Industrials Regulatory News and Trends - May 19, 2023

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.

President Biden proposes cash compensation from airlines to delayed passengers. On May 6, President Joe Biden said his Administration is preparing regulations that will require airlines to compensate passengers with cash when the airlines are responsible for significant flight delays or cancellations. “Our top priority has been to get American air travelers a better deal,” Biden said. This is the latest in a series of moves by the Administration that it says will crack down on airlines and bolster passenger consumer protections for domestic flights and for international flights involving an American destination or origin. The cash compensation would be in addition to ticket refunds when the airline is at fault for a flight being cancelled or significantly delayed. Under the proposed plan, consumers in the United States would have protections similar to those already available to consumers in the European Union.

Agency warns about water transportation of lithium-ion batteries. In a step that may have implications for the manufacture and transport of lithium-ion batteries, the National Transportation Safety Board issued a warning on May 4 stating that lithium-ion batteries and other possible ignition sources “could pose a fire safety issue in the transportation of scrap materials as cargo” in barge vessels. The agency wrote that scrap metal cargo is typically nonhazardous and poses a low fire risk, but also points to several recent fires involving such cargo. In particular, the agency pointed to a January 2022 incident in which a shoreside pile caught fire in Newark, New Jersey. The NTSB also says two international vessels carrying scrap material experienced cargo fires in 2022.

EPA rejects petition on use of polyvinyl alcohol film. On April 27, the Environmental Protection Agency denied a petition that could have limited the use of polyvinyl alcohol (PVA) film in laundry and dishwashing pods. The agency rejected a proposal that would have changed the substance’s status on the Safer Chemicals Ingredient List – which would have required additional testing for the material. Kathleen Stanton, associate vice president of the American Cleaning Institute, applauded the decision, noting that the EPA's response “cites a significant number of easily findable studies demonstrating the safety and biodegradability of PVA that the petitioners overlooked or ignored.” The petition was filed by Blueland, a green home-products brand, and by an environmental coalition in November and resubmitted in January.

Draft regulation aims to help curb methane emissions from gas pipelines. The Pipeline and Hazardous Materials Safety Administration (PHMSA), which is part of the US Department of Transportation, has proposed a draft regulation that aims to strengthen industry efforts to curb methane emissions from gas pipelines and thus to reduce hazards to people and the environment from these pipelines. The proposal, announced on May 5, would “boost efficiency, cut harmful pollution and waste, and create an estimated up to $2.3 billion annually in benefits,” the agency said. The agency stated that the proposed rule will update decades-old federal leak detection and repair standards that rely solely on human senses in favor of new requirements that add an additional layer of safety by deploying advanced technologies to find and fix leaks of methane and other flammable, toxic, and corrosive gases. The planned policy could reduce greenhouse gas emissions from the covered pipelines by as much as 55 percent, according to the agency. Earlier this year, PHMSA announced the first $196 million of grants under the Natural Gas Distribution Infrastructure Safety and Modernization program, created to repair and replace aging natural gas pipelines and reduce methane emissions across the US.

Maryland governor signs a recycling bill. The version of a Maryland Senate recycling bill signed earlier this week by Governor Wes Moore includes a considerable number of changes made from earlier drafts that focus more broadly on the recycling ecosystem and less narrowly on producers. The bill, as originally drafted in the state Senate, spelled out numerous responsibilities and potential penalties tied to an extended producer responsibility (EPR) system for packaged products sold in Maryland. The final version includes establishment of a producer responsibility advisory council, consisting of up to 21 members appointed by the secretary of the environment and representing a broad range of interested stakeholders, including representatives from local government recycling agencies, nonprofit groups, recyclable materials collectors and processors, retailers, and trade associations.

Bill advances in California to require humans in heavy autonomous vehicles. On April 25, the California state legislature advanced a high-profile bill that would prohibit the operation in that state of heavy autonomous vehicles without a human in the cab. The bill passed the California Assembly’s Communications and Conveyance Committee and is now headed to the Appropriations Committee. While California law currently allows for the testing and operation of autonomous vehicles weighing under 10,000 pounds without a human driver physically inside the vehicle, the California Department of Motor Vehicles is considering new rules that would also allow the testing of medium and heavy-duty commercial vehicles without a human driver present. Automotive News editorialized against the Assembly bill. It wrote, “Traffic safety must always be Job 1 in the continued development of autonomous driving technologies for vehicles of all sizes. When those technologies satisfactorily demonstrate that mission is accomplished, only then can human safety drivers be removed. But no law passed now should try to stop tomorrow's technological advancements.”

Leader of chemical group testifies in Congress that supply chain issues are key to manufacturing. On May 11, in testimony before the Subcommittee on Railroads, Pipelines and Hazardous Materials of the US House Committee on Transportation and Infrastructure, Chris Jahn, the American Chemistry Council’s president and CEO, stressed the importance to the nation of a resilient supply chain. He also gave his ideas about how to get freight rail back on track. “Quite simply – if we want to make more things in America rather than in places like China, we must manufacture and move more chemicals in America,” Jahn said. “For that to happen we must fix our nation’s transportation supply chain and make it stronger than ever.” Jahn noted that railroads have recovered to an extent from some pandemic-related issues as demand has eased. However, he explained that many rail service problems continue to negatively impact ACC members. In fact, he said, ACC’s latest supply chain survey of member companies found that freight transportation challenges are far from over.

Chemical trade group supports new permitting legislation. On May 5, the American Chemistry Council announced that it supports proposed permitting legislation introduced in the US Senate by Senators Joe Manchin (D-WV), Shelley Moore Capito (R-WV), and John Barrasso (R-WY). “We commend Senators Manchin, Capito, and Barrasso for their leadership on this critical issue and urge the Senate to pass meaningful and durable permitting reform this year,” the trade group said. “Their actions along with legislation passed by the House and additional proposals expected in the Senate signal progress on an initiative that could make or break our nation’s efforts to achieve key economic and environmental goals. Realizing the potential of the Bipartisan Infrastructure Law and Inflation Reduction Act will rely in part on enactment of permitting reform.”

NAM says EPA air quality rules could stifle manufacturing. On May 10, the National Association of Manufacturers warned that as a result of the EPA’s proposed air quality regulations, new manufacturing operations could be restricted or not permitted to take place, and new infrastructure would be less likely to receive permits to be built. The trade group projects that the proposed regulations would threaten $162.4 billion to $197.4 billion of economic activity and put 852,100 to 973,900 current jobs at risk, both directly from reductions in manufacturing and indirectly from cuts in supply chain spending. A further outcome would be higher prices for American consumer, the group said. Jay Timmons, NAM president and CEO, stated that, in any case, “improving air quality in the US is a top priority for manufacturers, and we’ve worked for years to make progress in delivering some of the cleanest manufacturing processes in the world.”