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10 January 20257 minute read

Industrials Regulatory News and Trends - January 10, 2025

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.

China imposes export control measures on dozens of US manufacturers. On January 2, China announced new export control measures targeting 28 US companies and added 10 US companies to a list of entities barred from doing business in China. This marked the latest escalation of trade tensions between the world's two largest economies at the governmental level. The larger group of manufacturing companies is composed primarily of companies active in defense contracting. The decision was viewed as a “shot across the bow” in advance of President-elect Donald Trump’s inauguration on January 20.

US hybrid and EV sales set all-time record in Q3 2024. A report issued in December by the Energy Information Administration found that sales of hybrid and electric vehicles in the US set an all-time record in Q3 2024. Combined sales of battery EVs, plug-in hybrids, and conventional hybrids made up 21.2 percent of all new light-duty vehicle sales in the US. Notably, hybrids (conventional and plug-in) now make up 10.8 percent of the total US light-duty vehicle market. Also of interest: according to Wards Intelligence, nearly 80 percent of EVs sold in the US in Q3 2024 were made in North America.

$32M grant to NYSDOT to support low-carbon construction materials in transportation projects. On January 2, New York Governor Kathy Hochul announced that the New York State Department of Transportation (NYSDOT) has received a $32 million grant from the Federal Highway Administration to advance the use of lower carbon materials in its infrastructure projects. NYSDOT will use the grant to develop and implement new standards for low-carbon materials used in state transportation projects. About a third of total carbon emissions from the construction industry arise from “embodied carbon” (the estimated amount of GHGs released over the lifespan of infrastructure), according to NYSDOT. The federal Low-Carbon Transportation Materials Grants funding was authorized by the Inflation Reduction Act.

EPA rejects industry petition to scrap safeguards against accidental emissions, cedes ground on good neighbor rule, incinerator standards. On December 30, the EPA rejected an industry coalition’s petition to scrap tighter safeguards against accidental releases of air pollutants from refineries, chemical manufacturing plants, and other facilities. The coalition had contended that the more stringent regulations impose “multiple unlawful and highly prescriptive mandates that undermine the performance-based flexibility that is the linchpin of process safety.” The coalition had also asked the EPA to freeze implementation. The EPA also found that the petition “fails to identify any information or circumstances that warrant mandatory reconsideration.” The likely next step will be taken in the courts. At the same time, ceding ground to the coming Trump Administration, the agency indicated it is pausing its plans to widen the geographic reach of the Clear Air Act’s good neighbor rule – which forbids states from allowing plants to emit atmospheric pollution that may contribute to downwind compliance problems in other states – and to tighten emissions standards on large trash incinerators located near historically disadvantaged communities.

Lawsuits in wake of blocked acquisition of US Steel. On January 6, Nippon Steel and US Steel filed a lawsuit charging that President Joe Biden’s executive order blocking Nippon’s acquisition of US Steel was signed for “purely political reasons” – and, in a separate lawsuit, the steelmakers are also suing Dave McCall, president of the United Steelworkers (USW), and Lourenco Goncalves, CEO of steelmaker Cleveland-Cliffs, for what they allege were “anticompetitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring US Steel as part of an illegal campaign to monopolize critical domestic steel markets.” In December, the Committee on Foreign Investment in the United States told President Biden that it was unable to reach consensus on whether the sale to Nippon would pose a national security risk; the final decision thus fell to the President. In announcing his decision on January 3, President Biden stated, “As I have said many times, steel production – and the steel workers who produce it – are the backbone of our nation. A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.” The proposed acquisition was controversial from the start; among those opposing it were the USW and President-elect Donald Trump. See some of our earlier coverage of the proposed acquisition here and here.

Appeals court rejects part of EPA Confidential Business Information rule. A three-judge panel of the US Court of Appeals for the DC Circuit has unanimously rejected a facet of new EPA regulations under the Toxic Substances Control Act (TSCA) that the court said could lead to the unwanted disclosure of manufacturers’ trade secrets. Under the TSCA, manufacturers must publish an inventory of chemical substances made, processed, or imported into the US; however, manufacturers may "assert and substantiate" a confidentiality claim to request that their chemicals be kept secret. In 2023, the agency finalized the confidential business information (CBI) rule, requiring manufacturers to make and substantiate confidentiality claims at the time of submission to the EPA. If the manufacturer does not assert confidentiality at that point, then information may be disclosed publicly. That, the court found in December, endangers manufacturers’ confidentiality protections. The panel stated that the CBI Rule is unlawful because it “would allow downstream entities without knowledge to inadvertently or intentionally waive a competitor's CBI claim,” adding, “Neither the TSCA nor good reason justifies these terms of the CBI Rule.”

EPA expands Toxics Release Inventory. On January 6, the EPA announced it has added nine substances to its Toxics Release Inventory (TRI), among them two PFAS with numerous industrial applications: fluorotelomer sulfonate potassium salt, also called 6:2 FTS, and sodium perfluorodecanoate, also called NaPFO. The EPA describes the TRI as “a resource for learning about toxic chemical releases and pollution prevention activities reported by industrial and federal facilities.” Facilities in designated industry sectors and federal facilities that manufacture, process, or otherwise use TRI-listed chemicals above defined quantities are required to submit annual reports about toxic releases to the EPA.

EPA reconsiders classification of five widely used chemicals. Also on January 6, the EPA announced it is reconsidering the classification of five chemicals, among them vinyl chloride. The agency said it will gather information in the next three months to determine whether vinyl chloride should be reclassified as a high-priority substance under the TSCA; this reclassification could prompt an investigation into whether vinyl chloride poses an “unreasonable risk of injury to health or the environment.” Also being reviewed are the classifications of acetaldehyde, acrylonitrile, benzenamine, and 4,4′-Methylenebis(2-chloroaniline), also known as MBOCA, all of which have numerous industrial applications. Any new rules on using these chemicals would only take effect after the formal assessment concludes, a process that could take as much as three years, if the process is not halted during the next presidential administration.

Crane manufacturer to pay $42.6M civil fine, complete emissions mitigation project. The Manitowoc Company, manufacturer of industrial cranes, will pay a $42.6 million civil penalty and complete an emissions mitigation project as part of its settlement with the EPA and the Department of Justice over violations of the Clean Air Act’s Transition Program for Equipment Manufacturers (TPEM). Those actions, announced on January 6, bring to a close an investigation first announced in three years ago, when, the company stated, it “an internal investigation indicated the company may not have met all requirements of the TPEM program for a portion of engines mounted on Manitowoc mobile cranes sold in the U.S. between 2014 and 2017.” The emissions migration project involves retrofitting a short-line locomotive which is now in service in the Sparrows Point, Maryland, area, near the Port of Baltimore, where the implicated mobile cranes had been placed.