New EU legislation on reducing methane emissions in the energy sector is set for 2021

The European Commission is moving forward with its legislative agenda to reduce methane emissions in the energy industry, specifically the oil, gas and coal sectors. Following the Commission’s October 2020 Communication (COM 2020/663 final) on an EU strategy to reduce methane emissions as part of the EU Green Deal programme, the Commission has set out the policy options under consideration as part of a public consultation. The consultation should be followed later in 2021 by a legislative proposal, which is scheduled for publication during the fourth quarter of 2021.

Background

Methane emissions are considered to be the second largest contributor to climate change, after carbon dioxide. Reducing methane emissions is therefore a key part of the EU’s strategy to meet its goal of being climate neutral by 2050. The impact assessment of the 2030 climate target plan (SWD(2020) 176 final) states that methane will continue to be the EU’s dominant non-carbon greenhouse gas and so – to achieve the more ambitious target of reducing emissions by 55% by 2030 as compared to 1990 levels – a stronger effort to reduce methane emissions is required.

The main areas where methane emissions are detected are (a) methane leakages from fossil fuel production sites, (b) transmission systems, (c) transportation (ships) and (d) the distribution sector. Methane is also commonly released through incomplete combustion from flaring.

EU legislative measures on methane under consultation

The Commission’s consultation discusses and seeks views on the following legislative measures:

Binding rules on monitoring, reporting, verification (‘MRV’)

As outlined in the Commission’s methane communication, it is considering the possibility of adopting compulsory MRV rules for all energy-related emissions at a company level, whilst seeking to improve information gathering, particularly as to its availability and accuracy, in relation to emissions of methane within the EU.

The Commission is proposing to do this by building on and extending the Oil and Gas Methane Partnership (‘OGMP’) framework, a global voluntary initiative currently covering the upstream oil and gas sector. The framework would be expanded to companies in upstream, midstream and downstream gas (via OGMP 2.0), as well as to the coal sector and closed or abandoned sites. The Commission’s options as outlined in the consultation’s Inception Impact Assessment vary from a ‘no policy change’ scenario, where OGMP would continue operating as a voluntary scheme, up to transforming the OGMP framework into EU legislation applicable to the full supply chain of the energy sector.

Rules on improving leak detection and repair

The Commission’s methane communication discussed the need to improve leak detection and repair on all fossil gas infrastructures, as well as any other production, transport or use of fossil gas. It also talked about actions that could be taken to eliminate routine venting and flaring in the energy sector, covering the full supply chain up to the point of production. The Commission is therefore proposing to impose legal obligations on companies to mitigate methane emissions across different segments of the energy supply chain.

Further EU measures to address methane

Beyond what is addressed in the current consultation, the Commission is also advocating the establishment of an international methane emissions observatory, which will be responsible for the collection and verification of data on emissions of methane. The observatory would, in the first place, cover methane emissions from oil and fossil fuel sectors, and its scope would be gradually extended to cover coal, waste and the agriculture sectors, once comparable monitoring and reporting obligations similar to the OGMP 2.0 are established for these sectors.

The Commission is also considering strengthening satellite-based detection and monitoring of methane emissions through the EU’s Copernicus programme, aimed at monitoring and detecting methane-heavy emitters.

Besides energy, the Commission’s strategy discusses measures in agriculture and waste and water management that are scheduled to be further addressed in the coming years.

In agriculture, the Commission will:

  • seek to develop an inventory of best practices and available technologies to promote mitigating actions for methane emissions in the agriculture sector, during 2021;
  • provide a digital carbon navigator template and guidelines on common pathways for the quantitative calculation of GHG so as to promote carbon-balance calculations at farm level, by 2022;
  • promote opportunities to reduce emissions with support from the Common Agricultural Policy (‘CAP’) as well as incentivise the collection of non-recyclable organic human and agricultural waste.

Concerning waste and water management, the Commission plans:

  • to review the Landfill Directive (1999/31/EC) within 2024, in order to consider further actions for improvement in the managing of landfill gas;
  • to reduce GHG emissions from sewage sludge as part of the evaluation of the Sewage Sludge Directive (86/278/EEC) and review of the Urban Waste Water Treatment Directive (91/271/EEC).

Review of existing EU legislation on methane emissions

A number of existing EU laws contribute to providing information on methane emissions. The Commission is also planning to review relevant climate change legislation as part of the EU Green Deal, which address methane emissions. These include:

  • a review of the Effort Sharing Regulation ((EU) 2018/842) which covers methane emissions in the EU next to all other greenhouse gases not covered by the EU ETS. A public consultation is currently open until 5 February 2021. The Commission’s adoption is planned for the second quarter of 2021;
  • a potential expansion in scope of the Industrial Emissions Directive (2010/75/EU) in order to enhance its role in controlling and preventing methane emissions and cover methane-emitting sectors, which are not currently accounted for. A public consultation is open until 23 March 2021. The Commission’s adoption is planned for the fourth quarter of 2021; and
  • a review of the European parliament’s Release and Transfer Register (under Regulation 2006/166) in order to expand its sectoral scope for reporting on emissions of methane.

 

EU EHS and Product Compliance laws: what to look out for in 2021

2021 is shaping up to be a very busy year for those who are affected by EU laws relating to Environment, Health & Safety, ESG and product compliance matters.

Important developments are expected this year across a number of the EU’s flagship Green Deal policy initiatives, but there are many other significant initiatives to watch out for.

Reed Smith’s EMEA EHS & Product Compliance team will be keeping a close eye on them all for you and writing more detailed pieces on developments as they occur throughout the year.

In the meantime, in this short blog we provide just a snapshot of what you can expect to see during 2021:

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California seeks to significantly restrict optional use of Proposition 65 “short-form” warnings on consumer products

The California Office of Environmental Health Hazard Assessment (OEHHA) has proposed to significantly amend the Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65, to revise the method of transmission and content of State-approved “safe harbor” short-form warnings for consumer products.

OEHHA believes implementation of the warning regulations has revealed the need for express limits on the use of the short-form warning for consumer products. The regulation did not expressly limit application of the short-form warning to a maximum label surface area. OEHHA intended for this warning option to only be used for small products or containers with insufficient space for the longer warning, but businesses have used the short form warning on a wide range of consumer products that have enough label space for the longer warning. OEHHA also is concerned that the short-form warning is allowing companies to place a short-form warning as a means to avoid a Proposition 65 claim even when a business has no knowledge of an exposure to a listed chemical requiring a Proposition 65 warning.

The rulemaking would expressly modify the existing short-form warning provisions as follows:

  • Only allow use of the short-form warning on products with 5 square inches or less of label space.
  • Eliminate use of short-form warnings for internet and catalog warnings.
  • Clarify how short-form warnings can be used for food products.
  • Require that the name of at least one chemical be included in the short-form warning.

Should this proposed change be approved, it will result in significant changes to thousands of consumer products – not only changes to product packaging but on all related websites for products as well. Significant time and resources will be required to identify / confirm specific chemicals of concern in all products to determine what chemical(s) need to be specifically named in the new warnings, and then to make changes to packaging, etc.

Any written comments concerning this proposed regulatory action, regardless of the form or method of transmission, must be received by OEHHA no later than March 8, 2021, the designated close of the written comment period. For more information, please see our client alert recently published here.

U.S. Army Corps of Engineers revamps Clean Water Act Nationwide Permit 12

On January 5, 2021, the U.S. Army Corps of Engineers (the Corps) released the final version of a rule revamping certain nationwide permits (NWPs) under the Clean Water Act (CWA). The CWA authorizes the Corps to issue general permits authorizing categories of activities that have minimal individual and cumulative adverse environmental effects. These permits remain in effect for no more than five years, at which point the Corps must renew the permits.

This rule reissues and modifies 12 nationwide permits (NWPs) and issues four new NWPs. Of these 16 NWPs, the most impactful changes are to NWP 12.

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ICYMI: Horizon Scanning: 2021 Environmental, health & safety law in the United States

Reed Smith’s U.S. based environmental team recently held a CLE webinar on what US environmental, health and safety legal and regulatory changes we can expect in 2021.  The webinar provided an insightful discussion on environmental policy and topics including:

  • Environmental Policy With Biden Win: Anticipating new federal regulation and enforcement actions
  • United States Supreme Court: October Term Outcomes and Beyond in light of addition of Justice Barrett to bench
  • Federal and State Government regulation of workplace hazards from COVID-19

The program is now on-demand, should you like to view it again or share the link with a colleague. A copy of the material is available on the resource widget.

Use the link here to enter the webcast at any time.

Signs point to Federal OSHA issuing rule under new administration as states continue to modify COVID-19 rules and guidance

As the transition in presidential administration draws closer and COVID-19 cases continue to increase in certain parts of the country, it appears increasingly likely that the Occupational Safety and Health Administration (“OSHA”) will undertake a rulemaking relating to COVID-19.  Additionally, state plan OSHA agencies continue to revise and issue guidance relating to their own rules, including in Virginia, Oregon, California, and Michigan.  (Washington state separately issued a regulation allowing enforcement of public health orders under its worker safety standards.)  These developments are described below.

Federal OSHA

With the upcoming change in administration and Biden’s stated focus of aggressively combating the coronavirus pandemic in the first 100 days, it is increasingly likely that an OSHA COVID-19 rulemaking is be on the horizon.  To date, OSHA has declined to promulgate COVID-19 restrictions.  However, since March OSHA has received numerous employee complaints regarding COVID-19 exposure and pressure from lawmakers and union groups to implement protective requirements.  In further support of a potential rulemaking being developed sooner rather than later, the Biden team announced that David Michaels, head of OSHA during President Obama’s administration and known for his development of expansive worker safety policies, is included on Biden’s COVID-19 task force.

Virginia issues permanent standard and reporting guidance

The Virginia Department of Labor and Industry (“VOSH”) issued its Emergency Temporary Standard (“ETS”) on July 27, 2020 as the first state to do so and is currently readying a permanent version of the standard.  An initial draft of VOSH’s Proposed Permanent Standard was issued the same day as and was identical to the ETS.  On December 10, 2020, VOSH issued a revised version of the Proposed Permanent Standard and is accepting comments through an online public forum through January 9, 2021.  The revisions include:

  • including a statement that enforcement action will not be brought against employers for failure to provide personal protective equipment (“PPE”) if it is not readily available on commercially reasonable terms,
  • removing the requirement to report single cases to the Virginia Department of Health and instead including a requirement to report outbreaks of two or more cases,
  • clarifying that face shields are not a substitute for other face coverings,
  • adding and clarifying various definitions,
  • correcting consistencies with the Centers for Disease Control (“CDC”) guidance,
  • changing the return to work requirements to be more prescriptive, and
  • revising the ventilation requirements for high or very high exposure risk employers.

 Consistent with one of the changes above, on December 8, 2020, VOSH also issued updated guidance to employers  that it is no longer requiring that the Virginia Department of Health be notified of individual cases of COVID-19.  However, after the initial report of an “outbreak” (two or more cases), employers must continue to report all cases to VDH until the local health department notifies the business that the outbreak has been closed.

 Cal/OSHA issues updated rule guidance and begins  stakeholder meetings

California’s emergency COVID-19 rule was approved by the Office of Administrative Law on the evening of November 20, 2020, and became effective immediately.  There were no substantive changes to the draft requirements that had been published only weeks earlier and were rapidly approved by the standards board, which we previously alerted here.  Since then, Cal/OSHA has since released FAQs on the new emergency rule, which includes a model plan for use by California employers. Additionally, Cal/OSHA announced that it is convening a stakeholder meeting on December 18, 2020, at 12:00 p.m., to receive input on the emergency rule, to explain key provisions of the regulations to the public, and to establish a focused agenda for a future Advisory Committee meeting to consider amendments to the regulations.

 Oregon OSHA offers online training

Oregon OSHA’s temporary rule became effective on November 16, 2020, with phased implementation dates for certain requirements.  In response to difficulties some employers have expressed with meeting the requirements, Oregon OSHA has recently launched a free online course to address the employer COVID-19 training requirements.  This is the latest in an ongoing roll out of resources to help Oregon employers comply with the rule.  Other resources, including template policies and plans and required posters that have been provided by Oregon OSHA are available here.

The Blue Guide proposed revisions: what to expect

The European Commission’s “’Blue Guide’ on the Implementation of EU products rules” (the Blue Guide) was last issued in 2016, and is now becoming out of date on a number of topics. In late 2019 the Commission announced its intention to prepare an updated version of the Blue Guide which, among other things, is intended to incorporate new EU legislation.

This update is currently in progress, with draft revisions identifying a number of areas of change, including:

  • aspects of the circular economy such as the remanufacturing and treatment of used goods;
  • a more accurate reflection of issues arising in the digital age and under a circular economy;
  • certain legal implications of Brexit;
  • coherence with the EU’s ongoing enhancement of its market surveillance and enforcement regime; and
  • a handful of clarificatory amendments, for example, around the position of “end-users” and “own use” of products.

Revisions to the Blue Guide are nearing completion, with the majority of edits made and the Commission due to publish the new guide in mid-2021.

A more detailed look at the key changes as we see them (based on the latest draft text), is available here.

California rapidly approves sweeping Cal/OSHA emergency COVID-19 regulation

Just one week after the California Division of Occupational Safety and Health (“Cal/OSHA”) made its proposed COVID-19 Emergency Regulation (“COVID-19 Rule”) available, the Occupational Safety and Health Standards Board (“OSHSB”) responsible for approving such regulations unanimously passed it without revisions.  Cal/OSHA is the fourth state OSHA plan to promulgate a rule to address COVID-19, following Virginia, Oregon, and Michigan.  The Washington Department of Labor & Industries has made violations of emergency proclamations subject to workplace safety citations.

In response to OSHSB’s September granting of a labor advocacy group’s petition seeking COVID-19 regulation of employers, on November 11, 2020 Cal/OSHA issued a 21-page draft COVID-19 Rule along with a notice of emergency.  Although employers and workers in California were not provided the ordinary months of time usually associated with rulemakings to review and digest the draft COVID-19 Rule, participation in the OSHSB November 19, 2020 public meeting was significant.  With over 500 virtual participants, not including those on the phone or live streaming, and 150 verbal commenters, the public meeting lasted over ten (10) hours.  The Board Chair estimated that the meeting had four times the usual number of attendees, and technical challenges occurred throughout the discussion.  Commentary was wide ranging with employee and industry interests equally represented.  Individual workers and labor groups generally urged OSHSB to adopt the ETS immediately and to consider the addition of future anti-retaliation provisions, while employer and industry representatives expressed frustration with the lack of stakeholder input or engagement, questioned whether Cal/OSHA has the authority to regulate wage and leave issues, pointed to the effectiveness of existing orders, and identified implementation challenges and inconsistencies with other California laws regulating COVID-19 response that have yet to become effective (i.e., AB 685).

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Chemical regulation in the new administration: PFAS top of list?

Organizations closely scrutinizing PFAS, like the Environmental Working Group (https://www.ewg.org/proposedpfaslegislation), are touting loudly that the Biden administration will address PFAS and speculating on how the Biden Administration might approach the chemicals by setting enforceable drinking water limits, designating the substances as hazardous and finding PFAS substitutes for consumer items.

Under President Trump, EPA touted its PFAS Action Plan and the agency’s broader work on addressing contamination by the family of thousands of chemicals, which have been linked to cancer and other severe health issues. But EPA has stalled on actions like setting a maximum contaminant level (MCL) for PFAS.

EPA currently has health advisories in place for two PFAS — PFOA and PFOS — of 70 parts per trillion in drinking water, but that threshold is not enforceable. No PFAS are designated as hazardous substances at present by EPA.

A new administration could, through executive action alone, set limits in drinking water through an MCL and designate PFAS as hazardous substances under the federal Superfund law (CERCLA).  However, such action would be subject to notice and comment rule making and then subsequent challenges to agency action – a process that could take years.

Reading Tea Leaves: Biden Transition Team

President Elect Joe Biden announced his agency review teams. Agency review teams are responsible for understanding the operations of each agency, ensuring a smooth transfer of power. The Biden team states, “[t]he teams have been crafted to ensure they not only reflect the values and priorities of the incoming administration, but reflect the diversity of perspectives crucial for addressing America’s most urgent and complex challenge.”

Curious what that means for the EPA?  See link here.

Notably, the team is stacked with former Obama and NGO representatives.  Lacking at this time is significant representation from the corporate world or industry. Climate experts, former Obama administration officials and green activists are among the team managing the transition for EPA.  This is also true of Energy, Interior and Agriculture departments, and the White House Council on Environmental Quality.

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