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5 May 20237 minute read

Industrials Regulatory News and Trends - May 5, 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.

Biden’s veto of WOTUS regulation survives override vote in House. The US House of Representatives has failed to override a veto by President Joe Biden of a resolution that would have blocked the Administration’s recent Waters of the US, or WOTUS, regulation. The WOTUS regulation expands which waters and wetlands can be regulated under the federal Clean Air Act. The president’s veto message said that the regulation would provide more certainty to advance infrastructure projects and farming, among other things. House Republicans noted that the rule is unpopular with rural voters, but the 227-196 vote to override on April 18 fell far short of the two-thirds of the chamber that are needed for such a step. Had the veto override succeeded in the House and the Senate, a Congressional Review Act resolution would have taken effect to overturn the Biden definition of WOTUS, which claimed a broader jurisdiction than former President Donald Trump’s administration had sought. See our earlier coverage of this story here.

Increased attention to safety measures for crowded space orbits. At the 38th Space Symposium in April, Richard DalBello, director of the Office of Space Commerce within the US Department of Commerce, expressed concern that companies and organizations that manufacture and operate in space need to operate their satellites safely in the increasingly crowded nature of space. “Not all operators are operating at the same level of competence,” DalBello said. “As we look forward to the future, I think we need to ask serious questions about what new responsibilities will come both for the government but also for the operators themselves, in terms of certification, in terms of capability, in terms of the commitment they make to safety and the overarching goal of space sustainability.” As reported in SpaceNews, DalBello’s office is leading efforts to establish a civil space traffic management (STM) capability, taking over this responsibility from the Department of Defense, which is sharing its space data and expertise with Commerce to ensure space traffic management structures are created to assist commercial operators maintaining safe operation of their satellites. However, DalBello suggested that ultimately management of STM might ultimately reside primarily in the hands of the commercial sector, “STM will just be one of the costs of flying a commercial satellite fleet. There will be a series of qualified [commercial] operators and you maybe just pick one for your particular system, and the government’s role could actually get quite small as we look out a decade or maybe two decades.”

Timing uncertain for Administration proposal on renewable fuel credits for electric vehicles. The Environmental Protection Agency (EPA) proposed in December 2022 to authorize electric vehicle (EV) automakers to generate tradable credits under the Renewable Fuel Standard (RFS) for charging EVs using electricity generated from renewable natural gas or methane collected from sources such as livestock and landfills. The EPA is currently considering public comments from a range of stakeholders that support or oppose the proposal. On May 1, Reuters reported that the Agency may consider postponing a decision on the EV credit proposal in light of legal concerns. However, any significant delay would likely require EPA to defer the start of the electricity component of the program – currently scheduled for 2024. Transforming the nation's fleet to electric power is a central part of President Joe Biden’s plan to combat climate change. These credits would add to the billions of dollars of incentives available under the Inflation Reduction Act to accelerate transition to EVs. The RFS program establishes a market for the credits by requiring oil refiners and importers to blend biofuels or purchase credits annually based on the quantity of fuel they produce or import. Most credits generated under the RFS are for liquid biofuels, such as ethanol or biodiesel. Adding credits for electricity generated from biogas would take the program in a new direction.

FTC is reviewing its “Green Guides” on environmental and sustainability claims. On April 27, Reuters reported that the Federal Trade Commission plans to consider major changes for the first time in a decade to its Green Guides, a set of standards for companies making environmental claims. The agency is now reviewing nearly 60,000 comments that it received on the topic. These came in response to questions that the agency posed about several frequently used environmental claims, ranging from “low carbon” to “net zero” – and also about claims of the recyclability, sustainability and compostability of products. These guides have been increasingly cited in class actions and other legal proceedings challenging allegedly false environmental claims, often referred to as “greenwashing."

Acting head of FAA will step down this summer. On April 21, Politico magazine reported that Billy Nolen, the acting administrator of the FAA, is stepping down from his position after one year of service. Nolen, who has overseen the agency on an interim basis since April 1, 2022, plans to resign this summer, he said, as soon as the agency names a new administrator for the aviation safety agency. “I have given everything to this agency, and now it’s time to do the same for my family, who have sacrificed so much and supported me during my time at the FAA,” Nolen said. Nolen’s decision was considered a blow to the FAA, which has not had a Senate-confirmed administrator since April 2022. In March, Phillip Washington, who was President Biden’s nominee for the permanent post as FAA chief, withdrew from consideration. See our coverage of that development here.

FAA appoints new special panel on air safety. On April 26, the Federal Aviation Administration named an independent safety review team within the federal government to look at ways to boost air safety after a series of close-call incidents. The National Airspace System Safety Review Team includes former FAA Administrator Michael Huerta, former NASA Administrator Charles Bolden, former Air Line Pilots Association President Tim Canoll and former National Transportation Safety Board Chair Robert Sumwalt. This development comes at a time when national attention is focused on air safety after several near-misses in the skies and at airports. Last month, the FAA issued a separate safety alert to airlines, pilots and others citing the “need for continued vigilance and attention to mitigation of safety risks.”

Chemistry trade group speaks out on EPA plastics proposal. On April 21, the American Chemistry Council issued a mixed review of the EPA’s draft national strategy to prevent plastic pollution, which had been issued that same day. “Some components of EPA’s draft strategy align with the federal policy proposal from America’s plastic makers, detailed in our 5 Actions for Sustainable Change, such as expanding recycling capacity and public education on recycling,” the trade group said. “However, other components of the strategy risk sending plastic manufacturing and jobs overseas where plastic is often made with less stringent environmental standards and more greenhouse gas emissions. We caution the Administration that prescribing alternative materials, capping plastic production, or limiting innovative recycling technologies could work against its climate objectives as plastic almost always has a lower lifecycle GHG [greenhouse gas] footprint compared to paper and metal.”