Managing large, complex environmental/pollution claims can be extremely challenging. Whether it’s a tanker truck roll-over, chemical plant fire, or train derailment, effective management of the response and cleanup can make a substantial impact on the outcome of the loss. This edition of HETI Horizons provides an overview of specific methods and practices that can be employed to minimize liabilities, control costs, and ensure correct application of the policy.

Initial Response

Whenever an environmental emergency occurs, swift and coordinated action is crucial. Immediate mobilization of qualified representatives ensures that carriers and insured parties have the needed support on-site when it’s needed most. This is especially critical within the first 48 hours, as emergency response efforts can be extremely dynamic and costly. The goal is to establish a consistent presence, to become an advocate of the insured, and to assist with facilitating efficient communications and clear lines of responsibility. Early reporting from an “on the ground” perspective is essential to assist the insurance carrier in determining policy applicability, assessing coverage, and gaining knowledge of the overall risks associated with the loss. Understanding the risk environment, the response effort, and the regulatory expectations will guide the ability to assist the insured in streamlining the response effort – assuring the most efficient, cost effective operation possible.

Risk Evaluation

Understanding the insured’s overall risks is fundamental. A comprehensive risk evaluation should be performed immediately following the event to identify and assess on-site and off-site impacts, affected third parties, potential business interruption impact, and regulatory liability. It is also important to determine whether other insurance policies, such as property or general liability, may apply to the claim and assess the cooperation levels with other carriers. Proper subrogation and risk transfer evaluation, including the preservation of evidence and review of contracts, are essential to minimizing exposure.

Effort Optimization

Maintaining momentum throughout the claims process requires ongoing communication. Establishing expectations on day one and adhering to an operational structure throughout the remediation process are vital. Regular follow-ups and updates prevent surprises and keep the claim on track. Developing relationships with emergency response contractors, regulators and other carriers will assist in streamlining the process ensuring readiness and assuring that an efficient and cost-effective posture is maintained. Early discussions between the insured, brokers, and claims adjusters help clarify documentation requirements and potential red flags.

Establishing an organized operational structure for all phases of response and remediation efforts is critical to manage resources, maintain clear lines of technical responsibilities, and accurately segregate on-site activity among funding sources. Additionally, on-site monitoring ensures that efforts remain cost-effective and aligned with expectations. Regular communications with the insured and remedial contractors should encourage efficiencies – such as utilization of alternative methodologies for waste management, treatment, and disposal.

Cost Allocation

Cost and expense allocation is another critical component in the claim management process. Typically, not all activity taking place on-site is considered applicable to a single policy. For example, decommissioning mechanical components, de-inventory of unaffected products, and demolition of structures may not be covered by an environmental policy. Therefore, daily activity reports and other documentation are necessary for the defensible allocation of applicable costs.

Contractors should be required to submit detailed invoices that can be clearly correlated with daily activity reports, field notes, and waste inventory. The assessment of charges should also include verifying their necessity, reasonableness, and adherence to industry standards.

Proper cost allocation and accurate documentation often yields significant cost reductions by parsing reasonable and necessary costs associated with activity applicable to the policy. An Invoice Evaluation Report is an invaluable tool to illustrate the effectiveness of on-site monitoring, documentation and collaboration throughout the process, and present costs that have been determined to be reasonable, necessary and applicable to the policy.

By employing these strategies, organizations can effectively manage environmental claims, control costs, and minimize liabilities – ensuring a balanced approach to environmental emergency response and remediation claims.

Services from HETI

HETI’s staff possesses extensive experience in responding to and managing environmental incident response and remediation projects on behalf of dozens of insurance carriers – representing their interests and, indirectly, those of their clients. HETI has subsequently helped its customers in significantly reducing overall risk, both short-term and long-term, as well as assisted in significant cost savings throughout the life of environmental/pollution claims.

To find out more about HETI’s emergency response, remediation,
and claim support services, please contact us.
James Rothrock
Senior Geologist/Senior Environmental Scientist
Phone: 978.263.4044
development@hetiservices.com

With the first generation of photovoltaic cells nearing their useful life (typically 25 to 30 years), the volume of solar panel (photovoltaic cell) waste has increased in the last few years. This trend will continue. Because of the construction of solar panels, a certain amount of processing is required before the panel components can be recycled. With the projected growth of solar technologies, raw material availability could be constrained. So, solar panel recycling will be increasingly important.

Solar Panel Technologies

A typical solar panel uses silicon crystals as a semi-conductor which converts light into electricity. The surface of each crystalline photovoltaic module – often a silicon crystal – is crisscrossed by thin strips of metal (silver and others) which move electricity into the panel’s copper wiring. The solar cells are encapsulated in a protective transparent barrier called EVA (ethylene-vinyl acetate) which is inexpensive and has good optical properties. A layer of glass is placed on top and a plastic backsheet – commonly polyethylene terephthalate (PET) – goes on the bottom. These encapsulating layers provide protection for the solar cells from harsh environments. The entire assembly is contained in an aluminum frame. Separation of the solar panel components can be a challenging process – contributing to the difficulties and costs in their recycling.

Of the three types of solar panels commonly found today: monocrystalline is the most efficient; polycrystalline the cheapest; and thin-film panels the most portable.

First-generation solar panels are crystalline silicon (c-Si) panels, which account for approximately 95% of all solar panels produced to date. Because silicon is readily available, c-Si panels are more affordable and highly efficient. The two types of c-Si panels are: monocrystalline, which can reach efficiencies of more than 20%; and polycrystalline, which tends to be below 20% efficient.

A monocrystalline solar panel is made from single crystal solar cells or “wafers.” Monocrystalline wafers are created from a single silicon crystal formed into a cylindrical silicon ingot. A monocrystalline cell’s composition provides more room for the electrons to move – making it more efficient. However, during the manufacturing of monocrystalline panels, the process of solidification of silicon must be controlled very carefully – increasing production costs. So, while monocrystalline solar cells tend to be more efficient than polycrystalline cells, their costs are higher.

Polycrystalline silicon solar panels – also known as “multi-crystalline” or many-crystals – consist of wafers constructed by melting many silicon fragments together into square molds. The resulting wafers are then cut into individual cells. Because the manufacturing process is much simpler, compared to monocrystalline panels, these panels tend to be less expensive.

Thin-film solar cell (TFSC) panels consist of a single or multiple layers of photovoltaic elements on top of a surface comprised of a variety of glass, plastic, or metal. Compared to first-generation c-Si panels, TFSCs require less semiconductor material. TFSCs use strongly light-absorbing materials – such as cadmium telluride, copper indium gallium selenide, amorphous silicon, and gallium arsenide. Because they are less affected by higher temperatures, TFSCs have lower thermal photovoltaic losses than c-Si panels; but they tend to be more expensive. Currently, TFSC panels have a small share of the solar panel market and are primarily used in mobile applications.

Regulatory Environment

When discarded, solar panels are classified as solid waste and fall under existing federal solid and hazardous waste regulations.

Some solar panels may contain enough metals (e.g., lead) to meet the definition of hazardous waste under the Resource Conservation and Recovery Act (RCRA). In such cases, the generator may use their own knowledge or may determine if the solar panels are hazardous waste by performing appropriate testing, such as toxicity characteristic leaching procedure (TCLP).

Solar panels can be recycled using the transfer-based exclusion if the state in which the solar panel waste is generated and recycled has adopted the 2015 or 2018 Definition of Solid Waste Rule. However, the requirements found in Environmental Protection Agency (EPA) Regulation 40 CFR, Section 261.4(a)(24) must be followed.

Solar panels are not a federal universal waste and cannot be managed as such. However, some states, such as California and Hawaii, have added solar panels as state-only universal waste. In part in response to a petition submitted by a broad coalition of industry associations to regulate solar panels as universal waste and to improve management and recycling of solar panels, EPA is drafting streamlined solar panel end-of-life management requirements – likely to be published in the summer of 2025 – by adding hazardous waste solar panels to the universal waste regulations (CFR 40 Part 273). This should improve management of all solar panel waste and encourage recycling.

Services from HETI

HETI’s staff continually reviews new and proposed changes to regulations and standards to make sure we have current knowledge of compliance and environmental health & safety (EHS) issues. We have extensive experience in supporting our clients though a comprehensive range of regulatory and other services. So, whether there is a need for waste management evaluation, permitting, or other regulatory support, HETI’s professionals are ready to help.

To find out more about HETI’s EHS and regulatory support services, please contact us.
Carmelo Blazekovic
Senior Geologist/Senior Environmental Scientist

In the little town of West, Texas, people’s lives were changed forever on April 17, 2013, when a catastrophic explosion ripped through a small fertilizer manufacturing facility. This plant had not followed the Risk Management Plan (RMP), as required by the Environmental Protection Agency (EPA) under the 1990 Clean Air Act; and responders did not know what chemicals were at the plant and the hazards they presented to appropriately contain the fire and protect themselves and the community. And if the plant had followed the RMP procedures, they would have had basic steps in place to prevent this hazardous outcome.

In this incident, the fertilizer facility had 40-60 tons of bulk ammonium nitrate in open bins, which exploded after a fire erupted in the building. Twelve firefighters and three members of the public died, and 260 people were injured. The explosion was felt up to 30 miles away and businesses, apartments, houses, a nursing home, and a school were damaged or destroyed. The plant had been built in 1961 and homes and businesses were allowed to be constructed close to the facility.

In another catastrophic event in November 2019 in Port Neches, Texas, a dangerous chemical in a 16-inch pipe was not moving, which caused a polymer to build up for more than 100 days. This led to an explosion – leaving a fire that burned for two months due to the presence of high-purity butadiene. About 50,00 people needed to be evacuated. After a comprehensive investigation of these explosions and several other severe chemical plant accidents, Executive Order 13650 directed the federal government to carry out several tasks – including modification of the RMP rule, intended to prevent chemical incidents.

Changes to the RMP Rule

The ensuing changes to the RMP rule – known as the Safer Communities by Chemical Accident Prevention (SCCAP) rule – were finalized on February 27, 2024, and went into effect May 10, 2024. The new modifications aim to protect the community, chemical plant owners/operators/workers, and emergency responders from chemical accidents. The amendments are intended to:

• Address and improve accident prevention program elements
• Enhance emergency preparedness requirements
• Ensure Local Emergency Planning Committees (LEPCs), local emergency response officials, and the public can
  access information in a user-friendly format to help them understand the risks at RMP facilities and better prepare
  for emergencies

EPA’s RMP Rule applies to approximately 11,470 U. S. facilities that use extremely hazardous substances.
Approximately 131 million people live within three miles of an RMP facility.

The final RMP Rule includes several changes – including:
     Safer Technologies
Facilities in high-accident industries must evaluate safer technologies and alternatives and implement reliable safeguards in industry sectors with high accident rates.
     Employee Participation
Facilities must improve employee participation training and decision-making in accident prevention. Employees can anonymously report unaddressed hazards.
     Third-party Audits
Facilities that have reported accidents must undergo third-party compliance audits and root-cause analyses.
     Information Sharing
Improved information sharing between facilities, communities, and emergency responders.
     Public Disclosure
Facilities must provide chemical hazard information to the public within 45 days of a request. EPA has also released an online tool that allows users to search for RMP facilities in their locality. Controls are in place to protect trade secrets.

What is the Risk Management Program

The EPA RMP is a guidance for chemical accident prevention for facilities that meet certain risk criteria. It consists of five parts:

1. Identify the Risk. The initial step is identifying the risks that the business has in its daily operations. The Rule includes a List of Regulated Substances under section 112 (r) of the Clean Air Act. These regulated substances are also subject to the requirements of the General Duty Clause promulgated by the Occupational Safety & Health Administration (OSHA). In addition to the federal list of chemicals, where the Clean Air Act Section 112 (r) has been delegated to a state, that state may have additional requirements.
2. Determine the Program Level of 1, 2 or 3. Program Level 1 covers processes that would not affect the public in the worst-case scenario. Level 2 covers operations that do not fit in Level 1 – often having relatively simple processes and may be located at small businesses. They have basic prevention practices but with less documentation and recordkeeping than Level 3. Program Level 3 covers operations that have the most hazardous processes and require the most hazard assessments and hazard prevention plans.
3. Evaluate the Risk by a Risk Assessment. This can include: a Hazard Assessment or a Process Hazard Analysis (PHA) that details the potential effects of an accidental release, an accident history of the last five years, and an evaluation of worst-case and alternative accidental releases; a Prevention Program that includes safety precautions and maintenance, monitoring, and employee training; and an Emergency Response Program that spells out emergency health care, employee training measures and procedures for informing the public and response agencies (such as the fire department, LEPCs, etc.) should an accident occur.
4. Train Employees about the risks.
5. Maintain, Monitor and Review the Risk. A RMP should be updated at complex organizations once a year, unless a major change in the process or chemicals present triggers a review. EPA requires that a Risk Management Plan be revised and resubmitted to EPA every five years.

HETI Risk Management Services

HETI has extensive expertise and experience in the implementation and management of facility-specific safety operations and procedures, including requirements needed for ensuring and maintaining compliance with EPA’s RMP. Our staff can provide a wide range of RMP services – including developing/reviewing Risk Management Plans, Risk Assessments, Hazard Assessments, Facility Audits, Emergency Response Programs, Training for Onsite Risks, and Root Cause Analyses.

To find out more about HETI’s risk management program and
regulatory support services, please contact us.
Jacqueline Armstrong
Senior Industrial Risk Manager
Phone: 978.263.4044
development@hetiservices.com