Recent Environmental Protection Agency’s (EPA) policies under the Toxic Substances Control Act (TSCA), particularly those governing new chemicals, derail sustainable chemical innovation by creating disproportionate regulatory burdens, delays, and creating market uncertainty.
The primary hurdle is the TSCA Section 5 requirement for a Premanufacture Notice (PMN). Any chemical not on the TSCA Inventory (which are many new biobased chemicals) is considered a “new chemical” and must undergo this review.
- Statutory Delays: While the law mandates a 90-day review, the EPA’s backlog means that the majority of PMNs, including those for biobased substances, are held up far longer. A significant percentage of cases are under review for over 365 days.
- Cost and Uncertainty: This unpredictable, prolonged timeline is a significant deterrent to investment. Biobased start-ups, which rely on tight capital and fast commercialization, cannot absorb the costs of a year or more of delay, often leading companies to abandon new product lines or pursue commercialization outside the U.S. This directly favors grandfathered, often less-sustainable, petroleum-derived chemicals that are already on the Inventory and face no such pre-market scrutiny.
To resolve a PMN review and allow a new chemical to enter the market, the EPA frequently issues specific regulatory actions that can severely limit a product’s commercial success.
- TSCA Section 5(e) Consent Orders: When EPA has “insufficient information” to determine if a new biobased chemical presents an “unreasonable risk,” it issues a Section 5(e) Order. This order prohibits or limits the chemical’s manufacture, processing, use, or disposal. Conditions frequently include:
- Low Production Volumes: Restricting annual manufacturing volume, which prevents a company from achieving the economies of scale needed to compete with commodity petrochemicals.
- Mandatory Controls: Requiring expensive, time-consuming testing or imposing strict worker protection (e.g., specific PPE and engineering controls) or environmental release restrictions, making the product economically unviable.
- Significant New Use Rules (SNURs): Following a Section 5(e) Order, EPA routinely publishes a SNUR. The SNUR effectively makes any activity not covered by the original PMN (and its restrictions) a “significant new use.” This means:
- Innovation Tax: If the biobased chemical manufacturer or a customer later finds a new, highly valuable application for the chemical, they cannot pursue it without first filing a new Significant New Use Notice (SNUN) and facing a new 90-day (or longer) review period. This system penalizes the subsequent expansion of a successful, sustainable product.
Policies the Environmental Protection Agency (EPA) in 2025 that may be interpreted as not supporting or potentially hindering investments in sustainable chemistry are primarily centered on regulatory shifts under the Toxic Substances Control Act (TSCA) and a broader effort toward regulatory simplification to boost economic development.
Sustainable chemistry includes the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances, policies that reduce the stringency of chemical risk evaluation, slow the introduction of new chemicals, or generally de-emphasize environmental protection in favor of industrial efficiency can be seen as undermining the market drivers for inherently safer, sustainable alternatives.
Policies Potentially Discouraging Novel Chemical Investment
Several policy actions in 2025 relate to the EPA’s chemical review process under TSCA, and these shifts create uncertainty and may favor existing, grandfathered chemicals over sustainable alternatives.
- TSCA New Chemicals Backlog and Prioritization:
- EPA Administrator Lee Zeldin acknowledged inheriting a “massive backlog of new chemical reviews”, which is seen as “getting in the way of projects” and impeding investments in innovative chemistries.
- To address the backlog, EPA announced it would prioritize the review of new chemicals intended for use in data center projects to support American manufacturing and technological advancement. This selective prioritization means that novel chemicals developed for other sustainable chemistry applications (e.g., biobased materials, non-toxic flame retardants) that fall outside of the immediate data center priority may continue to face significant delays, slowing their market entry and discouraging investment in those areas.
- The continued existence of a large backlog, which now includes 449 new chemicals reported in October 2025 to be under review for more than the 90-day statutory period, acts as a strong disincentive for all new chemical innovation, including biobased chemicals, as manufacturers face unpredictable timelines and a lack of certainty1.
- Relaxation of Chemical Risk Evaluation Standards:
- The EPA proposed a rule to revise its process for conducting TSCA risk evaluations for existing chemicals, replacing the “whole chemical” approach of with one that would scrutinize each use individually.
- The proposed rule would also factor in the use of Personal Protective Equipment (PPE) in risk assessments. Some argue this change could understate the actual risk of a chemical by relying on theoretical workplace controls instead of requiring inherently safer designs, which is a core tenet of sustainable chemistry. By potentially understating the risk of an existing chemical, the motivation to develop a safer, green alternative is reduced, favoring traditional petroleum-based chemistry.
- The EPA’s intent to reconsider and potentially revise risk management rules and risk evaluations suggests a regulatory environment that favors “reducing regulatory complexity” and avoiding “unnecessary risk management rules”.
