Comment and analysis by Reed Smith lawyers on the latest developments in Environmental Health & Safety
The Sixth Circuit issued an order on September 9, 2022 granting review of a class certification from March 7, 2022 that certified a class of roughly 11.8 million Ohio residents claiming injuries from per- and polyfluoroalkyl substances, or PFAS.
Background
Filed in 2018 in the Southern District Court of Ohio, the lawsuit alleged the named…
Introduction
President Biden signed the Inflation Reduction Act of 2022 (the Act) into law on August 16, 2022. The Act represents an expansive investment in the energy industry, with many provisions targeting clean energy and climate change issues through funding and tax credits. However, several notable provisions from an environmental permitting and compliance standpoint are buried amongst the financial and tax provisions. These environmental provisions relate to permitting and compliance that the regulated industry, especially energy companies, should watch closely.
Funding for Permitting and Programmatic Development
The Act provided significant funding to regulatory authorities for a number of permitting-related activities.
For example, the National Oceanic and Atmospheric Administration (NOAA) received $20 million to assist with permitting and project review. The funds are meant to result in more efficient, accurate, and timely reviews for planning, permitting and approval processes through hiring and training personnel and obtaining new technical and scientific services and equipment.
The United States Environmental Protection Agency (U.S. EPA) received $40 million for its permitting and project review efforts. The funds will be utilized to develop efficient, accurate, and timely reviews for permitting and approval processes through hiring and training of personnel, development of U.S. EPA programmatic documents, procurement of technical or scientific services for reviews, development of environmental data and new information systems, purchase of new equipment, developing new guidance documents, and more.
The Act provided over $62.5 million to the Council on Environmental Quality to develop programmatic documents, tools, guidance, and improvement engagement. These funds will also support collection of data regarding environmental justice issues, climate change data, development of mapping/screening tools, and tracking and evaluation of cumulative impacts.
Several other federal agencies received millions in funding for review and planning of electricity generation infrastructure, like the Federal Energy Regulatory Commission, the Department of Energy, and the Department of the Interior. Funding will be used to facilitate timely and efficient reviews, as well as generate environmental programmatic documents, environmental data, and increase stakeholder and community involvement.
In sum, regulators involved in environmental and energy permitting received a substantial boost in funding targeting the permitting process, including supporting the development and build out of programmatic documents and capabilities. The funding could improve the timing of the permitting processes for these agencies, but it could also lead to additional administrative burdens in the form of new application and compliance materials and increased regulatory scrutiny where a regulator has more time and money to invest in the regulatory process.…
Continue Reading Environmental aspects of the Inflation Reduction Act of 2022
As anticipated, on Friday the U.S. Environmental Protection Agency (EPA) issued a proposed Risk Management Program (RMP) Safer Communities by Chemical Accident Prevention rule pursuant to the Clean Air Act. The proposed rule would reinstate certain provisions newly introduced to the RMP rule (originally promulgated in 1991) late in the Obama administration and subsequently removed by the Trump administration in 2019. The EPA has additionally added significant new requirements not originally in the 2017 draft RMP rule, including provisions aimed to further current policies on environmental justice and climate change. The proposed RMP rule also appears to draw influence from recommendations made by the Chemical Safety Board (CSB) as well as state updates to process safety regulations in the past decade, most notably the California Accidental Release Prevention Program (CalARP) and the California Refinery Process Safety Management (PSM) Standard.
These changes, including the addition of requirements regarding employee participation, public availability of information, inherent safety, third party auditing, facility siting and natural hazards consideration, as well as emergency response planning, will result in covered RMP facilities having to significantly revisit and revise their RMP programs and plans. Certain requirements also appear to be directly aimed at limiting stationary sources’ ability to privately manage their internal risk management decisions. For example, covered facilities would now be required to document any revisions between draft and final compliance audits and provide justifications for rejected RMP program recommendations.
According to EPA Administrator Michael Regan, “protecting public health is central to EPA’s mission, particularly as we adapt to the challenges of climate change, and the proposal announced today advances this effort, especially for those in vulnerable communities. This rule will better protect communities from chemical accidents, and advance environmental justice for communities that have been disproportionately impacted by these facilities.” EPA estimates the rule will cost approximately $77 million a year.
Comments on the proposed rule are due to EPA within 60 days of its publication in the Federal Register and may be submitted online, via mail, or hand-delivery.…
Continue Reading EPA Proposes Expansive Changes to EPA RMP Rule
Over the last year, we have seen the emergence of a new carbon market based on the tokenisation of voluntary carbon credits. It represents a new, decentralised approach towards scaling up the carbon market, and it has seen very rapid growth since its inception.
The reasons for that growth are clear: it allows anyone with access to cryptocurrency software to instantly buy and sell tokenised carbon credits, without needing to hold an account in the underlying carbon credit program registry or undergo the usual KYC checks that come along with that. In that sense, it has the potential to unlock a huge segment of the carbon credit consumer market.
Like any new technology, it can be both a force for good and bad; the other side of the (digital) coin is that the proliferation of carbon credit-backed cryptocurrencies represents a threat to the integrity of the whole carbon market; it reality, a tokenised carbon credit is completely disconnected from the underlying carbon credit: it gives no right to the underlying credit, only a contractual right (as against the token issuer) to the environmental claims attached to it; and it is not controlled or backed by the carbon credit program provider. There is obvious scope for greenwashing and fraudulent schemes, which we have already seen happening.
It is clear that if the crypto carbon market is to have a future as a credible part of the wider carbon market, rather than as a marginal, high-risk product, it must be subject to controls to ensure that tokenised carbon credits possess the same fundamental attributes/qualities as the underlying carbon credits themselves, i.e. that the claimed carbon offsets must be real, additional, permanent, robustly quantified, independently verified, and uniquely claimed.…
In a highly anticipated decision, the U.S. Supreme Court (Court) rejected U.S. EPA’s (EPA) Clean Power Plan in West Virginia v. EPA on June 30, 2022. Relying upon the “major questions doctrine,” the Court found that Congress had not intended to authorize EPA to regulate emissions using “generation shifting” (i.e., requirements that power production be…
Status
Last month, the California Division of Occupational Safety and Health (Cal/OSHA) released a revised discussion draft of a proposed regulation for workplace violence prevention (Proposed Rule). The Proposed Rule would expand existing health care industry workplace violence prevention requirements to all industries. The Proposed Rule includes new definitions with broad applicability and a “one-size-fits…
The agencies regulating industrial chemical processes are taking a second look at modernizing regulations aimed at preventing chemical accidents in the near future. The Occupational Safety and Health Administration’s (OSHA) Process Safety Management (PSM) standard and the Environmental Protection Agency’s (EPA) Risk Management Program (RMP) rule were practically identical for processes containing threshold levels of…
As of 7 February 2022, pursuant to Commission Regulation (EU) 2022/63 (the “Titanium Dioxide Regulation”)[1], titanium dioxide (E171) has been removed from Annexes II and III of Regulation (EC) No 1333/2008 (the “Additives Regulation”), which sets out the regulatory framework for the use of additives in foods in the European Union.
Accordingly, since 7 February 2022, the use of titanium dioxide (E171) as a food additive in the European Union is prohibited. However, food operators will note that the Titanium Dioxide Regulation provides for a 6 month transition period, where foods produced in accordance with the rules applicable before 7 February 2022 may continue to be placed on the market until 7 August 2022. After that date, food products may remain on the market until their date of minimum durability or ‘use by’ date.[2]
The Titanium Dioxide Regulation has been introduced following a series of European Food Safety Authority (“EFSA”) safety assessments of the use of titanium dioxide (E171) as a food additive, including the most recent food safety assessment issued on 6 May 2021 (the “EFSA Opinion”), pursuant to which EFSA indicated that, based on is assessment of all the available evidence, a concern for genotoxicity could not be ruled out, and therefore concluded that titanium dioxide (E 171) can no longer be considered safe when used as a food additive.[3]…
Continue Reading Titanium dioxide (E171) banned as an additive in foods in the EU
On Wednesday April 6, 2022, in a 5-4 vote, the U.S. Supreme Court justices stayed a California district court’s October 21, 2021 decision to vacate the Section 401 Water Quality Certification Rule (401 WQC Rule). The U.S. Environmental Protection Agency (EPA) had requested that the district court remand the rule, saying it was planning…
We previously reported on requirements for Scope 3 emissions in the proposed climate disclosure rule released by the U.S. Securities Exchange Commission (“SEC”) on March 21, 2022 (“Proposed Rule”). In addition to Scope 3 emissions, the Proposed Rule would also require a registrant to disclose information about its direct GHG emissions (Scope 1) and indirect emissions from purchased electricity or energy sources (Scope 2). This post focuses on attestation requirements in the Proposed Rule for those Scope 1 and Scope 2 disclosures.
Who is subject to Scope 1 and Scope 2 attestation requirements and when is compliance required?
Section 229.1505 of the Proposed Rule would require a company that is an accelerated filer or large accelerated filer[1] to include an attestation report in its Scope 1 and 2 disclosures. The attestation requirement also applies to foreign private issuers.
The Proposed Rule does not make compliance with Scope 1 and 2 disclosure and attestation requirements immediate. Instead, subject companies are provided a grace period to achieve compliance with Scope 1 and 2 disclosure requirements. The Proposed Rule would also provide a transition period for the assurances required for the Scope 1 and 2 disclosure attestations (see further discussion below). The proposed compliance timeframes are as follows:
| Filer Type | Scopes 1 and 2 GHG Disclosure Compliance Date | Limited Assurance | Reasonable Assurance |
| Accelerated Filer | Fiscal year 2024 (filed in 2025) | Fiscal year 2025 (filed in 2026) | Fiscal year 2027 (filed in 2028) |
| Large Accelerated Filer | Fiscal year 2023 (filed in 2024) | Fiscal year 2024 (filed in 2025) | Fiscal year 2026 (filed in 2027) |
Who prepares the attestation report?
Under the Proposed Rule, a GHG emissions attestation provider would be required to prepare and sign the attestation report. The attestation provider would not need to be a registered public accounting firm. However, the Proposed Rule includes characteristics of acceptable attestation providers including:
According to the agency, the proposed expertise requirement is intended to ensure that the attestation provider is sufficiently competent to perform the attestation engagement. With respect to independence, SEC states that emissions disclosures by independent attestation providers should improve the reliability of the disclosure.…
