A new “Clean Hydrogen Bill” (SB 1075, Skinner) has been introduced in the California Legislature as a means of achieving the State’s goals for reducing greenhouse gas emissions and mitigating climate change. If passed, this bill would significantly increase the emphasis on “green hydrogen” as an alternative fuel in California’s economy, opening up
California extends comment period for proposed modifications to Proposition 65 warnings
California’s Office of Environmental Health Hazard Assessment (OEHHA) has extended the public comment period for the proposed amendments to their “short-form” Proposition 65 “safe harbor” warning regulations in response to a request from the California Chamber of Commerce. OEHHA’s proposed amendments change existing provisions addressing label size, catalog and internet warnings, and other issues (see
California proposes further modifications to its “Short-Form” Proposition 65 warnings
As we reported this past year, the California Office of Environmental Health Hazard Assessment (OEHHA) seeks to significantly amend the regulations under the Safe Drinking Water and Toxic Enforcement Act of 1986 (aka “Proposition 65”) to limit use of the previous State-approved “safe harbor” short-form warnings for regulated chemicals in consumer products. The State announced on December 13, 2021 further amendments to the proposed regulations, but generally continues to propose that use of the current “short form” safe harbor warning be dramatically scaled back, which will impact thousands of consumer products by requiring more specificity in future warning language.
As background, current California law allows a manufacturer, distributor or retailer of a consumer product to place either a “long form” or “short form” warning on the product or product packaging if one or more of 900+ regulated chemicals is in the product. The long form warning identifies by name “at least one” chemical from each regulated chemical risk category (i.e., carcinogens or reproductive toxicants). The short form alternate warning only requires identification of the risk category (ies) – not particular chemicals.
After reviewing over 160 written and oral comments on a prior proposed version of the regulations, OEHHA modified the proposed regulation again to:
U.S. EPA releases Roadmap to address PFAS contamination
On October 18, 2021, the U.S. Environmental Protection Agency (EPA) announced a per- and polyfluoroalkyl substances (PFAS) Strategic Roadmap (the Roadmap) detailing steps that the EPA plans to take to address PFAS contamination. PFAS are largely unregulated, but studies linking certain PFAS to health issues and their persistence in the environment and human body are driving the push for increased regulation. Currently, the EPA has established only a non-enforceable health advisory level for two PFAS, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS). Additionally, some states have been moving forward at different speeds to establish state-specific PFAS regulations, including drinking water standards and cleanup levels for soil and groundwater remediation. However, the EPA’s Roadmap suggests increased federal regulation looms.
The EPA’s approach under the Roadmap considers the lifecycle of PFAS, focusing not only on remediating PFAS-contaminated sites and regulating PFAS discharges or emissions, but also regulating PFAS at the upstream level where they are produced and incorporated into products. Other areas of focus called out in the Roadmap include (1) an emphasis on enforcement actions at PFAS-contaminated sites and placing responsibilities for limiting exposure on manufacturers, processors, distributors, and similar users; (2) research into PFAS over health effects and remediation technologies; and (3) an environmental justice focus on prioritization of PFAS effects on disadvantaged communities.
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Recent C-Suite analysis regarding ESG indicated genuine commitment overall, but “least” focus on environmental issues
A report published September 1, 2021 by analytics provider Intelligize (“Report”) revealed that companies were “all over the map” when it came to current disclosure practices on Environmental Social and Governance (“ESG”) issues and that their executives and other professionals showed a “troubling” lack of knowledge about ESG issues.
The survey responses came
IPCC releases a portion of updated Climate Report
The first installment of the UN’s Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6), which will be completed in 2022, was released on August 9, 2021. As it has in the run up to previous important Conferences of the Parties (COPs) under the UNFCCC, the IPCC released an updated report in the middle
Signs of the times: Environmental related ESG offerings
A number of signs point to the fact that public companies should expect increased scrutiny on whether their environmental-related ESG offerings, practices and controls are consistent with their disclosures, claims and marketing material.
SIGN #1: The Securities and Exchange Commission (SEC or Commission) announced that New Jersey Attorney General Gurbir Grewal will become the next
Electrifying transportation network companies in CA: Updates to SB 1014’s Clean Miles Standard + Incentive Program
As we reported, the California Legislature passed SB 1014 – the Clean Miles Standard and Incentive Program (the “Clean Miles Program”) – to reduce greenhouse gas emissions from “rideshare” vehicles. This led to the creation of the Clean Miles Standard regulation, which the California Air Resources Board (“CARB”) fully adopted in May 2021 after receiving stakeholder input. In sum, the Clean Miles Program directed CARB and the California Public Utilities Commission (“CPUC”) to develop and implement new requirements for transportation network companies (“TNCs”) like Uber and Lyft. In this blog post, we discuss the goals and three core requirements of the Clean Miles Program, the new regulations CARB just adopted in furtherance of those core requirements, and other obligations that lie ahead for TNCs.
The Clean Miles Program sets more stringent emissions standards for TNCs over time and encourages TNC drivers to shift to electric vehicles. The Clean Miles Program has three core requirements:
- In 2020, CARB established a greenhouse gas (“GHG”) emissions baseline for vehicles used in TNCs on a per-passenger-mile basis using 2018 as the base year;
- In 2021, CARB and CPUC adopted and implemented, respectively, targets and goals (beginning in 2023) for TNCs to reduce GHG emissions per passenger-mile driven; and
- By January 1, 2022, and every two years thereafter, each TNC shall develop a GHG emissions reduction plan.
CARB satisfied the first requirement and determined the baseline emission rate (301 grams of carbon dioxide (“CO2“) for each mile traveled.
In furtherance of the second and third requirements—CARB adopted (in May 2021) a “Clean Miles Standard” regulation that imposes new requirements that require TNCs to provide information including, but not limited to: (i) total miles that TNC drivers complete; (ii) share of miles completed by qualified “zero-emissions” (e.g., zero-emission vehicle); (iii) miles-weighted average of network-wide CO2 to produce an estimate of the GHG emissions; and (iv) total passenger-miles completed using an average passengers-per-trip estimate to account for trips where exact passenger headcount was not captured. The new regulation also requires TNCs to submit annual reports and a compliance plan every two years starting in January 2022.
ESG Watch: Carbon Tax vs. Clean Energy Standard
Many public companies are keeping a close watch on potential GHG regulations because the shape of these regulations can significantly affect their regulatory and reporting obligations and thus affect their ESG obligations. There is a significant difference between two recent proposals on that front.
CARBON TAX: The concept of a carbon tax is simple: fossil fuels bear a cost — climate change, as well as air pollution — that is not reflected in their price and thus “hidden”. A carbon tax would increase the price to reflect that hidden cost — by, say for example, $50 per ton of carbon dioxide emitted — and the market would work its magic to move the entire economy away from fossil fuels.
Yet for all their elegance and push for by economists, carbon taxes are politically unpopular.
Opponents of carbon taxes argue that a carbon price affects all of society, and therefore it increases costs for every energy consumer, without providing an immediate alternative. That means a publicly traded company that would not normally worry about – or report regarding – EPA obligations in the abstract turns out would have reporting and compliance obligations under a carbon tax regime and, therefore, a larger ESG burden.
This is likely why Biden’s climate plan leaves out a domestic tax on carbon, which for decades economists have championed as the gold standard of climate change mitigation.
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Environmental, Social and Governance Legislation in the Biden Era: The Climate Risk Disclosure Act of 2021 PART II: Oil and Gas Sector
In a previous post, we reported on the Climate Risk Disclosure Act of 2021 (the “Act’) being placed on list of all bills reported from committee and eligible for House floor action, some sweeping changes required by that Act, and the Act’s uncertain future in the Senate.
This Part II focuses on the effect