Industrials Regulatory News and Trends - July 26, 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.

China presses tariff dispute with US. On July 15, China asked the World Trade Organization to set up a panel to address its dispute with the US over electric vehicle subsidies. In May, the US announced substantial tariff increases on electric vehicles and batteries imported from China. The increases included a quadrupling of tariffs on electric vehicles, rising from 25 percent to 100 percent. China had opened its dispute before the WTO in March this year, in the wake of the 2022 Inflation Reduction Act, which offers billions of dollars in tax credits to help consumers buy EVs. A vehicle may not qualify for the credit if battery “critical minerals” or “components” are sourced, processed, manufactured or assembled by a “foreign entity of concern,” which includes many China-based companies. Find out more about the tariff increases being levied on Chinese-made EVs here, and more about the US incentives for EVs and renewable energy here.

US EV registrations on the rise. New vehicle registrations for electric vehicles rose 9.6 percent in May, totaling 104,916 registrations. Meanwhile, the overall light vehicle market saw registrations of about 1.4 million cars – a decline of .7 percent. Tesla vehicles remained the most popular choice for EV purchasers, but the company’s market share declined to 46 percent from 60 percent a year ago. At the same time, year-over-year US EV sales increased significantly at several automakers, including Kia (146 percent), Rivian (87 percent), Nissan (87 percent), and Hyundai (40 percent). EV purchase increases are spurred in part by strong incentives and discounts. Tom Libby, associate director of industry analysis at S&P, stated that these incentives "are not sustainable, and they are causing losses on the part of automakers.”

EPA rule re coal-fired plants may stand, for now. On July 19, the US Court of Appeals for the District of Columbia Circuit said an EPA regulation seeking to limit greenhouse gas emissions from coal-fired power plants may remain in place while legal challenges against it move forward. The rule, finalized in April, requires most coal-fired power plants to capture 90 percent of their carbon emissions within eight years. The three-judge panel said the groups challenging the regulation had not shown that their case is likely to succeed on the merits. Furthermore, the panel said, the recent Supreme Court decision in Loper Bright limiting federal agency powers is irrelevant because the EPA has claimed only the power to “set emissions limits ... that would reduce pollution by causing the regulated source to operate more cleanly." And, noting that the regulation's compliance deadlines don’t take effect until 2030 or 2032, the panel also unanimously rejected the plaintiffs' claim of immediate harm.

US environmental law post-Chevron: Changes ahead. The Supreme Court has overturned the Chevron doctrine – substantially boosting the power of federal courts to set aside agency rules and actions across the federal government landscape. Loper Bright can be expected to have profound implications for federal agencies and those subject to federal regulation, which is to say nearly everyone in the US, and the effects of this watershed decision on environmental law will be particularly significant. Our alert looks ahead.

EPA awards $4.3B in grants to reduce GHGs. On July 22, the EPA announced it is awarding $4.3 billion in grants to projects across the US working to cut GHG emissions. The grants, tackling emissions from transportation, electric power, commercial and residential buildings, industry, agriculture, and waste and materials management, will fund 25 projects in 30 states. Among the grants: nearly $500 million to California’s South Coast Air Quality Management District for transportation and freight decarbonization at the ports of Los Angeles and Long Beach and $307 million to Nebraska’s Department of Environment and Energy to increase the adoption of climate-smart, precision agriculture and reduce agricultural waste from livestock. EPA stated that the projects overall were created by states, local governments, Tribes, and coalitions of these entities. The grants are funded under the 2022 Inflation Reduction Act.

Stellantis eyes Michigan site for new Mopar center. Stellantis is considering a 230-acre site in Macomb County, Michigan for the construction of a massive new Mopar center. Mopar is the parts, service, and customer care division of Stellantis. The site, directly across 32 Mile Road from a decommissioned Ford engine plant in Romeo, currently consists of farmland and the Romeo Golf Course & Country Club. The company's 2023 agreement with the UAW calls for Stellantis to consolidate four aging Stellantis parts warehouses scattered around suburban Detroit into a regional megahub. At this writing, a real estate developer has submitted plans for the 2.7 million SF project, called the 32 Mile Logistics Campus, to the local planning commission.

Hemisphere’s largest solar R&D center opens. On July 18, US solar cell innovator First Solar announced the opening of the Jim Nolan Center for Solar Innovation, a new 1.3 million SF R&D facility in Lake Township, Ohio. The center is thought to be the largest facility of its kind in the Western Hemisphere. It includes a high-tech pilot manufacturing line for producing full-sized prototypes of thin film and tandem perovskite modules. First Solar is also building new thin-film solar manufacturing facilities in Alabama, expected to come online later this year, and Louisiana, slated to open in 2025. Jim Nolan, a former company board member, developed the company’s cadmium telluride semiconductor platform.

DOE funding update.

• On July 15, the US Department of Energy announced it will provide $1.7 billion to convert 11 shuttered or at-risk auto manufacturing and assembly facilities in 8 US states to the production of electric vehicles and parts in their supply chains. The Domestic Manufacturing Auto Conversion Grants program, being funded through the Inflation Reduction Act, will support industrial projects in Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, Pennsylvania, and Virginia.


• On July 19, the DOE announced $52 million in small grants aiming to fund the development of an array of clean energy projects – 229 projects being carried forward by small businesses in 29 US states. About $8 million will be shared by 20 projects via the Bipartisan Infrastructure Law; the rest are funded through the Energy Department’s Small Business Innovation Research and Small Business Technology Transfer programs. Among the DOE offices administering the grantees are Cybersecurity, Energy Security and Emergency Response; Electricity; Energy Efficiency and Renewable Energy; and Fossil Energy and Carbon Management. Secretary of Energy Jennifer Granholm stated, “With research and development grants awarded for small businesses in nearly every state, DOE continues to invest in an industrial strategy that leaves no community behind as we transition to a clean energy economy.”