The Nickel Report

On Friday, August 31, 2024, both houses of the California legislature approved a bill (SB 219) making targeted changes to the SB 253 and 261 climate disclosure obligations, which are discussed at length in our previous post.

On July 25, 2024, the US Environmental Protection Agency (EPA) proposed to designate acetaldehyde (CASRN 75-07-0), acrylonitrile (CASRN 107-13-1), benzenamine (CASRN 62-53-3), vinyl chloride (CASRN 75-01-4), and 4,4-methylene bis(2-chloroaniline) (MBOCA) (CASRN 101-14-4) as high-priority substances for risk evaluation under the Toxic Substances Control Act (TSCA).

Recent developments could impact implementation timing and compliance obligations under California’s landmark climate emissions disclosure and financial risk reporting laws that were enacted last year.

States across the country continue to add to the growing patchwork of restrictions for per- and polyfluoroalkyl substances (PFAS) in products, posing challenges for those who manufacture, distribute, and sell products in the U.S. In 2024 alone, states introduced nearly 250 bills addressing PFAS, including restrictions for PFAS in products. Thirteen states have already enacted laws regulating PFAS in products, including (as previously reported) Minnesota and California. In the past few months, Maine, Colorado, Connecticut, Vermont, and Rhode Island have joined the list, each with its own unique and nuanced set of requirements, deadlines and exemptions. The variations in these state laws presents a complicated compliance matrix, necessitating an informed and strategic approach, particularly for companies navigating the complexities of extensive, global supply chains. Below, we provide our analysis of these new laws that companies selling products in these states should be aware of.

Earlier this month, the US Department of Energy (DOE) released the first National Definition of a Zero-Emissions Building. DOE intends for this definition to set forth “standardized, consistent, and measurable minimum criteria” that can be adopted by public and private entities to support the transition for buildings toward zero emissions. The release of the definition follows on the heels of DOE’s National Blueprint for the Buildings Sectors, published in April. The Blueprint sets forth actions with the aim of reducing greenhouse gas emissions from US buildings 65% by 2035 and 90% by 2050 from a 2005 baseline, with cross-cutting goals of equity, affordability, and resilience. While this definition serves only as non-binding guidance, it may influence other regulatory and industry standards as buildings move toward decarbonization.  

Within the first five months of 2024, the United States Environmental Protection Agency (EPA) finalized two rules under section 6(a) of the Toxic Substances Control Act (TSCA) that would impose extensive bans and restrictions on uses of chrysotile asbestos and methylene chloride. Aside from a 2019 EPA rule prohibiting the manufacturing (including importing), processing, and distributing in commerce of methylene chloride for consumer paint and coating removal, these are the first two broadly applicable risk management rules that EPA has promulgated since Congress amended TSCA in 2016 to manage unreasonable risks to human health or the environment through broad restrictions on existing chemicals.

In December 2023, federal agencies released their “Fall 2023” Regulatory Agendas that provide an outlook for numerous upcoming regulatory actions on chemicals that could have significant implications for the regulated community. Hunton Andrews Kurth LLP’s chemical regulatory team has provided analyses of these upcoming regulatory actions:

• EPA’s Recent Release of its “Fall 2023” Regulatory Agenda: Upcoming PFAS-Related Actions
• EPA’s Recent Release of its “Fall 2023” Regulatory Agenda: Upcoming Toxic Substances Control Act (TSCA) Actions

On December 14, 2023, the European Parliament and the European Council reached a provisional deal on the Corporate Sustainability Due Diligence Directive (CS3D). Initially proposed by the European Commission in February of 2022, the CS3D requires certain companies to account for and mitigate adverse human rights and environmental impacts throughout their supply chains, including both their own operations as well as upstream and downstream activities. In November 2022, the European Council adopted the general approach proposed by the European Commission. Since then, the Council and the European Parliament have negotiated the parameters of the CS3D to reach a provisional agreement. While press releases from the Council, the Parliament, and the Commission all confirm an agreement has been reached, the text of the agreed upon CS3D is not yet publicly available. It is likely to be released in early 2024.

A set of mandatory environmental, social, and governance (ESG) reporting standards, the European Sustainability Reporting Standards (ESRS), are set to enter into force in the European Union (EU) at the end of this year.  These standards were adopted by the European Commission, the EU’s executive branch, on July 31, 2023 and, barring rejection by the European Parliament or the European Council, will be implemented as part of the EU’s Corporate Sustainability Reporting Directive (CSRD) – a fundamental pillar of the broad “EU Green Deal” – which requires mandatory ESG reporting for certain companies that do business in the EU.  This summary provides an overview of who is subject to the CSRD and when, summarizes key information covered under this initial set of standards, highlights technical guidance from the entity that created the standards, and discusses planned future development of additional standards.

EPA finalized a rule effective on August 7, 2023 concerning the treatment of confidential business information (CBI) claims made in Toxic Substances Control Act (TSCA) submissions. Companies who submit any information to EPA under TSCA and want their confidential information to be protected from public disclosure must comply with these new requirements for CBI claims. Failure to follow these procedural requirements can result in EPA’s denial of the confidentiality claims and the information being made public.

The Greenhouse Gas (GHG) Protocol Corporate Standard and related guidance are widely accepted as leading sources for companies to use in quantifying and reporting their GHG emissions. Companies report GHG emissions for a number of reasons (both legally mandated and voluntary) and in a number of contexts. Accurate accounting and reporting is critical because inaccuracies in emissions reporting can potentially expose the reporting entity to several types of legal liability, as evidenced by the recent proliferation of lawsuits alleging “greenwashing” claims and increasing regulatory scrutiny in this area.

On November 28, 2022, the Council of the European Union (EU) formally adopted the Corporate Sustainability Reporting Directive (CSRD), following the European Parliament’s formal adoption of the directive earlier last month. The CSRD is a broad environmental, social, and governance (ESG) reporting framework that will impose uniform, mandatory reporting requirements on many companies with European operations, including companies not based in Europe.

Carbon Capture and Sequestration Will Be Necessary to Meet State Climate Targets

On November 16, 2022, the California Air Resources Board (CARB) released its proposed final “2022 Scoping Plan for Achieving Carbon Neutrality” (Scoping Plan). The proposed final Scoping Plan—California’s fourth roadmap for mitigating climate change—lays out a path for California to achieve carbon neutrality and reduce anthropogenic emissions to 85 percent below 1990 levels by 2045.