California proposes revisions to regulation of air emissions from “Ships at Berth;” upcoming public hearing scheduled for late August

The California Air Resources Board (“CARB”) has again proposed revisions to the State’s existing “Ocean-Going Vessels At-Berth Regulation” of air emissions from ships docked in California. As revised, further reductions in air emissions will be required, but some of the earlier implementation dates have been extended.

Most substantive changes were made in response to feedback received from CARB’s Board during the June 25, 2020 Board Meeting, public comments received during the formal comment period for the “15-Day Changes” that began March 26, 2020 and ended May 1, 2020, and internal feedback from CARB legal and enforcement staff.

A summary of the proposed Second 15-Day Changes and impact on costs follows:

Delayed implementation schedule

  • Emissions control requirements for container, reefer and cruise vessels will now begin January 1, 2023 instead of 2021. In 2023, the control requirements will include all container, reefer and cruise vessels that visit terminals in California that are above the low activity threshold.
  • Roll –on/roll-off (“ro-ro”) vessel requirements begin in 2025 instead of 2024 as proposed in the 15-Day Changes.

The result of these changes is fewer emissions reductions in earlier years as some visits are controlled later. This change results in lower costs for vessel and terminal operators from 2021 through 2032.  Such costs were a major stakeholder concern due to COVID-19 related economic impacts.

Updated Terminal Incident Event (“TIE|”) and Vessel Incident Event (“VIE”) provisions

  • There were no changes made to the percentage of TIEs and VIEs granted for each vessel fleet or terminal. However, TIEs and VIEs will begin in 2023 to align with the first year of implementation for the container, reefer and cruise vessels. TIEs are maintained from the 15-Day Changes at 15 percent in 2023 and 2024 and maintained at 5 percent in 2025 and later.
  • ro-ro vessel requirements begin January 1, 2025, with TIEs maintained at 5 percent. VIEs are maintained at 5 percent in 2023 and all years later, for all regulated vessel types.

Port and terminal plan submission dates

  • The due dates for the initial terminal and port plans for container, reefer, and cruise terminals have moved from July 1, 2021 to December 1, 2021 as a result of adjusting the implementation date.
  • The due dates for the revised ro-ro terminal plans were moved back one year to February 1, 2024, to provide the same shift as the implementation date to provide for consistency.

Vessel visit reporting

  • With the change in the first implementation date to 2023, CARB staff propose changing the date from 2021 to 2023 to submit vessel visit information by vessel and terminal operators.

Innovative Concept provision

  • An earlier iteration of the proposed revisions included an “Innovative Concept” provision, which would allow a regulated party to avoid reduction of emissions “at berth” if instead it used lower cost options to reduce an equal or greater amount of emissions in port communities.  CARB staff revised the Innovative Concept provision to be used by tanker terminals receiving less than 40 visits to less than 60 visits. This change increases the estimated number of terminals (by three) that could utilize a lower cost Innovative Concept as their compliance mechanism.

On August 27, 2020, CARB will hold a final public hearing to consider public comments on the above changes, the final regulation order, proposed resolution for the proposed control measure, and next steps in the regulatory process.  The remote Hearing is set to commence at 9:00 a.m., and may continue at 8:30 a.m., August 28, 2020.  More information about the Board Meeting and how to participate can be found here.

FIFRA’s treated articles exemption: Should your antimicrobial product be registered?

Products claiming to protect users against microbes, such as those that are currently being used to protect us from COVID-19, are flying off the shelves.  Manufacturers of these products must comply with regulations governing the use of such pesticides.  One of said regulations is the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Under FIFRA, EPA regulates all pesticides distributed or sold in the United States.  EPA defines a pesticide as a product that is intended for: (i) preventing, destroying, repelling or mitigating any pest; (ii) use as a plant regulator, defoliant, or desiccant; or (iii) use as a nitrogen stabilizer.  FIFRA generally requires that pesticide products be registered (licensed) by EPA.

However, there is an exemption to the requirement for FIFRA registration, known as the “Treated Articles Exemption.”  This exemption applies to qualifying treated articles that bear claims stating the article itself is protected.  To qualify for the exemption, the product being sold must be: (i) registered for such use in or on the article and (ii) the product label must only bear claims that the product itself is protected.

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Proposition 65 – Potential warning requirement exemption for exposures to listed chemicals in cooked or heat processed foods

California is inviting public comments on a proposed regulation that would exclude the need to place warnings on many cooked, baked or fried food items that may expose individuals to acrylamide, a chemical the State has deemed to be a carcinogen.

California’s Safe Drinking Water and Toxic Enforcement Act (aka “Proposition 65”) prohibits businesses from knowingly and intentionally exposing consumers to over 900 chemicals that have been listed as “known to the state to cause cancer or reproductive toxicity” (without first giving a clear and reasonable warning to the consumer).  Acrylamide is regulated under this law as a carcinogen.

Acrylamide can be formed by the cooking or heat processing of many foods, including French fries, potato chips, other fried and baked snack foods, roasted asparagus, canned sweet potatoes and pumpkin, canned black olives, roasted nuts, roasted grain-based coffee substitutes, prune juice, breakfast cereals, crackers, some cookies, bread crusts, and toast.

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ICYMI – UK Industrial Energy Transformation Fund: Phase I grants competition now open

Earlier this month, BEIS (the UK Department for Business, Energy and Industrial Strategy) started to accept applications for grants under Phase I of its Industrial Energy Transformation Fund (IETF). The IETF, first announced by the UK government in August 2018, is slated to provide £315 million in funding by 2024 to support a shift to ‘greener’ operations in the UK’s manufacturing and data centre industries. The application deadline for phase I is 11am, on 28 October 2020. Funding is being made available for two types of projects under this phase: “deployment grants” and “studies grants”. Our recent client alert, available here, provides more details on these grants, including points to note for future phases.

Trumps signs the Great American Outdoors Act

Today, President Trump signed the Great American Outdoors Act (GAOA) into law, which may be considered one of the most significant land conservation laws passed in decades.

The legislation has two main impacts. First, the GAOA establishes a National Park and Public Lands Legacy Restoration Fund that will provide up to $9 billion over the next five years to fix deferred maintenance at national parks, wildlife refuges, forests, and other federal lands, with $6.5 billion earmarked specifically to the 419 national parks.

Second, the GAOA permanently funds the Land and Water Conservation Fund (LWCF) by guaranteeing approximately $900 million per year in perpetuity.  The LWCF is a flagship conservation program established in 1964 and paid for by royalty payments from offshore oil and gas drilling in federal waters.  The LWCF is especially important because it helps fund the four main federal land programs (National Parks, National Forests, Fish and Wildlife, and Bureau of Land Management) and provides grants to state and local governments to acquire land for recreation and conservation.

Although not a panacea, the GAOA will in effect help to safeguard the national park system and other public lands.

Consultation now open for proposed UK Carbon Emissions Tax

The UK Government has opened a consultation on a proposed UK carbon emissions tax with public submissions due by 29 September 2020.

The UK will no longer be participating in the EU Emissions Trading System (EU ETS), as of 31 December 2020. To enable the UK to meet its carbon reduction targets from 1 January 2021, the Government has proposed the establishment of a UK Emissions Trading Scheme (UK ETS), which would be preferably linked to the current EU ETS (as has, eventually, been done by Switzerland’s greenhouse gas emissions trading system). Subject to the success of negotiations on a linked UK/EU ETS, the UK has proposed an unlinked UK ETS or a proposed UK carbon emissions tax, by way of an alternative.

The carbon emissions tax would be intended to align with the EU ETS in regards to emissions monitoring, reporting and verification and apply to regulated installations currently participating in the EU ETS that exceed their annual tax emission allowance.

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ICYMI – CEQ issues final revisions to NEPA rule

Earlier this month, the White House Council for Environmental Quality (CEQ) finalized its update of the governing regulations for the National Environmental Policy Act (NEPA) rule.  This marks the first comprehensive review of NEPA since its 1978 promulgation. Entitled, “Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act,” it seeks to ensure a quicker and more efficient NEPA review process, foster better interagency coordination, and improve state and tribal participation. We recently published a client alert on the overhaul of the NEPA rule, which you can read in full here.

California Energy Commission workshop on hydrogen fuel cell demonstrations in rail and marine applications at ports

Companies reliant upon the use of rail services and commercial harbor craft at California’s ports should be interested in the State’s:

  • Increasing focus on utilizing zero emission technologies to reduce greenhouse gas emissions resulting from port-related operations; and
  • Provision of $6.6 million in available grants to “fund the design, integration, and demonstration of hydrogen fuel cell systems and hydrogen fueling infrastructure for locomotive and commercial harbor craft” operations

On July 31, 2020 (10:30-12:30 PDT), the California Energy Commission will be hosting a workshop to assist applicants in obtaining these funds.

Due to COVID-19, the Workshop is available on-line only at:

Meeting ID: 947 9266 2867
Meeting Password: 357152
Topic: GFO-20-604 Pre-Bid Workshop

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Recent district court decision limits Proposition 65 warnings on First Amendment ‘compelled speech’ grounds

A U.S. District Court recently barred enforcement of California’s Proposition 65 warning requirement on the First Amendment ground of “compelled speech.” Proposition 65 requires businesses to provide warnings to consumers before exposing them to over 900 chemicals linked to cancer or reproductive toxicity. Although the State of California will almost certainly appeal the decision, National Association of Wheat Growers et al., v. Xavier Becerra[1] could be a turning point for Proposition 65 and set the stage for further challenges to consumer product warning labels on First Amendment grounds.

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U.S. EPA takes historic action on aviation emissions

In a historic act, U.S. EPA proposed the nation’s first-ever greenhouse gas (GHG) emissions standard for aircraft on July 21, 2020. (Proposed Rule). Once the Proposed Rule is published in the Federal Register, the public will have 60 days to submit comments. There will likely be significant push back from environmental groups on the Proposed Rule; so it may be important to provide industry comments, where appropriate. U.S. EPA has stated it is hoping to issue a final rule in 2021.

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