “to the original process ... from which they were generated” or if it meets “widely recognized commodity standards and specifications.” § 260.43(a)(4)(ii)(A)-(B). Those standards or specifications need not address the hazardous aspects of the product. Final Rule, 80 Fed. Reg. at 1,728/2-3. And EPA has explained that compliance •with “customer specifications” may suffice for “specialty” products. Id. at 1,728/1. Although that gloss on “specifications” appears only in EPA’s discussion of the with-analogue track, the Final Rule offers little indication that the same word in the no-analogue track is meant to read differently on this matter. Compare id. at 1,727/3-28/1 (with-analogue), with id. at 1,728/2-3 (no-analogue). Putting all this together, if a recycled product, lacking an analogue, fails to satisfy customer specifications, falls short of relevant commodity standards, and is not derived from a closed-loop type process, EPA treats it as discarded (subject to the ultimate exception). These tests focus largely on the utility of the recycling in question, a reasonable inquiry when deciding legitimacy. See id. at 1,728/3 (commodity standards and specifications criteria mean that “market forces [will] dictate” legitimacy); id. at 1,729/1 (“looping” criterion appropriate because this type of recycling “conserves the use of raw materials” without adding new hazards).

The other track in Factor 4’s technical provisions, applying where the recycled product has an analogue, is more explicitly tuned to the “along for the ride” metaphor. It requires that the recycled product exhibit no hazardous “characteristic” that is absent from the product’s analogue. 40 C.F.R. § 260.43(a)(4)(i)(A); see also Final Rule, 80 Fed. Reg. at 1,727/1 (“The characteristics are ignitability, corrosivity, reactivity, and toxicity.”). This criterion— fenced in as it is by the definitions of those characteristics, see 40 C.F.R. §§ 261.21-.24 — also seems reasonable: one would expect analogous products to have similar attributes. But the track goes on from there. Even if the recycled product and its analogue share the same hazardous characteristics, the amount or “levels” of hazardous constituents in the product must be “comparable to or lower than” its analogue’s. § 260.43(a)(4)(i)(B). If the product fails that test, it can still be legitimate if it “meet[s] widely-recognized commodity standards and specifications.” Id. Unlike in the no-analogue track, here the commodity standards and specifications must “specifically address [] hazardous constituents.” Id. Otherwise EPA will regard the product as discarded (subject to the ultimate exception).

We have left EPA some leeway in applying the idea that genuine recyclers cannot include hazardous material just “along for the ride” in their products. Thus in American Petroleum Institute v. EPA, 216 F.3d 50 (D.C. Cir. 2000) (“API /”), we rejected a challenge under “Chevron step one” to a rule that treated “recovered oil” as discarded if it included “extra materials ... that provide no benefit to the industrial process.” Id. at 58-59 (emphasis added). But we hinted that such a rule should reasonably avoid “incidentally regulat[ing] oil containing chemicals [whose presence in the recycled oil was] not caused by sham recycling (and therefore not discarded).” See id. at 59.

Judged by that perhaps opaque standard, EPA’s “along for the ride” metaphor suffers at least one of the usual dangers of metaphors — imprecision. The record contains examples of hazardous secondary *60materials that are beneficially recycled into valuable products (recognized as such by EPA), even though those products contain hazardous constituents that do not, in themselves, contribute to the value of the final product. See, e.g., Final Rule, 80 Fed. Reg. at 1,721/1-2 (zinc-containing secondary materials), 1,729/3 (lead-containing secondary materials). In those cases, even if EPA could technically say that some small excess of hazardous constituents has been left in the final product, the mere fact of their presence would not constitute a reasonable basis for dubbing the product or the process a sham. After all, it can be costly to extract tiny amounts of hazardous constituents — potentially on the order of “parts per million,” see id. at 1,727/2-3— from secondary materials destined for recycling, and no statute has given EPA authority to compel firms to engage in such extraction where failing to do so imposes no health or environmental risk. To rule otherwise would be to disregard the statute’s stated “objective[ ]” of “encouraging ... properly conducted recycling.” 42 U.S.C. § 6902(a)(6).

EPA made this very point in Safe Food to defend its exclusion for recycled zinc fertilizers even though those fertilizers could have “considerably higher” contaminant levels than the corresponding “virgin commercial fertilizer.” 350 F.3d at 1269. After reviewing EPA’s data on the threat posed by the additional contaminants, we agreed that the excesses of the contaminant levels that EPA allowed (as consistent with legitimate recycling) over those in virgin fertilizer samples “lose their significance when put in proper perspective— namely, a perspective based on health and environmental risks.” Id. at 1270.

No such perspective is allowed by the “comparable to or lower than” standard for products with analogues. That standard sets the bar at the contaminant level of the analogue without regard to whether any incremental contaminants are significant in terms of health and environmental risks. This problem is reduced, but not eliminated, by firms’ option to meet “widely-recognized commodity standards and specifications,” 40 C.F.R. § 260.43(a)(4)(i)(B) — including “customer specifications” if the product is made-to-order, Final Rule, 80 Fed. Reg. at 1,728/1. Many products might fail this alternative, not because they represent sham recycling, but because the relevant commodity standards or specifications don’t address the hazardous constituent levels of concern to EPA. Industry Petitioners contend, and EPA does not contradict, that such standards usually refer to minimum levels of desired elements rather than maximum levels of specific impurities. Doubtless this track will ensnare some sham recycling, but it does so with a test that is not a “reasonable tool for distinguishing products from wastes.” See Safe Food, 350 F.3d at 1269.

EPA, having recognized some of the shortcomings in these provisions, created an exception purporting to account for them. See Final Rule, 80 Fed. Reg. at 1,729/1. A recycler may avoid the sham label if it “prepare[s] documentation showing why the recycling is, in fact, still legitimate” and notifies regulators. 40 C.F.R. § 260.43(a)(4)(iii). The legitimacy “can be shown” by “lack of exposure from toxics in the product, lack of the bioavailability of toxins in the product, or other relevant considerations which show that the recycled product does not contain levels of hazardous constituents that pose a significant human health or environmental risk.” Id.

In explaining this exception, EPA has indicated that the question is whether the recycled product will be used beneficially in a manner that reasonably protects *61against the risks its residual hazardous constituents present. See Final Rule, 80 Fed. Reg. at 1,729/1-3. Absence of these circumstances would indicate that the true purpose of the recycling is disposal. Hence, EPA explained in the rulemaking that “lead contaminated foundry sand[ ]” would be sham recycled when packaged as “children’s play sand” but that the same material can be legitimately recycled for “mold making in a facility’s sand loop.” Final Rule, 80 Fed. Reg. at 1,729/2-3. The sand is (in a sense) equally hazardous in both cases, but the latter use is legitimate “because ... there is little chance of the hazardous constituents being released into the environment or causing damage to human health”; “there is lead throughout the foundry’s process” (i.e., the sand isn’t introducing new hazards); and “there is a clear value to reusing the sand” in that industry. Id. at 1,729/3. Recyclers can also meet this exception by analyzing the “increased risk” of their product relative to its analogues, if any. Id. We read this as saying, in light of EPA’s brief, that a recycler can show its product is legitimate by documenting that any incremental risk it presents is not “significant” to health and the environment. See Respondent Br. 42-43 (citing Safe Food, 350 F.3d at 1269-71).

Contrary to Industry Petitioners’ claims, the general criteria embodied in the Factor 4 exception seem permissible, indeed consistent with our ruling in Safe Food. Industry Petitioners also argue that the exception affords EPA unlimited discretion to find discard. The language of Factor 4 and its exception is rather open-ended, so judicial review of EPA’s subsequent interpretations would normally be highly deferential, Auer v. Robbins, 519 U.S. 452, 461-62, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997), potentially leaving petitioners at the mercy of a different reading in the future. But we note that Factor 4’s exception is tuned specifically to “significant human health or environmental risk[s].” 40 C.F.R. § 260.43(a)(4)(iii). And EPA has simultaneously provided an explanation of how to apply the exception along with an example of how a specific material might pass or fail it. Final Rule, 80 Fed. Reg. at 1,729/2-3 (foundry sand). These aspects of the rulemaking sufficiently constrict the range of possible interpretations: “[a]n interpretation at odds with the agency’s expressed intent at the time of adoption enjoys no judicial deference.” AT&T Corp. v. FCC, 841 F.3d 1047, 1054 (D.C. Cir. 2016).

The exception nonetheless falls short of saving the rule, due to the draconian character of the procedures it imposes on recyclers. See Industry Pet’rs’ Br. 29, 33. To qualify for the exception just described, a firm must contemporaneously document how its recycling is “still legitimate,” notify regulators of that finding, and keep the documents “on-site for three years after the recycling operation has ceased.” 40 C.F.R. § 260.43(a)(4)(iii). Failing any of these steps will make a sham out of what would otherwise have been a legitimate product. See Final Rule, 80 Fed. Reg. at 1,721/1, 1,735/3-36/1.

EPA is correct that these notice and recordkeeping mandates will create useful “oversight” and may be correct that they constitute only a “minimal burden” on recyclers. Id. at 1,730/1, 1,732/1. But paperwork is not alchemy; a legitimate product will not morph into waste if its producer fails to file a form (or loses a copy two years later). EPA insists that it can impose burden-shifting rules even in drawing the line between what it may and may not regulate. Respondent’s Br. 58. True enough; but the generality is applicable only if the products subjected to the burden-shifting are such that it would normal*62ly be reasonable to expect them to qualify as “discarded” in the absence of affirmative evidence from the recycler. Thus in American Chemistry Council v. EPA, 337 F.3d 1060 (D.C. Cir. 2003), we affirmed EPA’s decision to put the burden on regulated entities to initiate a “delisting” process preemptively to establish that a given “mixture or derivative” of hazardous waste is not itself hazardous. Id. at 1065. Waste handlers would evidently have to undertake this process, concededly “cumbersome,” in advance of any EPA enforcement. Id. But there EPA had found that “many mixtures of and derivatives from hazardous wastes are themselves hazardous,” an inference that those materials’ origin in hazardous waste renders highly plausible. Id. Further, the rule included exceptions to “prevent [EPA] from casting too wide a net over” materials outside its jurisdiction. Id. Compare Dissent at 8. The same might be said of the no-analogue track and the hazardous characteristic criterion. But we cannot say the same for the with-analogue track’s “comparable to or lower than” test, even as qualified by the exception for products meeting commodity standards or specifications.

Never in the rulemaking does EPA make out why a product that fails those criteria is likely to be discarded in any legitimate sense of the term. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (agency rules must be “justified by the rulemaking record”).

Environmental Intervenors argue that the necessary backing for Factor 4 lies in EPA’s report, An Assessment of Environmental Problems Associated with Recycling of Hazardous Secondary Materials (Dec. 10, 2014) (the “Problems Study”). See Respondent-Intv’rs’ Joint Br. 13-14, 16. By its own account, the report was “not exhaustive”; it restricted itself to 250 “easy to find” instances of environmental damage associated with recycling. Problems Study at 4 (identifying sources of “potentially relevant” data that the study did not exhaust). Compare Dissent at 11. The study seems to support a proposition, surely indisputable, that recycling can go awry. Further, the authors claim to have identified various causal factors, characterized rather vaguely and clearly overlapping, such as “Improper Disposal of Residuals,” “Abandoned Materials,” and “Improper Management of Hazardous Secondary Materials.” Problems Study at 6-8. But none of these bears any obvious relation to the “comparable to or lower than” standard of the with-analogue track. Reading the report liberally, we see around a dozen instances (out of the 250) involving recycled products that possibly would have flunked the technical provisions. See id. app’x 1 at 22-23; 26-27; 45-47; 114-15, 121-22; 128-30, 247-48, 258-59, 298-300, 304, 319-320, 339-40, 404-05, 443-44. And some of these products could have already been considered hazardous waste for failing other legitimacy criteria or for being “placed on the land in a manner that constitutes disposal,” 40 C.FR. § 261.2(c)(1)(A). See, e.g., Problems Study app’x 1 at 299 (recycler allegedly “planned to sell [ ] contaminated ash as fill material to the public”).

Thus the study in no way purports to establish that there is any particular probability, much less a reasonable probability, that the recycled products exceeding the “comparable to or lower than” standard will cause damage to health or the environment. But the quality or relevance of the study makes no difference in this context, as EPA did not rely on it to justify its assumption that materials which fail the technical provisions are “discarded.” The study appears to enter EPA’s Factor 4 discussion only implicitly via the foundry sand example, and the most EPA inferred *63from that was that certain recycled products “may or may not be legitimate, depending on the use.” Final Rule, 80 Fed. Reg. at 1,729/2-3. That conclusion doesn’t take us beyond EPA’s bare assertion that “high levels of hazardous constituents ... could indicate” discard. Id. at 1,726/1.

In API I, we were satisfied by EPA’s mere “concerní ]” that some test samples had “unexpected” levels of contaminants (EPA had no evidence that those results were due to adulteration). 216 F.3d at 58. We stressed, though, that “a refiner in a specific case” could show that the product was not adulterated and not discarded. Id. at 59. Thus, the rule involved at most a rebuttable presumption, which we have said can “be sustained without an evidentiary showing ... so long as the agency articulates a rational basis.” Sec. of Labor v. Keystone Coal Mining Corp., 151 F.3d 1096, 1101 (D.C. Cir. 1998). But our cases show that here a “rational basis,” id., means a reason, grounded in common sense or logic, to suppose the inference “so probable that it is sensible and timesaving to assume [its] truth ... until the adversary disproves it,” Nat’l Mining Ass’n v. Babbitt, 172 F.3d 906, 912 (D.C. Cir. 1999) (quoting Keystone, 151 F.3d at 1100-01) (rejecting presumption for which the agency had “not offered any support, scientific or otherwise”).

EPA has not offered a sufficient “rational basis.” Because a recycler “in a specific case” won’t be able to recover from failing to file paperwork and failing the technical provisions, see API I, 216 F.3d at 59, EPA must offer more than timorous assertions such as “could indicate” and “may or may not be legitimate,” Final Rule, 80 Fed. Reg. at 1,726/1, 1,729/2-3.

The dissent sees nothing wrong with EPA’s exception procedure. But our colleague’s view is significantly colored by an assumption, not made by EPA, that the “comparable to or lower than” standard is inherently reasonable and may not even require an exception. Compare Dissent at 76-77, 79-80, with Final Rule, 80 Fed. Reg. at 1,729/1. The dissent argues that the standard is reasonably limited to situations where constituent levels are “significantly” higher or exceed a “small acceptable range.” Dissent at 77-78 (citing Final Rule, 80 Fed. Reg. at 1,727/2). But significant as to what? Acceptable against what measure? The rulemaking gives no answer, certainly none linking directly to the “significant human health or environmental risk” criterion used in the exception. § 260.43(a)(4)(iii). Similarly absent is any reference to utility or market acceptance as embodied in the “commodity standards” clauses of subparagraphs (i) and (ii). If either of those perspectives governed the “comparable to or lower than” standard, why would EPA devote separate provisions to them? Not even EPA argues that the “comparable to or lower than” standard is reasonably limited to any such circumstances; we will not adopt a tortured interpretation to infer that it is. See generally Final Rule, 80 Fed. Reg. at 1,727/2-3 (explaining standard via examples of “zinc galvanizing metal” and “solvent”). Because the “comparable to or lower than” standard (and, by extension, the with-analogue track) is not reasonably focused on items that are “part of the waste disposal problem,” Safe Food, 350 F.3d at 1268, the exception process must be adequate to offset that fault. It is not.

For these reasons Factor 4 is unreasonable as a requirement applied, through 40 C.F.R. § 261.2(g), to all hazardous secondary material recycling. (EPA has also written the legitimacy factors into specific exclusions. See, e.g., 40 C.F.R. § 261.4(a)(23)(ii)(E). Petitioners do not challenge Factor 4 as applied to those individual exclusions.)

*64C. Used Oil Recycling

Industry Petitioners also ask us to invalidate EPA’s legitimacy factors as applied to used oil recycling. This request misreads EPA’s rules, which exempt used oil from the legitimacy factors along with all the other “requirements of [40 C.F.R.] parts 260 through 268.” 40 C.F.R. § 261.6(a)(4).

III. Verified Recycler Exclusion

The Final Rule also amended EPA’s stance on “reclamation,” a type of recycling that occurs when secondary materials are “processed to recover a usable product, or ... regenerated.” 40 C.F.R. § 261.1(c)(4), (7). A dead battery is reclaimed, for example, by extracting the still-valuable lead from it. § 261.1(c)(4). The other modes of recycling are “use[ ]” and “reuse[ ],” which occur when “[a] material is ... [e]mployed as an ingredient ... in an industrial process to make a product” or “[ejmployed ... as an effective substitute for a commercial product.” § 261.1(c)(5), (7). In the 1980s, EPA adopted a rule manifesting its belief that certain hazardous secondary materials are so “waste-like” that reclaiming them is equivalent to discard. Hazardous Waste Mgmt. Sys., 50 Fed. Reg. 614, 619/1 (Jan. 4, 1985). The materials so classified are spent materials, listed sludges, listed byproducts, and scrap metal — although EPA has a specific exception for the latter. See 40 C.F.R. § 261.2(c)(3) & tbl.l. “Listed” means catalogued by EPA as hazardous in § 261.31 or § 261.32. See Hazardous Waste Mgmt. Sys., 50 Fed. Reg. at 619/1. Because processing something is hardly akin to throwing it away, we held that this reclamation rule improperly regulated materials that were “neither disposed of nor abandoned, but [were] passing in a continuous stream or flow from one production process to another.” AMC, 824 F.2d at 1190, 1193.

EPA nonetheless kept the reelamation-equals-discard rule, apparently on the reasoning that AMC merely “granted the petition for review” without ordering vacatur. See Revisions to the Definition of Solid Waste, 72 Fed. Reg. 14,172, 14,176/3-77/1 (Mar. 26, 2007). Instead EPA sought to “implement the AMC I opinion” by adding exclusions for specific materials or processes. See, e.g., Identification and Listing of Hazardous Waste, 59 Fed. Reg. 38,536, 38,537/1 (July 28, 1994) (adding exclusion for petroleum-refining secondary materials), codified as amended at 40 C.F.R. § 261.4(a)(12). Materials-specific and process-specific exclusions form a large part of the pre-2008 exclusions discussed in the introduction to this opinion. See Proposed Rule, 76 Fed. Reg. at 44,139/1-3 (listing pre-2008 exclusions). Further, EPA adopted two general exclusions, which unlike almost all of the pre-2008 exclusions, depend on whether the recycling is performed by a third-party. The first general exclusion, the Generator-Controlled Exclusion, governs reclamation “under the control of the generator,” § 261.4(a)(23), and is not challenged here. The other addresses reclamation of materials transferred to and reclaimed by a third-party, and has come in two successive editions. EPA adopted the first edition, the Transfer-Based Exclusion, as part of its 2008 Rule, 73 Fed. Reg. at 64,669/3-70/1, previously codified at 40 C.F.R. § 261.4(a)(24)-(25) (2014), and replaced it with the current edition, the Verified Recycler Exclusion, in the Final Rule, 80 Fed. Reg. at 1,706/3, codified at § 261.4(a)(24).

Under the Transfer-Based Exclusion, the party offloading the materials (the “generator”) could send them to a reclaimer that possessed a RCRA permit (or in*65terim status). 40 C.F.R. § 261.4(a)(24)(v)(B) (2014). Alternatively, the generator could send materials to a reclaimer that lacked such a permit or status, if the generator had made “reasonable efforts to ensure that [the chosen] reclaimer intends to properly and legitimately reclaim the hazardous secondary material and not discard it.” Id. The “reasonable efforts” involved investigating and “affirmatively answering]” specific questions that the re