We're delighted to share our Knowledge team's insights on the most important legal changes affecting the Industrials sector around the globe.
Asia
China: National standard for green factory evaluation
On January 7, the Department of Energy Conservation and Comprehensive Utilization highlighted that the updated national standard General Principles for Green Factory Evaluation (GB/T 36132‑2025) came into effect on December 31, 2025. It is the first major revision since 2018 and aims to advance green and low‑carbon manufacturing. The new standard clarifies the definition of green factories and focusses on five core elements: low‑carbon energy, resource efficiency, clean production, green products, and intensive land use. It also introduces an indicator system with low carbon energy use weightings. A new scoring method compares company data to show green performance more clearly. The Ministry of Industry and Information Technology (MIIT) plans further promotion and industry‑specific guidance. On December 12, the MIIT with the People's Bank of China announced a financial support initiative for green factory construction.
Impact: The government sees green factories as a key component of its manufacturing policy, as outlined in its 15th Five-Year Plan for National Economic and Social Development. Manufacturers could take advantage of any opportunities and incentives to transition to greener industrial processes where possible.
China: Lithium battery trade rules eased
On December 9, the Ministry of Industry and Information Technology announced a relaxation of import and export controls on some lithium thionyl chloride batteries starting January 1, 2026. The new rules apply to single batteries or packs containing no more than 1 kg of thionyl chloride, a chemical previously regulated under controlled substances laws. Larger batteries will still need approval under existing regulations.
Authorities stated that these products pose minimal risk due to low chemical content and difficulty of extraction. Under the updated policy, such batteries will no longer be classified as controlled chemicals or dual-use items. This eliminates the need for chemical control or dual-use licenses during customs declarations.
Impact: Exporters and importers should update their supply chain processes to reflect the removal of licensing requirements but maintain accurate chemical content declarations for customs. Lithium thionyl chloride batteries are widely used in scientific instruments, these businesses could benefit from any streamlined process.
South Korea: Strategy to boost K-battery competitiveness
On November 28, the Ministry of Climate, Energy and Environment announced plans under the National High-Tech Strategic Industry Act to enhance Korea’s battery sector. Key elements include strengthening K-battery competitiveness through next-generation technology leadership and supply chain security. Plans include a 2035 technology roadmap, KRW 280 billion research and development investment by 2029, and support for solid-state and lithium-based batteries. Measures also include expanding domestic production, recycling, and stockpiling critical minerals. Demand stimulation will involve increased electric vehicle subsidies (KRW 715.3 billion in 2025 to KRW 936 billion in 2026) and tax reductions. The government plans to designate new specialized industrial complexes for batteries, robotics, and defense, and consider adding strategic technologies like AI and future cars.
Impact: Domestic businesses could benefit from measures to increase supply chain localization, with less dependence on foreign components. A new focus on supply chain circularity could see some increased recycling strains on business operations. Manufacturers may want to explore any government incentives and opportunities in the planned specialized industrial complexes.
China: Improving the reliability and security of domestically produced automotive chips
Based on an article shared by the State Administration for Market Regulation on November 20, the Chinese authorities acknowledge the importance of coordinated standards, certification and industry collaboration in enhancing the quality control and reliability of domestically produced automotive chips. With an aim of increasing their global competitiveness, and reducing reliance on imported products in the automative sector. This forms part of government backed initiatives for domestically sourced chips in vehicles.
Impact: Domestic automakers could benefit from shorter research and development cycles, driven by anticipated governmental and regulatory support. A transition to domestically produced chips could reshape automotive electronics supply chains, enabling Chinese automakers to reduce reliance on foreign suppliers and mitigate the impact of global trade tensions on their operations.
China: Some rare earth export controls eased
On October 9, the Ministry of Commerce introduced a range of rare earth export measures, including expanded export controls on rare earth items and equipment, tightened restrictions on rare earth-related technologies, limitations on re-exports, transfers, and end-uses of specific rare earth items, and export controls on lithium batteries and superhard materials.
On November 7, the Ministry of Commerce announced an immediate suspension of the abovementioned measures, until November 10, 2026.
On November 9, the Ministry of Commerce also announced an immediate suspension of certain US-specific export controls introduced in December 2024, including a ban on exports of dual-use items related to gallium, germanium, antimony and superhard materials, and stricter end-user and end-use reviews as regards exports of dual-use items related to graphite. The suspension is in effect until November 27, 2026.
Based on the announcements to date, it appears that export controls on specific medium and heavy rare earth materials announced in April 2025 remain in place.
Impact: The announced suspensions come in the wake of an easing of US-China trade tensions and the agreement to lower tariffs. Any development that helps alleviate potential supply chain strains would be welcome news for businesses. However, delays and shortages may persist pending further clarity on certain rare earth export controls. Businesses relying on Chinese rare earth should, if not already, assess the potential implications of these controls on their operations, and develop alternative sourcing plans if needed.
China: 15th Five-Year Plan
On October 23, the Central Committee of the Communist Party of China passed its official recommendations for the 15th Five-Year Plan for National Economic and Social Development (the Plan). The Plan underscores green industrial development as central to its modernization strategy. It commits to achieving peak carbon emissions by 2030 and accelerating the transition to a clean, low-carbon, safe, and efficient new energy system. Industrial policy emphasizes upgrading traditional sectors through digital, smart, and green manufacturing, while enhancing the national infrastructure system and sector competitiveness.
Impact: The Plan continues to reflect the national policy of promoting greater self-reliance and industrial upgrading, particularly in strategic emerging sectors such as new energy, new materials, aviation and aerospace, and the low-altitude economy. Export controls and security reviews aligned to these policy objectives are expected to be introduced or strengthened. The Plan is expected to be formally released and implemented in March 2026.
Europe
EU and India sign Free Trade Agreement
On January 27, the EU and India concluded a landmark Free Trade Agreement (FTA). The deal removes major trade barriers, streamlines customs procedures, expands market access, and supports supply chain diversification.
The tariff schedules cover the vast majority of goods traded between the EU and India, with India liberalizing 96.6% of EU exports and the EU liberalizing 99.5% of its tariff lines.
Tariffs on EU machinery, electrical equipment, aircraft and spacecraft, chemicals, pharmaceuticals, motor vehicles, and iron and steel will be phased out over 5–10 years. The EU retains tariffs on some of its most sensitive products and opens calibrated quotas; a bilateral safeguard mechanism applies.
The agreement now awaits approval by the European Parliament and the Council. Once ratified by India, it can enter into force. Tariff cuts and regulatory changes will be phased in gradually over a period of up to ten years.
Impact: Tariff reductions are expected to benefit European businesses broadly. The cut in India’s motor vehicle tariffs (from 110% to 10%) should significantly expand market access for European manufacturers. The agreement is expected to create new opportunities for a wide range of businesses, including SMEs. However, specific SME-targeted measures have not yet been detailed publicly. The European Commission estimates €4 billion in annual duty savings and expects that EU exports to India will double by 2032.
To prepare, businesses should:
- review sector specific tariff reduction schedules
- identify products most affected by duty cuts
- reassess supply chains and logistics costs as market access conditions evolve
EU: Trade agreement with Mercosur signed
On January 17, the European Union and the Mercosur bloc (Argentina, Brazil, Paraguay and Uruguay) formally signed the long‑negotiated trade agreement, marking the conclusion of over 25 years of negotiations. The signing took place in Asunción, Paraguay, and creates what EU officials describe as the world’s largest free‑trade area, covering roughly 700 million people.
The European Parliament will have to give its consent. However, the ratification process now faces a certain level of uncertainty. On January 21, 2026, the European Parliament narrowly voted to refer the agreement to the European Court of Justice for legal review, suspending Parliament’s approval procedure. The review is expected to delay any final decision.
The Mercosur agreement aims to establish the largest free trade zone, aiming to phase out most tariffs while applying special schedules for sensitive sectors. The agreement aims to phase out around 90% of tariffs across industrial, agricultural and services sectors. It maintains special timetables and safeguards for sensitive agricultural products, including clauses allowing the EU to reintroduce tariffs if imports surge beyond agreed thresholds. On market access, the deal expands opportunities in services, digital trade, public procurement and investment, enabling EU companies to participate in Mercosur public tenders on equal terms with domestic bidders.
The agreement also protects 344 Geographical Indications and strengthens supply‑chain access for critical raw materials, reducing EU reliance on third‑country suppliers.
Impact:The agreement offers companies notable tariff savings, broader market access, and more diversified supply chains, particularly in sectors such as automotive, chemicals, agri‑food, and green technologies. SMEs may benefit from simplified procedures and improved access to procurement and partnership opportunities. At the same time, businesses should anticipate the need to adjust supply chains and manage additional regulatory and reporting obligations as the framework evolves.
EU: Revised ETS state aid guidelines for energy-intensive industries
On December 23, the European Commission amended the Emission Trading System (ETS) State aid Guidelines. The update aims to address rising carbon leakage risks for energy-intensive industries.
The changes extend eligibility to 20 new sectors and two subsectors, including organic chemicals and ceramics, and raise aid intensity from 75% to 80% for previously eligible sectors. Member States may propose additional sectors if they prove genuine risk. Large beneficiaries must invest part of the aid in projects supporting the green transition. Updated CO₂ emission factors and geographic data apply for 2026–2030, with a gradual transition allowed where reductions are significant. Clearer rules on aid cumulation prevent excessive support across schemes.
These measures aim to maintain competitiveness, prevent relocation to regions with weaker climate rules, and preserve incentives for decarbonization.
Impact: The revised ETS State Aid Guidelines may affect energy-intensive businesses by increasing potential compensation for indirect carbon costs. Businesses in newly eligible sectors may gain access to aid, while existing beneficiaries may receive higher support levels. Updated CO₂ emission factors and geographic data may alter calculations for aid eligibility and intensity. Clearer rules on aid cumulation may require businesses to review combined support from different schemes
EU: New automotive package presented
On December 16, the European Commission (EC) presented the Automotive Package. The initiative aims to support the sector’s efforts towards clean mobility.
From 2035 onwards, carmakers must cut tailpipe emissions by 90%. They will compensate the remaining 10% through low-carbon steel ‘made in the EU’, e-fuels, or biofuels. This means removing the 2035 ban on combustion engines. Plug-in and mild hybrids, range extenders, and internal combustion engines remain viable alongside electric (EVs) and hydrogen vehicles.
Other key measures include:
- national targets to increase zero- and low-emission corporate fleets
- €1.8 billion Battery Booster for battery production and supply security
- incentives for small affordable EVs and harmonized labelling rules
Impact: Dropping the 2035 combustion engine ban and introducing a 90% emissions cut may reshape fleet strategies and technology investments. National corporate fleet targets would require businesses to accelerate EV adoption and review procurement plans. European battery cell producers should benefit from interest-free loans. Together with streamlined testing rules, this could lower costs and improve supply chain resilience. Simplified compliance and harmonized labelling aim to reduce administrative burdens and enhance consumer transparency. The EC estimates €706 million in annual savings from reduced red tape.
Eversheds Sutherland update
EU: New vehicle circularity and end of life rules agreed
On December 12, the Council and European Parliament announced a provisional agreement on a regulation for vehicle circularity and end-of-life management. The new rules replace two directives, aiming to boost recycling, reuse, and recovery throughout the vehicle lifecycle.
They expand scope to include heavy-duty vehicles, motorcycles, and special-purpose vehicles. Mandatory recycled plastic targets will reach 15% in six years and 25% in ten years, with 20% from closed-loop recycling. Clear criteria define end-of-life vehicles to curb illegal dismantling and exports. Extended producer responsibility is strengthened, requiring manufacturers to finance proper treatment and take-back systems. The regulation bans exporting non-roadworthy vehicles after five years, ensuring materials remain within the EU economy. This initiative supports the European Green Deal and circular economy goals.
Impact: The rules could significantly impact automotive businesses. Manufacturers must redesign vehicles for easier dismantling and integrate at least 15% recycled plastic within six years, rising to 25% in ten years, with 20% sourced from closed-loop recycling. Manufacturers may then have to increase their use of recycled plastic, steel and aluminum. Extended producer responsibility will make manufacturers financially and organizationally accountable for the entire lifecycle, including free take-back and proper treatment of end-of-life vehicles across borders. The regulation introduces stricter compliance obligations, clearer criteria for end-of-life status, and bans exports of non-roadworthy vehicles after five years.
EU: Action Plan to secure critical raw materials
On December 3, the European Commission (EC) adopted the RESourceEU Action Plan to strengthen raw material supply security. The initiative builds on the Critical Raw Materials Act and aims to reduce strategic dependencies and boost competitiveness.
Key measures include creating a European Critical Raw Materials Centre, promoting joint purchasing and stockpiling, and introducing recycling incentives. The plan aims to mobilize €3 billion to de-risk investments and fast-track strategic projects, targeting a 50% dependency reduction by 2029. It also deepens partnerships with resource-rich countries and supports global diversification efforts through G7 and G20 frameworks. Additionally, the EC will revise the Water Framework Directive in Q2 2026 and integrate Strategic Projects under the Foreign Direct Investment Regulation.
These actions seek to protect EU industry from geopolitical shocks and ensure resilient supply chains for sectors such as automotive, defense, and digital technologies.
Impact: The RESourceEU Action Plan may improve supply security, reducing risks from geopolitical disruptions and price volatility. Businesses should benefit from joint purchasing and stockpiling, which would stabilize procurement and enhance predictability. Recycling incentives may lower raw material costs and support circular economy goals. Strategic project fast-tracking could accelerate innovation and competitiveness in sectors like automotive and digital technologies. However, compliance with new standards may increase administrative burdens and require investment in reporting systems.
EU: Military Schengen and Defense Industry Transformation published
On November 19, the European Commission unveiled a military mobility package and a Defense Industry Transformation Roadmap.
The military mobility package aims to create an EU-wide “Military Schengen” by 2027, enabling faster, safer troop and equipment movement. It introduces harmonized rules, emergency frameworks, and upgrades transport corridors to dual-use standards for resilience and cybersecurity.
The roadmap accelerates defense innovation, linking deep tech and defense sectors to boost production and modernize capabilities. Priorities include investment in defense firms, rapid technology development, expanded access to capabilities, and skills for technological leadership.
Both initiatives align with the Defense Readiness 2030 plan.
Impact: Investment in dual-use infrastructure and defense innovation may open new markets for transport, logistics, and technology businesses. Harmonized rules may ease cross-border operations and accelerate projects. However, compliance with cybersecurity and resilience standards may raise costs, and smaller businesses may face barriers to defense contracts. Defense businesses may see growing demand for military equipment, cyber tools, AI systems, and space technologies. Logistics and dual-use technology providers may play expanded roles in military mobility.
EU: ECHA recommends four substances for REACH authorization
On November 18, the European Chemicals Agency advised adding four substances to the REACH Authorization List. The recommendation aims to protect health and the environment by requiring companies to seek authorization for continued use.
Selected from the Candidate List of substances of very high concern, these chemicals pose significant risks requiring regulatory oversight. The European Commission will decide on inclusion and conditions.
Impact: Businesses may need to apply for authorization, which can be time-consuming and resource-intensive. This may lead to supply chain adjustments and potential substitution with safer alternatives.
EU: Safeguard measures on ferroalloy imports
On November 18, the European Commission imposed definitive safeguard measures on certain ferroalloy imports to protect EU industry. Measures include country-specific tariff rate quotas per alloy type, limiting duty-free volumes and applying duties below price thresholds. The annual tariff-rate quota is split into four three-month periods, starting each year on November 18. Countries exceeding 5% of imports for a product type over three years receive dedicated quotas, following the steel safeguard model. Other origins access remaining quotas on a first-come basis, determined by the order customs declarations for free circulation are accepted. They apply to all third countries, including Norway and Iceland, while aiming to minimize disruption to integrated EU supply chains.
Impact: Ferroalloys are vital for steel production, supporting sectors like construction, automotive, aerospace, and defense. Businesses involved in importing, trading, or using ferroalloys should evaluate how the new safeguard measures affect sourcing plans and supply stability. EU importers of covered products should verify the goods’ non-preferential origin and calculate the impact of safeguard tariffs on overall costs. Existing contracts, delivery timelines, and customs procedures may require adjustments to remain compliant and mitigate potential disruptions. The measures will last until November 2028.
EU: Critical Chemicals Alliance launched
On October 28, the European Commission launched the Critical Chemicals Alliance to reinforce Europe’s chemical sector resilience and sustainability. It aims to identify essential chemical productions and molecules for strategic sectors and improve trade monitoring via EU Customs Surveillance. The Alliance seeks to coordinate investments by aligning EU and national funding tools to support key industrial projects.
Impact: Chemical industry stakeholders may sign up to the Alliance. Businesses could benefit from clearer investment signals and coordinated funding for strategic chemical production. Improved trade monitoring may help businesses anticipate supply chain disruptions and adjust sourcing strategies.
EU: Plastic Pellet Regulation adopted
On October 23, the European Parliament adopted a Regulation targeting a 30% reduction in microplastic emissions from plastic pellets by 2030.
The Regulation imposes binding obligations across the supply chain, from production to maritime transport, to curb pellet losses and mitigate environmental risks. Key measures include mandatory risk management plans for handling, packaging, training, and equipment; compulsory clean-up of accidental pellet losses; EU-based representatives for non-EU carriers; third-party certification for operators handling over 1,500 tons per year; simplified self-declaration for microenterprises; and new maritime rules to prevent pellet spills at sea.
Impact: The Regulation applies to all EU-based operators handling ≥5 tons of plastic pellets per year, as well as non-EU carriers transporting pellets into the EU. Sectors most affected include plastics manufacturing, logistics, and waste management. To prevent pellet losses, these industries should consider strengthening controls and improving environmental practices across the supply chain. Businesses should also ensure clear communication when marketing plastic pellets, including product details and safe handling instructions.
Businesses should establish responsible pellet handling at all stages and update risk management plans and notify them to the competent authority. They should also revise terms with contractors and carriers and review certification thresholds and requirements.
EU Omnibus VI: Stop-the-clock for chemicals regulation
On October 23, the European Parliament approved a “stop-the-clock” mechanism for the revised Regulation on classification, labeling, and packaging of chemicals (CLP). On November 17, the Council of the EU formally adopted the Regulation as well.
This forms part of the “Omnibus VI” package to simplify EU chemicals legislation. It aims to reduce regulatory burdens while preserving consumer and environmental protections.
The “stop-the-clock” mechanism delays the revised CLP Regulation’s application date to January 1, 2028, giving businesses more time to comply. Further amendments extend deadlines for relabeling, formatting, advertising, distance sales, and fuel pump labelling requirements. They include changes to the CLP Regulation, Cosmetics Regulation and Fertilizing Products Regulation.
The Danish presidency of the EU Council prioritized the proposal to ensure legal certainty for businesses. Member States supported aligning application dates to avoid conflicting obligations between three major chemicals legislative frameworks.
Impact: Application delay until 2028 eases immediate pressure, but businesses should use this time to prepare for changes under the revised CLP Regulation, Cosmetics Regulation and Fertilizing Products Regulation. Harmonized dates across these three laws support long-term planning, while early preparation on labeling, packaging, and sales materials helps avoid last-minute bottlenecks. Businesses should align compliance calendars with postponed CLP obligations (labeling, advertising, distance sales, fuel pumps).
UK
UK: Government letter to industry on long duration electricity storage
On December 18, the Minister for Energy wrote an open letter to industry on long duration energy storage (LDES). Marking the date of Royal Assent of the Planning and Infrastructure Act 2025 (Act), the note:
- highlights how the Act will aid the deployment of next-generation LDES
- outlines the technologies covered under the banner of LDES and the value of these
- reminds that Ofgem will act as the delivery body and regulator responsible for delivering and administering the LDES cap and floor scheme
- flags that Ofgem will make final decisions on successful LDES projects in Summer 2026 (following the application period that opened in 2024)
Impact: The letter showcases the Government’s support of LDES technologies to deliver the clean energy transition. LDES technologies include pumped hydro and advanced batteries, enabling eight-hour-plus storage which are critical in boosting energy security. Expected to impact: Scheduled for Summer 2026, Ofgem will select LDES projects from a 77-strong shortlist
UK joins European defense export treaty
On December 10, the UK Government announced it had joined a European defense export treaty with France, Germany and Spain. The agreement aims to simplify export licensing between the countries and strengthen cooperation on defense industrial development. It supports the UK’s ambitions on defense exporting, as set out in the Strategic Defense Review.
The new arrangement could help reduce administrative burdens, provide certainty for supply chains and support high‑skilled employment. UK manufacturers can now include up to 20% UK content in joint systems without causing export delays. Other contracting parties can still block exports if their security interests are at risk, with a two month notification period.
Impact: UK defense firms could benefit from simpler export licensing when trading with France, Germany and Spain. Businesses in multinational programs could gain greater certainty and smoother cooperation with European partners. Any closer alignment could be seen as a positive move for UK defense manufacturers given the recent announcement that the UK would not be joining the EU's SAFE (Security Action for Europe) €150 billion assistance fund.
UK: Critical minerals strategy
On November 22, the UK Government released the policy paper Vision 2035 Critical Minerals Strategy. This aims to secure vital resources for industrial growth sectors. The government anticipates demand for minerals like lithium and copper will surge by 2035. They want to secure domestic production, recycling, and diversified global supply chains. The strategy sets the following targets: 10% of demand met through UK production, 20% through recycling, and no more than 60% reliance on any single country. Key measures include funding up to £50 million for projects, energy cost relief from 2027, streamlined permitting, and international partnerships. The approach supports advanced manufacturing, defense, and clean energy industries.
Impact: If fully implemented the policy could help diversify critical mineral sourcing to reduce reliance on dominant global players. Businesses that align their supply chain strategies with the 2035 diversification target could see the benefits of secure domestic sourcing at a time of increased global tensions.
US
US: EPA announces intention to regulate butadiene
On December 31, the Environmental Protection Agency (EPA), announced the completion of a review of the rubber ingredient 1,3-butadiene, finding potential unreasonable health risks for workers in 11 specific industrial settings. The EPA plans to regulate these industrial uses. The review, conducted under the Toxic Substances Control Act, analyzed six years of data and 20,000 studies. The EPA concluded that workplace exposure poses risks such as leukemia, bladder cancer, anemia, and reduced birthweight, while consumer and environmental risks remain minimal.
The FDA intends to develop protective rules considering health impacts, exposure levels, and economic factors, with stakeholder input to ensure practicality. Personal protective equipment can help mitigate risks.
Impact: The EPA are working on a final rule to guide businesses on safe use of these products. No specific date was given, but 2026 is possible. Industrial users may want to implement personal protective equipment in workplaces handling 1,3-butadiene to reduce health risks, if they don't already have such measures.
US: EPA intends to regulate five major phthalates
On December 31, the Environmental Protection Agency (EPA) announced that it intends to regulate uses of five major phthalates (BBP, DBP, DCHP, DEHP, and DiBP). These substances are commonly used to make plastics more flexible in building materials and industrial applications. The EPA identified unreasonable risks for workers during manufacturing and spray applications. The EPA highlighted concerns about hormone disruption and other health effects in vulnerable populations. Consumer exposure assessed under TSCA did not show unreasonable risks for the general population.
The EPA plans to consult with workers, businesses and communities on rules to remove the identified risks.
Impact: Manufacturers and users of phthalates should be aware that regulatory actions could include protective equipment, engineering controls and alternatives to reduce harm. Businesses should prepare for strengthened worker protections and environmental safeguards.
US: Imports of foreign drones and components restricted
On December 22, the Federal Communications Commission (FCC) updated its Covered List which effectively bans the import of all new foreign-made drones and critical components. It cited national security risks. Existing drones already approved and purchased remain unaffected. The decision follows a White House review highlighting threats such as unauthorized surveillance and data exfiltration. The FCC’s ruling aligns with broader efforts to reduce reliance on foreign drone firms.
Impact: Waivers may be possible through processes managed by the Department of War and Homeland Security. Drone manufacturers should also be aware that further restrictions could be announced. Manufacturers should prepare for restrictions by diversifying supply chains, ensuring compliance with security standards, and exploring domestic production to maintain market access. Some disruption could be expected as domestic component supply ramps up to fill any gaps from foreign imports.
US: National Defense Authorization Act 2026 enacted
On December 18, the National Defense Authorization Act 2026 was signed into law. One of the measures is the imposition of restrictions on US troop reductions in Europe and Korea. A bolstering of European defense could be seen as a contrast to the content of the recent National Security Strategy. The Act requires Pentagon certification and NATO consultation before lowering troop levels below 76,000 in Europe or 28,500 in Korea. It also maintains US leadership in NATO’s Supreme Allied Commander role. The legislation authorizes $901 billion in annual military spending. It also includes funding for the Golden Dome missile defense system.
Impact: Aerospace and defense manufacturers could anticipate stable or increased defense spending momentum. The current geopolitical landscape could contribute to increased military spending globally.
Eversheds Sutherlands. NDAA 2026: New biotech restrictions and outbound investment controls
US: Funding to strengthen rare earth element supply chains announced
On December 1, the Department of Energy (DOE), announced $134 million to strengthen domestic rare earth element (REE) supply chains. The funding will support projects proving the commercial viability of recovering and refining REEs from waste materials. These projects will use unconventional feedstocks such as mine tailings, e-waste, and other discarded resources.
The initiative aims to reduce the country’s reliance on foreign sources of REEs. It also aims to strengthen national security and advance American energy independence.
Impact: The DOE is seeking applications to build and operate a demonstration facility that separates and refines REEs from waste. The program aims to fund innovative facilities that produce 150–1,000 metric tons of REEs annually for US use. The following criteria will be applied:
- facilities must process, separate, and refine rare earth oxides into metals from waste-derived feedstock at one site
- priority will be given to projects focusing on heavy REEs
Project awards are scheduled for April 2026.
US: Default values for new chemical risk reviews
On November 24, the Environmental Protection Agency (EPA) released key default values used in assessing new chemicals under the Toxic Substances Control Act (TSCA). These numeric assumptions guide companies on evaluations of environmental release and workplace exposure when chemical-specific data is unavailable. Publishing these values aims to improve transparency and efficiency, reducing submission rework and helping manufacturers prepare higher-quality applications.
EPA encourages industry to submit representative data to ensure assumptions remain scientifically robust and fit for purpose.
Impact: Businesses should use the published default values to improve submission quality. Submission of high-quality data aligned with EPA assumptions could help to minimize rework and accelerate TSCA review processes. Businesses should be aware that the EPA may further update the evolving guidance.
US: Proposed change to PFAS reporting for business
On November 10, the Environmental Protection Agency (EPA) released proposed changes to perfluoroalkyl and polyfluoroalkyl substances (PFAS) reporting regulations under the Toxic Substances Control Act. The changes aim to reduce compliance burdens while ensuring essential PFAS data collection. The original 2023 rule required manufacturers and importers to report PFAS data from 2011–2022. The new proposal introduces exemptions for low-concentration mixtures (under 0.1%), imported articles, certain byproducts, impurities, research chemicals, and non-isolated intermediates. Technical corrections will clarify reporting requirements and adjust submission timelines.
Impact:The EPA is taking comments for 45 days after publication in the Federal Register. Businesses may want to review supply chain operations in preparation for new reporting rules. Heavy users of PFAS should be aware that individual states may still have their own reporting rules.
US: Expanded critical minerals list
On November 7, the Department of the Interior announced the expansion of the critical minerals list to include copper and metallurgical coal. The final list of 2025 identifies 60 minerals. It aims to strengthen domestic supply chains for materials vital to defense, manufacturing, and clean energy technologies.
Copper is essential for electric vehicles, power grids, and electronics, whereas metallurgical coal supports steel production. The move seeks to reduce reliance on imports from countries which dominate global supply. The update also includes potash, rhenium, silicon, and lead, reinforcing efforts to secure resources critical for economic and national security.
Impact: The list is reviewed at least every three years. Heavy users of materials on the current list may want to consider reviewing their supply chains to reduce disruption risks. Domestic mining and supply of critical minerals is a priority policy area for the current US Administration. Businesses may want to explore eligibility of any federal incentives to expand domestic mineral production or switch to domestic supply.
Co-authored Westley Trimble, Paola Paccani and Rachel Campion (Knowledge)
[View source.]
