Monitoring Federal Rule-makers

Committee Offers Updates on Biden Administration’s Policy Moves

Monitoring Federal Rule-makers

The environmental, health, and safety (EHS) committee of the Flexible Packaging Association (FPA) tracks regulatory developments on federal environmental and occupational safety regulations and develops action plans for those that could impact the industry.

The environmental policy initiatives under the Biden administration are a major shift from the previous administration. The initiatives focus on climate and environmental justice (EJ), as well as the disproportionally harmful impact on low-income communities and communities of color.

The Biden administration is also focused on creating well-paying union jobs. A substantial amount of money has been earmarked for EJ-targeted infrastructure projects, including $20 million for neighborhood air quality and industry fence-line monitoring studies.

The EHS committee is monitoring these developments, as many of its member companies are located within impacted areas. Additionally, the U.S. Department of Justice is asking federal courts to either reverse, hold in abeyance, or remand back to the U.S. Environmental Protection Agency (EPA) many of the air, water, waste, and toxics regulations promulgated or abolished by the former administration. The EHS committee is keeping a close watch on these issues and is ready to act on matters that may negatively impact FPA member companies.

Consider some of the committee’s recent areas of focus:

  • Security and Exchange Commission (SEC) Climate Disclosure Rule: The SEC sought input on updating and broadening its 2009 Climate Disclosure rules, including environmental social governance (ESG) for publicly traded companies. Analysis indicated it would also impact privately held companies, particularly investment and commercial loans. FPA provided comments discussing greenhouse gas (GHG) emission metrics, their comparability from industry to industry, and data collected by organizations like the Carbon Disclosure Project and EPA. The submission under-scored the difficulty the proposed requirements for auditing and comparison of different industry GHG metrics will present for investors. Additionally, FPA urged the SEC not to adopt Scope 3 (supply chain) reporting and to defer requiring social and governance disclosures in SEC filings at this time. Note that the U.S. Chamber of Commerce and private companies such as Amazon and Bank of America were harsh in their comments. U-Haul called the new ESG reporting requirements nothing but “unconstitutional ‘name and shame.’” In addition, FPA submitted comments on the “Social Cost of Carbon” to the Office of Management and Budget (OMB), which the Biden administration is expected to use in formulating climate regulations.
  • GHG Regulation and the Inflation Reduction Act (IRA): In June, the U.S. Supreme Court overturned the D.C. Circuit Court’s 2021 decision and held that EPA lacked the authority to regulate GHGs under the Clean Power Plan and the Affordable Clean Energy Rule. Additionally, in July, EPA published a proposed GHG emission reporting revision rule. Although the proposal names the phasedown of fluorinated GHG (F-GHG) under the American Innovation and Manufacturing Act of 2020 as a reason to update emission factors and reporting for F-GHGs like sulfur hexafluoride and refrigerants, the rulemaking seems clearly tied to SEC’s proposed ESG rules, discussed above. If adopted, the rule would be codified as a new Energy Consumption Source Category, likely limited initially to industries currently subject to other GHG reporting but with the potential to be easily expanded to as-of-yet-unregulated manufacturers. The IRA, also known as the climate bill, includes many new fiscal measures to reduce GHG and build resilience to climate change—roughly$437 billion on climate, health subsidies, and green tax credits that will expand by $270 billion over the 10-year budget window. The IRA also addresses climate justice, with increased tax credits and budgetary spending targeted to disadvantaged communities. The legislation also adds permanent Superfund taxes on oil at the rate of 16.4 cents per barrel, indexed to inflation. The Government Accountability Office and EPA’s Inspector General issued warnings regarding EPA’s ability to manage the funds they receive and oversee the grants authorized for EJ, energy, and other purposes.
  • Risk and Technology Review of Paper and Other Web Coatings (POWC) Maximum Achievable Control Technology (MACT) Rule: In response to a consent decree entered with environmental groups, EPA proposed amendments to the POWC MACT Rule in 2020. As required by the Clean Air Act, the rule examined “residual risk” to the public and the environment from hazardous air pollutants. In March, EPA lifted the stay of a formaldehyde standard, which was originally stayed in 2004. EPA’s action triggered a 180-day period for affected sources to submit to their EPA Regional Office a continuous monitoring plan and perform a stack test for compliance. EPA intends to finalize a proposed revision of the rule for OMB review by the end of 2022.
  • Per- and polyfluoroalkyl (PFAS): There continues to be movement at the state and federal levels to ban/regulate the use and reporting of PFAS. As part of the EPA-PFAS action plan, the agency proposed regulations on imported products that contain PFAS chemicals as surface coatings. In addition, EPA’s Office of Pollution Prevention and Toxics is undertaking a risk assessment of several classes of PFAS to determine regulatory actions. In August, EPA announced it will publish a proposed rulemaking to designate certain PFAS chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act. The proposal applies to perfluorooctanoic acid and perfluorooctanesulfonic acid, including their salts and structural isomers as hazardous substances under the Superfund Act. Under this rule, water and wastewater utilities would be required to dispose of PFAS-laden filters at a hazardous waste facility. Many current landfills may become Superfund sites, resulting in staggering financial liability and cleanup costs. These costs are likely to be passed on to communities, industry, and ratepayers. FPA joined a coalition led by the U.S. Chamber of Commerce to advocate for the industry’s position. FPA’s product stewardship and circularity committee has also been active in the legislative arena on this subject.

The EHS committee typically meets quarterly. Each meeting agenda provides an in-depth analysis of regulatory issues, the development of action plans, and an opportunity for members to share experiences and insights on these and related issues. FPA will continue to monitor regulatory developments and act as necessary, while also joining other industry coalitions to collectively address issues of mutual concern.

Abigail Trumpy, Esq., is director, regulatory affairs, at FPA.