EPA Regulatory Agenda Intensifies for Manufacturers

- The EPA's proposal to rescind the 2009 Endangerment Finding aims to remove the legal basis for regulating greenhouse gas emissions from vehicles, power plants, and oil and gas production under the Clean Air Act. This move is intended to eliminate future obligations for manufacturers regarding the measurement and reporting of GHG emissions for highway engines and vehicles. - Under the AIM Act, companies that produce, import, export, destroy, or use HFCs as a feedstock must submit quarterly reports to the EPA, which are due 45 days after the end of each reporting period. Additionally, an annual third-party audit of these reports is required for many of these entities. - The American Innovation and Manufacturing (AIM) Act mandates an 85% phasedown of HFC production and consumption by 2036. Starting January 1, 2026, regulations will require the minimization of HFC releases during equipment servicing and repair, and mandate HFC recycling before equipment disposal. - The SEC's climate disclosure rule, finalized in March 2024, requires public companies to disclose climate-related risks. Large accelerated filers must begin reporting Scope 1 and Scope 2 emissions in fiscal year 2026, though the initially proposed requirement for Scope 3 emissions was dropped. - OSHA has increased its maximum penalties for safety violations as of January 15, 2025, with fines up to $16,550 for serious violations and up to $165,514 for willful or repeated violations. However, the agency also expanded penalty relief for small businesses, extending a 70% reduction to companies with up to 25 employees. - Recent EPA enforcement actions include a settlement with a food packaging company for over $138,000 for failures in managing anhydrous ammonia and a $1.9 million penalty against a natural gas company for Clean Air Act violations. In the fourth quarter of 2024, the EPA finalized 215 settlement agreements resulting in over $7.7 million in fines. - A proposed OSHA rule from August 2024 would require employers to implement heat illness prevention plans for both indoor and outdoor work environments, mandating access to water, rest, and shade in high-heat conditions. - The EPA is demanding warranty and failure data from 14 major diesel engine manufacturers for models from 2016, 2019, and 2023 to investigate ongoing issues with Diesel Exhaust Fluid (DEF) systems that cause equipment shutdowns. This follows a clarification that the Clean Air Act does not prevent farmers and others from making temporary emissions overrides to complete repairs.