Here is the wording from the NHTSA Final Rule document:

The agency has determined that a quick, inexpensive, and environmentally safe process exists to disable the engine of the trade-in vehicle while in the dealer’s possession. Removing the engine oil from the crankcase, replacing it with a 40 percent solution of sodium silicate (a substance used in similar concentrations in many common vehicle applications, including patching mufflers and radiators), and running the engine for a short period of time at low speeds renders the engine inoperable.

Generally, this will require just two quarts of the sodium silicate solution. The retail price for two quarts of this solution (enough to disable the largest engine under the program) is under $7, and the time involved should not substantially exceed that of a typical oil change.

The agency has tested this method at its Vehicle Research and Test Center and found it safe, quick, and effective. As with many materials used in the vehicle service area of a dealership, certain common precautions need to be taken when using sodium silicate.

The same is true with regard to workers who may come in contact with the substance during the crushing or shredding of the engine block. We have discussed the matter with the EPA and the Occupational Safety and Health Administration (OSHA) and are aware of no detrimental effects related to the disposal of the engine block with this material in it.

The agency considered several possible methods of rendering the engine inoperable. The agency was looking for a method that was safe for workers involved, completely effective, environmentally sound, and relatively inexpensive for a dealer to
use. NHTSA’s Vehicle Research and Test Center (VRTC) tested various methods and prepared a report (placed in the docket) summarizing the tests. VRTC evaluated four options:

(1) the use of sodium silicate solution in the manner the agency has now adopted;

(2) destroying the oil filter sealing land and threaded fastener boss;

(3) drilling a hole in the engine block; and

(4) running the engine without oil.

VRTC concluded that the sodium silicate method was the best option. The other methods all had significant problems related to their effectiveness, practical limitations based on vehicle variations, and/or safety risks for workers involved. Sodium Silicate solution is a mixture of water and sodium silicate solids.

When, after draining the oil, it is introduced into the engine oil system, the oil pump is able to distribute the solution throughout the engine oiling system. The heat of the operating engine then dehydrates the solution leaving solid sodium silicate distributed throughout the engine’s oiled surfaces and moving parts. These solids quickly abrade the bearings causing the engine to seize while damaging the moving parts of the engine and coating all of the oil passages.

Only a small amount of sodium silicate remains in solution after completion of the process. Many of the engine parts will be unaffected by this process such as: intake and exhaust manifolds, bolt-on components, and fuel system components.