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20 January 20237 minute read

Industrials Regulatory News and Trends

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.

FAA announces key proposal concerning 5G interference on planes. On January 9, the FAA said it will propose a requirement that passenger and cargo aircraft in the United States have 5G C-Band-tolerant radio altimeters or install approved filters by early 2024. Concerns that 5G service could interfere with airplane altimeters, which give data on a plane's height above the ground and are crucial for bad-weather landing, led to disruptions at some US airports earlier this year. The FAA expressed serious concern about the quality of warnings that pilots may receive concerning possible 5G interference. “As the flight crew becomes more desensitized to erroneous warnings, they are less likely to react to an accurate warning, negating the safety benefits of the warning altogether and likely leading to a catastrophic incident,” the FAA proposal says.

NAM opposes new EPA announcement on air quality. On January 6, the National Association of Manufacturers expressed opposition to the Environmental Protection Agency’s recent proposal to reconsider its National Ambient Air Quality Standards for particulate matter. The influential manufacturers’ group wrote, “Improving air quality in the U.S. is a priority for manufacturers, and we’ve worked for years to make progress in delivering some of the cleanest manufacturing processes in the world. Based on the EPA’s own data, air quality has improved by more than 30% over the past 20 years, even as production and energy consumption have increased. The EPA’s announcement today to reconsider the PM 2.5 standard will only further weaken an already slowing economy.”

Several states’ PFAS restrictions begin this year. Bloomberg Law reported January 4 that laws restricting per- and polyfluoroalkyl substances, known as PFAS, are taking effect in 2023 in more than a half dozen states. These measures range from labeling requirements to actual bans of the substances in products such as food packaging, firefighting foam, and personal care products, as well as Maine’s first-in-the-nation reporting requirement for intentionally added PFAS in most products. The Maine law’s reporting requirement and prohibition on PFAS-containing rug, carpet, and fabric treatment sales and distribution took effect January 1, 2023, with a broader sales and distribution ban for most other products scheduled to take effect January 1, 2030.  PFAS, often known as “forever chemicals,” are a class of chemicals that do not break down naturally; thus, they accumulate in water, soil, and the human body.

Canada takes major steps against single-use plastics. On December 20, Canada announced several additional steps in its ongoing efforts to limit or prohibit single-use plastics on a nationwide basis. As of that date, checkout bags; cutlery; food service containers and wares made from, or containing, hard-to-recycle plastics; stir sticks; and straws (with some exceptions) will be prohibited from being manufactured or imported into Canada. This prohibition would affect any US company with manufacturing operations for these products anywhere in Canada. “With this ban, and our participation toward achieving a global treaty, we're joining the global effort to reduce plastic pollution and protect our wildlife and habitats. There is a clear linkage between a world free of plastic pollution and a sustainable world, rich in biodiversity – a world that also best supports the health and economic security of Canadians, protects our environment, and helps in the fight against climate change," said Steven Guilbeault, Canada’s minister of environment and climate change.  Please also see our recent alert, New Caifornia Extended Producer Responsibility Act is major addition to suite of plastics-focused laws

GOP senators say proposed DOD rule would put the environment ahead of national security. In a December 19 letter to Defense Secretary Lloyd Austin, all 50 Republican senators in the 117th Congress said that a proposed DOD rule regarding the disclosure of greenhouse gas emissions and climate-related financial risk would “impose significant regulatory burdens on defense contractors” and might harm the nation’s military preparedness. The rule would require that any company receiving more than $7.5 million annually in defense contracts must set science-based targets for reducing its greenhouse gas emissions. The letter from the senators said that the DOD rule would in effect require that a company “account not only for its own emissions but for emissions that occur elsewhere if they are associated with the company's activities under a defense contract.” The senators took the view that DOD is prioritizing environmental benefits over national security.

Is this Cadillac an SUV – or merely a car? On January 6, General Motors said that it is asking the US Treasury to reconsider its current classification of GM's electric Cadillac Lyriq to allow the vehicle to qualify for federal tax credits. For this purpose, the Treasury and the Internal Revenue Service did not classify the Lyriq as an SUV, meaning that its retail price cannot be above $55,000 if it is to qualify for up to $7,500 in new federal tax credits for electric vehicles. The Lyriq, which is often classified as a midsize crossover, currently starts at a retail price of $62,990. To qualify for the credit, SUVs can be priced at up to $80,000, while cars, sedans and wagons can only be priced at up to $55,000. “We are addressing these concerns with Treasury and hope that forthcoming guidance on vehicle classifications will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers,” GM told Reuters.

Trade panel rules against US on automobile content rules. On January 11, a dispute panel acting as a decisionmaker under the new US-Mexico-Canada trade pact ruled in favor of Canada and Mexico on their challenge to the interpretation of content rules for automobiles under the pact. This ruling favors auto-parts makers in those two nations. A year ago, Canada and Mexico filed a complaint against the United States over how to apply automotive-sector content requirements under the free trade agreement, which came into effect in 2020. The decision is “disappointing,” said Adam Hodge, a spokesperson for the United States Trade Representative's office, who added that the ruling could result in fewer American manufacturing jobs. Under the trade agreement, the United States must now agree with Canada and Mexico on how to apply the panel decision -- or face possible retaliatory tariffs.

NAM lauds formation of new House committee concerning China and manufacturing. On January 11, the National Association of Manufacturers announced that it is strongly supporting the decision by the new GOP-led House of Representatives to set up a new Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party. The NAM said that it has long supported more robust efforts to reset the relationship between the US and China and to hold the Chinese accountable for their discriminatory economic actions and policies. It said that these practices by China have had a negative effect on US manufacturing competitiveness. It pointed to testimony by its vice president, Ken Monahan, last fall, in which Monahan said, “From unfair import and export subsidies and industrial policies to intellectual property theft, manufacturers and workers in the U.S. face an unfair playing field that harms manufacturing in the U.S. and holds back the industry.”