Industrials Regulatory News and Trends - January 19, 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.

Review of proposed steel merger may last a year or more. On January 11, Bloomberg News reported that a review of the proposed takeover by Nippon Steel Corporation of US Steel Corporation by the Committee on Foreign Investment in the US (CFIUS) is unlikely to conclude until late 2024 and may extend into 2025. This is far longer than the companies have publicly indicated. The review is in its early stages, sources said, and closing of the transaction is conditioned on CFIUS approval. CFIUS is an interagency panel led by the Treasury Department that has the power to approve, block, or amend the deal on national security grounds. A January 7 article in the New York Times reported that the Biden Administration has expressed some reservations about the deal, in large part due to the tension it creates between the President’s attempts to revitalize the nation’s industrial sector and his efforts to rebuild international alliances.

Louisiana factory to become first US manufacturer of a critical lithium battery material. A large investment of federal funds under the Bipartisan Infrastructure Law will support the conversion of a Louisiana chemical plant to America’s first domestic manufacturer of critical lithium battery materials. Koura Global’s factory near Baton Rouge currently produces a fluorine refrigerant that is being replaced with a more environmentally friendly chemical. Koura will retrofit the facility to produce the new replacement refrigerant, and, with a $100 million Department of Energy grant, will construct new facilities on the site to manufacture lithium hexafluorophosphate (LiPF6), a primary component in lithium-ion batteries. Once the operation is up and running, Koura expects to make enough LiPF6 for more than a million electric vehicle batteries a year.

New Jersey law sets up guidance for recycling lithium-ion vehicle batteries. On January 8, New Jersey Governor Phil Murphy signed into law the Electric and Hybrid Vehicle Battery Management Act, making New Jersey the first state in the nation to create guidance for recycling lithium-ion vehicle batteries. The Electric and Hybrid Vehicle Battery Management Act provides a framework for the collection, transportation, remanufacturing, reuse, recycling, and responsible disposal in New Jersey of lithium-ion batteries used in electric and hybrid-electric cars and trucks. “New Jersey has taken a forward-looking and holistic view of the true value of these batteries,” said state Senator Bob Smith, chairman of the New Jersey Senate Environment and Energy Committee and sponsor of the bill. “We developed guidance for those in the growing recycling industry that will support innovation, job creation and environmental stewardship from reusing materials and parts.” The bill passed both houses of the state legislature by a 66-0 vote.

Boeing 737s still grounded. On January 5, an Alaska Airlines Boeing 737 MAX 9 which had been in service only eight weeks lost a door plug while it was climbing out of Portland International Airport. Flight 1282 returned safely to PDX; the FAA swiftly grounded all 737 MAX 9s on January 6. On January 17, the FAA said that before it clears any Boeing 737 MAX 9s to return to service, it needs to review airlines’ inspections of the aircraft. The agency said that once it approves an inspection and maintenance process, that process “will be required on every grounded 737-9 MAX prior to future operation. The safety of the flying public, not speed, will determine the timeline for returning these aircraft to service.” On January 15, Boeing announced it will add further quality inspections for its 737 MAX jetliner and will deploy a team to work with one of its leading suppliers, Spirit AeroSystems, which makes and installs the part involved in the incident, to check and approve Spirit's work before fuselages are sent to Boeing's production facilities in Washington state. On January 16, Boeing announced that retired Admiral Kirkland Donald would act as a special advisor to Boeing’s president and CEO, David Calhoun, as a team of outside experts assesses the manufacturer’s quality management system, including its oversight of suppliers. Also on January 16, four passengers who had been aboard flight 1282 during the incident filed a lawsuit in King County Superior Court against Boeing and the airline.

Administration awards $623 million to build EV charging network nationwide. On January 11, the Biden Administration announced it is awarding $623 million in grants to states, local governments, and Tribes to help build an electric vehicle charging network across the nation. The grants will fund 47 EV charging stations and related projects in 22 states and Puerto Rico, including 7,500 EV charging ports, officials said. “America led the arrival of the automotive era, and now we have a chance to lead the world in the EV revolution – securing jobs, savings and benefits for Americans in the process,” said Transportation Secretary Pete Buttigieg. The new funding “will help ensure that EV chargers are accessible, reliable and convenient for American drivers, while creating jobs in charger manufacturing, installation and maintenance for American workers,” he said. Congress approved $7.5 billion in the 2021 Bipartisan Infrastructure Law to meet President Joe Biden’s goal of building a national network of 500,000 publicly available chargers by 2030.

Nanoplastics in bottled water. A study from Columbia University published in the Proceedings of the National Academy of Sciences on January 8 states that the average bottle of water contains nearly a quarter million fragments of nanoplastics. The study expresses concern that these minute particles may pose serious risks to human health. The term “microplastics” has become a familiar term in the conversation about plastic pollution; microplastics may be measured in millionths of a meter and can be viewed using widely available technologies, like scanning electron microscopes. Nanoplastics, in contrast, are thousands of times smaller – pretty much the size of a virus. These smaller sizes can translate to greater danger, an author of the article said, because this very small size allows the nanoplastics to more easily cross the blood-brain barrier and penetrate human cells. Nanoparticles have also been shown to cross the blood-placenta barrier. The study noted that in the production of bottled water, “plastic contamination is confirmed in every step from the well to the bottle.” To carry out the study, the researchers developed a new optical imaging technique “for rapid analysis of nanoplastics with unprecedented sensitivity and specificity.” Read the study here. 

Top senators say hydrogen rules will be made more friendly to producers. On January 12, Senators Tom Carper (D-DE) and Joe Manchin (D-WV) said they expect the Biden Administration to change a Treasury Department proposed rule on hydrogen tax credits to make it friendlier to hydrogen producers. The draft guidance, released in late December, proposed requirements for companies to qualify for tax incentives and benefits for clean hydrogen production and related projects established by the Inflation Reduction Act. Hydrogen industry leaders have recently said they expect the final rules will be less restrictive and more conducive to hydrogen projects, and both senators reiterated this expectation. “The guidance has killed the whole thing that could be a tremendous transition. We’ve put four or five hydrogen hubs in limbo,” said Manchin, referring to the potential effect of the December guidance on hydrogen energy development hubs.

Collaboration applies AI to seek a new approach to EV battery production. The Microsoft Corporation announced January 9 that it has collaborated with a US national laboratory to use artificial intelligence to rapidly identify a material that could one day lead to the capacity to produce batteries that require 70 percent less lithium. The secret ingredient: sodium, the same cheap and abundant element found in table salt. The process still needs extensive evaluation by scientists at the laboratory, the Pacific Northwest National Laboratory in Richland, Washington, to determine whether it could be suitable for mass production. The use of AI in the process is a potentially significant development. Brian Abrahamson, chief digital officer of PNNL, said the process used to find the alternative battery material can be applied to many other chemistry and materials science problems. "Something that could have taken years, we did in two weeks," Jason Zander, an executive vice president at Microsoft, stated.

Deadline extended to comment on EPA’s environmental justice technical guidance. Continuing its prioritization of environmental justice, the EPA is extending the comment period for the draft revision of its Technical Guidance for Assessing Environmental Justice in Regulatory Analysis. The guidance sheds light on how EPA will incorporate environmental justice considerations using the most recent state of the science, peer-reviewed agency guidance, and new terminology to effectuate its new community focused priorities in future agency rulemaking. The new deadline to submit comments is January 30, 2024. See our alert.