[author: Stephanie Sebor]

Several federal agencies, including the United States Environmental Protection Agency, Federal Trade Commission, Department of the Interior, and Securities and Exchange Commission, have a slew of pending environmental regulations that they anticipate finalizing in 2024. When issued, these regulations will affect a broad swath of regulated industry groups, creating a host of new compliance obligations. The Biden Administration will be under time pressure to finalize these regulations before the November 2024 elections, after which they are sure to be challenged in court and potentially under the Congressional Review Act.

Air Quality Regulations

• In January 2023, EPA proposed to lower the primary annual National Ambient Air Quality Standards (“NAAQS”) for fine particulate matter (“PM₅”) from 12 micrograms per cubic meter (“µg/m³”) to a level between 9 and 10 µg/m³. Under a lower standard, it is expected that more areas of the country will be designated as nonattainment with the annual PM_2.5 NAAQS. The rule is also expected to create challenges with Prevention of Significant Deterioration (“PSD”) permitting because background ambient PM_2.5 concentrations are close to 9 and 10 µg/m³ in many areas of the country. Therefore, it may be difficult for new sources or sources undergoing a major modification to demonstrate that they will not cause or contribute to noncompliance with the PM_2.5 NAAQS or an exceedance of a PSD increment intended to limit degradation of air quality. The final rule is currently under White House Office of Management and Budget (“OMB”) review, and EPA is planning to issue the final rule by January 30, 2024. The new PM_2.5 standard is expected to take effect within 60 days after publication of the final rule.

• In May 2023, EPA proposed its long-awaited greenhouse gas (“GHG”) emission standards for the fossil-fueled power sector under Section 111 of the Clean Air Act. The rule will require affected sources to achieve GHG emissions limits and guidelines based on technologies such as carbon capture and sequestration (“CCS”), low-GHG hydrogen co-firing, and natural gas co-firing. EPA received over a million public comments on the proposed rule, which EPA expects to finalize in April 2024. The rule is sure to be challenged in court on several bases, including that the rule exceeds EPA’s authority under the major questions doctrine articulated in West Virginia v. EPA and that nationwide CCS and hydrogen technologies are not adequately demonstrated and therefore cannot serve as the best system of emissions reduction (“BSER”).

• In April 2023, EPA proposed two rules that would regulate vehicle emissions: one concerning GHG emissions from heavy-duty vehicles and one concerning criteria pollutant, GHG, and air toxics emissions from light- and medium-duty vehicles. The proposed standards for light- and medium-duty vehicles would be phased in over model years 2027 through 2032, and the heavy-duty vehicle GHG emissions standards would commence with model year 2027. EPA intends to finalize both rules in March 2024.

Water Regulations

• In March 2023, EPA proposed to set maximum contaminant levels (“MCLs”) for perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”) in drinking water under the Safe Drinking Water Act. EPA’s proposal also included health advisory levels (“HALs”) for PFOA and PFOS that are more stringent than the MCLs. The proposal would also regulate several other per- and polyfluoroalkyl substances (“PFAS”), including hexafluoropropylene oxide dimer acid (“GenX”), perfluorononanoate (“PFNA”), perfluorohexanesulfonic acid (“PFHxS”), and perfluorobutane sulfonic acid (“PFBS”), using a hazard index, which is a screening level approach that provides a risk indicator rather than a risk estimate for a mixture of components. EPA intends to finalize the rule by September 3, 2024.

• EPA proposed in August 2023 an update to the regulations that allow states and tribes to administer their own Clean Water Act Section 404 permitting programs. While the Clean Water Act allows states and tribes to assume the Section 404 permitting program, only three states – Michigan, New Jersey, and Florida – have received approval to do so. EPA’s proposal is intended to make the procedures and substantive requirements for assumption more transparent and straightforward to facilitate further assumption of the Section 404 permitting program by state and tribal governments. Currently, the U.S. Army Corps of Engineers administers Clean Water Act Section 404 permitting in most states. EPA intends to finalize this rulemaking in June 2024.

• As previously covered on our blog, EPA intends to revise the National Primary Drinking Water Regulation for lead and copper under the Safe Drinking Water Act by October 2024. The proposed rule would require public water systems to replace all lead service lines and certain galvanized service lines within 10 years, lower the lead action level to 10 parts per billion (or µg/L), and update tap water sampling protocols for affected systems. EPA estimates the proposed rule would cost between $2.1 billion and $3.6 billion per year, primarily associated with identifying and replacing lead service lines.

PFAS Regulations

• In September 2022, EPA proposed to add PFOA and PFOS to the list of hazardous substances subject to regulation under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). EPA plans to finalize this regulation in March 2024, which will create new release reporting requirements for PFOA and PFOS and allow for CERCLA cost recovery and contribution claims related to PFOA and PFOS cleanup costs.

• Meanwhile, EPA also issued an advanced notice of proposed rulemaking (“ANPR”), seeking input on whether it should designate as CERCLA hazardous substances (1) seven additional PFAS and their salts and structural isomers; (2) precursors of these seven PFAS, plus the precursors of PFOA and PFOS; and (3) categories of PFAS. The public comment period on the ANPR ended on August 11, 2023. It is unclear when EPA intends to proceed with a proposed rule (and if so, what the timing for finalization will be), although EPA may make reference to its future plans when it finalizes its designation of PFOA and PFOS as CERCLA hazardous substances in March 2024.

• In response to several petitions, including one from the Governor of New Mexico, EPA has indicated its intention to propose to list four PFAS constituents – PFOA, PFOS, PFBS, and GenX – as hazardous constituents under the Resource Conservation and Recovery Act (“RCRA”). In addition, EPA intends to issue regulations clarifying that emerging contaminants such as PFAS can be cleaned up through the RCRA corrective action process. EPA had planned to issue both of these proposed rules before the end of 2023, but interagency of the proposals is not yet complete. EPA has indicated that it expects to propose these rules as soon as the interagency reviews are complete, likely in early 2024.

• EPA proposed a rule in May 2023 under the Toxic Substances Control (“TSCA”) that, if finalized, would make changes to the approval processes for new PFAS chemicals to ensure that they go through a full safety review process before entering commerce. Specifically, the proposal would update EPA’s TSCA regulations to include the five statutory determinations EPA must make for each new chemical submission, eliminate eligibility exemptions from the full safety review process for PFAS and other persistent, bioaccumulative, and toxic chemicals, and make other changes to the new chemicals review process. EPA intends to finalize the rule by April 2024.

Other Chemical Regulations

• In October 2023, EPA proposed to ban the manufacture (including import), processing, and distribution in commerce of trichloroethylene (“TCE”) for all uses. The proposal would largely phase out TCE within one year after publication of the final rule, subject to certain extended compliance timeframes and workplace controls (including an exposure limit) for some processing and industrial/commercial uses, such as battery separator manufacturing. The proposed rule would also prohibit the disposal of TCE to industrial pre-treatment, industrial treatment, or publicly owned treatment works, with a time-limited exemption for cleanup projects. EPA expects to issue the final rule in April 2024.

• In May 2023, EPA proposed to prohibit the manufacture (including import), processing, and distribution in commerce of methylene chloride for all consumer uses and most industrial and commercial uses. For industrial/commercial uses where EPA determined that unreasonable risks can be addressed, EPA proposed to require a workplace chemical protection program (“WCPP”), including inhalation exposure concentration limits and exposure monitoring. EPA expects that the proposal would be fully implemented in 15 months after the rule is finalized and would amount to a prohibition of approximately 52% of annual production volume and end uses. EPA expects to issue the proposed rule in March 2024.

• In June 2023, EPA proposed to prohibit the manufacture (including import), processing, and distribution in commerce of perchloroethylene (“PCE”) for all consumer uses and most industrial and commercial uses. For industrial/commercial uses where EPA determined that unreasonable risks can be addressed, EPA proposed to require a WCPP, including inhalation exposure concentration limits and dermal contact prevention requirements. EPA also proposed a 10-year phase out for the use of PCE in dry cleaning; otherwise, EPA estimated that these changes would be fully implemented within two years of issuance of the final rule. EPA expects to publish the final rule in July 2024.

• In August 2022, EPA proposed to prohibit the manufacture (including import), processing, distribution in commerce and commercial use of chrysotile asbestos in a six categories of products: asbestos diaphragms, sheet gaskets, oilfield brake blocks, aftermarket automotive brakes and linings, other vehicle friction products, and other gaskets. EPA proposed that its prohibitions take effect between 180 days and two years after issuance of the final rule. EPA anticipates publishing the final rule in January 2024.

Securities Regulations

• In April 2022, the SEC proposed a rule that would enhance and standardize the climate-related disclosures provided by public companies in their registration statements and annual reports (i.e., Form 10-K filings). Under the proposed rule, a registrant would be required to provide information about its climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The proposed rules would also require disclosure of a registrant’s GHG emissions and certain climate-related financial metrics in a registrant’s audited financial statements. Specifically, the proposed rule would require a registrant to disclose information about its direct GHG emissions (Scope 1) and indirect GHG emissions from purchased electricity or other forms of energy (Scope 2). In addition, a registrant would be required to disclose GHG emissions from upstream and downstream activities in its value chain (Scope 3), if material or if the registrant has set a GHG emissions target or goal that includes Scope 3 emissions. The SEC plans to finalize the rule in April 2024.

• In June 2022, the SEC proposed its highly-anticipated environmental, social and governance (“ESG”) rule for certain registered investment advisers, advisers exempt from registration, registered investment companies, and business development companies. The rule would create a common disclosure framework for ESG factors that affected funds use in their investment strategies in order to provide comparable, reliable, and transparent information for investors. The SEC also plans to finalize this rule in April 2024.

Species Regulations

• In June 2023, USFWS issued three proposed rules aimed at revising Endangered Species Act regulations issued during the Trump Administration. First, USFWS proposed to reinstate its "blanket” Section 4(d) regulations, which were withdrawn in 2019. The blanket 4(d) rules provide an option to extend most protections provided to endangered species to those listed as threatened, unless the FWS adopts a species-specific 4(d) rule. Without this blanket rule, the USFWS must issue a species-specific 4(d) each time it lists a species as threatened. Second, USFWS proposed to revise its regulations concerning interagency consultation under Section 7 of the Endangered Species Act. Third, USFWS proposed to revise its regulations regarding listing and reclassification of species and designation of critical habitat. Perhaps most significantly, the proposal would restore the phrase “without reference to possible economic or other impacts of such determination” to the end of 50 CFR § 424.11(b) to clarify that the economic impacts and any other impacts that might flow from a listing decision must not be taken into account when making listing determinations; rather, per Section 4(b)(1)(A) of the Endangered Species Act, listing decisions are to be made solely on the basis of the best scientific and commercial data available. These regulatory changes will have a significant impact on USFWS’s and NMFS’s administration of the Endangered Species Act, which will have broad ramifications across other regulatory programs, such as projects undergoing National Environmental Policy Act Review, and industries, including the renewable energy industry.

• In February 2023, USFWS proposed revisions to its regulations governing incidental take permits under Section 10 of the Endangered Species Act. The proposal would revise the regulations to allow incidental take permits to be issued for species that are not listed as threatened or endangered. In such case, the permittee would begin implementing the conservation commitments for the non-listed covered species; however, the take authorization would not go into effect until such time as the non-listed covered species becomes listed, either as endangered or threatened, provided the permittee is complying with the permit and properly implementing the agreement or plan. This mechanism would allow permittees to obtain incidental take permits for candidate species that appear likely to be listed during the conduct of otherwise lawful activities that may result in the incidental take of a species, such as the operation of wind turbines. The proposal would also codify requirements related to Habitat Conservation Plans (“HCPs”) that are currently found in the so-called Five Point Policy in the HCP Handbook. USFWS intends to finalize this rulemaking in February 2024.

• In October 2021, USFWS issued an ANPR seeking public input on the creation of an incidental take permit program under the Migratory Bird Treaty Act. USFWS intended to issue a proposed rule on this topic in November 2023 and to finalize the rule by April 2024; however, USFWS has not yet issued a proposal. When issued, the proposal is certain to attract attention from a variety of industry groups, in light of significant penalties that USFWS has assessed in recent years for violations of the Act.

• In September 2022, USFWS issued a proposed rule that would revise its incidental take permit regulations under the Bald and Golden Eagle Protection Act. Specifically, USFWS proposed to create general permits for four categories of activities: (1) wind-energy generation projects, (2) power line infrastructure, (3) activities that may disturb breeding bald eagles, and (4) bald eagle nest take. Permittees would be required to meet eligibility criteria and mitigation requirements to avoid, minimize, compensate for, and monitor impacts to eagles. USFWS would continue to allow the issuance of site-specific permits for activities that do not fit within the four general permit categories. USFWS plans to issue to final rule in January 2024.

Consumer Protection Regulations

• In December 2022, the FTC announced that it was seeking public comment on its 2012 “Guides for the Use of Environmental Marketing Claims” — also known as the Green Guides. Specifically, the FTC sought guidance on carbon offset and renewable energy claims, the terms “recyclable” and “recycled content,” and the need for additional guidance regarding claims such as “compostable,” “degradable,” “ozone-friendly,” “organic,” and “sustainable,” as well as those regarding energy use and energy efficiency. Following the close of the public comment period in April 2023, the FTC has continued to seek public input as part of its review of the Green Guides. For example, the FTC held a public workshop in May 2023 regarding “recyclable” advertising claims as part of its ongoing review of the Green Guides. Although it is uncertain when the FTC will issue an update to the Green Guides, it is likely that it will do so sometime in 2024.

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