Industrials Regulatory News and Trends - October 11, 2024

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.

Federal law will exempt semiconductor facilities from environmental reviews. On October 2, President Joe Biden signed into law the Building Chips in America Act, legislation that will exempt semiconductor manufacturing facilities that receive funding under the CHIPS and Science Act from federal environmental review. The measure is not without controversy. Proponents of the legislation hope that it will streamline the construction process and speed the development of the US semiconductor industry. Opponents, however, expressed concerns about environmental impacts.

Washington state imposes fines on plastic producers. On October 3, the state of Washington announced that 35 companies have been fined a total of $416,554 for not complying with the state’s new recycled content law – the first time the state has issued penalties under that 2021 law. The plastic manufacturers, said the Washington Department of Ecology, did not include enough recycled material in their products. Companies that produce plastic trash bags are required to include a minimum of 10 percent recycled content; beverage containers must include at least 15 percent recycled content. In coming years, as additional aspects of the law phase in, more companies will be required to meet the state’s recycled content standards for a wider range of products – the standards, by 2036, will encompass many types of common consumer products and require a minimum of 50 percent recycled content for most of them. You may also be interested in our alert looking at other Washington state legislation addressing plastic pollution.

Port strike suspended. The International Longshoreman’s Association has suspended its strike of 36 East Coast and Gulf Coast ports, after securing commitment to major wage increases – 62 percent over six years – from the US Maritime Alliance (USMX). About 45,000 dockworkers returned to work on October 4 to restart machinery and clear the way for the more than 40 container ships waiting at sea to get to a berth. To keep both sides at the bargaining table, members of the Biden Administration engaged in behind-the-scenes negotiations later described by US Transportation Secretary Pete Buttigieg as "midnight and pre-dawn meetings, conversations with the parties, shuttle diplomacy.” Buttigieg said, "What we were able to do was to discover basically that the parties were not as far apart as it sounded on economics." The parties have until January 15 to resolve remaining contract issues, most notably port automation.

California adds teeth to PFAS laws. California Governor Gavin Newsom has signed into law AB 347, adding comprehensive registration, certification, and enforcement provisions to California’s existing and forthcoming restrictions on the use of PFAS in covered products: juvenile products, textile articles, and food packaging. See our alert.

NHTSA opens investigation into Ford crossover SUVs because of brake issues. On October 4, the National Highway Traffic Safety Administration announced its initiation of an investigation of 370,000 Model Year 2015-17 Ford Edge crossover vehicles, citing concerns regarding the vehicles’ braking systems. The Agency opened the investigation based on complaints alleging that these vehicles could experience impaired braking capability (potentially resulting in longer stopping distance) without advance warning to the driver. Ford said it is working with NHTSA to support its investigation. In 2020, the automaker recalled 488,000 Ford Edge and Lincoln MKX vehicles in the United States due to a risk of brake hose failure.

EPA announces final rule on managing and recycling HFCs. In late September, the EPA announced that it has finalized a rule to promote better management, recycling, and reuse of hydrofluorocarbons (HFCs) under the American Innovation and Manufacturing (AIM) Act. The rule, which is part of the AIM Act’s goal of drastically cutting climate-warming emissions, creates a new reclamation program for HFCs while imposing new requirements to reduce HFC emissions. Here are some key requirements of the new Emission Reduction and Reclamation Program:

• Leaks in appliances with at least 15 pounds of HFC-containing refrigerants must be repaired
  
  
• Certain new and existing commercial and industrial refrigeration appliances that contain at least 1,500 pounds or more of an HFC or HFC substitute must include automatic leak detection systems
  
  
• Certain existing HVAC equipment must be serviced and repaired using reclaimed HFCs
  
  
• HFC recyclers and reclaimers and recyclers will also be subject to new labeling, handling, reporting, and record-keeping requirements.

Separately, the agency also issued an advanced notice of proposed rulemaking requesting input on the technical training or certifications that should be required of refrigeration and cooling equipment installers, technicians, and servicers.

First-ever conviction for illegally imported HFCs. A San Diego man has pleaded guilty to a single count of conspiracy to violate the federal Clean Air Act and the American Innovation and Manufacturing (AIM) Act by illegally importing hydrofluorocarbons (HFCs) on multiple occasions. This was the first ever prosecution to target the illegal importation of HFCs, the potent greenhouse gases that are considered a major threat to the climate. In his plea agreement, Michael Hart said he would advertise on various Internet sites; after customers placed orders, he would drive to Tijuana, purchase cylinders of HFCs, and smuggle them across the border hidden under a tarp. Hart, who is scheduled to be sentenced on December 9, faces a maximum of five years in prison, though prosecutors agreed to recommend a lesser term and a fine of $250,000. Under the AIM Act, the EPA is authorized to phase down HFC production and consumption and facilitate the transition to next-generation technologies through sector-based restrictions on HFCs. Tara McGrath, the US Attorney for the Southern District of California, stated, “This is the first time the Department of Justice is prosecuting someone for illegally importing greenhouse gases, and it will not be the last.”

US will fund more battery makers in effort to strengthen US supply chain. Aiming to increase the domestic production of advanced batteries and battery materials, the US Department of Energy announced that it will award a total of $3 billion to 25 battery manufacturing projects in 14 states. The funding is part of the Biden Administration’s broader plan to increase domestic manufacturing of electric vehicles, EV batteries, and other EV supplies and equipment, and to reduce US dependence on imports of those vehicles and supplies from China. The funding announced in late September, will support battery-grade processed critical minerals, components, battery manufacturing, and recycling projects. The Department forecasts that the projects will generate $16 billion in total investment and support 12,000 production and construction jobs.

New recycling strategy for inbound international flights. International airlines, with a boost from a new US Customs and Border Protection (CBP) policy, are now participating in a program enabling them to recycle single-use aluminum, paper, and plastic products used during international flights arriving in the US. Historically, the USDA’s Animal and Plant Health Inspection Service (APHIS) has mandated sterilization or burning of all regulated waste arriving in the US on international flights, to protect against foreign pests and pathogens. The new program, a collaboration among CBP, APHIS, and the International Air Transport Association, will allow international airlines to recycle appropriate materials once safety measures have been implemented. The program aligns with CBP's Green Trade Strategy, which governs the agency's efforts to advance environmental sustainability, climate resilience, and green innovation. With more than 120 million international passengers arriving in the United States annually, it is estimated that incoming passengers generate over 67 million pounds of recyclables on international flights.

EPA launches Safer Choice outdoor label. The EPA is launching a new Outdoor Use Safer Choice label to help consumers identify products marketed for outdoor use – like grill and boat cleaners and fire suppressants – that meet the agency’s expanded criteria for helping to protect the environment. The label builds on the existing Safer Choice-certified program with an additional requirement that such products break down quickly in the environment and have lower aquatic toxicity. The EPA notes that more than 50 products already certified under the indoor Safer Choice label also meet its additional criteria for outdoor use. Find products that are Safer Choice-certified for outdoor use via the Safer Choice product search page, choosing the “Products with outdoor uses” box. The agency expects the Outdoor Use Safer Choice label to begin appearing on products as early as next year.

Chemistry trade group supports pending recycling bill. The American Chemistry Council has thrown its support behind new bipartisan recycling legislation pending in Congress. The trade group said in mid-September that it backs a bill introduced by Representatives Larry Bucshon (R-IN) and Don Davis (ND-NC) that would modernize the nation’s outdated recycling infrastructure and increase the use of recycled material in new products. The ACC calls the Accelerating a Circular Economy for Plastics and Recycling Innovation Act of 2024 the first comprehensive bipartisan effort by Congress in years to tackle plastics pollution in the US and says that it would be a major step towards increasing the recycling of plastics and preventing plastic from ending up in the environment.