Industrials Regulatory News and Trends - August 9, 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.

Biden Administration announces latest grid modernization projects. On August 6, the Biden Administration announced it will invest $2.2 billion in eight projects under its Grid Resilience and Innovation Partnership (GRIP) program to bolster the US power grid with nearly 13 GW of new transmission capacity across 18 states. This is GRIP’s second round of spending the $105 billion allocated to it via the 2021 Infrastructure Investment and Jobs Act. The eight projects collectively will build 600 miles of new transmission lines and will reconductor more than 400 miles of existing lines across 18 states. Energy Secretary Jennifer Granholm stated, “When you combine these Group 2 investments with the ones from the first round, we’ll be adding 50 GW of capacity to the nation’s grid and over 1,000 miles of transmission lines.”

United Airlines switching to SAF at O’Hare. This month, United Airlines will become the first airline switching to sustainable aviation fuel (SAF) at O'Hare International Airport in Chicago. Made of renewable waste materials such as leftover oils and fats, SAF emits up to 85 percent less carbon than conventional jet fuels. Existing aircraft can use it without major structural or engine alterations. United Airlines noted that it was encouraged to make the change by Illinois tax incentives – $1.50 per gallon in tax credits. United's first shipment of SAF will arrive at O'Hare this month, and, by year's end, United will have received 1 million gallons of SAF at O’Hare from its supplier.

Industrial plant to be powered by solar array. A titanium smelting plant now under construction in Ravenwood, West Virginia, will be powered primarily by a solar microgrid being built right next door. The project is being regarded as the first to directly power a large industrial facility with solar-plus-storage technology. To generate the intense heat needed to melt titanium sponge and scrap, the BHE Renewables facility will include a 106 MW solar array and a battery energy storage system with a capacity of 50 MW or 260.5 megawatt-hours. That system will power the two types of electricity-driven furnaces in the Titanium Metals Corporation (Timet) plant to generate the intense heat needed to melt titanium sponge and scrap. David Dugan, director of corporate communications for Timet’s parent, Precision Castparts Corp., said the solar array will provide the “consistent, reliable power supply” that smelters require, at a cost “comparable to traditional power sources.” Both Timet and BHE Renewables are part of Berkshire Hathaway.

Report: Steelmaking moving away from coal-based production. The annual Pedal to the Metal report from Global Energy Monitor (GEM) observes that the steel and iron industry has made major strides in the transition away from coal-based steelmaking. But, the report notes, emissions-intensive coal-fired blast furnaces are still being built around the world. More lower-emissions electric arc furnaces (EAFs) have come on line in the past year and are under development (for instance, in China, the top developer of EAF capacity), while planned retirements show the industry is transitioning away from coal-based manufacturing – suggesting the International Energy Agency’s net zero-aligned target of 37 percent EAF steelmaking globally by 2030 “is increasingly attainable.” However, the report continues, 16 countries (among them China and India) currently have new blast furnace capacity under development, a trend “increasingly out of alignment with a net zero future” and that raises concerns about stranded assets – infrastructure that is no longer economically viable. GEM’s annual survey of the global iron and steel plant fleet compares sector activity to global decarbonization roadmaps and corporate and country-level net zero pledges. See the 2024 report here.

NHTSA expands probe of Stellantis vehicles. On August 2, the National Highway Transportation Safety Administration upgraded and expanded its investigation of Stellantis Dodge sport utility vehicles regarding allegations of defects in these vehicles’ door locks and windows that is associated with one reported death. The Agency is investigating a possible defect that could cause a malfunction of the power windows and door locks, impeding passengers from exiting in case of emergency. The Agency's engineering analysis will cover nearly 1 million Model Year 2009–2020 vehicles, representing a twelvefold increase from the number initially scrutinized when NHTSA began its inquiry in May 2023.

States are implementing Extended Producer Responsibility laws. Regulators in five US states are moving to implement Extended Producer Responsibility laws for packaging and other products as rulemaking and compliance deadlines approach. EPR laws are gaining momentum across the US and globally, bringing significant compliance requirements and challenges for producers. Our alert examines what producers should know as they prepare to operate under these comprehensive new regimes.

New GAO report calls for increased scrutiny of contractors’ anti-trafficking compliance. A report from the US Government Accountability Office (GAO) has found that, in the majority of federal contracts reviewed, four key federal agencies have not been complying with federal anti-trafficking requirements. The GAO analyzed the efforts of the Departments of Homeland Security, Defense, and State, and the US Agency for International Development in identifying and managing human trafficking risks under government contracts. Among the report’s findings: although contractors are required to maintain an anti-trafficking plan and submit annual certifications regarding their compliance, government contracting officials typically were not requesting or reviewing the plans, nor obtaining the annual certifications. The GAO recommended that the four agencies develop and implement a systematic approach to managing trafficking risks in federal procurements and ensure that contracting officials are reviewing contractors’ anti-trafficking plans and obtaining the required certifications. Earlier this year, the federal government issued the National Action Plan on Responsible Business Conduct, which states that the government “expects” contractors to proactively conduct human rights due diligence “throughout their value chains” and to “treat these standards and principles as a floor rather than a ceiling… while incorporating lessons learned and striving for continuous improvement.”

Washington state launches EV rebate program. On August 1, the State of Washington launched a new EV Instant Rebate Program which Governor Jay Inslee says is intended to help “democratize” EV ownership. For individuals and households making up to 300 percent of the federal poverty level, the program offers a rebate of up to $5,000 for a purchase or a 24- to 35-month lease of a new EV, and up to $9,000 for leasing a new EV. Eligible customers interested in purchasing or leasing used EVs may also qualify for a $2,500 rebate. At a kickoff event for the new program, Governor Inslee stated, “These rebates open up so many affordable new options to thousands of lower-income drivers. This brings down costs for consumers and reduces pollution in our communities.”

PFAS-eating microbes discovered. A team of University of California, Riverside environmental engineers has discovered that a common genus of bacteria is capable of destroying certain per- and polyfluoroalkyl substances (PFAS) in contaminated drinking water. Acetobacterium, the team reports, is found in wastewater environments worldwide. The team, led by Yuji Men, M.S., Ph.D., Associate Professor at UC Riverside’s Chemical Environmental Engineering Department, discovered that Acetobacterium have the ability to cleave the carbon-fluorine bond, triggering a spontaneous process that destroys the chemical. The promising discovery builds on earlier research by Dr. Men that expands the understanding of how microorganisms can be used to clean up PFAS. Microbes have been used to clean up industrial pollutants, such as oil spills. The process is reported to be less costly and more environmentally friendly than chemical treatments, and such biological remediants can also be injected into hard-to-reach spots underground.

NAM asks for more transparency at the CPSC. On July 23, the National Association of Manufacturers noted in a letter to a US House subcommittee that a lack of transparency at the Consumer Product Safety Commission has stymied businesses’ attempts to understand how they are regulated. “Taken together, the self-reporting and safeguards currently in place ensure the CPSC has access to information it needs to make regulatory decisions while assuring the public that the information the agency discloses is reasonable and accurate,” the group wrote. “Further, it encourages self-reporting by easing company concerns that their reports will result in potentially devastating reputational harm from inaccurate or misleading disclosures.” However, the NAM noted, “Unfortunately, in recent years the CPSC has attempted to circumvent these standards, releasing statements that lack any scientific data or research or by taking actions without official agency rulemaking.”