California Governor Gavin Newsom recently signed three bills addressing carbon capture, utilization and storage (“CCUS”) and carbon dioxide removal (“CDR”). Collectively, these bills create a pathway for new regulation of CCUS and CDR projects, enabling them to become part of a solution for the State to meet aggressive carbon reduction / neutrality goals in 2030
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.…
As of 7 February 2022, pursuant to Commission Regulation (EU) 2022/63 (the “Titanium Dioxide Regulation”), 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.
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.…
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:…
Prior to COP26, we published an article that identified several issues being discussed at COP26 that could be of critical importance to business.
|During COP26, we followed the developments of these issues in a special Viewpoints series.
And now that COP26 is concluded, people are asking: What impact did it have? Where does the world stand on these issues?
You probably read the mixed reviews with regard to success of this COP. The New York Times reported Nov. 13 within minutes of the banging of the final gavel: “Global negotiators in Glasgow agreed to do more to fight climate change and aid vulnerable nations, but left crucial questions unresolved.”
What was resolved? For those of us who have studied agreements coming out of the COPs, this agreement, called the Glasgow Climate Pact is notably weak. The parties could only agree to language that “notes” certain issues or “urges” certain actions, as opposed to strong language that “decides” any points or “commits” parties to any defined metric.
The Pact does “reaffirm” the Paris Agreement temperature goal of holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 above pre-industrial levels but that will require all nations to slash their carbon dioxide emissions by nearly half this coming decade to hold warming below 1.5 degrees Celsius.
However, the Pact merely “emphasizes” the urgent need for parties (as opposed to “the parties agree to…”) to increase their efforts collectively to reduce emissions through accelerated action and implementation of domestic mitigation measures in accordance with Article 4, paragraph 2, of the Paris Agreement and merely “urges” parties that have not yet communicated new or updated nationally determined contributions (NDCs) to do so as soon as possible in advance of the next session of the Conference of the Parties (as opposed to “the Parties that have not yet communicated new or updated nationally determined contributions agree to submit by [insert date]”).
|It also “urges” wealthy nations (as opposed to “wealthy nations agree…”) to “at least double” funding by 2025 to protect the most vulnerable nations from the hazards of a hotter planet. And it explicitly mentions the need to curb fossil fuel usage, the first time a global climate agreement has done so.|
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.…
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.…
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.
Continue Reading ESG Watch: Carbon Tax vs. Clean Energy Standard
The past few weeks saw a number of developments in relation to the UK Emissions Trading Scheme (UK ETS), which came into force on 1 January 2021. This short blogpost summarises the key aspects of what is changing.
Consultation on compensation to energy intensive industries for UK ETS is now open
The UK ETS poses…
On July 13, 2021, the Pennsylvania Environmental Quality Board approved a rulemaking to establish a program to limit the CO2 emissions from fossil fuel-fired electric generating units (EGU) located in the Commonwealth.
The stated purpose of the final-form rulemaking is “to reduce anthropogenic emissions of CO2, a greenhouse gas (GHG) and major contributor to climate…